NATIONAL DAIRY DEVELOPMENT BOARD,ANAND V. THE ASSTT. COMMISSIONER OF INCOME TAX, ANAND CIRCLE, ANAND

MA 127/AHD/2024

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The National Dairy Development Board filed a Miscellaneous Application seeking rectification of mistakes in the Income Tax Appellate Tribunal's order dated 17.05.2024 concerning the assessment year 2011-12. The application focused on two grounds: the disallowance under section 14A and the treatment of provisions made for VRS payments. The Tribunal had previously restored the matter to the Assessing Officer for re-examination due to insufficient computation and basis provided by the assessee for the claimed administrative expenses. The Tribunal also directed the Assessing Officer to verify the double disallowance claim regarding VRS payments. The assessee contended that the Tribunal's decision did not consider previous rulings on similar issues, which constituted a mistake apparent from the record. However, the Tribunal found that the issues raised did not constitute mistakes apparent from the record but were rather requests for a reappraisal of the facts and legal conclusions.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 826164 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 3 month(s) 19 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 05-01-2026
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 17-09-2024
• Laws Referred To: Income-tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ABHIJIT
• Assessee Lawyers: APARNA PARELKAR
• Keywords: Rule of consistency; Rectification of order; Earning of tax free income; Rule 8D
• Section: 37; 14A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, AHMEDABAD BEFORE SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER & SHRI MAKARAND VASANT MAHADEOKAR, ACCOUNTANT MEMBER M.A. No.127/Ahd/2024 (in I.T.A. No.2994/Ahd/2016) (Assessment Year: 2011-12) National Dairy Development Board, P.O. Box No. 40, Anand, Gujarat-388001 Vs. Assistant Commissioner of Income Tax, Anand Circle, Anand [PAN No.AABCN2029C] (Appellant) .. (Respondent) Appellant by : Ms. Aparna Parelkar, AR Respondent by: Shri Abhijit, Sr. D.R. Date of Hearing 28.11.2025 Date of Pronouncement 05.01.2026 O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: The present Miscellaneous Application No. 22 has been filed by the assessee, National Dairy Development Board, seeking rectification of mistakes alleged to be apparent from the record in the consolidated order passed by the Hon’ble ITAT, Ahmedabad “B” Bench, dated 17.05.2024 in ITA No. 2994/Ahd/2016 for A.Y. 2011–12. The Miscellaneous Application is confined only to Ground Nos. 3 and 7 raised by the assessee in its appeal before the Tribunal and does not seek a review of the entire order. 2. So far as Ground No. 3 is concerned, the issue relates to disallowance made under section 14A of the Income-tax Act. Before the Tribunal, the assessee had raised multiple contentions under this ground, Printed from counselvise.com M.A No. 127/Ahd/2024 (in ITA No. 2994/Ahd/2016) National Dairy Development Board vs. ACIT Asst. Year –2011-12 - 2– including that section 14A was not applicable as investments yielding exempt income were made out of own funds, that Rule 8D could not be applied in the absence of recorded dissatisfaction by the Assessing Officer, that interest expenditure related to specific borrowings could not be considered, that disallowance could not be made in respect of strategic investments, that investments yielding no exempt income should be excluded, and that in any case the disallowance should be restricted to a much lower amount. While adjudicating this ground, the Tribunal, in paragraphs 33 and 50 of its order, restored the matter to the file of the Assessing Officer on the reasoning that the assessee had not furnished any proper basis or computation for offering a sum of ₹27,000/- as administrative expenses attributable to exempt income. In the Miscellaneous Application, the assessee has pointed out that this adjudication suffers from a mistake apparent from the record. It has been specifically contended that the Tribunal failed to consider and follow its own earlier orders in the assessee’s case for A.Ys. 2008–09 and 2009–10, wherein on identical facts, the Tribunal had held that the assessee possessed sufficient interest-free funds, that there was no nexus between borrowed funds and investments, and had restricted the disallowance under section 14A to an ad hoc amount of ₹10 lakhs towards administrative expenses. The assessee has highlighted that copies of these earlier Tribunal orders were placed in the paper book and the factual position was also specifically brought to the notice of the Bench during the course of hearing through charts filed on record. According to the assessee, in the absence of any change in facts, the principle of consistency required that the same Printed from counselvise.com M.A No. 127/Ahd/2024 (in ITA No. 2994/Ahd/2016) National Dairy Development Board vs. ACIT Asst. Year –2011-12 - 3– approach be followed for the year under consideration. The assessee has therefore submitted that the Tribunal decided Ground No. 3 without considering binding precedents in its own case, which constitutes a mistake apparent from the record. On this basis, the assessee has requested that directions be issued to the Assessing Officer to follow the Tribunal’s orders for A.Ys. 2008–09 and 2009–10, or alternatively that the matter be recalled for fresh adjudication on this limited issue. 3. The second issue raised in the Miscellaneous Application pertains to Ground No. 7, which relates to deduction of provision of ₹18,00,29,457/- made towards payments to employees under a Voluntary Retirement Scheme (VRS). While adjudicating this ground, the Tribunal, in paragraphs 54 and 55 of its order, directed the Assessing Officer to comply with the directions of the learned CIT(A) and to give clear findings on the allowability of the claim under section 37 of the Act, particularly examining the contention of the assessee regarding alleged double disallowance. In respect of this ground, the assessee has pointed out that there is a factual error in the Tribunal’s direction. It has been submitted that the learned CIT(A), in paragraph 10.3 of his order, had not directed the Assessing Officer to examine the allowability of the provision under section 37(1). Instead, the CIT(A) had directed the Assessing Officer to verify the assessee’s contention regarding double disallowance and to grant relief on a payment basis after verification. The assessee has explained that it had already disallowed the provision of ₹18.00 crore while computing income for A.Y. 2011–12, and when actual monthly Printed from counselvise.com M.A No. 127/Ahd/2024 (in ITA No. 2994/Ahd/2016) National Dairy Development Board vs. ACIT Asst. Year –2011-12 - 4– payments out of this provision were made in the subsequent year, those payments were again disallowed by the Assessing Officer, resulting in double disallowance of the same expenditure. According to the assessee, this specific grievance of double disallowance was not properly appreciated by the Tribunal, and instead the Tribunal proceeded to direct examination of allowability under section 37(1), which was not the issue decided by the CIT(A). The assessee has therefore contended that the Tribunal’s observations and directions in respect of Ground No. 7 are based on an incorrect appreciation of the CIT(A)’s order and the assessee’s submissions, thereby constituting a mistake apparent from the record. On this basis, the assessee has prayed that the Tribunal may rectify the order by directing the Assessing Officer to follow the CIT(A)’s directions and allow deduction of VRS payments strictly on payment basis, so as to eliminate the double disallowance. 4. We have heard the rival contentions and perused the material on record. 5. So far as the first issue relating to disallowance under section 14A of the Act is concerned, we find that this Tribunal, in paragraphs 33 and 50 of the impugned order, had examined the facts in detail and restored the matter to the file of the Assessing Officer only for the limited purpose of examining the basis and computation furnished by the assessee for offering a sum of ₹27,000/- as administrative expenditure attributable to earning exempt income. The Tribunal has categorically recorded that the assessee Printed from counselvise.com M.A No. 127/Ahd/2024 (in ITA No. 2994/Ahd/2016) National Dairy Development Board vs. ACIT Asst. Year –2011-12 - 5– had neither furnished any computation nor any cogent basis to substantiate how such a meagre amount was arrived at, despite earning substantial exempt income. At the same time, the Tribunal also noted that while the Assessing Officer recorded dissatisfaction, he had not pointed out any specific infirmity in the said figure. In these circumstances, the matter was restored to the Assessing Officer in the interest of justice for fresh examination after affording due opportunity to the assessee. During the course of hearing of the present Miscellaneous Application, the learned counsel for the assessee fairly submitted that the assessee has already approached the Hon’ble High Court against the orders passed by the Tribunal for earlier assessment years on the very issue of ad hoc disallowance under section 14A, contending that such ad hoc disallowance is not sustainable in law. In this factual backdrop, it is not understandable as to how the assessee can now seek recall or modification of the present order by placing reliance on the very same earlier Tribunal orders, when those orders themselves have been challenged by the assessee before the Hon’ble High Court. Once the assessee has disputed the correctness of the earlier years’ Tribunal orders before the higher judicial forum, the assessee cannot, at the same time, seek rectification of the present order by invoking the principle of consistency based on those very orders. We further find that the Tribunal has consciously considered the submissions of the assessee, the findings of the Assessing Officer and the CIT(A), and thereafter passed a reasoned order restoring the issue for fresh examination. No mistake apparent from the record has been pointed out. The assessee, in the guise of the present Miscellaneous Application, is only Printed from counselvise.com M.A No. 127/Ahd/2024 (in ITA No. 2994/Ahd/2016) National Dairy Development Board vs. ACIT Asst. Year –2011-12 - 6– seeking a reappreciation of facts and a different conclusion, which is beyond the scope of section 254(2) of the Act. Therefore, the Miscellaneous Application on the first issue relating to section 14A is liable to be dismissed. 6. Coming to the second issue relating to deduction of provision of ₹18,00,29,457/- made towards VRS payments, we find that the Tribunal, in paragraphs 54 and 55 of its order, has elaborately considered the findings of the learned CIT(A) and the submissions of the assessee regarding alleged double disallowance. The Tribunal has noted that the CIT(A) had directed the Assessing Officer to verify the assessee’s contention regarding double disallowance and to grant relief on payment basis after due verification. Taking note of the factual position that similar claims were allowed in later assessment years but disallowed in earlier years, the Tribunal issued a specific direction to the Assessing Officer to comply with the order of the CIT(A) and to give clear findings on the allowability of the claim under section 37 of the Act, particularly with reference to the allegation of double disallowance. 7. On a careful perusal of the Miscellaneous Application, we find that the assessee is essentially aggrieved by the nature of the directions issued by the Tribunal and seeks a different or more favourable direction. This would clearly amount to seeking a review of the order passed by the Tribunal, which is impermissible under section 254(2) of the Act. The Tribunal has neither omitted to consider any material fact nor committed Printed from counselvise.com M.A No. 127/Ahd/2024 (in ITA No. 2994/Ahd/2016) National Dairy Development Board vs. ACIT Asst. Year –2011-12 - 7– any patent or obvious error apparent from the record. The issue has been consciously adjudicated and appropriate directions have been issued. Reconsideration of the same issue on merits is outside the limited scope of rectification proceedings. 8. In view of the above discussion, we hold that there is no mistake apparent from the record in the order of the Tribunal dated 17.05.2024 warranting interference under section 254(2) of the Act on either of the two issues raised by the assessee. The present Miscellaneous Application filed by the assessee is, therefore, dismissed in entirety. 9. In the result, the Miscellaneous Application filed by the assessee stands dismissed. This Order pronounced in Open Court on 05/01/2026 Sd/- Sd/- (M. V. MAHADEOKAR) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 05/01/2026 Tanmay, Sr. PS TRUE COPY आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ(अपील) / The CIT(A)- 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad Printed from counselvise.com "