Income Tax Appellate Tribunal - Chennai
Metro Fabrics, Trichy vs Department Of Income Tax
IN THE INCOMETAX APPELLATE TRIBUNAL: C- BENCH:CHENNAI
(Before Shri Abraham P. George. Accountant Member
and Shri George Mathan, Judicial Member)
MA No.171/Mds/10
ITA No.694/Mds/07
Assessment Year 2003-04
The ACIT, vs M/s Metro Fabrics,
Cir.II, Range II, Tiruchirapalli 44&46, 50 Feet Rd.,
Ramakrishnapuram North,
Karur
(PAN AAAFM5247P)
(Applicant) (Respondent)
Appllicant by: Shri Shaji P.Jacob.
Respondent by: Shri N.Quadir Hoseyn
ORDER
PER GEORGE MATHAN, JUDICIAL MEMBER--
In this Misc. petition grievance raised by the Revenue is that this Tribunal ;had remitted the issue relating to claim for deduction under sec. 80HHC on DEPB benefits back to the file of AO, for fresh consideration in accordance with the guidelines laid down by the Special Bench in the case of Topman Exports v. ITO (318 ITR(AT)87). According to the ld. DR, Hon'ble Bombay High Court has in the case of CIT vs. Kalpataru Colours & Chemicals (328 ITR 451) reversed the decision of the Special Bench in MA 171/Mds/10 2 Topman Exports (supra) and hence there is a mistake apparent in the order of the Tribunal in this regard.
2. Ld.AR submitted that the guidelines mentioned in Special Bench order in Topman Export's case no more existed, since it was overturned by Hon. Bombay High Court in Kalpataru Colours & Chemical's case (supra). Therefore, according to him, the AO if he followed the guidelines given in Topman Export's case of Special Bench, will be doing an act of judicial indiscipline, since he will have to go by a decision which was overturned by a higher authority.
3. As against above the ld. AR submitted that there was no error apparent in the order of the Tribunal supra.
(i) As on date when the Tribunal passed the order, the Special Bench decision in Topman Export's case was the only authority on the issue.
(ii) There will be a rectificable mistake only if there was a decision of the jurisdictional High Court or the Apex Court, and there was nothing of these sorts for Chennai Bench of the Tribunal to exercise its' powers under sec. 254(2) of the Act.
(iii) Giving any further direction to the AO will result in a review of the order of this Tribunal.MA 171/Mds/10 3
(iv) Revenue had taken the subject order of the Tribunal in appeal before the jurisdictional High Court and hence an MP cannot be entertained on such order.
4. As against this the ld. AR was sof the opinion that there was no error in the order of the Tribunal warranting any rectification.
5. We have seen the order of the Tribunal. One of the issues raised by the assessee in the appeal was regarding the calculation of deduction under sec. 80HHC of the Act on DEPB benefits. This Tribunal had held as under at para-3 of its order:
"In regard to second issue, which was against the action of the ld.CIT(A) in holding that there is no cost involved in getting DEPB and therefore, the entire proceeds realized on transfer of DEPB are business/s 28(iiid). It was submitted by the ld. AR that the issue was squarely covered by the decision of the Special Bench of this Tribunal in the case of M/s Topman Exports reported in 318 ITR (AT) 87 (Mum)(SB). Ld. DR also fairly agreed that the issue was to be reconsidered in the line with the decision of Special Bench of this Tribunal in the case of M/s Topman Exports (supra). We have considered the submissions. It is noticed that the issue is to be considered in line with the decision of Special Bench of this Tribunal in the case of M/s Topman Exports (supra). Consequently this issue is restored to the file of the AO for readjudication in line with the decision of the Special Bench of this Tribunal in M/s Topman Exports (supra). In the circumstances, the appeal of the assessee is partly allowed."
6. As on the date when this Tribunal passed order, no doubt it was justified in remitting the matter and directing the AO to follow the guidelines MA 171/Mds/10 4 in Topman Export's case (supra). But it remains an uncontroverted fact that the said decision has been overruled by the Hon. Bombay High Court in Kalpataru Colours & Chemical's case (supra). In our opinion there is an error in the order of the Tribunal, in that power of AO to consider the issue was limited to the guidelines laid down by the Special Bench in Topman Export's case, whereas it should have been principles evolving out of Topman Export's case. It is the manifest duty of a judicial or quasi judicial body to ensure that its' orders are clear and should subserve the ultimate object of rendering justice and if the directions given could lead to a result whereby judicial discipline of the hierarchy of Courts would get negated, then such directions will be susceptible to a rectificatory proceedings, the mistake in such directions being glaring and apparent. Rectification of such a mistake cannot be refused just for a reason that one of the parties to the dispute has moved in further appeal.
7. Therefore, for maintaining judicial discipline we find it appropriate to modify the directions given to the AO in the order of the Tribunal as under:
"Hence in the interest of justice, we set aside the order of the AO and Ld. CIT(A) om the aspect of Sec.80HHC deduction, and remit the issue back to the file of the AO for deciding it based on the principles evolving out of Topman Export's case and the decisions of any higher MA 171/Mds/10 5 judicial authorities, on the relevant issue, which are available to the AO when he considers it afresh."
8. Needless to mention, assessee has to be given a fair chance to represent its' case.
9. The Misc. Petition filed by the Revenue is disposed of with the above directions.
10. For statistical purposes the Misc. Petition is treated as partly allowed.
Order pronounced in open Court on 14 -1-2011.
Sd/- sd/-
( ABRAHAM P. GEORGE) (GEORGE MATHAN)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Chennai: 14th January, 2011
Nbr"
Cc: Assessee/ Assessing Officer/ CIT(A)/ CIT/ D.R/ Guard File.
MA 171/Mds/10 6