Income Tax Appellate Tribunal - Chennai
Metro Fabrics, Trichy vs Department Of Income Tax on 26 August, 2011
IN THE INCOME TAX APPELLATE TRIBUNAL
'D' BENCH, CHENNAI
BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER, AND
SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER
.....
M.P. No. 179/Mds/2010
(in I.T.A. No. 1704/Mds/2009)
Assessment Year : 2002-03
The Assistant Commissioner M/s Metro Fabrics,
of Income Tax, 44 & 46, 50 Feet Road,
Circle II, Range II, v. Ramakrishnapuram North,
Trichy. Karur.
PAN : AAAFM5247P
(Petitioner) (Respondent)
Petitioner by : Shri T.N. Betgeri, JCIT
Respondent by : Shri N. Quadir Hoseyn
Date of Hearing : 26.08.2011
Date of Pronouncement: 09.09.2011
O R D E R
PER ABRAHAM P. GEORGE, ACCOUNTANT 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 2 M.P.No. 179/Mds/10 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 Topman Exports (supra) and hence there is a mistake apparent in the order of the Tribunal in this regard.
2. Learned D.R. 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.
3 M.P.No. 179/Mds/10
(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.
(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. We have perused 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 at para 5 of its order as under :-
"5. The treatment regarding DEPB at the point of credit as well as when such export incentives are sold has been dealt with in detail by the Special Bench of this Tribunal in the decision of Topman Exports reported in 318 ITR [AT] 87. Neither the Assessing Officer nor the ld. CIT(A) had the opportunity to go through this order at the time when the issue was dealt. Hence, in the interest of justice, we set aside the order of the Assessing Officer and ld. CIT(A) in this regard and remit the 4 M.P.No. 179/Mds/10 issue regarding DEPB to the file of the Assessing Officer for consideration afresh in the light of guidelines laid down by the Special Bench in the aforementioned decision."
5. 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 in Topman Export's case (supra). But it remains an uncontroverted fact that the said decision has been overruled atleast to an extent 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 5 M.P.No. 179/Mds/10 for a reason that one of the parties to the dispute has moved in further appeal.
6. Therefore, for maintaining judicial discipline we find it appropriate to modify the directions given to the AO in para 5 of 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) on 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 judicial authorities, on the relevant issue, which are available to the AO when he considers it afresh."
7. Needless to mention, assessee has to be given a fair chance to represent its' case.
8. The Misc. Petition filed by the Revenue is disposed of with the above directions.
9. For statistical purposes the Misc. Petition is treated as partly allowed.
6 M.P.No. 179/Mds/10The order was pronounced in the Court on 9th September, 2011.
sd/- sd/-
(Hari Om Maratha) (Abraham P. George)
Judicial Member Accountant Member
Chennai,
Dated the 9th September, 2011.
Kri.
Copy to: (1) Petitioner
(2) Respondent
(3) CIT(A)
(4) CIT
(5) D.R.
(6) Guard file