Himachal Pradesh High Court
Commissioner Of Income Tax vs M/S Shivalik Hatcheries Pvt Ltd on 8 August, 2016
Bench: Mansoor Ahmad Mir, Tarlok Singh Chauhan
1 IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA .
ITA No.51 of 2008 along with ITA No.53 of 2008 Date of decision: 8.8.2016.
ITA No.51 of 2008 Commissioner of Income Tax, Shimla ...Appellant.
of
Versus
M/s Shivalik Hatcheries Pvt Ltd
rt ...Respondent
ITA No. 53 of 2008
Commissioner of Income Tax, Shimla ...Appellant.
Versus
M/s Shivalik Hatcheries Pvt Ltd ...Respondent
Coram
The Hon'ble Mr. Justice Mansoor Ahmad Mir, Chief Justice The Hon'ble Mr. Justice Tarlok Singh Chauhan, Judge.
Whether approved for reporting?1 Yes.
For the Appellant(s): Mr.Vinay Kuthiala, Senior Advocate with Ms. Vandana Kuthiala, Advocate.
For the Respondent(s): Mr. Vishal Mohan and Mr. Sushan Keprate, Advocates.
Tarlok Singh Chauhan J.
Since common questions of law arise for consideration in these appeals, therefore they were taken up together for hearing and are being disposed of by a common judgment.
2. The appeals were admitted on the following substantial questions of law:
i) Whether there is any limitation while passing an order by the Commissioner, Income Tax which has been passed in Whether the reporters of the local papers may be allowed to see the Judgment? Yes.::: Downloaded on - 15/04/2017 20:59:15 :::HCHP 2
consequence of, or to give effect to any finding or direction .
contained in the order of the appellate Tribunal, High Court or Apex Court?
ii) Whether the findings recorded by Income Tax appellate Tribunal would be treated as finding with respect to Section 263(3) of Income Tax Act?
of 3 The respondent (assessee) in ITA No.51 of 2008 was engaged in the business of hatcheries (respondent is now merged rt with Venkateshwara Hatcheries Ltd vide order dated 20.6.2006).
On 31.12.1993, respondent filed its return of income and claimed deduction under Section 80-I of the Act amounting to Rs. 18.11 lakhs. The said return was processed by the Assessing Officer under Section 143(3) of the Act vide order dated 24.11.1995 and the said claim was allowed.
4. Whereas, in ITA No. 53 of 2008, respondent filed its return of income and claimed deduction under Section 80-I of the Act amounting to Rs. 29,23,410/-. The said return was processed by the Assessing Officer under Section 143(3) of the Act vide order dated 30.10.1996 and the claim was allowed.
5. Thereafter, the facts, common to both the appeals, are that on 10th February, 1998, the CIT issued a notice to the respondents u/s 263 of the Act to withdraw the deduction allowed u/s 80-I of the Act in view of Hon'ble Bombay High Court decision in the case of CIT Vs. Deejay Hatcheries 211 ITR 652. The respondent filed a detailed reply to the said notice and inter alia contended that since there is divergence of opinion on the issue of ::: Downloaded on - 15/04/2017 20:59:15 :::HCHP 3 deduction as evident from Hon'ble Andhra Pradesh High Court .
decision in the case of CIT Vs. Venkateshwara Hatcheries Ltd 174 ITR 231, proceedings under section 263 of the Act be dropped. The CIT vide its order dated 27th March, 1998 passed a detailed order considering the issue and deciding to allow the claim u/s 80-I of the of Act.
6. On 16th September, 1999, the assessing officer passed rt an order u/s 154 of the Act to rectify its order u/s 143(3) by withdrawing the deduction u/s 80-I of the Act in view of the Hon'ble Supreme Court decision in the case Venkateshwara Hatcheries (supra) decided on 24.3.1999. The said order was challenged unsuccessfully before the first appellate authority.
7. On appeal, the Tribunal vide its order dated 23.2.2005 held that the assessing officer was not empowered to pass order u/s 154 of the Act to withdraw the deduction u/s 80-I of the Act since the said issue was considered and decided by the CIT u/'s 263 of the Act and hence the action of the assessing officer was without jurisdiction as per section 154(1A) of the Act. The tribunal in its order observed that CIT could have rectified its order u/s 263 of the Act since the said order was not apparently correct after the decision of the Hon'ble Supreme Court in the case of Venkateshwara Hatcheries (supra). The Tribunal accordingly quashed the order before them i.e. order u/s 154 of the Act.
::: Downloaded on - 15/04/2017 20:59:15 :::HCHP 48. The revenue challenged the aforesaid order of the .
Tribunal by filing appeals before this Court. The said appeals were numbered as 29/2005 and 30/2005.
9. However, before any decision could be rendered in the aforesaid appeal, CIT again on 26.5.2006 initiated fresh of proceedings u/s 263 of the Act to revise the assessment order passed u/s 143(3) of the Act allowing deduction u/s 80-I of the Act.
rt The basis of the notice was once again the judgment of the Hon'ble Apex Court in case of Vankateshwara Hatcheries (supra). The CIT further sought to rely on section 263(3) to confer jurisdiction on it and this notice was not based on the Tribunal's order dated 23.2.2005 although same was available on record. The respondent assessee filed a detailed reply to the said notice inter alia contending that the notice is bad in law on various grounds.
10. On 9th August, 2006, the CIT after considering the reply of the respondent assessee passed an order u/s 263 of the Act rejecting all the contentions of the assessee and set aside the original assessment order dated 24th November,1995 denying the deduction allowed u/s 80-I of the Act on the ground that same constitutes mistake apparent from record in the light of Supreme Court decision in the case of Venkateshwara Hatcheries (supra).
The CIT also relied on Section 263 (3) of the Act to justify its order and further relied on Tribunal's order dated 23.2.2005.
11. The respondent assessee challenged the aforesaid order before the Tribunal who vide its order dated 18.1.2008 held ::: Downloaded on - 15/04/2017 20:59:15 :::HCHP 5 that the observations in the Tribunal's earlier order passed u/s 263 .
of the Act did not constitute 'finding or direction' so as to lift the time limit available to pass order u/s 263 (2) of the Act and making provisions of Section 263(3) of the Act applicable.
12. The Tribunal applied the test laid down by the Supreme of Court in the case of Income Tax Officer Vs. Murlidhar Bhagwan Dass 52 ITR 335 (SC) and Rajinder Nath Vs. CIT 120 ITR 14 (SC) rt to the facts of the instant case to quash the order u/s 263 of the Act dated 9th August, 2006, which order was assailed before the ITAT.
13. However, after filing of the instant appeals, this court vide order dated 26.10.2009 decided ITA Nos. 29 and 30 of 2005 and the appeals filed by the revenue were ordered to be dismissed.
We have heard the learned counsel for the parties and have gone through the material placed on record.
14. Though a number of contentions have been raised on either sides, but we find that those really need not be adverted to and have rather been rendered academic in view of the pronouncements made by this court in ITA Nos.29 and 30 of 2005.
15. The issue involved in ITA Nos. 29 and 30 of 2005 emanated from the orders earlier passed in these proceedings by the ITAT on 23.2.2005, whereby the rectification order passed in respect of the Assessment years 1993-94 and 1994-95 were assailed by the revenue on the grounds taken therein. On 2.9.2005 ::: Downloaded on - 15/04/2017 20:59:15 :::HCHP 6 these appeals were admitted on the following substantial questions .
of law:
"1.Whether on the facts and circumstances of the case the Hon'ble Tribunal was right in accepting the additional ground raised by the assessee after a lapse of more than 5 years, when such ground was not raised before the CIT of (Appeals) or the AO, and the period for taking remedial action u/s 154/147 by the CIT/AO had also expired?.
2. Whether on the facts and circumstances of the case the rt Hon'ble Tribunal was right in law in holding that the A.O could not rectify his order u/s 143(30 since the CIT had considered the matter u/s 263, whereas in fact the CIT, after considering the facts of the case, had refused to interfere with the order passed by the A.O and had dropped the proceedings u/s 263?.
3. Whether on the facts and in the circumstances of the case the order passed by the CIT u/s 263 could be termed as matter considered and decided by the CIT, when the proceedings initiated by him had been dropped?".
16. Thereafter vide order dated 26.10.1999, the appeals were dismissed by recording the following reasons:
"8. Now when order passed by a lower forum or court is subjected to appellate or revisional jurisdiction of a superior forum or court and a final verdict about such order is given, as in the present case, the lower forum or court cannot review or rectify that order, even if the appellate/revisional forum/court happens to uphold such original order. Reason is that such order merges into the order of appellate /revisonal authority.
9.In view of above stated position, we answer all the aforesaid questions against the appellant and consequently dismiss the appeals."::: Downloaded on - 15/04/2017 20:59:15 :::HCHP 7
17. It would be evident from the aforesaid findings that while .
invoking the doctrine of merger, this court held that once an order of the lower forum or court is subjected to appellate or revisional jurisdiction of a superior forum or court and a final verdict about such order is given, the lower forum or court cannot review or rectify of that order, even if the appellate/ revisional forum/court happens to uphold such original order.
rt
18. Once the order passed by CIT on 23.2.2005 is held to be final, then all the consequential proceedings initiated by the authorities below thereafter would be deemed to be non est and without jurisdiction. Meaning thereby that none of the authorities including CIT could have thereafter passed the order dated 9.8.2006, thereby setting aside the original assessment made on 30.11.1996 and thereafter directed the Assessing Officer to complete the same afresh.
19. Thus, it can safely be concluded that the proceedings initiated by the revenue under section 263 that too after the order dated 23.2.2005 are clearly without jurisdiction in view of aforesaid decision rendered in ITA Nos. 29 and 30 of 2005 (supra), which decision admittedly has attained finality.
20. In addition to the aforesaid, it has also been noticed that the substantial questions of law framed in these appeals are virtually identical to those framed in ITA Nos. 29 and 30 of 2005 and the same having been already answered against the revenue are not open to ::: Downloaded on - 15/04/2017 20:59:15 :::HCHP 8 challenge in these appeals, or else, it would amount to sitting over the .
decision already rendered in ITA Nos. 29 and 30 of 2005.
21. Having said so, the substantial questions of law are answered against the revenue.
Consequently, there is no merit in this appeal and the of same is dismissed leaving the parties to bear their costs.
rt (Mansoor Ahmad Mir)
Chief Justice.
(Tarlok Singh Chauhan),
Judge.
August 8, 2016
(sl)
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