Income Tax Appellate Tribunal - Mumbai
Joint Commissioner Of Income Tax vs Aroh Trading (P) Ltd. on 28 May, 2004
Equivalent citations: (2005)96TTJ(MUM)570
ORDER
M.K. Chaturvedi, Vice President
1. This appeal by the Revenue is directed against the deletion of penalty levied under Section 271(1)(c) of the IT Act, 1961, and relates to the asst. yr. 1992-93.
2. We have heard the rival submissions in the light of material placed before us and precedents relied upon. The CIT(A) has held that no penalty for concealment is leviable in the case of the assessee as it was assessed for the year under consideration on a loss of Rs. 15,40,450. Therefore, the question posed before us was whether the penalty for concealment is leviable in a case where an assessee has been assessed on a figure of loss.
3. We find that the Tribunal decided this issue in the case of Dy. CIT v. Galaxy Dyeing & Printing Mills (P) Ltd. being ITA No. 3331/Mum/1997, dt. 9th March, 2004. It is pertinent to note that while deciding this issue, the Tribunal followed the judgment rendered by the apex Court in the case of CIT v. Prithipal Singh & Co. . The Tribunal also took note of the decision rendered by the jurisdictional High Court in the case of CIT v. Chemiequip Ltd. . The Hon'ble Supreme Court confirmed the view taken by the Hon'ble Punjab & Haryana High Court in the case of CIT v. Piithipal Singh & Co. . Hon'ble High Court took the view that if there was no taxable income or tax assessed is nil during the particular year, the question of evasion and consequently penalty did not arise. When the matter travelled before the Hon'ble Supreme Court, it was held as under:
"We have heard the learned counsel and find that on the facts of the case no interference is called for. The civil appeal is dismissed. No order as to costs."
4. Shri B. Pruseth, learned Departmental Representative, vehemently contended that Article 141 of the Constitution of India speaks of declaration of law by the Supreme Court. For a declaration of law there should be a speaking order. A decision which is not express and is not founded on reasons nor on consideration of the issues, cannot be deemed to be a law declared, to have binding effect as is contemplated by Article 141. A summary dismissal by the Supreme Court, without laying down any law, is not a declaration of law envisaged by Article 141. When reasons are given the decision of the Supreme Court would be binding on all Courts within the territory of India. When no reasons are given, dismissal simpliciter is not a declaration of law by the Supreme Court. To buttress this point, reliance was placed on the decision of the apex Court rendered in the case of S. Shanmugavel Nadar v. State of Tamil Nadu & Anr. .
5. We have gone through the facts of the case cited by the learned Departmental Representative. In this case the constitutional validity of the Madras City Tenants Protection (Amendment) Act, 1996, was challenged. When the matter came up for hearing before the Division Bench, reliance on behalf of the respondent in the High Court was placed on the Division Bench decision of the High Court, Special leave petition was filed against the decision of the Division Bench. The apex Court dismissed the appeals on the ground that State of Tamil Nadu was not made a party in the Special Leave Petition. It was held that a challenge to the constitutional validity of the Act cannot be considered or determined, in the absence of the concerned State. Ex consequent!, the special leave petition was dismissed. On this factual backdrop, the Hon'ble Supreme Court has held that mere rejection by a superior forum resulting in refusal to exercise its jurisdiction which is invoked cannot ipso facto be construed as the imprimatur of the superior forum on the correctness of the decision sought to be appealed against. It is pertinent to note that this decision was rendered by the Bench comprising of two Judges.
6. Shri Hiro Rai, learned counsel for the assessee,. invited our attention on the decision of the apex Court rendered in the case of Kunhayammed & Ors. v. State of Kerala & Anr. . This decision was rendered by a Bench comprising of three Judges. In this case, the Hon'ble Supreme Court has held that if the petition seeking grant of special leave is dismissed, it is expression of opinion by the Supreme Court that a case for invoking the appellate jurisdiction of the Court was not made out. It is not relevant whether the dismissal is with or without speaking order. Once the superior Court has disposed of the lists before it either way-it is the order of the superior Court, which is final, binding and operative. When an appeal is dismissed by the apex Court, though by a non-speaking order, the doctrine of merger applies.
7. In the case of V.M. Salgaocar & Brothers (P) Ltd. Etc. v. CIT Etc. , it was held that when an appeal is dismissed by the Supreme Court by a non-speaking order, the order of the High Court or the Tribunal from which the appeal arose, merges with that of the Supreme Court. In such a case, the Supreme Court upholds the decision of the High Court or the Tribunal from which the appeal is provided under Clause (3) of Article 133 of the Constitution.
8. As per the mandate of Article 141 of the Constitution, all Courts in India are bound to follow the decision of the Supreme Court. What is binding is the ratio of the decision. The doctrine of binding precedent has an import of permitting a modicum of certainty and consistency in judicial decisions. The theory of judicial precedents has an intrinsic internal and interrelated judicial strength, in the process of underlying thread of judicial discipline. Precedents, as observed by Lord Macmillan, should be "stepping stones" and not halting places. But Justice Cardozo's caution should not go unheeded that the weekly change in the composition of the Court ought not to be accompanied by changes in its rulings. Frequent changes in rulings rob the modicum of stability. Consistency, certainty and uniformity are the pillars of the doctrine of precedent. The precedents set a pattern upon which a future conduct may be based. One of the basic principles of administration of justice is that the case should be decided alike.
9. In the case of S. Shanmugavel Nadar (supra), there was summary dismissal. No law was laid down. SLP was dismissed on a technical ground. But in the case of Prithipal Singh (supra), the Hon'ble Supreme Court decided the issue on merits. The apex Court took note of the various reasonings adopted by the High Court for arriving at the conclusion. It is not a case of summary dismissal or deciding the appeal on a technical ground. Therefore, in our opinion, the decision of the Hon'ble High Court in the case of Pnthipal Singh (supra) got merged with the decision of the Supreme Court. As such, the ruling of the Supreme Court is binding on us under Article 141. We do not find any infirmity in the order of the Tribunal rendered in the case of Galaxy Dyeing & Printing Mills (P) Ltd., cited supra, in following the decision of the Supreme Court rendered in the case of CIT v. Pnthipal Singh (supra).
10. We, therefore, respectfully following the precedent, decide this appeal in favour of the assessee and against the Revenue.
11. In the result appeal of the Revenue stands dismissed.