ITO 4(2)(1), v. PARKLIGHT INVESTMENT P. LTD,

MA 163/MUM/2010 | 2002-2003
Pronouncement Date: 14-05-2010 | Result: Allowed

Appeal Details

RSA Number 16319924 RSA 2010
Assessee PAN AAACP9065D
Bench Mumbai
Appeal Number MA 163/MUM/2010
Duration Of Justice 2 month(s) 3 day(s)
Appellant ITO 4(2)(1),
Respondent PARKLIGHT INVESTMENT P. LTD,
Appeal Type Miscellaneous Application
Pronouncement Date 14-05-2010
Appeal Filed By Department
Order Result Allowed
Bench Allotted K
Tribunal Order Date 14-05-2010
Assessment Year 2002-2003
Appeal Filed On 11-03-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES K MUMBAI BEFORE SHRI D.MANMOHAN VP AND SHRI R.S.SYAL AM M.A.NO.163/MUM/2010 (ARISING OUT OF ITA NO.656/MUM/2008 : ASST.YEAR 200 2-2003) THE INCOME TAX OFFICER WARD 4(2)(1) MUMBAI. VS. M/S.PARKLIGHT INVESTMENT PRIVATE LIMITED BOMBAY MUTUAL CHAMBERS BLOCK NO.36 3 RD FLOOR MUMBAI 400 023. PA NO.AAACP9065D. (APPLICANT) (RESPONDENT) APPLICANT BY : SHRI MOHD. USMAN RESPONDENT BY : SHRI REEPAL G.TRALSHAWALA O R D E R PER R.S.SYAL AM : THIS MISCELLANEOUS APPLICATION U/S.254(2) OF THE IN COME-TAX ACT 1961 HAS BEEN MOVED BY THE REVENUE PRAYING FOR THE RECTIFICA TION OF THE ORDER OF THE TRIBUNAL DATED 28.07.2009 IN ITA NO.656/MUM/2008. THE ONLY ISSUE RAISED IN THIS PETITION IS AGAINST THE ALLOWING OF DEPRECIATION ON BOMBAY STOCK EXCHANGE MEMBERSHIP CARD. THE LD. DR STATED THAT THE TRIBUNA LS VIEW OF GRANTING THE RELIEF TO THE ASSESSEE BY WAY OF DEPRECIATION ON BSE MEMBE RSHIP CARD HAS BECOME ERRONEOUS IN THE LIGHT OF THE SUBSEQUENT JUDGMENT O F THE HONBLE JURISDICTIONAL HIGH COURT JUDGMENT IN CIT VS. TECHNO SHARES AND ST OCKS LTD. [SINCE REPORTED AT (2010) 323 ITR 69 (BOM)]. 2. IT IS SEEN THAT THE TRIBUNAL ORDER GRANTING DEPRECIATION ON BSE MEMBERSHIP CARD WAS PASSED PRIOR TO THE JUDGMENT RENDERED BY THE HONBLE JURISDICTIONAL HIGH COURT HOLDING THAT NO DEPRECIATION CAN BE GRA NTED. THERE IS NO CONFLICT ON THE POINT THAT AS PER THIS JUDGMENT THE BENEFIT OF DE PRECIATION ON BSE MEMBERSHIP CARD CAN NO MORE BE EXTENDED TO THE ASSESSEE. NOW THE QUESTION ARISES AS TO WHETHER A SUBSEQUENT JUDGEMENT RENDERED BY THE HON BLE JURISDICTIONAL HIGH COURT MA NO.163/MUM/2010 M/S.PARKLIGHT INVESTMENT PRIVATE LIMITED. 2 CAN BE CONSIDERED FOR TREATING THE EARLIER CONTRARY ORDER OF THE TRIBUNAL AS ERRONEOUS LIABLE FOR RECTIFICATION U/S.254(2) OF TH E ACT. 3. IN THIS CONTEXT IT MAY BE RELEVANT TO NOTICE TH E FOLLOWING OBSERVATION OF THE HONBLE APEX COURT IN THE CASE OF ACIT VS. SAURASHTRA KUTCH STOCK EXCHANGE LTD. [(2008) 305 ITR 227 (SC)] :- THE CORE ISSUE THEREFORE IS WHETHER NON-CONSIDER ATION OF A DECISION OF JURISDICTIONAL COURT (IN THIS CASE A DECISION OF THE HIGH COURT OF GUJARAT) OR OF THE SUPREME COURT CAN BE SAID TO BE A MISTAKE APPARENT FROM THE RECORD? IN OUR OPINION BOTH T HE TRIBUNAL AND THE HIGH COURT WERE RIGHT IN HOLDING THAT SUCH A MISTAKE CAN BE SAID TO BE A MISTAKE APPARENT FROM THE RECORD WHICH CO ULD BE RECTIFIED UNDER S.254(2). A SIMILAR QUESTION CAME UP FOR CONSIDERATION BEFOR E THE HIGH COURT OF GUJARAT IN SUHRID GEIGY LTD. VS. COMMR. OF SURTAX ( SUPRA). IT WAS HELD BY THE DIVISION BENCH OF THE HIGH COURT THAT IF THE POINT IS COVERED BY A DECISION OF THE JURISDICTIONAL COURT R ENDERED PRIOR OR EVEN SUBSEQUENT TO THE ORDER OF RECTIFICATION IT COULD BE SAID TO BE MISTAKE APPARENT FROM THE RECORD UNDER S.254(2) O F THE ACT AND COULD BE CORRECTED BY THE TRIBUNAL. IN OUR JUDGEMENT IT IS ALSO WELL-SETTLED THAT A JUDICIAL DECISION ACTS RETROSPECTIVELY . ACCORDING TO BLACKSTONIAN THEORY IT IS NOT THE FUNCTION OF THE COURT TO PRONOUNCE A `NEW RULE BUT TO MAINTAIN AND EXPOUND THE `OLD ONE. IN OTHER WORDS JUDGES DO NO T MAKE LAW THEY ONLY DISCOVER OR FIND THE CORRECT LAW. THE LAW HAS ALWAYS BEEN THE SAME. IF A SUBSEQUENT DECISION ALTERS THE EARLIER O NE IT (THE LATER DECISION) DOES NOT MAKE NEW LAW. IT ONLY DISCOVERS THE CORRECT PRINCIPLE OF LAW WHICH HAS TO BE APPLIED RETROSPECT IVELY. TO PUT IT DIFFERENTLY EVEN WHERE AN EARLIER DECISION OF THE COURT OPERATED FOR QUITE SOME TIME THE DECISION RENDERED LATER ON WOU LD HAVE RETROSPECTIVE EFFECT CLARIFYING THE LEGAL POSITION WHICH WAS EARLIER NOT CORRECTLY UNDERSTOOD. 4. FROM THE ABOVE ENUNCIATION OF LAW BY T HE HIGHEST COURT OF THE LAND IT BECOMES DISCERNIBLE THAT THE JUDICIAL DECISIONS OPE RATE RETROSPECTIVELY AND IF A MA NO.163/MUM/2010 M/S.PARKLIGHT INVESTMENT PRIVATE LIMITED. 3 POINT IS COVERED BY THE DECISION OF THE JURISDICTIO NAL HIGH COURT RENDERED BEFORE OR AFTER THE ORDER THE CONTRARY VIEW HAS TO MAKE THE SPACE FOR THE HIGHER WISDOM TO PREVAIL BY WAY OF RECTIFICATION OF THE EARLIER ORDE R. IF THE VIEW POINT OF THE LD. AR IS ACCEPTED THAT THE SUBSEQUENT JUDGMENT BE IGNORED FO R THE PURPOSES OF RECTIFICATION OF THE EARLIER CONTRARY ORDER IT WOULD MEAN THAT T HE EARLIER ORDER WOULD BE HELD IN ACCORDANCE WITH THE LAW AS ON THE DATE OF PASSING O F ITS ORDER. IT WOULD THEREFORE MEAN THAT THE SUBSEQUENT JUDGMENT OF THE HONBLE S UPREME COURT OR THE JURISDICTIONAL HIGH COURT IS NOT DECLARATORY BUT PR OSPECTIVE WHICH IS CONTRARY TO THE SETTLED LEGAL POSITION. 5. WE ARE NOT OBLIVIOUS OF THE FACT TH AT IN CERTAIN OTHER CASES IT HAS BEEN HELD THAT THE LATER JUDGMENT CANNOT CONSTITUTE THE BASIS FOR RECTIFICATION OF THE CONTRARY ORDER PASSED PRIOR TO SUCH JUDGMENT. BUT IT IS RELEVANT TO MENTION THAT IT IS NOT THE ONLY VIEW ON THE POINT. THE FULL BENCH OF THE PUNJAB & HARYANA HIGH COURT IN CIT VS. SMT.ARUNA LUTHRA[(2001) 252 ITR 76 (P&H) (F B)] HAS HELD THAT THE RECTIFICATION OF AN ORDER CAN BE INITIATED ON THE BASIS OF AN ORDER PASSED BY THE JURISDICTIONAL HIGH COURT OR THE SUPREME COURT SUBS EQUENT TO THE ORDER PASSED BY THE AUTHORITY UNDER THE ACT. SIMILAR VIEW HAS BEEN EXPRESSED BY THE HONBLE KERALA HIGH COURT IN KIL KOTAGIRI TEA AND COFFEE ESTATES CO. LTD. VS. I NCOME TAX APPELLATE TRIBUNAL AND OTHERS [(1988) 174 ITR 579 ( KER.)] BY HOLDING THAT THE ORDER BASED UPON THE INTERPRETATION OF LAW FOUND WR ONG SUBSEQUENTLY DISCLOSED MISTAKES APPARENT FROM RECORD WHICH IS RECTIFIABLE. IT HAS BEEN HELD THAT WHERE AN ORDER IS PASSED BY AN AUTHORITY ON THE BASIS OF A P ARTICULAR DECISION REVERSAL OF SUCH DECISION IN FURTHER PROCEEDINGS WILL JUSTIFY A REC TIFICATION OF ORDER PASSED ON EARLIER DECISION. SIMILAR VIEW HAS BEEN TAKEN IN THE FOLLOW ING CASES ALSO M.K.KUPPURAJ VS. ITO (1995) 211 ITR 853 (MA D) SURAT TEXTILES MILLS LTD. VS. CIT (1971) 80 ITR 1 (GUJ) MA NO.163/MUM/2010 M/S.PARKLIGHT INVESTMENT PRIVATE LIMITED. 4 SOUTHERN INDUSTRIAL CORPORATION LTD. VS. CIT (2002) 258 ITR 481 (MAD) 6. MOREOVER WITH THE ADVENT OF THE JUDGMENT BY THE HONBLE SUMMIT COURT IN SAURASHTRA KUTCH STOCK EXCHANGE LTD. (SUPRA) LAYING DOWN CLEARLY IN FAVOUR OF RECTIFICATION WE HAVE NO HESITATION IN COMING TO THE CONCLUSION THAT THE JUDGMENT RENDERED BY THE HONBLE SUPREME COURT OR T HE HONBLE JURISDICTIONAL HIGH COURT RENDERS THE EARLIER CONTRARY ORDER PASSE D BY THE TRIBUNAL ERRONEOUS WHICH NEEDS TO BE RECTIFIED U/S.254(2) OF THE ACT. IT IS NOTWITHSTANDING THE FACT THAT SUCH JUDGMENT WAS PRONOUNCED BEFORE OR AFTER THE PA SSING OF THE ORDER BY THE TRIBUNAL. 7. THE LEARNED COUNSEL FOR THE ASSESSEE THEN ARGUED THAT THE TRIBUNAL WHILE ACCEPTING THE ASSESSEES CLAIM OF ALLOWING DEPRECIA TION ON THE BOMBAY STOCK EXCHANGE MEMBERSHIP CARD RELIED ON THE ORDER PASSED BY THE COORDINATE BENCH IN ASSESSEES OWN CASE IN ASSESSMENT YEAR 2001-2002 A GAINST WHICH ORDER NO MISCELLANEOUS APPLICATION WAS FILED BY THE REVENUE . HE SUBMITTED THAT THE REVENUE INSTEAD PREFERRED TO FILE A DIRECT APPEAL T O THE HONBLE HIGH COURT AGAINST SUCH ORDER WHICH WAS STILL PENDING. IN SUPPORT OF HIS CONTENTION THAT THE IMPUGNED ORDER CANNOT BE RECALLED HE RELIED ON THE JUDGEME NT OF THE HONBLE SUPREME COURT IN THE CASE OF UNION OF INDIA AND OTHERS VS. KAUMUDINI NARAYAN DAL AL AND ANOTHER [(2001) 249 ITR 219 (SC)]. 8. WE ARE NOT CONVINCED WITH THE VIEW POINT CANVASS ED BY THE LEARNED A.R. FOR THE REASON THAT THE ISSUE RAISED IN THIS M.A. IS NO MORE RES INTEGRA IN VIEW OF THE JUDGEMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN CIT VS. TECHNO SHARES & STOCKS LIMITED(SUPRA) . ANY ORDER PASSED BY A JUNIOR AUTHORITY CONTRARY T O THE VIEW EXPRESSED BY THE HONBLE JURISDICTIONAL HIGH COURT BECOMES ERRONEOUS AMENABLE TO RECTIFICATION. IF WE ACCEPT THE CONTENTION RAISE D ON BEHALF OF THE ASSESSEE THAT NO RECTIFICATION BE EFFECTED ON THE GROUND THAT NO M.A . WAS FILED AGAINST THE EARLIER MA NO.163/MUM/2010 M/S.PARKLIGHT INVESTMENT PRIVATE LIMITED. 5 ORDER IT WOULD MEAN THAT THE VIEW TAKEN IN THE PRES ENT ORDER ABOUT THE ALLOWABILITY OF DEPRECIATION OF BSE MEMBERSHIP CARD IS CORRECT WHICH IS NOT THE CASE IN THE LIGHT OF THE JUDGEMENT OF THE JURISDICTIONAL HIGH C OURT. WE FURTHER NOTE THAT THE JUDGMENT IN THE CASE OF KAUMUDINI NARAYAN DALAL AND ANOTHER (SUPRA) DOES NOT SUPPORT THE CASE OF THE ASSESSEE IN AS MUCH AS THE REVENUE HAS ALREADY FILED APPEAL AGAINST THE ORDER OF THE TRIBUNAL FOR THE EARLIER Y EAR AS STATED BY THE LD. AR HIMSELF WHICH IS PENDING FOR DISPOSAL. APART FROM THE NARRA TION OF THIS FACTUAL POSITION THE LD. AR FAILED TO POINT OUT AS TO HOW THE JUDGMENT I N THE CASE OF TECHNO SHARES & STOCKS LIMITED(SUPRA) WAS NOT APPLICABLE TO THE FACTS OF THE CASE. WE TH EREFORE REFUSE TO ACCEPT THIS ARGUMENT. 9. UNDER THESE CIRCUMSTANCES WE ARE OF THE CONSIDERED OPINION THAT THE IMPUGNED ORDER PASSED BY THE TRIBUNAL SUFFERS FROM INFIRMITY INASMUCH AS IT IS IN CONTRADICTION TO WHAT HAS BEEN SUBSEQUENTLY LAID DO WN BY THE HONBLE JURISDICTIONAL HIGH COURT IN TECHNO SHARES & STOCKS LIMITED (SUPRA) . THE SAME DESERVES AND IS HEREBY RECTIFIED. WE ORDER FOR THE SUSTENANCE OF THE DISALLOWANCE OF DEPRECIATION OF RS.18 59 625 MADE BY THE ASSESSI NG OFFICER AS CONFIRMED BY THE LEARNED CIT(A). CONSEQUENTLY THE APPEAL FILED BY TH E ASSESSEE WOULD STAND PARTLY ALLOWED. 10. IN THE RESULT THE MISCELLANEOUS APPLICATION IS ALLOWED. ORDER PRONOUNCED ON THIS 14 TH DAY OF MAY 2010. SD/- SD/- ( D.MANMOHAN ) ( R.S.SYAL ) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI : 14 TH MAY 2010. DEVDAS* MA NO.163/MUM/2010 M/S.PARKLIGHT INVESTMENT PRIVATE LIMITED. 6 COPY TO : 1. THE APPLICANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT(A) - IV MUMBAI. 5. THE DR/ITAT MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR ITAT MUMBAI.