The DCIT, Central Circle-1(1),, Ahmedabad v. M/s. Meghmani Organics Ltd.,, Ahmedabad

MA 26/AHD/2010 | 2001-2002
Pronouncement Date: 30-03-2012 | Result: Allowed

Appeal Details

RSA Number 2620524 RSA 2010
Assessee PAN AABCM0644E
Bench Ahmedabad
Appeal Number MA 26/AHD/2010
Duration Of Justice 2 year(s) 1 month(s) 17 day(s)
Appellant The DCIT, Central Circle-1(1),, Ahmedabad
Respondent M/s. Meghmani Organics Ltd.,, Ahmedabad
Appeal Type Miscellaneous Application
Pronouncement Date 30-03-2012
Appeal Filed By Department
Order Result Allowed
Bench Allotted B
Tribunal Order Date 30-03-2012
Assessment Year 2001-2002
Appeal Filed On 12-02-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH AHMEDABAD BEFORE SHRI MUKUL KUMAR SHRAWAT JUDICIAL MEMBER AND SHRI A. K. GARODIA ACCOUNTANT MEMBER M.A. NO.23 & 26/AHD/2010 IN I.T.A. NO.249 / AHD/2005 & 1347/AHD/2004 (ASSESSMENT YEAR 2002-03 & 2001-02 RESPECTIVELY) ACIT CIRCLE 4 AHMEDABAD VS. M/S. MEGHMANI ORGANICS LTD. 183/184 PHASE II GIDC VATVA AHMEDABAD PAN/GIR NO. : AABCM0644E (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI B.L. YADAV SR. DR RESPONDENT BY: SHRI S N SOPARKAR SR. ADV. MS. URVASHI SHODHAN DATE OF HEARING: 16.03.2012 DATE OF PRONOUNCEMENT: 30.03.2012 O R D E R PER SHRI A. K. GARODIA AM:- THESE TWO MISCELLANEOUS APPLICATIONS ARE FILED BY THE REVENUE AND IT HAS BEEN SUBMITTED BY THE REVENUE IN THE MISCELLANE OUS APPLICATION THAT AS PER THE TRIBUNAL ORDER DATED 12.06.2009 IT WAS HELD BY THE TRIBUNAL THAT DEDUCTION IS ALLOWABLE TO THE ASSESSEE U/S 80-IB IN RESPECT OF DEPB BENEFIT AND WHILE DOING SO THE TRIBUNAL HAS RELIED UPON THE DECISION OF M.A.NO.23 &26 /AHD/2010 2 HONBLE GUJARAT HIGH COURT RENDERED IN THE CASE OF CIT VS INDIA GELATINE AND CHEMICALS LTD. 275 ITR 284 AND THE JU DGEMENT OF HONBLE DELHI HIGH COURT RENDERED IN THE CASE OF ELTEK SGS P LTD. AS REPORTED IN 300 ITR 06. IT IS ALSO SUBMITTED IN THE MISCELLANE OUS APPLICATION THAT THIS ISSUE OF DEPB AND ALLOWABILITY OF DEDUCTION U/S 80- IB HAS BEEN SETTLED BY HONBLE APEX COURT IN THE CASE OF LIBERTY INDIA LTD. VS. CIT AS REPORTED IN 317 ITR 218 WHICH WAS DELIVERED ON 31.0 8.2009. IT IS SUBMITTED BY THE REVENUE THAT AS PER THE JUDGMENT O F HONBLE APEX COURT RENDERED IN THE CASE OF SAURASHTRA KUTRCH STOCK EXC HANGE LTD. AS REPORTED IN 305 ITR 227 EVEN IF THE JUDGMENT OF HO NBLE APEX COURT OR THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT I S OF A LATER DATE IT WILL BE A MISTAKE APPARENT FROM THE RECORD IN THE T RIBUNAL ORDER IF THE TRIBUNAL ORDER IS NOT IN LINE WITH SUCH SUBSEQUENT JUDGMENT OF HONBLE APEX COURT OR HONBLE JURISDICTIONAL HIGH COURT. I T HAS BEEN SUBMITTED BY THE REVENUE IN THE MISCELLANEOUS APPLICATION THA T SINCE IT IS A MISTAKE APPARENT FROM RECORD IN THE TRIBUNAL ORDER AND THER EFORE THE SAME SHOULD BE RECTIFIED. RELIANCE WAS ALSO PLACED ON THE TRIB UNAL ORDER IN THE CASE OF AMIT ESTATE ORGANIZERS VS ITO IN M.A. 295 296 302 329 TO 332/AHD/2008 DATED 04.09.2009 COPY OF WHICH WAS SU BMITTED. IN REPLY IT WAS SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSE E THAT SIMILAR ISSUE WAS CONSIDERED BY THE HONBLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF CIT VS TTK PRESTIGE LTD. AS REPORTED IN 322 ITR 393 WHEREIN IT WAS HELD THAT WHEN THE DEDUCTION WAS ALLOWED BY THE A.O. U/S 80-IA THE RECTIFICATION OF THE SAME TO WITHDRAW SUCH DEDUCTIO N ON EXPORT INCENTIVE/ DUTY DRAWBACK IS A DEBATABLE MATTER AND HENCE RECTI FICATION U/S 154 IS NOT PERMISSIBLE. IT WAS SUBMITTED THAT AGAINST THIS JU DGEMENT OF HONBLE KARNATAKA HIGH COURT SLP WAS FILED BY THE REVENUE BEFORE THE HONBLE M.A.NO.23 &26 /AHD/2010 3 APEX COURT AND THE SAME WAS DISMISSED WITH REASONS. HE SUBMITTED A COPY OF THIS ORDER OF HONNLE APEX COURT REGARDING REJECTION OF THE SLP NO. CC21280/09 DATED 05.01.2010 AND IT WAS POINTED OUT THAT THE SLP WAS DISMISSED WITH REASONS WHERE IT IS STATED BY TH E HONBLE APEX COURT THAT IT IS DISMISSED ONLY ON THE GROUND THAT SECTIO N 154 IS NOT PERMISSIBLE REGARDING DEDUCTION U/S 80-IA/80-IB AND HENCE THE PRESENT TRIBUNAL ORDER ALSO CANNOT BE RECTIFIED U/S 254(2) ALSO. RELIANCE WAS PLACED ON THE JUDGEMENT OF HONBLE APEX COURT RENDERED IN THE CAS E OF KUNHAYAMMED AND OTHERS VS STATE OF KERALA AS REPORTED IN 245 IT R 360 IN SUPPORT OF THIS CONTENTION THAT WHEN THE SLP IS DISMISSED BY T HE HONBLE APEX COURT WITH REASONS IT IS A BINDING DECISION UNDER ARTICLE 141 OF THE CONSTITUTION OF INDIA. IT WAS SUBMITTED THAT IN P REFERENCE TO THE JUDGEMENT OF HONBLE APEX COURT RENDERED IN THE CAS E OF SAURASHTRA KUTCH STOCK EXCHANGE LTD. (SUPRA) THIS DECISION OF HONBLE APEX COURT SHOULD BE FOLLOWED BECAUSE IT IS DIRECTLY ON THE IS SUE AS TO WHETHER THE DEDUCTION EARLIER ALLOWED U/S 80-IA/80-IB CAN BE WI THDRAWN BY WAY OF RECTIFICATION. 2. RELIANCE WAS ALSO PLACED ON THE JUDGMENT OF HON BLE APEX COURT RENDERED IN THE CASE OF MEPCO INDUSTRIES LTD. VS CI T AS REPORTED IN 319 ITR 208 IN SUPPORT OF THIS CONTENTION THAT THE DECI SION ON DEBATABLE POINT OF LAW CANNOT BE TREATED AS MISTAKE APPARENT FROM R ECORD. IN REJOINDER IT WAS SUBMITTED BY THE LD. D.R. THAT BOTH THESE JUDGM ENTS CITED BY THE LD. COUNSEL FOR THE ASSESSEE ARE NOT APPLICABLE IN THE PRESENT CASE BECAUSE THE FACTS ARE DIFFERENT. M.A.NO.23 &26 /AHD/2010 4 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE IMPUGNED TRIBUN AL ORDER AND THE JUDGEMENTS CITED BY BOTH THE SIDES. WE FIND THAT I T WAS HELD BY THE TRIBUNAL IN THE MISCELLANEOUS APPLICATION ORDER PAS SED IN THE CASE OF AMIT ESTATE ORGANIZERS (SUPRA) THAT AN ORDER OF THE TRI BUNAL HAS TO BE RECTIFIED U/S 254(2) TO BRING IT IN CONFORMITY WITH THE JUDGM ENT OF HONBLE JURISDICTIONAL HIGH COURT AS HAS BEEN HELD BY THE H ONBLE APEX COURT IN THE CASE OF ACIT VS SAURASHTRA KUTCH STOCK EXCHANGE LTD. (SUPRA). IT WAS ALSO HELD THAT EVEN IF THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT / HONBLE APEX COURT IS OF A LATER DATE I.E. AFTER THE DATE OF THE TRIBUNAL ORDER THEN ALSO IT IS AN APPARENT MISTAK E IN THE TRIBUNAL ORDER AND THE SAME HAS TO BE RECTIFIED U/S 254(2) OF THE ACT. THE JUDGEMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF LIBERTY INDIA (SUPRA) IS DIRECTLY ON THE ISSUE AS TO WHETHER DEDUCTION U/S 8 0-IA/80-IB IS ALLOWABLE OR NOT IN RESPECT OF DEPB AND DUTY DRAWBACK OR EXPO RT INCENTIVE AND IT WAS HELD THAT THESE INCENTIVE PROFITS ARE NOT PROFI TS DERIVED FROM THE ELIGIBLE BUSINESS AND THEREFORE THESE RECEIPTS DO NOT FORM PART OF THE NET PROFIT OF THE INDUSTRIAL UNDERTAKING FOR THE PURPOS E OF SECTION 80-IA/80-IB IN RESPECT OF EXPORT INCENTIVE SUCH AS DEPB/DUTY DR AWBACK. THE TRIBUNAL ORDER IN THE PRESENT CASE DATED 12.06.2009 IS NOT I N CONFORMITY WITH THIS LATER DECISION OF HONBLE APEX COURT AND AS PER THE JUDGMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF SAURASHTRA KUTCH STOCK EXCHANGE LTD. (SUPRA) AND AS PER THE TRIBUNAL ORDER IN THE CASE OF AMIT ESTATE ORGANIZER (SUPRA) THIS IS AN APPARENT MISTAKE IN THE TRIBUNAL ORDER WHICH SHOULD BE RECTIFIED U/S 254(2) OF THE ACT. M.A.NO.23 &26 /AHD/2010 5 4. WE DEEM IT FIT AND PROPER THAT THE RELEVANT PORT ION OF THE JUDGMENT OF THE HONBLE APEX COURT RENDERED IN THE CASE OF SAURASHTRA KUTCH STOCK EXCHANGE LTD. (SUPRA) BE REPRODUCED FOR THE SAKE OF READY REFERE NCE. WE THEREFORE REPRODUCE THE RELEVANT PORTION FROM PLACI TUM 41 AND 42 OF THIS JUDGMENT OF HONBLE APEX COURT WHICH IS AS UNDER:- A SIMILAR QUESTION CAME UP FOR CONSIDERATION BEFOR E THE HIGH COURT OF GUJARAT IN SUHRID GEIGY LTD. V. COMMISSIONER OF SURTAX [1999] 237 ITR 834. IT WAS HELD BY THE DIVISION BENCH OF T HE HIGH COURT THAT IF THE POINT IS COVERED BY A DECISION OF THE J URISDICTIONAL COURT RENDERED PRIOR OR EVEN SUBSEQUENT TO THE ORDER OF R ECTIFICATION IT COULD BE SAID TO BE A MISTAKE APPARENT FROM THE RECORD UNDER SECTION 254(2) OF THE ACT AND COULD BE CORRECTED BY THE TRIBUNAL. IN OUR JUDGMENT IT IS ALSO WELL-SETTLED THAT A JUD ICIAL 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 NOT 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 CORRE CT 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. 5. FROM THE ABOVE TWO PARAS OF THIS JUDGMENT OF HON BLE APEX COURT IT IS SEEN THAT IT WAS HELD BY HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF S UHRID GEIGY LTD. (SUPRA) THAT IF THE POINT IS COVERED BY A DECISION OF THE JURISDICTIONAL COURT RENDERED PRIOR OR EVEN SUBSEQU ENT TO THE ORDER OF RECTIFICATION IT COULD BE SAID TO BE A MISTAKE APP ARENT FROM THE RECORD U/S.254(2) OF THE IT ACT AND COULD BE CORRECTED BY THE TRIBUNAL. HENCE THE ISSUE BEFORE US IS SQUARELY COVERED BY THIS JUD GMENT OF HONBLE JURISDICTIONAL COURT AND ALSO BY THE HONBLE APEX C OURT RENDERED IN THE M.A.NO.23 &26 /AHD/2010 6 CASE OF SAURASHTRA KUTCH STOCK EXCHANGE LTD. (SUPRA) AND BY RESPECTFULLY FOLLOWING THESE TWO JUDGEMENTS WE HOLD THAT THE MA S FILED BY THE REVENUE SHOULD BE ALLOWED. WE HOLD ACCORDINGLY. 6. NOW WE DEAL WITH THE ARGUMENTS ADVANCED BY THE LD. COUNSEL FOR THE ASSESSEE. LD. COUNSEL FOR THE ASSESSEE HAS PLACED RELIANCE ON THE JUDGMENT OF HONBLE KARNATAKA HIGH COURT RENDERED I N THE CASE OF CIT VS TTK PRESTIGE LTD. AS REPORTED IN 322 ITR 390 (KA RN) AGAINST WHICH SLP WAS FILED BY THE REVENUE BEFORE THE HONBLE APE X COURT WHICH WAS DISMISSED BY THE HONBLE APEX COURT WITH REASONS. I T IS ALSO SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE THAT SINCE IT W AS HELD BY THE HONBLE KARNATAKA HIGH COURT IN THAT CASE THAT THE ORDER PA SSED BY THE A.O. GRANTING DEDUCTION U/S 80-IA IN RESPECT OF EXPORT INCENTIVE IS NOT RECTIFIABLE U/S 154 AND THE HONBLE APEX COURT HAD DISMISSED THE SLP FILED AGAINST THIS JUDGMENT WITH REASONS THIS JUD GMENT OF HONBLE KARNATAKA HIGH COURT DULY CONFIRMED BY THE HONBLE APEX COURT SHOULD BE FOLLOWED IN PREFERENCE TO THE JUDGMENT OF HONBL E APEX COURT RENDERED IN THE CASE OF SAURASHTRA KUTCH STOCK EXCH ANGE LTD. (SUPRA). WE FIND THAT IN THAT CASE IT IS NOTED BY THE HONB LE KARNATAKA HIGH COURT THAT IT IS RELEVANT TO NOTE THAT EXPORT INCENTIVE S HOULD QUALIFY FOR DEDUCTION U/S 80-IA OF THE INCOME TAX ACT OR NOT I S A HIGHLY DEBATABLE MATTER AND THERE ARE JUDGEMENTS ON BOTH THE SIDES W ITH REGARD TO THE ISSUE AS TO WHETHER THE EXPORT INCENTIVE WILL QUALIFY FOR THIS DEDUCTION. UNDER THESE FACTS IT WAS HELD BY THE HONBLE KARNATAKA H IGH COURT THAT SINCE IT IS A DEBATABLE MATTER IT DOES NOT COME WITHIN THE PURVIEW OF SECTION 154 OF THE I.T. ACT. AT THAT POINT OF TIME THIS JUDGM ENT OF HONBLE APEX COURT RENDERED IN THE CASE OF LIBERTY INDIA (SUPRA) WAS NOT AVAILABLE M.A.NO.23 &26 /AHD/2010 7 BECAUSE THIS JUDGMENT WAS RENDERED ON 31.08.2009 AN D THIS GOES TO SHOW THAT THE RECTIFICATION ORDER PASSED BY THE A.O. WAS NOT ON THE BASIS OF ANY SUBSEQUENT JUDGEMENTS OF HONBLE JURISDICTIONAL HIG H COURT OR HONBLE APEX COURT WHEREAS IN THE PRESENT CASE THE MISCEL LANEOUS APPLICATION FILED BY THE REVENUE IS ON THE BASIS OF THE JUDGMEN T OF HONBLE APEX COURT RENDERED IN THE CASE OF LIBERTY INDIA (SUPRA) AND HENCE BECAUSE OF THIS FACTUAL DIFFERENCE THIS JUDGEMENT OF HONBLE KARNATAKA HIGH COURT AGAINST WHICH SLP WAS DISMISSED BY THE HONBLE APEX COURT IS NOT APPLICABLE IN THE PRESENT CAUSE BECAUSE ORDER U/S 1 54 IN THAT CASE WAS PASSED BY THE A.O. MUCH EARLIER AND PRECISELY IT W AS PASSED ON 31.03.1998 AND HENCE THIS JUDGEMENT IS OF NO HELP TO THE ASSESSEE. 7. SIMILARLY THE JUDGMENT OF HONBLE APEX COURT RE NDERED IN THE CASE OF MEPCO INDUSTRIES LTD. (SUPRA) IS ALSO OF NO HELP TO THE ASSESSEE IN THE PRESENT CASE BECAUSE THE FACTS ARE DIFFERENT. IN T HAT CASE THE DECISION WAS ON THIS BASIS THAT IT IS A DEBATABLE POINT OF LAW A ND HENCE CANNOT BE TREATED AS MISTAKE APPARENT FROM RECORD. THE ISSUE IN THAT CASE WAS AS TO WHETHER SUBSIDY RECEIVED BY THE ASSESSEE WAS CAPITAL RECEIP T OR REVENUE RECEIPT. IN THAT CASE IN THE ORIGINAL RETURN OF INCOME THE ASSESSEE OFFERED THIS RECEIPT OF SUBSIDY AS REVENUE RECEIPT AND LATER ON THE ASSESSEE SOUGHT REVISION OF THE ASSESSMENT ORDER CONTENDING THAT SUBSIDY AMOUNT WAS CAPITAL RECEIPT AND NOT LIABLE TO BE TAXED AND LD. COMMISSIONER ALLOWED THE REVISION PETITION U/S 264. THEREAFTER BY FOLL OWING THE JUDGEMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF SAHNEY S TEEL AND PRESS WORKS LTD. VS CIT AS REPORTED IN 228 ITR 253 (S.C.) WHEREIN IT WAS HELD THAT INCENTIVE SUBSIDY WAS REVENUE RECEIPT LD. COM MISSIONER OF INCOME TAX PASSED RECTIFICATION ORDER U/S 154. IN THAT CA SE THE DECISION OF LD. M.A.NO.23 &26 /AHD/2010 8 CIT FOR RECTIFICATION WAS ON THAT BASIS THAT POWER TARIFF SUBSIDY GIVEN TO THE ASSESSEE WAS ADMISSIBLE ONLY AFTER COMMENCEMENT OF PRODUCTION AND HENCE IT CONSTITUTES OPERATIONAL SUBSIDY AND NOT C APITAL SUBSIDY. THIS GOES TO SHOW THAT THIS RECTIFICATION DECISION BY CI T IN THAT CASE WAS NOT SIMPLY ON THE BASIS OF A SUBSEQUENT JUDGMENT OF HON BLE APE COURT BUT IT WAS ON FACTUAL ASPECT AS TO WHETHER THE SUBSIDY WAS RECEIVED AFTER COMMENCEMENT OF PRODUCTION OR BEFORE COMMENCEMENT O F PRODUCTION FOR THE QUESTION AS TO WHETHER IT IS REVENUE RECEIPT OR CAPITAL RECEIPT IT WAS HELD TO BE DEPENDENT ON THIS ASPECT. IN THE PRESEN T CASE THE REQUEST OF THE REVENUE FOR RECTIFICATION OF THE TRIBUNAL ORDER U/S 254(2) IS BASED ON ONLY THE SUBSEQUENT JUDGMENT OF HONBLE APEX COURT RENDE RED IN THE CASE OF LIBERTY INDIA LTD. (SUPRA) AND NOT ON ANY DEBATABLE FACTUAL ASPECT AS IN THAT CASE AND HENCE THIS JUDGMENT OF HONBLE APEX COURT IS ALSO OF NO HELP TO THE ASSESSEE IN THE PRESENT CASE. 8. AS PER THE ABOVE DISCUSSION WE HAVE SEEN THAT B OTH THE JUDGMENTS CITED BY THE LD. COUNSEL FOR THE ASSESSEE ARE NOT APPLICABLE IN THE PRESENT CASE AND THE REQUEST OF THE REVENUE FOR RECTIFICATI ON OF THE IMPUGNED TRIBUNAL ORDER U/S 254(2) IS SQUARELY COVERED IN FA VOUR OF THE REVENUE BY THE JUDGMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF SAURASHTRA KUTCH STOCK EXCHANGE LTD. (SUPRA) AND BY THE JUDGMENT OF HONBLE JURISDICTIONAL COURT RENDERED IN THE CASE OF SUHRID GEIGY LTD. (SUPRA) AND BY THE TRIBUNAL ORDER IN THE CASE OF AMIT ESTATE ORGANIZERS (SUPRA). RESPECTFULLY FOLLOWING THE SAME WE HOLD THAT THIS IS A APPARENT MISTAKE IN THE IMPUGNED TRIBUNAL ORDER BECAUSE THE SAME IS NOT IN CONFORMITY WITH THE SUBSEQUENT DECISION OF HONBLE APEX COURT RENDE RED IN THE CASE OF LIBERTY INDIA LTD. (SUPRA). WE RECTIFY THIS MISTAK E AND HOLD THAT THE M.A.NO.23 &26 /AHD/2010 9 ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION U/S 80-IB/80 -IA IN RESPECT OF DUTY DRAWBACK INCOME AND PROFITS ON SALE OF DEPB AND TO THAT EXTENT THE TRIBUNAL ORDER DATED 12.06.2009 STANDS RECTIFIED. 9. IN THE RESULT BOTH THE MISCELLANEOUS APPLICATIONS OF THE REVENUE STAND ALLOWED. 10. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED HEREINABOVE. SD./- (MUKUL KUMAR SHRAWAT) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBE SP/*DKP AS PER SEPARATE ENCLOSING ORDER SD./- (MKS) JM PER SHRI MUKUL KR. SHRAWAT I HAVE CAREFULLY PERUSED THE DRAFT JUDGEMENT OF M Y ESTEEMED LD.BROTHER AND IN THIS REGARD AT THE OUT SET I MAY LIKE TO PLACE ON RECORD THE CONTENT OF A NOTE FORWARDED TO HIM FOR HIS KIND PERUSAL AS ALSO JUDICIAL CONSIDERATION; REPRO DUCED BELOW:- RESPECTED BROTHER IN THE DECISION OF SAURASHTRA KUTCH STOCK EXCHANGE 305 ITR 227 VIDE PLACITUM (47) THE TRIBUNAL DECIDED THE MATTER ON 27 TH OCTOBER-2000 BUT THE DECISION OF HIRALAL BHAGWATI 246 ITR 188 (GUJ.) WAS ADMITTEDLY DECIDED FEW MONTHS PRIOR TO THAT DECISION OF THE TRIBUNAL BUT IT WAS NOT BROUGHT TO THE ATTENTION OF THE TRIBUNAL THEREFORE THE APEX COURT HAS HELD TH AT IT WAS A RECTIFIABLE MISTAKES RIGHTLY CORRECTED BY THE TRIBU NAL U/S.254(2). BUT IN THE PRESENT M.A. OF THE REVENUE THE ORDER O F THE TRIBUNAL IS DATED 12/06/2009 HOWEVER THE ORDER OF THE LIBE RTY INDIA 317 ITR 218 IS ADMITTEDLY DATED 31.08.2009. PLEASE RECO NSIDER YOUR M.A.NO.23 &26 /AHD/2010 10 DECISION ON THESE LINES AND ALSO EXPLORE THE CORREC T POSITION OF LAW. I HAVE ALSO UNDERLINED BY PENCIL SOME OF YOUR OBSERVATIONS FOR DEEPER DELIBERATION SO THAT THERE MUST NOT BE ANY ERROR IN OUR JUDGEMENT ABOUT THE DATES OF THE ORDERS. THANKS SD/- (MUKUL KR.SHRAWAT) JM 31.10.2011 2. IN THE LIGHT OF THE ABOVE NOTE I PREFER TO REPR ODUCE A PARAGRAPH FROM THE ORDER OF THE HON'BLE SUPREME COURT PRONOUN CED IN THE CASE OF SAURASHTRA KUTCH STOCK EXCHANGE LTD. 305 ITR 227 (SC) WHICH HAS BEEN RELIED UPON BY MY LD. COLLEAGUE. PLACITUM (47) :- IN THE PRESENT CASE ACCORDING TO THE ASSESSEE TH E TRIBUNAL DECIDED THE MATTER ON OCTOBER 27 2000. HIRALAL BH AGWATI WAS DECIDED A NEW MONTHS PRIOR TO THAT DECISION BUT IT WAS NOT BROUGHT TO THE ATTENTION OF THE TRIBUNAL. IN OUR OPINION IN THE CIRCUMSTANCES THE TRIBUNAL HAS NOT COMMITTED ANY E RROR OF LAW OR OF JURISDICTION IN EXERCISING POWER UNDER SUB-SE CTION (2) OF SECTION 254 OF THE ACT AND IN RECTIFYING THE MISTA KE APPARENT FROM THE RECORD. SINCE NO ERROR WAS COMMITTED BY THE TRIBUNAL IN RECTIFYING THE MISTAKE THE HIGH COURT WAS NOT W RONG IN CONFIRMING THE SAID ORDER. BOTH THE ORDERS THEREF ORE IN OUR OPINION ARE STRICTLY IN CONSONANCE WITH LAW AND NO INTERFERENCE IS CALLED FOR.( HIGHLIGHTED TO EMPHASIZE) SINCE THE ORDER OF THE TRIBUNAL WAS DECIDED ON 27/ 10/2000 BUT THE DECISION WHICH WAS TO BE FOLLOWED OF HIRALAL BH AGWATI 246 ITR 288 (GUJ.) WAS DATED 18/4/2000 I.E. PRIOR TO THE D ECISION OF THE TRIBUNAL. THEREFORE THE HON'BLE SUPREME COURT HAS EXPRESSED ITS OPINION THAT THE TRIBUNAL COMMITTED THE ERROR IN NO T FOLLOWING THE SAME AND THAT RIGHTLY RECTIFIED THAT MISTAKE U/S 2 54(2). THE HON'BLE SUPREME COURT HAS CATEGORICALLY STATED THAT THE SAI D DECISION OF HIRALAL BHAGWATI (SUPRA) WAS DECIDED A FEW MONTHS PRIOR TO THE DECISION OF THE TRIBUNAL BUT THAT WAS NOT BROUGHT TO THE ATTENT ION OF THE TRIBUNAL M.A.NO.23 &26 /AHD/2010 11 THEREFORE IN THE OPINION OF THEIR LORDSHIP UNDER T HOSE CIRCUMSTANCES THE TRIBUNAL HAD NOT COMMITTED ANY ERROR OF LAW OR JURISDICTION IN EXERCISING POWER U/S.254(2) OF THE I.T.ACT IN RECT IFYING THAT MISTAKE APPARENT FROM THE RECORD. 3. THIS VIEW CAN BE FORTIFIED BY CITING A DECIS ION OF HON'BLE MADRAS HIGH COURT PRONOUNCED IN THE CASE OF SREE PALANIAPP A TRANSPORTS VS. CIT 238 ITR 492; RELEVANT PORTION REPRODUCED BELOW :- WE WILL FIRST DECIDE THE QUESTION REFERRED TO US A ND THEN WE WILL ALSO ADVERT TO THE MERITS OF THE CASE BECAUSE OF A SUBSEQUENT JUDGMENT OF THE SUPREME COURT. ON THE MAINTAINABILI TY OF AN APPLICATION UNDER S. 254(2) OF THE ACT RELIANCE IS PLACED ON THE JUDGMENT OF SOMASUNDARAM J. IN M.K. KUPPURAJ VS. IT O (1995) 128 CTR (MAD) 407 : (1995) 211 ITR 853 (MAD) : TC 5 3R.401. THE LEARNED JUDGE HAS NO DOUBT CATEGORICALLY DECID ED THAT AN ASSESSMENT CONTRARY TO A JUDGMENT SUBSEQUENTLY REND ERED WOULD ALSO CONSTITUTE AN ERROR ON THE FACE OF THE RECORD AND THEREFORE RECTIFIABLE UNDER S. 154 OF THE ACT. THE POWER UNDE R S. 254(2) IS NOT DIFFERENT FROM THE POWER UNDER S. 154 OF THE AC T. WITH RESPECT TO THE LEARNED JUDGE WE THINK THAT THE LEARNED JUD GE HAS COMMITTED AN ERROR IN RELYING ON THE JUDGMENT OF A DIVISION BENCH OF THIS COURT IN METTUR CHEMICAL & INDUSTRIAL CORPORATION LTD. VS. CIT (1977) 110 ITR 822 (MAD) : TC 53R.393. WE HAVE CAREFULLY PERUSED THE JUDGMENT IN METTUR CHEMICAL & INDUSTRIAL CORPORATION LTD. VS. CIT (SUPRA) AND WE FIND THAT T HAT WAS NOT A CASE WHICH RELATED TO A SUBSEQUENT JUDGMENT OF THE JURISDICTIONAL HIGH COURT HAVING AN EFFECT ON EARLIER ORDER OF THE TRIBUNAL. ALL THAT THE DIVISION BENCH HELD WAS THAT THE ITO IN TH AT CASE HAD NOT FOLLOWED A JUDGMENT OF THE JURISDICTIONAL HIGH COURT WHICH WAS AVAILABLE TO HIM ON THE DATE OF HIS ORDER. THER EFORE WE DO NOT SEE HOW JUSTICE SOMASUNDARAM HAS APPLIED THE SA ID DECISION IN RESPECT OF A JUDGMENT SUBSEQUENTLY RENDERED SUB SEQUENT TO THE ORDER OF THE TRIBUNAL. ON A BARE READING OF S. 254( 2) WE HAVE NO HESITATION IN COMING TO THE CONCLUSION THAT A TRIBU NAL DECIDING A CASE ON CERTAIN DEBATABLE ISSUES WHEREIN THERE IS NO DECISION OF THE JURISDICTIONAL HIGH COURT COULD NOT BE DEEMED T O HAVE MADE A MISTAKE BECAUSE SUBSEQUENT TO THE DECISION OF THE TRIBUNAL A JUDGMENT HAS BEEN RENDERED BY THE JURISDICTIONAL HI GH COURT. M.A.NO.23 &26 /AHD/2010 12 THIS IS PRECISELY THE ISSUE BEFORE US. AS RIGHTLY P OINTED OUT BY THE TRIBUNAL IN RESPECT OF ORDERS PASSED BY THE TRIBUN AL SUBSEQUENT TO THE DECISION OF THE JURISDICTIONAL HIGH COURT I F IT DOES NOT FOLLOW THE RATIO OF THE JUDGMENT OF THE JURISDICTIO NAL HIGH COURT THEN IT CAN BE SAID THAT IT HAS COMMITTED AN ERROR APPARENT ON THE FACE OF THE RECORD. IN THIS VIEW OF THE MATTER WE ARE CONSTRAINED TO OVERRULE THE JUDGMENT OF SOMASUNDARAM J. IN M.K. KUPPURAJ VS. ITO [1995] 211 ITR 853 (MAD.). IN FINE WE ANSWER THE QUESTION REFERRED TO US IN T HE NEGATIVE AND AGAINST THE ASSESSEE. 4. EVEN AFTER ABOVE REMARKS I HEREBY CONCUR TO THE FINAL VERDICT OF MY VENERATED LD. COLLEAGUE THROUGH WHICH THE MISCEL LANEOUS PETITION OF THE REVENUE DEPARTMENT HAS BEEN ALLOWED. AS PER TH E SAID FINAL CONCLUSION IT WAS HELD THAT THE ASSESSEE WOULD NOT BE ELIGIBLE FOR DEDUCTION U/S.80-IB/80IA IN RESPECT OF DUTY DRAW BA CK INCOME AND PROFITS ON SALE OF DEPB AND TO THAT EXTENT THE ORDE R OF THE TRIBUNAL DATED 12/06/2009 STOOD RECTIFIED. I AM CONSENTING WITH THIS VIEW BECAUSE FOR ANY COURT OF LAW THE PRIMARY CONSIDERAT ION SHOULD BE THE JUSTICE OF THE CASE AS IT WAS HELD IN THE CASE OF DR.RAJAH SIR M.A. MUTHIAH CEHTTIAR (DECD) VS. CIT 238 ITR 505 (MAD.) ; THAT IN THE CASES WHERE A PRONOUNCEMENT OF THE SUPREME COURT SUBSEQUE NT TO THE ORIGINAL DECISION OF THE TRIBUNAL ON THE EFFECT OF THE APPLI CATION OF THE LAW IS BROUGHT TO THE NOTICE OF THE TRIBUNAL BY WAY OF AN APPLICATION FOR RECTIFICATION AND IF THE TRIBUNAL IS OF THE VIEW T HAT INTERESTS OF JUSTICE WOULD REQUIRE SUCH AN APPLICATION BE ALLOWED IT WO ULD BE OPEN TO THE TRIBUNAL TO DO SO. THE RELEVANT PORTION IS REPROD UCED BELOW:- RECTIFICATION SHOULD BE OF A MISTAKE IN THE ORIGIN AL ORDER. THE MISTAKE CAN OCCUR ON ACCOUNT OF OMISSION TO NOTICE RELEVANT FACTS OR STATING FACTS WRONGLY OR OMITTING TO TAKE INTO A CCOUNT THE LAW OR APPLYING THE LAW IN A MANNER CONTRARY TO THE BIN DING DECISION OF THE SUPREME COURT. SEC. 254(2) ADVISEDLY USES TH E WORD M.A.NO.23 &26 /AHD/2010 13 'MAY'. IT CONFERS A DISCRETION ON THE TRIBUNAL IN T HE MATTER OF RECTIFYING WHAT IT MAY FIND TO BE A MISTAKE IN ITS ORDER. THE PRIMARY CONSIDERATION SHOULD BE THE JUSTICE OF THE CASE. IF AN ASSESSEE HAD FAILED TO CHALLENGE AN ORDER MADE BY T HE TRIBUNAL BECAUSE IT WAS IN ACCORDANCE WITH THE DECISION OF T HE SUPREME COURT THEN HOLDING THE FIELD AND WITHIN A PERIOD OF FOUR YEARS THE SUPREME COURT MODIFIED ITS VIEW AND THE MODIFIED VI EW BECOMES THE LAW OF THE LAND UNDER ART. 141 JUSTICE WOULD REQUIRE THAT WHEN A PARTY WHO HAD NOT PREFERRED APPEAL AND SOUGH T TO CONTINUE PROCEEDINGS IN THE BELIEF THAT SUCH PROCEE DINGS WOULD BE FUTILE SUCH A PERSON IS NOT TO BE PENALISED BY DENYING TO THAT PERSON AN OPPORTUNITY TO HAVE THE ORDER TO BE RECTI FIED BY THE TRIBUNAL ITSELF. IN CASE WHERE THE TRIBUNAL IS SATI SFIED THAT THE LAW DECLARED BY THE SUPREME COURT WITH REGARD TO TH E MATTERS DEALT WITH IN THE ORDER WHICH THE TRIBUNAL HAD BEEN CALLED UPON TO EXAMINE HAD BEEN ALTERED AS FOR OR PRIOR TO THE DATE OF THE ORIGINAL ORDER IT WOULD BE OPEN TO THE TRIBUNAL TO EXERCISE ITS JURISDICTION UNDER S. 254(2) OF THE ACT. THOUGH THE SECTION MERELY REFERS TO RECTIFICATION OF A MISTAKE THE NATURE OF THE MISTAKE AND THE PURPOSE FOR WHICH THE JURISDICTION IN INVOKED C AN ALSO BE REGARDED AS RELEVANT FACTORS FOR THE PURPOSE OF DEC IDING THE QUESTION AS TO WHETHER THE APPLICATION IS REQUIRED TO BE ALLOWED OR REFUSED. IF THE RESULT OF ALLOWING THE APPLICATI ON IS TO BRING ABOUT A RESULT WHICH IS MANIFESTLY UNJUST OR CONTRA RY TO THE SUBSTANTIVE PROVISION OF THE ACT THE TRIBUNAL CAN IN ITS DISCRETION DECLINE TO ALLOW SUCH AN APPLICATION FO R RECTIFICATION OF MISTAKE. IF ON THE OTHER HAND BY ALLOWING SUCH AN APPLICATION THE TRIBUNAL BRINGS ABOUT THE RESULT W HICH WOULD BE IN ACCORDANCE WITH THE SUBSTANTIVE CHARGING PROV ISIONS OF THE ACT SUCH AN EXERCISE WILL HAVE TO BE REGARDED AS ONE WHICH IS A PERMISSIBLE EXERCISE OF POWER TO RECTIFY THE M ISTAKE UNDER S. 254(2) OF THE ACT. ( PORTION HIGHLIGHTED) 5. FOLLOWING THE RATIO LAID DOWN HEREINABOVE I THE REFORE ACQUIESCE WITH THE FINDING OF MY RESPECTED COLLEAGUE. SD/- ( MUKUL KR. SHARAWAT ) JUDICIAL MEMBER 29.3.2012 M.A.NO.23 &26 /AHD/2010 14 COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR AHMEDABAD BY ORDER 6. THE GUARD FILE AR ITAT AHMEDABAD 1. DATE OF DICTATION. 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER.OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 30/3 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.30/3 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 30/3/12 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. ..