Income Tax Appellate Tribunal - Mumbai
Bajaj Hindusthan Limited vs The Joint Commissioner Of Income-Tax on 19 May, 2004
Equivalent citations: [2005]92ITD411(MUM), [2005]277ITR1(MUM), (2005)92TTJ(MUM)1064
ORDER
O.K. Narayanan, A.M.
1. This appeal is filed by the Assessee, for the Asst. Year 1989-90. The appeal is filed against the order of the CIT(A)-II at Mumbai dated 1-5-2000 and arises out of the order dated 26-9-1997 passed Under Section 155(4A) of the Income-tax Act, 1961.
2. The Assessee had made additions to its plant and machinery of its Cement unit at Udaipur, during the previous year relevant to the assessment year under appeal. According to the Assessee, the said investment amounting to Rs. 3,47,89,596 qualified for investment allowance available Under Section 32A. In fact the claim was made by the Assessee in its computation of income. Investment allowance was granted by the Assessing Officer including an allowance of Rs. 69,57,919, pertaining to the additions made in the Cement unit at Udaipur.
3. The Assessee had sold its Udaipur Cement unit to M/s. J.K. Udaipur Udyog Limited during the relevant previous year except certain machineries which were leased out by the Assessee. On this, the Assessing Officer proposed to rectify the assessment order by withdrawing the investment allowance already granted. The Assessee submitted a reply to the Assessing Officer that it had no objection for the investment allowance being withdrawn in respect of the additions made to the pant and machinery in its Udaipur Cement unit, which were sold out. But in respect of certain additions of plant and machinery amounting to Rs. 3,39,66,519, the Assessee submitted that the investment allowance may not be withdrawn as those plant and machinery are not sold but leased out to M/s. J.K. Udaipur Udyog Limited.
4. The Assessing Officer anyhow passed an order Under Section 155(4A) withdrawing the entire investment allowance including that of the machinery given on lease. He held that the leasing of assets would amount to "otherwise transfer". While passing the order the Assessing Officer placed reliance on the decision of the Hon'ble Supreme Court in the case of CIT v. Narang Dairy Products (219 ITR 478).
5. The Assessee filed an appeal challenging that portion of the order of the Assessing Officer withdrawing investment allowance pertaining to assets leased out by the Assessee. The thrust in the appeal made by the Assessee was on the ratio laid down by the Hon'ble Supreme Court in CIT v. Shaan Finance (P) Ltd. (97 Taxman 435).
6. The CIT(A) found that the Assessee had not originally filed any appeal against the order passed by the Assessing Officer Under Section. 155(4A). The due date of filing of appeal was 21-11-1997; but the appeal was filed on 21-5-1998. The Assessee had filed the condonation petition before the CIT(A). The main ground raised in the condonation petition is that the appeal has been filed in the light of the decision of the Hon'ble Supreme Court in the case of Shaan Finance (P) Ltd. and as the said decision was not available at the time of due date, the delay was caused. The Assessee had also filed a petition Under Section 154 before the Assessing Officer to rectify his order in the light of the order of the Hon'ble Supreme court in the case of Shaan Finance (P) Ltd.
7. In the above circumstances it was the apprehension of the CIT(A) that if the delay was condoned in the said case, it would lead to proliferation of endless litigation with no finality attached to any order. On the basis of the said observation he refused to condone the delay and dismissed the appeal as barred by limitation.
8. It is against the above order that the Assessee has come in appeal before us.
9. We heard Ms. Jayshree Grover the learned Chartered Accountant appearing for the Assessee and Shri B. Pruseth the learned D.R. appearing for the Revenue.
10. As pointed out by the learned Commissioner, filing of similar petitions by assessees may proliferate endless litigation in matters of tax assessments. But we do not think that it is a proper ground to reject the legitimate contentions of an Assessee. It is settled that the mistake arising as a result of subsequent interpretation of law by the Hon'ble Supreme Court would constitute "a mistake apparent from record" and therefore rectification proceedings could be initiated accordingly. This position confers a legal right on an Assessee to pursue the matter before appropriate authorities. The chance of proliferation of endless litigation is the result of the above legal position with which we cannot interfere. We cannot interfere in the rights of citizens and assessees. Even if filing of similar petitions may generate endless litigation, we have to sit in judgment on those petitions on the merits of the points raised therein and we cannot refuse to sit in judgment citing certain consequential difficulties.
11. Therefore it is to be seen that the Assessee has exercised its legitimate right to move the petition before the Assessing Officer and also filed an appeal before the CIT(A). It is to be seen that the Assessing Officer has not disposed off the petition filed Under Section 154 which is again not justified. Apart from the observation of the CIT(A) regarding the proliferation of litigation, he has not otherwise considered the reasonableness of condoning the delay. The delay caused in this case before the CIT(A) was of 180 days. The Assessee got the chance to file rectification petition or an appeal as such, because of the subsequent pronouncement of law by the Hon'ble Supreme Court. The pronouncement was not available on the due date. Therefore the Assessee had no occasion to file an appeal within time but the Assessee has filed the appeal as soon as the law has been declared by the Hon'ble Supreme court. Therefore it is our view that the delay of 180 days need to be condoned. The CIT(A) has erred in not condoning the delay.
12. As this is a matter pertaining to a very old assessment year 1989-90, we do not want to send back the file to the lower authorities and again prolong the disposal of the issue involved in this case. We cannot perpetuate the inordinate delay anymore.
13. Therefore in the peculiar circumstances, we are not sending back the file to the lower authorities. We are adjudicating the matter ourselves. We hold that the delay caused in filing the appeal before the CIT(A) is explained and therefore it is to be condoned. So the lacuna of delay is dispensed with.
14. The next is the merit of the case. The law has been declared by the Hon'ble Supreme Court in the case of CIT v. Shaan Finance (P) Ltd. (97 Taxman 435) therefore the Assessing Officer is directed to revise the assessment in the impugned assessment year 1989-90 by restoring the investment allowance portion pertaining to the machineries leased out by the Assessee.
15. In result, the appeal is allowed. Order accordingly.