JT. CIT SP. RG 53, v. GRASIN INDUSTRIES LTD,

MA 247/MUM/2010 | 1995-1996
Pronouncement Date: 25-03-2011 | Result: Dismissed

Appeal Details

RSA Number 24719924 RSA 2010
Assessee PAN AAACG4464B
Bench Mumbai
Appeal Number MA 247/MUM/2010
Duration Of Justice 11 month(s) 13 day(s)
Appellant JT. CIT SP. RG 53,
Respondent GRASIN INDUSTRIES LTD,
Appeal Type Miscellaneous Application
Pronouncement Date 25-03-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted J
Tribunal Order Date 25-03-2011
Assessment Year 1995-1996
Appeal Filed On 12-04-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH J MUMBAI BEFORE SHRI R.S.SYAL (A.M) & SHRI N.V.VASUDEVAN(J .M) M.A.NO.247/MUM/2010 (ARISING OUT OF ITA NO.6253/MUM/99) JT. COMMISSIONER OF INCOME TAX SPECIAL BENCH 53 ROOM NO.639 AAYKAR BHAVAN MK ROAD MUMBAI 20. (APPLICANT) VS. GRASIM INDUSTRIES LTD. 3 RD FLOOR CENTURY BHAVAN DR.A.B.ROAD WORLI MUMBAI 400 051 PAN: AAACG 4464B (RESPONDENT) APPLICANT BY : SHRI NARESH KUMAR BALODIA RESPONDENT BY : SHRI JEHANGIR D. MISTRY ORDER PER N.V.VASUDEVAN J.M THIS IS A MISCELLANEOUS APPLICATION FILED BY THE RE VENUE U/S.254(2) OF THE INCOME TAX ACT 1961 (THE ACT) PRAYING FOR REC TIFICATION OF CERTAIN APPARENT ERRORS IN THE ORDER OF THE TRIBUNAL. 2. THE ASSESSEE IS A COMPANY. IT IS ENGAGED IN MAN UFACTURING AND TRADING ACTIVITIES. THE ASSESSEE HAD FILED APPEAL BEFORE THE TRIBUNAL AGAINST THE ORDER DATED 16-09-1999 OF THE CIT(A)-XII MUMBA I FOR A.Y.1995-96 BEING ITA NO.6253/MUM/99. THE ASSESSEE SOUGHT TO RAISE A N ADDITIONAL GROUND BEFORE THE TRIBUNAL APART FROM THE GROUNDS URGED IN THE MEMORANDUM OF GROUNDS OF APPEAL IN FORM NO.36. THE ADDITIONAL GR OUND WAS RAISED CLAIMING THAT SALES TAX EXEMPTION THAT THE ASSESSEE OBTAINED UNDER VARIOUS SCHEMES OF STATE GOVERNMENT WAS CAPITAL RECEIPT NOT CHARGEA BLE TO TAX. THE TRIBUNAL DEALT WITH THE ADMISSIBILITY OF THE ADDITIONAL GROU ND AND THE MERITS OF THE GRIEVANCE PROJECTED BY THE ASSESSEE IN THE ADDITION AL GROUND AS FOLLOWS: M.A.NO.247/MUM/2010 2 35. THE ASSESSEE HAS FILED AN APPLICATION SEEKING TO RAISE AN ADDITIONAL GROUND OF APPEAL. THE ADDITIONAL GROUND OF APPEAL SOUGHT TO BE RAISED BY THE ASSESSEE RELATES TO THE CLAIM MADE BY THE ASSESSEE ON ACCOUNT OF SALES TAX EXEMPTION WHICH THE ASSESSEE RECEIVED WAS CAPITAL RECEIPT AND NOT CHARGEABLE TO TAX. ADMITTED LY THIS ISSUE WAS NEITHER RAISED BY THE ASSESSEE BEFORE THE AO OR THE CIT(A). THIS QUESTION RAISED BY THE ASSESSEE FOR THE FIRST TIME BEFORE THE TRIBUNAL. IN VIEW OF THE DECISION OF THE HONBLE SUPREME COUR T IN THE CASE OF NTPC 229 ITR 383 (SC) THE ASSESSEE IS ENTITLED TO URGE QUESTION OF LAW ON THE BASIS OF FACTS ALREADY AVAILABLE ON RECO RD. THE SCHEME UNDER WHICH THE SALES TAX EXEMPTION WAS RECEIVED BY THE ASSESSEE HAS TO BE ANALYSED AND TO FIND IF THE SUBSIDY IN QUESTI ON IS CAPITAL RECEIPT OR REVENUE RECEIPT. IT WAS ALSO SUBMITTED THAT ON I DENTICAL SCHEME VARIOUS DECISIONS OF HONBLE HIGH COURTS EXIST AND THE ISSUE CAN BE ADJUDICATED ON THE BASIS OF THE RATIOS LAID DOWN IN THE AFORESAID DECISIONS THE CASE LAWS OF WHICH ARE AS UNDER:- I) RELIANCE INDUSTRIES LD. 88 ITD 272 (MUM)(SB) II) PONY SUGAR 308 ITR 392 (SC) III) PONY SUGAR 260 ITR 605(MAD) IV) PJ CHEMICAL 210 ITR 830 V) SADICHHA CHITRA 189 ITR 774(BOM) VI) CIT V. RUBY RUBBER WORKS 178 ITR 181 (KERALA) (SB) VII) CIT VS. PLASTICHEM 174 ITR 546 (MP) VIII) CIT VS. DUSAD INDS. 162 ITR 784(MP) IX) ASBESTOS CEMENT 203 ITR 358 35.1 THE LEARNED DR OPPOSED THE PRAYER FOR ADMISSIO N OF THE ADDITIONAL GROUND ON THE GROUND THAT THE ASSESSEE H AS NOT REVISED ITS RETURN OF INCOME MAKING THE AFORESAID CLAIM AND IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F GOETZ INDIA LTD. VS. CIT 284 ITR 323 (SC) SUCH PLEA CANNOT BE ENTE RTAINED AT THE INSTANCE OF THE ASSESSEE. 35.2 ON THIS OBJECTION THE LEARNED COUNSEL FOR TH E ASSESSEE BROUGHT TO OUR NOTICE THE DECISION OF THE HONBLE DELHI HIG H COURT IN THE CASE OF JAI PAROBOLIC SPRINGS LTD. VS. CIT 306 ITR 42(DEL.) WHEREIN THE DELHI HIGH COURT HAS HELD THAT THE POWER OF THE TRIBUNAL TO ENTERTAIN THE ADDITIONAL GROUND IS NOT IN ANY WAY RESTRICTED IN V IEW OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF GOETZ INDI A LTD. IN VIEW OF THE ABOVE WE ADMIT ADDITIONAL GROUND FOR ADJUDICAT ION. WE ARE HOWEVER OF THE VIEW THAT FOR ADJUDICATION OF THE A DDITIONAL GROUND THE AO HAS TO EXAMINE THE SCHEME UNDER WHICH THE SUBSID Y WAS RECEIVED AND THEREAFTER GIVE CONCLUSION REGARDING CLAIM MADE BY THE ASSESSEE. WE ARE THEREFORE OF THE OPINION THAT THE MATTER S HOULD BE REMANDED M.A.NO.247/MUM/2010 3 TO THE AO WITH A DIRECTION TO THE AO TO EXAMINE THE CLAIM OF THE ASSESSEE AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND DECIDE THE ISSUE. WE ORDER ACCORDINGLY. FOR STATIST ICAL PURPOSE THE ADDITIONAL GROUND OF ASSESSEE IS ALLOWED. 3. THE REVENUE ORIGINALLY FILED AN APPLICATION U/S. 254(2) OF THE INCOME TAX ACT 1961 (THE ACT) ON 12-4-2010 WHICH WAS NUM BERED AS MA 247/MUM/10. A LETTER DATED 3.2.2011 WAS FILED BY M R. ALOK SINGH ASST. COMMISIONER OF INCOME-TAX CIRCLE 6(3) MUMBAI ALON G WITH AN APPLICATION U/S.254(2) OF THE ACT IN WHICH IT HAS BEEN STATED THAT THE EARLIER APPLICATION WHICH WAS NUMBERED AS MA 247/MUM/10 DID NOT CONTAIN FULL FACTS AND THE APPLICATION ENCLOSED WITH THE LETTER DATED 3.2.2011 IS INTENDED IN PLACE OF THE EARLIER APPLICATION AND THAT A DECISION MAY BE RENDERED ON THE APPLICATION ENCLOSED WITH THE LETTER DATED 3.2.2011 IN PLACE OF THE EARLIER APPLICATION FILED ON 12.4.2010. WE WILL THEREFORE CONSIDER THE APPLICATION FILED ALONG WITH THE LETTER DATED 3.2.2011. 4. THE STAND TAKEN BY THE REVENUE IN THE APPLICATIO N IS AS FOLLOWS: 1. THE CLAIM OF THE ASSESSEE THAT IT RECEIVED A SUM O F RS.10 90 23 209/- BY WAY OF SALES TAX EXEMPTION AND THE FACT THAT T HE SAME IS SHOWN AS REVENUE RECEIPT FORMING PART OF SALES CREDITED IN T HE ACCOUNTS BY THE ASSESSEE AND OFFERED TO TAX IN THE RETURN OF INCOME FILED FOR AY 95-96 IS NOT DISCERNIBLE FROM THE ASSESSMENT RECORDS AND THEREFORE THE QUANTIFICATION OF THE SAME NEEDS FRESH INVESTIGATIO N INTO FACTS. 2. THE ASSESSEE NEVER RAISED THE ISSUE WITH REGARD TO NON-TAXABILITY OF SALES TAX EXEMPTION BEFORE THE AO OR CIT(A) AND N O DETAILS WERE SUBMITTED BY THE ASSESSEE ABOUT THE SAME. THE DETA ILS OF THE SALES MADE AND SALES TAX COLLECTED ARE NOT AVAILABLE ON R ECORD TO DETERMINE THE AMOUNT OF SALES TAX EXEMPTION IF ANY AS CLAIM ED BY THE ASSESSEE. 3. THE HONBLE ITAT HAS ADMITTED THE ADDITIONAL GROUND OF THE ASSESSE ON THE ABOVE ISSUE AND SET ASIDE THE ISSUE TO THE FILE OF AO TO EXAMINE THE ISSUE AFRESH AFTER AFFORDING OPPORTUNITY OF BEING H EARD TO THE ASSESSEE AND DECIDE THE ISSUE. THE ITAT WHILE GIVING THE AB OVE DIRECTION HAS NOT RECORDED ANY FINDING THAT ALL THE FACTS AND DET AILS OR SUFFICIENT EVIDENCE NECESSARY TO DECIDE THE CLAIM OF THE ASSE SSEE RAISED IN THE M.A.NO.247/MUM/2010 4 ADDITIONAL GROUND ARE AVAILABLE ON RECORDS OF THE AO OR THAT THE FACTS NECESSARY TO DECIDE THE QUESTION OF LAW HAVE BEEN F OUND BY THE REVENUE AUTHORITIES DURING THE COURSE OF ASSESSMENT OR THEREAFTER IN APPELLATE PROCEEDINGS BEFORE CIT(A) AND ARE DULY RE CORDED. THIS IS A CONDITION PRECEDENT BEFORE ADDITIONAL GROUND IS ADM ITTED. ACCORDING TO THE REVENUE THE CONDITION PRECEDENT TO ADMIT AN ADDITIONAL GROUND OF APPEAL RAISED FOR THE FIRST TIME BEFORE TRIBUNAL IS THAT ALL FACTS AND DETAILS NECESSARY TO DECIDE THE CLAIM ARE FOUND ON THE RECORDS OF THE REVENUE AUTHORITIES. 4. THE ASSESSEE HAD FILED ADDITIONAL EVIDENCE BEFORE T HE TRIBUNAL IN SUPPORT OF THE CLAIM MADE IN THE ADDITIONAL GROUND OF APPEAL. ACCORDING TO THE REVENUE THE ASSESSEE CANNOT BE PE RMITTED TO FILE ADDITIONAL EVIDENCE OR FURTHER EVIDENCE OR FRESH DE TAILS IN SUPPORT OF ADDITIONAL GROUND RAISED BEFORE ITAT. IT IS FURTHE R AVERRED THAT FRESH INVESTIGATION INTO FACTS TO DECIDE ADMISSIBILITY OF AN ADDITIONAL CLAIM RAISED FOR THE FIRST TIME BEFORE ITAT CANNOT BE PER MITTED. 5. THE ASSESSEE HAD FILED A PAPER BOOK AT THE TIME OF HEARING OF THE ORIGINAL APPEAL IN WHICH THE FOLLOWING DOCUMENTS HA D BEEN FILED: S.NO. PARITUCLARS PAGE NO. UNIT. 1. DETAILS OF SALES TAX EXEMPTION CLAIMED AS CAPITAL RECEIPT IN FY 95 1 VIKRAM ISPAT/PAC/CSA/MEMBRANE 2. PACKAGE SCHEME OF INCENTIVE 1988 DATED 1/10/1988 BY STATE OF MAHARASHTRA 02-16 VIKRAM ISPAT 3. COPY OF CERTIFICATE OF ENTITLEMENT NO.N29M/ 136/LM/660 ISSUED BY DY. COMMISSIONER OF SALES TAX (INCENTIVE & ENFORCEMENT) SALES TAX DEPARTMENT MAHARASHTRA. 17-29 VIKRAM ISPAT 4. ELIGIBILITY CERTIFICATE FOR SALES TAX INCENTIVE ISSUED BY SICOM 30-53 VIKRAM ISPAT 5. CERTIFICATE OF REGISTRATION U/S. 22 AND 22A OF THE BOMBAY SALES TAX ACT 54-56 VIKRAM ISPAT 6. SALES TAX ASSESSMENT ORDER F.Y. 1995 57-63 VIKRAM ISPAT 7. NEW INDUSTRIES NOTIFICATION NO.A-3- 11-86(74)-ST-V DATED 16/10/1986 UNDER MADHYA PRADESH GENERAL SALES TAX ACT 1958 64-69 PAC 8. SALES TAX ASSESSMENT ORDER FOR F.Y 1995- STATE SALES TAX 70-74 PAC M.A.NO.247/MUM/2010 5 9. SALES TAX ASSESSMENT ORDER FOR F.Y. 1995- CENTRAL SALES TAX 75-78 PAC 10. ENTRY TAX NOTITIACTION NO.422-6596 DATED 09/02/1977 UNDER MADHYA PRADESH STHANIYA KSHETRA ME MAL KE PRAVESH PAR KAR ADHINIYAM 1976 78-82 PAC & CSA 11. ENTRY TAX ASSESSMENT ORDER FOR F.Y 1995 83-87 PAC 12. ENTRY TAX ASSESSMENT ORDER FOR FY 1995 88-92 CSA 13. NEW INDUSTRY NOTIFICATION NO.A-3-24- 94-ST-V(112) DATED 6/10/1994 UNDER MADHYA PRADESH STHANIYA KHHETRA ME MAL KE PRAVESH PAR KAR ADHINIYAM 1976 93-96 MEMBRANE 14. ENTRY TAX ASSESSMENT ORDER FOR FY 1995 97-102 MEMBRANE THE ABOVE DOCUMENTS WERE NOT SUBMITTED BEFORE THE LOWER AUTHORITIES. IT HAS BEEN CLARIFIED BY THE ASSESSEE THAT THESE WE RE NOT FILED BEFORE THE LOWER AUTHORITIES. OUT OF THE ABOVE PAGE-1 CO NTAINS THE FOLLOWING DETAILS: NAME OF UNIT SALES TAX AMOUNT VIKRAM ISPAT ALIBAUG 107 21 823 CHEMICAL DIVISION NAGDA POLY ALUMINIUM CHLORIDE CST POLY ALUMINIUM CHLORIDE-STATE POLY ALUMINIM CHLORIDE ENTRY CHLORO SULPHONIC ACID DIVISION- ENTRY TAX CAUSTIC SODA MEMBRANCE SALE ENTRY TAX 1 162 868 375 026 135 604 30 023 101 865 TOTAL 109 023 209 THIS DOCUMENT ACCORDING TO THE REVENUE IS NOT CERTI FIED. THE OTHER DOCUMENTS ARE INCENTIVE SCHEMS OF THE STATE OF MAHA RASTRA M.P. BUT NEVERTHELESS ADDITIONAL EVIDENCE. 6. IT HAS FURTHER BEEN CONTENDED THAT THE ASSESSEE HA S NOT FILED ANY APPLICATION TO ADMIT THE DOCUMENTS FILED IN THE PAP ER BOOK IN SUPPORT OF THE ADDITIONAL GROUND OF APPEAL AS ADDITIONAL EV IDENCE. EVEN THE TRIBUNAL IN ITS ORDER HAS NOT DIRECTED THAT THESE D OCUMENTS ARE ADMITTED AS ADDITIONAL EVIDENCE ON ITS OWN MOTION A S CONTEMPLATED M.A.NO.247/MUM/2010 6 RULE 29 OF THE ITAT NOR HAS IT HAS HELD THAT THESE DOCUMENTS ARE NOT TO BE ADMITTED AS ADDITIONAL EVIDENCE. HAVING MADE TH E ABOVE ALLEGATION THE REVENUE NEVERTHELESS CONTENTS IN THE APPLICATI ON THAT THE TRIBUNAL COMMITTED A MISTAKE IN ADMITTING THE ADDITIONAL EVI DENCE. TO THIS EXTENT THERE IS A CONTRADICTION IN THE STAND TAKEN BY THE REVENUE. BE THAT AS IT MAY. 7. THE FINAL CONCLUSION OF THE REVENUE IN THE APPLICAT ION IS THAT THE HONBLE SUPREME COURT IN THE CASE OF NTPC LTD. 229 ITR 283 (SC) HELD THAT ADDITIONAL GROUND RAISED FOR THE FIRST TIME BE FORE TRIBUNAL CAN BE ADMITTED PROVIDED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE ADDITIONAL GROUND ARE AVAILABLE ON RECORD. IT IS T HE PLEA OF THE REVENUE THAT IN THE PRESENT CASE THE FACTS NECESSARY FOR A DJUDICATION OF THE ADDITIONAL GROUND OF APPEAL ARE NOT AVAILABLE ON RE CORD AND THEREFORE THE TRIBUNAL OUGHT TO HAVE REFUSED TO ADMIT THE ADD ITIONAL GROUND OF APPEAL. THE REVENUE HAS PRAYED THAT THE ABOVE MIST AKE IN THE ORDER OF THE TRIBUNAL SHOULD BE SUITABLY RECTIFIED. 5. WE HAVE HEARD THE SUBMISSIONS OF THE LEARNED D.R . THE LEARNED D.R. REITERATED THE STAND OF THE REVENUE AS REFLECTED IN THE APPLICATION U/S.254(2). IT WAS FURTHER SUBMITTED THAT ADMITTEDLY THE DOCUME NTS IN SUPPORT OF THE ADDITIONAL GROUND OF APPEAL WERE NOT AVAILABLE ON R ECORD. THEREFORE THE FACTS NECESSARY FOR ADJUDICATION OF THE ADDITIONAL GROUND OF APPEAL WAS NOT AVAILABLE ON RECORD. THE TRIBUNAL THEREFORE OUGHT TO HAVE REFUSED TO ADMIT THE ADDITIONAL GROUND OF APPEAL RAISED FOR THE FIRS T TIME BY THE ASSESSEE BEFORE THE TRIBUNAL BECAUSE AS PER THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF NTPC LTD. 229 ITR 283 (SC) ADD ITIONAL GROUND RAISED FOR THE FIRST TIME BEFORE TRIBUNAL CAN BE ADMITTED PROV IDED THE FACTS NECESSARY FOR ADJUDICATION OF THE ADDITIONAL GROUND ARE AVAIL ABLE ON RECORD. 6. THE FURTHER CONTENTION OF THE LEARNED D.R. WAS T HAT THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF NTPC LTD. (SUP RA) WAS RENDERED IN THE CONTEXT OF THE LAW AS IT STOOD AT THE RELEVANT POIN T OF TIME. IN THIS REGARD HE FIRST POINTED OUT THAT THE DECISION IN THE CASE OF NTPC(SUPRA) WAS RENDERED M.A.NO.247/MUM/2010 7 BY THE HONBLE SUPREME COURT WITH REFERENCE TO A DI SPUTE RELATING TO AY 78- 79. ACCORDING TO HIM THE SCHEME OF LAW WITH REGARD TO ASSESSMENT OF INCOME AS IT PREVAILED PRIOR TO ITS SUBSTITUTION B Y THE DIRECT TAX LAWS (AMENDMENT) ACT 1987 W.E.F. 1-4-1989 WAS THAT U/S. 143(2) OF THE ACT THE ASSESSING OFFICER IF HE WAS NOT SATISFIED WITHOUT REQUIRING THE PRESENCE OF THE ASSESSE OR THE PRODUCTION OF EVIDENCE THAT THE RETURN IS CORRECT AND COMPLETE HE COULD REQUIRE PRESENCE OF ASSESSEE AND PRODUCTION OF EVIDENCE IN SUPPORT OF CLAIM MADE IN A RETURN OF INCOME. AC CORDING TO HIM W.E.F. 1-4- 89 U/S.143(2) OF THE ACT THE AO CAN CALL FOR THE PRESENCE OF THE ASSESSEE OR PRODUCTION OF EVIDENCE IN SUPPORT OF THE CLAIM MADE IN THE RETURN OF INCOME ONLY IF HE CONSIDERS IT NECESSARY OR EXPEDIENT TO E NSURE THAT THE ASSESSEE HAS NOT UNDERSTATED THE INCOME OR HAS NOT COMPUTED EXCE SSIVE LOSS OR HAS NOT UNDER-PAID THE TAX IN ANY MANNER. ACCORDING TO HIM THE POWERS OF THE AO PRIOR TO 1-4-89 TO CALL UPON THE ASSESSEE TO PRODUC E EVIDENCE IN SUPPORT OF THE CLAIM IN THE RETURN OF INCOME WAS MUCH WIDER VI Z. TO ENSURE THAT THE RETURN IS CORRECT AND COMPLETE WHEREAS AFTER 1-4-8 9 SUCH POWERS ARE RESTRICTED ONLY IN CASES OF UNDERSTATEMENT OF INCO ME COMPUTATION OF EXCESSIVE LOSS OR UNDERPAYMENT OF TAX. THEREFORE ACCORDING TO THE LEARNED D.R. AFTER 1-4-89 THE POWERS OF THE AO WHILE MAKIN G AN ASSESSMENT WHILE COMPLETING THE ORIGINAL ASSESSMENT BEING VERY LIMIT ED CANNOT BE ENLARGED BY THE TRIBUNAL BY ADMITTING ADDITIONAL GROUND WHI CH THE AO COULD NOT HAVE CONSIDERED WHILE COMPLETING THE ORIGINAL ASSESSMENT . ACCORDING TO THE LEARNED D.R. BECAUSE OF THE CHANGE IN THE POLICY OF THE GOVERNMENT IN THE MATTER OF MAKING ASSESSMENTS THE DECISION OF THE H ONBLE SUPREME COURT IN THE CASE OF NTPC(SUPRA) SHOULD BE APPLIED KEEPING I N VIEW THE ABOVE CHANGE. IT WAS FURTHER SUBMITTED BY HIM THAT THE HONBLE SU PREME COURT IN THE CASE OF GOETZ (INDIA)LTD. VS. CIT 284 ITR 323(SC) HAS HE LD THAT A CLAIM FOR DEDUCTION CANNOT BE ENTERTAINED BY AN ASSESSING OFF ICER OTHERWISE THAN BY WAY OF FILING A REVISED RETURN OF INCOME. THIS DEC ISION ACCORDING TO THE LEARNED D.R. WAS RENDERED IN RELATION TO A TAX DISP UTE PERTAINING TO AY 95-96 M.A.NO.247/MUM/2010 8 AND IS IN TUNE WITH THE CHANGE IN THE POLICY OF THE GOVERNMENT IN THE MATTER OF MAKING ASSESSMENTS REFERRED IN THE EARLIER PARAG RAPH OF THIS ORDER. ACCORDING TO HIM THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. JAI PARABOLIC SPRINGS LTD. 306 ITR 42 (DEL) HAS NO DOUBT EXPLAINED THE DECISION OF THE HONBLE SUPREME COURT IN THE CA SE OF GOETZ (INDIA) LTD. (SUPRA) IN THE LIGHT OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF NTPC (SUPRA) AND HAS HELD THAT AS LAID DOWN BY T HE HONBLE SUPREME COURT IN THE CASE OF NTPC(SUPRA) THE POWER OF THE T RIBUNAL IN DEALING WITH APPEALS IS EXPRESSED IN THE WIDEST POSSIBLE TERMS. THE PURPOSE OF THE ASSESSMENT PROCEEDINGS BEFORE THE TAXING AUTHORITIE S IS TO ASSESS CORRECTLY THE TAX LIABILITY OF AN ASSESSEE IN ACCORDANCE WITH LAW AND THAT THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF GOETZE (INDIA) LTD.(SUPRA) IS LIMITED TO THE POWER OF THE ASSESSING AUTHORITY TO ENTERTAIN CLAIM FOR DEDUCTION OTHERWISE THAN BY A REVISED RETURN AND DID NOT IMPINGE ON THE POWER OF THE TRIBUNAL. ACCORDING TO HIM THE FACTS IN THE CASE OF GOETZ (INDIA) LTD. WERE THAT 1/5 TH OF EXPENDITURE WHICH WAS ADMITTED REVENUE IN NATUR E WAS CLAIMED AS DEDUCTION IN THE RETURN OF INCOME BU T IN THE ASSESSMENT THE ENTIRE EXPENDITURE WAS CLAIMED AS DEDUCTION. THUS ACCORDING TO THE LEARNED D.R. FACTS NECESSARY FOR ADJUDICATION WERE AVAILABL E ON RECORD AND THEREFORE THE HONBLE DELHI HIGH COURT MADE THE AFORESAID OBS ERVATIONS. ACCORDING TO HIM THE DECISION OF THE HONBLE DELHI HIGH COURT H AS TO BE CONSIDERED AS HAVING BEEN RENDERED ON THE FACTS OF THAT CASE AND CANNOT BE APPLIED TO THE FACTS OF THE CASE DECIDED BY THE TRIBUNAL WHICH IS SUBJECT MATTER OF THE PRESENT APPLICATION. 7. THE LEARNED D.R. RELIED ON THE FOLLOWING DECISIO NS WHERE THE TRIBUNAL HAS REFUSED TO ADMIT AN ADDITIONAL GROUND FOR ADJUD ICATION ON THE GROUND THAT FACTS NECESSARY FOR ADJUDICATION OF ADDITIONAL GROUND WERE NOT AVAILABLE ON RECORD. 1. JAY BHARAT CO-OP HSG.SOCIETY LTD. VS. ITO 125 TTJ (MUMBAI) 552 M.A.NO.247/MUM/2010 9 2. DDIT(INTERNATIONAL TAXATION VS. SCIENTIFIC ATLANTA INC. 130 TTJ (MUMBAI) 142 3. ACIT VS. DHL OPERATIONS BV 108 TTJ (MUMBAI) (SB) 1 52 8. HIS NEXT SUBMISSION WAS THAT UNLIKE CIT(A) THE TRIBUNAL DOES NOT HAVE POWERS OF ENHANCEMENT. THE POWERS OF TRIBUNAL ARE RESTRICTED TO QUESTIONS CONSIDERED IN AN ASSESSMENT. HE RELIED O N THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. STEPWE LL INDUSTRIES LTD. 228 ITR 171 (SC) WHEREIN THE HONBLE SUPREME COURT HELD THAT A CLAIM FOR EXPORT MARKET ALLOWANCE U/S.35B OF THE ACT COULD NO T HAVE BEEN ALLOWED BY THE TRIBUNAL U/S.35B ON WEIGHTED BASIS ON ASSUMPTIO N OF FACTS WHEN NO CLAIM WAS MADE BEFORE THE AO OR THE FIRST APPELLANT AUTHORITY AND NO PARTICULARS OF EXPENDITURE WERE FURNISHED TO THEM. REFERENCE WAS ALSO MADE TO THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF ACIT VS. GURJARGRAVURES PVT. LTD. 111 ITR 1 (SC) WHEREIN IT WAS HELD THAT CLAIM FOR RELIEF U/S.84 OF THE ACT WHICH WAS NOT MADE BEFORE AO AND WHERE THERE WERE NO MATERIAL ON RECORD SUPPORTING SUCH A CLAIM THE CIT(A) COULD NOT ENTERTAIN THE CLAIM OR DIRECT THE AO TO ALLOW RELIE F. 9. HE NEXT DREW OUR ATTENTION TO RULE 29 OF THE ITA T RULES 1963 WHICH READS AS FOLLOWS: 29. PRODUCTION OF ADDITIONAL EVIDENCE BEFORE THE T RIBUNAL.--THE PARTIES TO THE APPEAL SHALL NOT BE ENTITLED TO PROD UCE ADDITIONAL EVIDENCE EITHER ORAL OR DOCUMENTARY BEFORE THE TRIB UNAL BUT IF THE TRIBUNAL REQUIRES ANY DOCUMENTS TO BE PRODUCED OR A NY WITNESS TO BE EXAMINED OR ANY AFFIDAVIT TO BE FILED TO ENABLE IT TO PASS ORDERS OR FOR ANY OTHER SUBSTANTIAL CAUSE OR IF THE INCOME-TAX AUTHORITIES HAVE DECIDED THE CASE WITHOUT GIVING SUFFICIENT OPPORTUN ITY TO THE ASSESSEE TO ADDUCE EVIDENCE EITHER ON POINTS SPECIFIED BY TH EM OR NOT SPECIFIED BY THEM THE TRIBUNAL FOR REASONS TO BE RECORDED MAY ALLOW SUCH DOCUMENT TO BE PRODUCED OR WITNESS TO BE EXAMINED O R AFFIDAVIT TO BE FILED OR MAY ALLOW SUCH EVIDENCE TO BE ADDUCED. M.A.NO.247/MUM/2010 10 10. IT WAS SUBMITTED BY HIM THAT PRODUCTION OF ADDI TIONAL EVIDENCE BEFORE THE ITAT IS NOT A RIGHT OF THE PARTIES BEFORE THE I TAT. IT IS ONLY WHEN ITAT REQUIRES ADMISSION OF ADDITIONAL EVIDENCE TO ENABLE IT TO PASS ORDERS OR FOR SUBSTANTIAL CAUSE ADDITIONAL EVIDENCE CAN BE ADMIT TED. IN THIS REGARD THE LEARNED D.R. RELIED ON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. SMT.KAMAL C.MAHBOOBBANI 214 ITR 15 (BOM) WHEREIN THE ABOVE PROPOSITION OF LAW WAS LAID DOWN IN THE CONTE XT OF RULE 29 OF THE ITAT RULES 1963. FURTHER REFERENCE WAS ALSO MADE TO THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF VELJI DEORAJ & CO. VS. CIT 68 ITR 708 (BOM) AND HONBLE M.P.HIGH COURT IN THE CASE OF CIT VS. BABULAL NIM 47 ITR 864 (M.P.) LAYING DOWN IDENTICAL PROPOSITION OF LAW . IN THIS REGARD HE SUBMITTED THAT IN THE PRESENT CASE THE TRIBUNAL DI D NOT CALL FOR ANY ADDITIONAL EVIDENCE NOR DID IT ADMIT ADDITIONAL EVI DENCE OR REJECT ADDITIONAL EVIDENCE FILED BY THE ASSESSEE BEFORE THE TRIBUNAL. 11. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT FROM THE FACT THAT THE LEARNED D.R. HAD TO MAKE SUCH LENGTHY SUBMISSIO NS BY ITSELF WOULD GO TO SHOW THAT THE ISSUE SOUGHT TO BE CANVASSED BY THE L EARNED D.R. IS HIGHLY DEBATABLE ISSUE INVOLVING DEALING WITH LONG DRAWN PROCESS OF REASONING AND ISSUES ON WHICH POSSIBLY THERE COULD BE TWO VIEWS. IN SUCH CASES APPLICATION U/S.254(2) IS NOT APPROPRIATE REMEDY. THIS SUBMISSION WAS MADE WITHOUT PREJUDICE TO THE SUBMISSION THAT EVEN OTHERWISE THERE IS NO MERIT IN THE APPLICATION FILED BY THE REVENUE. 12. ON THE SUBMISSION OF THE LEARNED D.R. THAT THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF NTPC LTD. (SUPRA) WOUL D NOT HOLD GOOD AFTER THE CHANGE IN THE LAW W.E.F. 1-4-89 THE LEARNED CO UNSEL FOR THE ASSESSEE SUBMITTED THAT THE LAW ALWAYS WAS AND HAS BEEN THAT TAX LIABILITY CAN BE IMPOSED ONLY IN ACCORDANCE WITH LAW. IF ACCORDING TO LAW A PARTICULAR RECEIPT IS NOT INCOME AND THEREFORE NOT CHARGEABLE TO TAX THE SAME CANNOT BE M.A.NO.247/MUM/2010 11 BROUGHT TO TAX. TECHNICALITIES WOULD NOT AND CANNO T STAND IN THE WAY OF DETERMINATION OF TAX LIABILITY IN ACCORDANCE WITH L AW AND THIS IS THE RATIO OF THE HONBLE SUPREME COURT IN THE CASE OF NTPC (SUPR A). IN THIS REGARD HE MADE A REFERENCE TO ARTICLE 265 OF THE CONSTITUTION OF INDIA WHICH LAYS DOWN THAT THERE SHALL BE NO TAX LEVIED AND COLLECTED SAV E IN ACCORDANCE WITH LAW. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER RELIED ON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF NIRMALA L. MEHTA V. A. BALASUBRAMANIAM COMMISSIONER OF INCOME-TAX 269 ITR 1 (BOM) WHEREIN IT WAS HELD AS FOLLOWS: THERE CANNOT BE ANY ESTOPPEL AGAINST THE STATUTE. ARTICLE 265 OF THE CONSTITUTION OF INDIA IN UNMISTAKABLE TERMS PROVIDE S THAT NO TAX SHALL BE LEVIED OR COLLECTED EXCEPT BY AUTHORITY OF LAW. ACQUIESCENCE CANNOT TAKE AWAY FROM A PARTY THE RELIEF THAT HE IS ENTITL ED TO WHERE THE TAX IS LEVIED OR COLLECTED WITHOUT AUTHORITY OF LAW. SO LO NG AS THE INCOME-TAX ACT 1961 DID NOT BECOME APPLICABLE TO THE STATE O F SIKKIM THE INCOME-TAX ACT 1961 COULD NOT BE APPLIED TO THE I NCOME EARNED IN SIKKIM. THE PRESIDENT OF INDIA IN EXERCISE OF HIS P OWERS CONFERRED BY CLAUSE (N) OF ARTICLE 371F OF THE CONSTITUTION EXT ENDED TO THE STATE OF SIKKIM THE INCOME-TAX ACT 1961 BY NOTIFICATION N O. S. O. 1028(E) DATED NOVEMBER 7 1988 WITH EFFECT FROM APRIL 1 1 989. HOWEVER THE COMMENCEMENT OF THE INCOME-TAX ACT 1961 WAS DEFER RED FOR ONE YEAR MAKING IT EFFECTIVE FROM APRIL 1 1990 APPLICABLE FROM THE ASSESSMENT YEAR 1990-91 AND ONWARDS. THE LEGAL POSITION THAT E MERGES THUS IS THAT THE INCOME-TAX ACT 1961 WAS MADE APPLICABLE AND CAME INTO FORCE IN THE STATE OF SIKKIM FROM THE ASSESSMENT YE AR 1990-91 (PREVIOUS YEAR 1989-90) AND ON THE COMING INTO FORC E OF THE INCOME-TAX ACT 1961 THE SIKKIM INCOME-TAX MANUAL 1948 STOO D REPEALED. 13. FURTHER REFERENCE WAS ALSO MADE TO THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF BALMUKUND ACHARYA VS. DCIT 310 ITR 310 (BOM) WHEREIN IN PARA-31 OF ITS JUDGMENT THE H ONBLE COURT HAS HELD THAT AUTHORITIES UNDER THE INCOME TAX ACT 1961 ARE UNDER AN OBLIGATION TO ACT IN ACCORDANCE WITH LAW. TAX CAN BE COLLECTED O NLY AS PROVIDED UNDER THE ACT. IF ANY ASSESSE UNDER A MISTAKE MISCONCEPTIO N OR NOT BEING PROPERLY INSTRUCTED IS OVER-ASSESSED THE AUTHORITIES UNDER THE ACT ARE REQUIRED TO ASSIST HIM AND ENSURE THAT ONLY LEGITIMATE TAXES DU E ARE COLLECTED. FURTHER M.A.NO.247/MUM/2010 12 REFERENCE WAS ALSO MADE TO THE DECISION OF THE HON BLE DELHI HIGH COURT IN THE CASE OF DCM BENETTON 173 TAXMAN 283 (DELHI) LAY ING DOWN IDENTICAL PROPOSITION. 14. IT WAS ALSO SUBMITTED BY HIM THAT THE HONBLE S UPREME COURT IN THE CASE OF NTPC (SUPRA) HAS EMPHASISED THE NEED FOR FA CTS ON RECORD BEING AVAILABLE ON RECORD ONLY BECAUSE OF THE QUESTION TH AT IT FRAMED FOR CONSIDERATION IN THAT CASE. IN THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF NTPC (SUPRA) THE TRIBUNAL HAD FRAMED A S MANY AS FIVE QUESTIONS WHILE MAKING A REFERENCE TO HONBLE SUPREME COURT. SINCE THE TRIBUNAL HAD NOT EXAMINED THE ADDITIONAL GROUNDS RAISED BY THE A SSESSEE ON THE MERITS THE HONBLE SUPRME COURT DID NOT PROPOSE TO ANSWER THE QUESTIONS RELATING TO THE MERITS OF THOSE CONTENTIONS. THE HONBLE SUP REME COURT THEREFORE REFRAMED THE QUESTION WHICH IT HAD TO CONSIDER AS F OLLOWS : WHERE ON THE FACTS FOUND BY THE AUTHORITIES BELOW A QUESTION OF LAW ARISES (THOUGH NOT RAISED BEFORE THE AUTHORITIES) W HICH BEARS ON THE TAX LIABILITY OF THE ASSESSEE WHETHER THE TRIBUNAL HAS JURISDICTION TO EXAMINE THE SAME ? IT WAS POINTED OUT BY HIM THAT THE OPERATIVE PORTIO N OF THE JUDGMENT OF THE HONBLE SUPREME COURT WAS AS FOLLOWS: UNDER SECTION 254 OF THE INCOME-TAX ACT THE APPELL ATE TRIBUNAL MAY AFTER GIVING BOTH THE PARTIES TO THE APPEAL AN OPPO RTUNITY OF BEING HEARD PASS SUCH ORDERS THEREON AS IT THINKS FIT. T HE POWER OF THE TRIBUNAL IN DEALING WITH APPEALS IS THUS EXPRESSED IN THE WIDEST POSSIBLE TERMS. THE PURPOSE OF THE ASSESSMENT PROCE EDINGS BEFORE THE TAXING AUTHORITIES IS TO ASSESS CORRECTLY THE TAX L IABILITY OF AN ASSESSEE IN ACCORDANCE WITH LAW. IF FOR EXAMPLE AS A RESUL T OF A JUDICIAL DECISION GIVEN WHILE THE APPEAL IS PENDING BEFORE T HE TRIBUNAL IT IS FOUND THAT A NON-TAXABLE ITEM IS TAXED OR A PERMISS IBLE DEDUCTION IS DENIED WE DO NOT SEE ANY REASON WHY THE ASSESSEE S HOULD BE PREVENTED FROM RAISING THAT QUESTION BEFORE THE TRI BUNAL FOR THE FIRST TIME SO LONG AS THE RELEVANT FACTS ARE ON RECORD I N RESPECT OF THAT ITEM. WE DO NOT SEE ANY REASON TO RESTRICT THE POWER OF T HE TRIBUNAL UNDER SECTION 254 ONLY TO DECIDE THE GROUNDS WHICH ARISE FROM THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS). BOTH THE ASSESSEE AS WELL AS THE DEPARTMENT HAVE A RIGHT TO FILE AN APPEAL/CR OSSOBJECTIONS BEFORE M.A.NO.247/MUM/2010 13 THE TRIBUNAL. WE FAIL TO SEE WHY THE TRIBUNAL SHOUL D BE PREVENTED FROM CONSIDERING QUESTIONS OF LAW ARISING IN ASSESSMENT PROCEEDINGS ALTHOUGH NOT RAISED EARLIER. THEREAFTER THE HONBLE SUPREME COURT RELIED ON THE RULING OF HONBLE SUPREME COURT IN THE CASE OF JUTE CORPORATION OF IN DIA LTD. V. CIT [1991] 187 ITR 688 WHEREIN IT WAS HELD THAT IN THE ABSENC E OF ANY STATUTORY PROVISION THE APPELLATE AUTHORITY IS VESTED WITH A LL THE PLENARY POWERS WHICH THE SUBORDINATE AUTHORITY MAY HAVE IN THE MATTER. T HE HONBLE COURT THEREAFTER HELD THAT THE TRIBUNAL WILL HAVE THE DIS CRETION TO ALLOW OR NOT ALLOW A NEW GROUND TO BE RAISED AND FURTHER OBSERVED THAT WHERE THE TRIBUNAL IS ONLY REQUIRED TO CONSIDER A QUESTION OF LAW ARISING FROM THE FACTS WHICH ARE ON RECORD IN THE ASSESSMENT PROCEEDINGS THEN SUCH A QUESTION SHOULD BE ALLOWED TO BE RAISED WHEN IT IS NECESSARY TO CONSID ER THAT QUESTION IN ORDER TO CORRECTLY ASSESS THE TAX LIABILITY OF AN ASSESSE E. THEREAFTER THE HONBLE COURT OBSERVED AS FOLLOWS: THE REFRAMED QUESTION THEREFORE IS ANSWERED IN T HE AFFIRMATIVE I.E. THE TRIBUNAL HAS JURISDICTION TO EXAMINE A QUESTION OF LAW WHICH ARISES FROM THE FACTS AS FOUND BY THE AUTHORITIES BELOW AN D HAVING A BEARING ON THE TAX LIABILITY OF THE ASSESSEE. WE REMAND THE PROCEEDINGS TO THE TRIBUNAL FOR CONSIDERATION OF THE NEW GROUNDS RAISE D BY THE ASSESSEE ON THE MERITS. 15. ACCORDING TO THE LEARNED COUNSEL FOR THE ASSESS EE THE OBSERVATION OF THE HONBLE SUPREME COURT ABOUT THE NEED FOR FACTS BEING ON RECORD TO ADJUDICATE THE ADDITIONAL GROUND IS ONLY BECAUSE O F THE REFRAMED QUESTION IN THAT CASE BUT THE PRINCIPLE REASON GIVEN BY THE HON BLE SUPREME COURT IS THE NEED TO DETERMINE TAX LIABILITY IN ACCORDANCE WITH LAW. ACCORDING TO HIM IT WOULD BE PROPER TO INTERPRET THE DECISION OF HONBL E SUPREME COURT AS NOT RESTRICTING THE POWER OF TRIBUNAL TO ADMIT ADDITION AL GROUND ONLY WHERE FACTS NECESSARY FOR ADJUDICATION OF THE ADDITIONAL GROUND IS ALREADY AVAILABLE ON RECORD. M.A.NO.247/MUM/2010 14 16. IT WAS SUBMITTED BY HIM THAT THE ADDITIONAL EVI DENCE SOUGHT TO BE FILED BY THE ASSESSEE BEFORE THE ITAT WERE THE QUANTUM OF SALES TAX SUBSIDY RECEIVED WHICH IS ALREADY RECORDED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE FOR THE RELEVANT PREVIOUS YEAR. IT WAS SUBMITTED B Y HIM THAT THE QUANTUM OF DEDUCTION WAS IRRELEVANT BEFORE THE ITAT AND THE QU ESTION WAS WHETHER IT IS CAPITAL RECEIPT NOT CHARGEABLE TO TAX OR A REVENUE RECEIPT CHARGEABLE TO TAX. THE OTHER DOCUMENTS ARE ALL INCENTIVE SCHEMES OF TH E GOVERNMENT AND ORDERS PASSED BY THE AUTHORITIES UNDER THE RELEVANT SALES TAX LAW. ALL THESE ARE PUBLIC DOCUMENTS. AUTHENTICITY ADMISSIBILITY AND RELEVANCY OF THESE DOCUMENTS CANNOT BE DISPUTED BY THE REVENUE. IN TH IS REGARD HE DREW OUR ATTENTION TO THE DECISION OF THE HONBLE ITAT IN TH E CASE OF EVEREST INDUSTRIES LTD. VS. ACIT ITA NO.1968/MUM/2005 DATED 27-10-2008 WHEREIN DEALING WITH A SIMILAR ARGUMENT ON THE SIDE OF THE REVENUE THE HONBLE ITAT HELD IN PARA-17 OF ITS ORDER THAT WHERE ADDITIONAL EVIDENCE CONSIST OF PUBLIC DOCUMENTS IT CANNOT BE SAID THAT THERE IS NEED TO INVESTIGATE FURTHER FACTS. THE TRIBUNAL ADMITTED ADDITIONAL EVIDENCE AND REMAN DED THE ISSUE TO THE AO FOR FRESH CONSIDERATION. IN THIS REGARD THE LEARN ED COUNSEL FOR THE ASSESSEE ALSO MADE A STATEMENT ACROSS THE BAR THAT THE AO IN THE SET ASIDE PROCEEDINGS HAS ALREADY ALLOWED THE DEDUCTION THERE BY ALLAYING ALL FEARS EXPRESSED BY THE LEARNED D.R. ABOUT FACTS NOT BEING AVAILABLE ON RECORD OF THE AO TO DECIDE THE ADDITIONAL GROUND RAISED BY TH E ASSESSEE. 17. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT PENDING DISPOSAL OF APPEAL OF THE ASSESSEE BEFORE THE ITAT THE VARI OUS DECISIONS OF THE TRIBUNAL HOLDING SIMILAR RECEIPT OF SALES TAX SUBSI DY AS CAPITAL RECEIPT NOT CHARGEABLE TO TAX WERE RENDERED. THE HONBLE BOMB AY HIGH COURT IN THE CASE OF CIT VS. M/S.RELIANCE INDUSTRIES LTD. BY IT S JUDGMENT DATED 15.4.2009 HELD THAT IDENTICAL SALES TAX SUBSIDY WAS CAPITAL RECEIPT NOT CHARGEABLE TO TAX. IT WAS IN THOSE CIRCUMSTANCES T HAT THE ASSESSEE MADE THE CLAIM BY WAY OF ADDITIONAL GROUND BEFORE THE TRIBUN AL. M.A.NO.247/MUM/2010 15 18. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT FOR DECIDING WHETHER RECEIPT OF A SUBSIDY IS CAPITAL RECEIPT OR REVENUE RECEIPT ONE HAS TO LOOK AT THE SCHEME AND FIND OUT THE PURPOSE FOR WHI CH THE SUBSIDY WAS GIVEN. ACCORDING TO HIM THEREFORE INVESTIGATION OF FACTS IS NOT INVOLVED IN DECIDING THE ISSUE AS ALLEGED BY THE LEARNED D.R. 19. IN THIS REGARD THE LEARNED COUNSEL FOR THE ASS ESSEE FILED BEFORE US A COPY OF THE ORDER OF THE ITAT MUMBAI IN THE CASE OF M/S.ADITYA BIRLA NUVO LTD. VS. ACIT ITA NO.3207/MUM/02 WHEREIN IDENTICAL ARGUMENT BASED ON THE SAME CASE LAWS WERE ADVANCED BY THE REVENUE BUT REJECTED BY THE TRIBUNAL. 20. THE LEARNED D.R. IN HIS REJOINDER SUBMITTED THA T AT THE STAGE OF ADMISSION OF ADDITIONAL GROUND THE MERITS OF THE CL AIM MADE BY THE ASSESSEE SHOULD NOT INFLUENCE THE MIND OF THE COURT. HE ALSO SUBMITTED THAT IN THE EVENT OF AN APPARENT ERROR IN THE ORDER OF THE TRIB UNAL SUCH ORDERS CAN BE RECALLED OR THE ORDER OF THE TRIBUNAL MODIFIED AND IN THIS REGARD RELIED ON THE DECISION OF THE FULL BENCH OF THE DELHI HIGH COURT IN THE CASE OF M/S.LACHMAN DASS BHATIA HINGWALA PVT. LTD. VS. ACI T WP ( C) 6460 TO 6465 OF 2010 JUDGMENT DATED 24.12.2010. IT WAS ALS O SUBMITTED THAT ANY APPARENT ERROR HAS TO BE RECTIFIED AS LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF ACIT VS. SAURASTRA KUTCH STOCK EXCHANGE LTD. 305 ITR 227 (SC). 21. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AT TH E OUTSET WE HAVE TO RECORD THE FACT THAT THE LEARNED D.R. WHO ARGUED TH E APPLICATION DID NOT ARGUE THE APPEAL. THERE IS NO AVERMENT IN THE APPL ICATION THAT THE ISSUE SOUGHT TO BE RAISED BY THE AO IN THE PRESENT APPLIC ATION WAS ARGUED WHEN THE APPEAL WAS HEARD AND THE TRIBUNAL HAS FAILED TO CONSIDER SUCH ARGUMENT. M.A.NO.247/MUM/2010 16 WE HAVE ALREADY EXTRACTED THE ORDER OF THE TRIBUNAL ON THE ADMISSIBILITY OF THE ADDITIONAL GROUND OF APPEAL. A PERUSAL OF THE SAME WOULD SHOW THAT THE ONLY ARGUMENT RAISED BY THE LEARNED D.R. WHEN THE A PPEAL WAS HEARD WAS THAT A CLAIM NOT MADE BY WAY OF A REVISED RETURN OF INCOME CANNOT BE ENTERTAINED AND HE PLACED RELIANCE ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF GOETZ (INDIA) LTD. (SUPRA). T HE LEARNED COUNSEL FOR THE ASSESSEE RELIED ON THE DECISION OF THE HONBLE DELH I HIGH COURT IN THE CASE OF JAI PAROBOLIC SPRINGS LTD. (SUPRA) WHEREIN THE HON BLE DELHI HIGH COURT AFTER CONSIDERING THE DECISION OF THE HONBLE SUPREME COU RT IN THE CASE OF NTPC (SUPRA) AND GOETZ (INDIA) LTD. (SUPRA) HELD THAT PO WER OF THE TRIBUNAL TO ENTERTAIN ADDITIONAL GROUND IS NOT IN ANY WAY RESTR ICTED BY THE RULING OF THE HONBLE SUPREME COURT IN THE CASE OF GOETZ (INDIA) LTD. (SUPRA). IN THESE CIRCUMSTANCES IT IS NOT OPEN TO THE REVENUE TO RAI SE BY WAY OF AN APPLICATION U/S.254(2) OF THE ACT A NEW ARGUMENT WHICH WAS NEV ER ADVANCED WHEN THE APPEAL WAS HEARD. IT IS NOT OPEN TO THE REVENUE TO URGE AN ARGUMENT BY WAY OF APPLICATION U/S.254(2) OF THE ACT WHICH WAS NEV ER URGED WHEN THE APPEAL WAS HEARD. ON THIS SHORT GROUND THE APPLICATION U/ S.254(2) OF THE ACT IS LIABLE TO BE DISMISSED. 22. NEVERTHELESS WE WILL ALSO EXAMINE THE OTHER AR GUMENTS OF THE LEARNED D.R. AND THE LEARNED COUNSEL FOR THE ASSESSEE. 23. THE FIRST ARGUMENT ADVANCED BY THE LEARNED D.R. WAS THAT THE FACTS NECESSARY FOR ADJUDICATION OF THE ADDITIONAL GROUND OF APPEAL WAS NOT AVAILABLE ON RECORD AND THEREFORE THE TRIBUNAL OUGH T TO HAVE REFUSED TO ADMIT THE ADDITIONAL GROUND OF APPEAL RAISED FOR THE FIRS T TIME BY THE ASSESSEE BEFORE THE TRIBUNAL BECAUSE AS PER THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF NTPC LTD. 229 ITR 283 (SC) ADD ITIONAL GROUND RAISED FOR THE FIRST TIME BEFORE TRIBUNAL CAN BE ADMITTED PROV IDED THE FACTS NECESSARY M.A.NO.247/MUM/2010 17 FOR ADJUDICATION OF THE ADDITIONAL GROUND ARE AVAIL ABLE ON RECORD. THE RATIO LAID DOWN IN THE DECISION OF THE HONBLE SUPREME CO URT IN THE CASE OF NTPC (SUPRA) IS THAT THE PURPOSE OF THE ASSESSMENT PROCE EDINGS BEFORE THE TAXING AUTHORITIES IS TO ASSESS CORRECTLY THE TAX LIABILIT Y OF AN ASSESSEE IN ACCORDANCE WITH LAW AND THEREFORE THE TRIBUNAL SHOU LD NOT BE PREVENTED FROM CONSIDERING QUESTIONS OF LAW ARISING IN ASSESS MENT PROCEEDINGS ALTHOUGH NOT RAISED EARLIER. THE QUESTION WHETHER A SUBSIDY RECEIVED BY AN ASSESSEE IS A CAPITAL RECEIPT NOT CHARGEABLE TO TAX OR A REVENUE RECEIPT CHARGEABLE TO TAX HAS TO BE ASCERTAINED BY LOOKING INTO THE SCHEME UNDER WHICH THE SUBSIDY IS RECEIVED. THE SUBSIDY SCHEMES ARE ALL FRAMED BY STATE GOVERNMENTS AND ONE HAS TO TAKE JUDICIAL NOTICE OF THE SAME. THE RECEIPT OF SUBSIDY IS IMBEDDED IN THE SALES WHICH IS ALREADY DISCLOSED BY THE ASSESSEE IN ITS BOOKS OF ACCOUNTS. THE ORDERS OF ASSESSMENT AND OTHER ORDERS ALLOWING RELIEF TO THE ASSESSEE UNDER THE RELEVANT SALES TAX LAWS ARE ALL DOCUMENTS THE AUTHENTICITY OF WHICH CANNOT BE DOUB TED. WE FAIL TO SEE WHAT FRESH FACTS NEED TO BE EXAMINED BY THE AO. WE ARE SURPRISED AT THE STAND TAKEN BY THE REVENUE THAT THEY WOULD REFUSE T O EXAMINE THE ISSUE BECAUSE OF TECHNICALITIES. THE CLAIM OF THE ASSESS EE IS THAT THE SCHEME UNDER WHICH SUBSIDY WAS RECEIVED BY THE ASSESSEE HA S ALREADY BEEN CONSIDERED BY THE TRIBUNAL/HIGH COURTS IN OTHER CAS ES AND IT HAS BEEN HELD THAT THE SUBSIDY WERE CAPITAL IN NATURE NOT CHARGEA BLE TO TAX. THE REVENUE HOWEVER WANTS TO CONTEND BEFORE THE TRIBUNAL THAT T HE MERITS OF CHARGEABILITY TO TAX OF THE RECEIPT SHOULD NOT WEIG H IN THE MIND OF THE TRIBUNAL WHILE DECIDING THE APPLICATION U/S.254(2) OF THE ACT. THAT APART ALL THAT HONBLE SUPREME COURT HAS OBSERVED IN NTPCS C ASE IS THAT WHERE ALL THE NECESSARY FACTS ARE ON ASSESSMENT RECORDS THER E IS GOOD REASON FOR NOT EXERCISING THE DISCRETION OF ADMITTING ADDITIONAL G ROUND OF APPEAL ON A QUESTION OF LAW BUT IN OUR HUMBLE UNDERSTANDING THIS OBSERVATION CANNOT BE CONSTRUED TO MEAN THAT JUST BECAUSE SOME ADDITIO NAL FACTUAL VERIFICATIONS M.A.NO.247/MUM/2010 18 ARE NEEDED TRIBUNAL IS DENUDED OF POWERS TO ADMIT THE ADDITIONAL GROUND OF APPEAL ON QUESTIONS OF LAW. 24. WE ARE ALSO OF THE VIEW THAT IN THE PRESENT CAS E THE FIRST POINT OF TIME AT WHICH THE ASSESSEE COULD HAVE RAISED THIS ISSUE IS ONLY BEFORE THE TRIBUNAL. IT IS ONLY DURING THE PENDENCY OF THE APP EALS OF THE ASSESSEE BEFORE THE TRIBUNAL THAT THE VARIOUS DECISIONS OF THE TRIB UNAL HOLDING SIMILAR RECEIPT OF SALES TAX SUBSIDY AS CAPITAL RECEIPT NOT CHARGEABLE TO TAX WERE RENDERED. THE HONBLE BOMBAY HIGH COURT IN THE CAS E OF CIT VS. M/S.RELIANCE INDUSTRIES LTD. BY ITS JUDGMENT DATED 15.4.2009 HELD THAT IDENTICAL SALES TAX SUBSIDY WAS CAPITAL RECEIPT NOT CHARGEABLE TO TAX. IT WAS IN THOSE CIRCUMSTANCES THAT THE ASSESSEE MADE THE C LAIM BY WAY OF ADDITIONAL GROUND BEFORE THE TRIBUNAL. THE OBJECTIO N RAISED BY THE REVENUE IS THEREFORE WITHOUT ANY MERIT. 25. WE FAIL TO SEE ANY PREJUDICE THAT WOULD BE CAUS ED TO THE REVENUE IF THE ISSUE IS EXAMINED AFRESH BY THE AO. THE OBJECTION THAT THE ADDITIONAL GROUND SHOULD NOT BE ADMITTED SEEMS TO SUGGEST THAT TAX LIABILITY CAN BE FASTENED ON A TAXPAYER EVEN WITHOUT DECIDING EXISTE NCE OR OTHERWISE OF SUCH LIABILITY IN ACCORDANCE WITH LAW. IN THIS REGARD W E ARE ALSO OF THE VIEW THAT APPROACH IN SUCH MATTERS WOULD BE DIFFERENT WHEN TH E REVENUE SEEKS TO FASTEN LIABILITY ON AN ASSESSEE AT THE STAGE OF PRO CEEDINGS BEFORE THE TRIBUNAL ON A BASIS DIFFERENT FROM THE ONE THAT WAS ADOPTED BY THE REVENUE AUTHORITIES. THE REASONS ARE THAT AN ASSESSEE HAS NO FURTHER AVENUE TO PROJECT HIS GRIEVANCE EXCEPT BEFORE THE TRIBUNAL. IF ON THE FACTS AND IN LAW ULTIMATELY IT IS FOUND THAT THE ASSESSEE IS NOT LIA BLE TO TAX THE REVENUE CAN NOT HAVE GRIEVANCE. ART.265 OF THE CONSTITUTION OF INDIA PROVIDES THAT NO TAX SHALL BE LEVIED AND COLLECTED EXCEPT BY AUTHORITY O F LAW. IF ULTIMATELY THE ASSESSEE IS FOUND TO BE LIABLE TO TAX HE COMPENS ATES THE REVENUE IN THE FORM OF INTEREST. THEREFORE THE TRIBUNAL CAN EVEN THINK OF A REMAND OF THE M.A.NO.247/MUM/2010 19 CASE FOR A FINDING ON FACTS OR CAN ADJUDICATE ON FA CTS ITSELF. ON THE OTHER HAND THE REVENUE HAS OTHER OPTIONS OPEN TO IT UNDER THE ACT. IF THE ORDER OF AN ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL T O THE INTERESTS OF THE REVENUE THE SAME CAN BE REVISED BY THE CIT U/S 263 OF THE ACT. IF INCOME CHARGEABLE TO TAX ESCAPES ASSESSMENT PROCEEDINGS U /S 147 CAN BE INITIATED TO BRING TO TAX SUCH ESCAPED INCOME. IN AN APPEAL BY AN ASSESSEE AGAINST THE ORDER OF THE ASSESSING OFFICER THE CIT(A) HAS POWER OF ENHANCEMENT U/S 251(1) OF THE ACT. 26. THE NEXT ARGUMENT PUT FORTH BY THE LEARNED D.R. BEFORE US THAT THE POWERS OF THE AO PRIOR TO 1-4-89 TO CALL UPON THE A SSESSEE TO PRODUCE EVIDENCE IN SUPPORT OF THE CLAIM IN THE RETURN OF I NCOME WAS MUCH WIDER VIZ. TO ENSURE THAT THE RETURN IS CORRECT AND COM PLETE WHEREAS AFTER 1-4- 89 SUCH POWERS ARE RESTRICTED ONLY IN CASES OF UN DERSTATEMENT OF INCOME COMPUTATION OF EXCESSIVE LOSS OR UNDERPAYMENT OF TA X. THEREFORE ACCORDING TO THE LEARNED D.R. AFTER 1-4-89 THE POWERS OF THE AO WHILE MAKING AN ASSESSMENT WHILE COMPLETING THE ORIGINAL ASSESSMENT BEING VERY LIMITED CANNOT BE ENLARGED BY THE TRIBUNAL BY ADMITTING ADD ITIONAL GROUND WHICH THE AO COULD NOT HAVE CONSIDERED WHILE COMPLETING T HE ORIGINAL ASSESSMENT. ACCORDING TO THE LEARNED D.R. BECAUSE OF THE CHANGE IN THE POLICY OF THE GOVERNMENT IN THE MATTER OF MAKING ASSESSMENTS THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF NTPC(SUPRA) SH OULD BE APPLIED KEEPING IN VIEW THE ABOVE CHANGE. WE ARE OF THE VI EW THAT THE ARGUMENT PUT FORTH BY THE LEARNED D.R. CANNOT BE ACCEPTED BECAUS E THE ARGUMENT OVERLOOKS THE PRINCIPLE THAT TAX LIABILITY HAS TO B E DETERMINED IN ACCORDANCE WITH LAW. EVEN OTHERWISE THE LIMITATION OF THE POW ERS SHOULD APPLY ONLY TO THE AO AND THE ASSESSEE SHOULD NOT LOSE HIS RIGHT T O DEMAND ASSESSMENT OF CORRECT INCOME TO TAX IN ACCORDANCE WITH LAW. IN O THER WORDS THE REVENUE SHOULD NOT BE PERMITTED TO PUT ITS OWN INABILITY AS A DEFENCE TO DENY A LEGITIMATE CLAIM MADE BY AN ASSESSEE. WE ARE OF THE VIEW THAT THE FUNDAMENTAL PRINCIPLE LAID DOWN BY THE HONBLE SUPR EME COURT IN THE CASE M.A.NO.247/MUM/2010 20 OF NTPC (SUPRA) IS THAT THERE CAN BE NO TAX LIABILI TY WITHOUT THE AUTHORITY OF LAW AND THIS PRINCIPLE WILL HOLD GOOD AT ALL POINT OF TIME. WE THEREFORE REJECT THIS ARGUMENT OF THE REVENUE. THE ARGUMENT THAT TH E POWERS OF THE TRIBUNAL TO ENTERTAIN ADDITIONAL GROUND OF APPEAL SHOULD ALS O BE CONSIDERED TO BE RESTRICTED BECAUSE OF THE CHANGE IN THE LAW REFERRE D TO ABOVE ALSO DESERVES TO BE REJECTED FOR THE REASONS GIVEN ABOVE. 27. THE OTHER ARGUMENTS OF THE LEARNED D.R. PLACING RELIANCE OF DECISIONS OF ITAT WHEREIN ADDITIONAL GROUNDS WERE NOT ADMITTE D FOR WANT OF EVIDENCE IN SUPPORT OF THE ADDITIONAL GROUND BEING AVAILABLE ON RECORD ARE NOT RELEVANT IN THE PRESENT CASE AS WE HAVE ALREADY HELD THAT THE GRIEVANCE PROJECTED IN THE ADDITIONAL GROUND CAN BE DECIDED ON THE BASIS OF AU THENTIC AND RELIABLE EVIDENCE AND THE SALES ALREADY RECORDED BY THE ASSE SSEE IN ITS BOOKS OF ACCOUNTS. THESE DECISIONS THEREFORE DO NOT REQUIRE ANY CONSIDERATION. SIMILARLY THE DECISIONS BASED ON RULE 29 OF THE ITA T RULES 1963 REFERRED TO BY THE LEARNED D.R. IN OUR VIEW ALSO DO NOT REQUIRE ANY CONSIDERATION. 28. AS RIGHTLY CONTENDED BY THE LEARNED COUNSEL FOR THE ASSESSEE THE POWER OF THE TRIBUNAL UNDER S. 254(2) OF THE ACT IS CONFINED TO RECTIFYING ANY MISTAKE APPARENT FROM THE RECORD. THE TRIBUNAL DOE S NOT HAVE INHERENT POWER OF RECTIFICATION OR REVIEW OR REVISION. UNLES S THERE IS MISTAKE APPARENT FROM THE RECORD IN THE SENSE OF PATENT OBVIOUS CL EAR ERROR OR MISTAKE THE TRIBUNAL CANNOT RECALL ITS PREVIOUS ORDER. IF THE ERROR OR MISTAKE IS ONE WHICH COULD BE ESTABLISHED ONLY BY LONG-DRAWN ARGUM ENTS OR BY WAY OF PROCESS OF INVESTIGATION AND RESEARCH IT IS NOT A MISTAKE APPARENT FROM THE RECORD. UNLESS THERE IS MANIFEST ERRORS WHICH ARE O BVIOUS CLEAR AND SELF- EVIDENT THE TRIBUNAL CANNOT RECALL ITS PREVIOUS OR DER IN AN ATTEMPT TO REWRITE THE SAME. FAILURE OF THE TRIBUNAL TO CONSIDER AN A RGUMENT ADVANCED BY EITHER PARTY FOR ARRIVING AT A CONCLUSION IS NOT AN ERROR APPARENT ON THE RECORD ALTHOUGH IT MAY BE AN ERROR OF JUDGMENT. T HE TRIBUNAL CANNOT IN M.A.NO.247/MUM/2010 21 EXERCISE OF ITS POWER OF RECTIFICATION LOOK INTO SO ME OTHER CIRCUMSTANCES WHICH WOULD SUPPORT OR NOT SUPPORT ITS CONCLUSION. THE TRIBUNAL CANNOT REDECIDE THE MATTER AND IT HAS NO POWER TO REVIEW I TS ORDER. THE TRIBUNAL HAS NO POWER TO RECTIFY A DECISION ON DEBATABLE POINT O F LAW. A DECISION ON DEBATABLE POINT OF LAW IS NOT A MISTAKE APPARENT FR OM THE RECORD. 29. WHERE THE TRIBUNAL HAS OVERLOOKED THE RELEVANT MATERIAL ON RECORD THERE WOULD BE AN ERROR APPARENT FROM RECORD WHICH CAN BE RECTIFIED BY SETTING ASIDE THE ORDER FOR FRESH CONSIDERATION. W HERE A MATERIAL FACT BROUGHT TO THE NOTICE OF THE TRIBUNAL HAS BEEN LOST SIGHT OF THE TRIBUNAL HAS THE POWER TO RECTIFY THE MISTAKE SO COMMITTED; PROV IDED THE MATERIAL FACT HAS AN IMPORTANT BEARING ON THE ULTIMATE DECISION. THE MISTAKE POINTED OUT IN THE APPLICATION U/S.254(2) OF THE ACT BY THE REVENU E IN THE PRESENT CASE CANNOT BE SAID TO FALL IN EITHER OF THE ABOVE CATEG ORIES. 30. FOR THE REASONS STATED ABOVE WE ARE OF THE VIE W THAT THE PRESENT APPLICATION U/S.254(2) OF THE ACT IS DEVOID OF MERI TS AND DESERVES TO BE DISMISSED AND IS HEREBY DISMISSED. 31. IN THE RESULT THE APPLICATION IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 25 TH DAY OF MAR.2011 SD/- SD/- (R.S.SYAL) (N.V.VASUDEVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED. 25 TH MARCH.2011 COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CITY CONCERNED 4. THE CIT(A)- CONCERNED 5. THE D.RE BENCH. (TRUE COPY) BY ORDER ASST. REGISTRAR I TAT MUMBAI BENCHES MUMBAI. VM. M.A.NO.247/MUM/2010 22 DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 18/3/2011 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 23/3/2011 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7. FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER