P.S.King, Kottayam v. ITO, Kottayam

MA 33/COCH/2011 | 2002-2003
Pronouncement Date: 30-12-2011

Appeal Details

RSA Number 3321924 RSA 2011
Assessee PAN AFNPK7408N
Bench Cochin
Appeal Number MA 33/COCH/2011
Duration Of Justice 4 month(s) 6 day(s)
Appellant P.S.King, Kottayam
Respondent ITO, Kottayam
Appeal Type Miscellaneous Application
Pronouncement Date 30-12-2011
Appeal Filed By Assessee
Bench Allotted DB
Tribunal Order Date 30-12-2011
Assessment Year 2002-2003
Appeal Filed On 23-08-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH COCHIN BEFORE S/SHRI N.R.S.GANESAN JM AND SANJAY AROR A AM M.P. NOS. 33-35/COCH/2011 (ARSG. OUT OF I.T.A NOS. 156-158/COCH/2010) ASSESSMENT YEARS: 2002-03 2003-04 AND 2005-05 P.S.KING PASUPPARA ESTATE PASUPPARA P.O. [PAN: AFNPK 7408N] VS. THE INCOME TAX OFFICER WARD-2 KOTTAYAM. (ASSESSEE-APPELLANT) (REVENUE- RESPONDENT) ASSESSEE BY SHRI R.KRISHNAN CA-AR REVENUE BY MS. S. VIJAYAPRABHA JR. DR DATE OF HEARING 16/12/2011 DATE OF PRONOUNCEMENT 30/12/2011 O R D E R PER SANJAY ARORA AM: THESE ARE A SET OF THREE MISCELLANEOUS PETITIONS P REFERRED U/S. 254(2) OF THE INCOME-TAX ACT 1961 ('THE ACT' HEREINAFTER) BY TH E ASSESSEE AGAINST THE ORDER BY THE TRIBUNAL DATED 30-06-2011 PASSED FOR THREE ASSESSME NT YEARS I.E. A.Y.S 2002-03 2003- 04 AND 2005-06 RESPECTIVELY IN ITS CASE. 2. THE APPLICATIONS CONCERN A COMMON ISSUE DECIDED BY THE TRIBUNAL PER ITS SAID IMPUGNED ORDER AND WERE ACCORDINGLY HEARD TOGETHER AND ARE CONSEQUENTIALLY BEING DISPOSED OF BY A COMMON CONSOLIDATED ORDER. 3. THE ASSESSEES CONTENTION IS TWO-FOLD. ONE THAT THE TRIBUNAL SUMMARILY REJECTED ITS RELIANCE ON THE DECISION BY ITS SPECIAL BENCH IN TH E CASE OF SAIPEM SPA V. ITO 76 ITD 101 (DEL.)(SB) BY STATING THAT THE SAME WAS A CASE OF AN EMPLOYEE WORKING ON AN OIL M.P. NOS.33-35 /COCH/2011 P.S.KING V. ITO WARD 2 KOTTAYAM 2 RIG/OIL EXPLORATION SITE FOR WHICH EXCEPTION STAND S PROVIDED IN RULE 3 OF THE INCOME-TAX RULES 1962 (`THE RULES HEREINAFTER). EVEN SO THE TRIBUNAL HAS NOT ADDRESSED ITSELF TO THE RATIO OF THE SAID DECISION I.E. THAT THERE IS NO QUESTION OF A `PERQUISITE IF THE FACILITY OR AMENITY PROVIDED BY THE EMPLOYER IS EX NECESSITATE I.E. NECESSARY TO DISCHARGE THE DUTY ASSIGNED TO THE EMPLOYEE (REFER PARA 18 AT PG. 112 ). THE RESIDENTIAL ACCOMMODATION AT THE PASUPPARA ESTATE PASUPPARA IN THE INSTANT CASE IS REQUIRED FOR THE PROPER PERFORMANCE OF HIS DUTIES BY THE ASSESSEE-EMPLOYEE AS THE SUPER INTENDANT OF THE ESTATE. THE SAME IT MAY BE APPRECIATED WAS A CONDITION OF EMPLOYMENT A ND THUS THE RATIO OF THE SAID SPECIAL BENCH DECISION IS SQUARELY APPLICABLE IN THE PRESEN T CASE. SECONDLY THE TRIBUNAL GOES ON TO STATE THAT THE DECISION BY THE APEX COURT IN THE CASE OF ARUN KUMAR & OTHRS. V. UNION OF INDIA (2006) 286 ITR 89 (SC) IS SQUARELY APPLICABLE IN THE (FACTS OF THE) PRESENT CASE AND GOES ON TO DECIDE AGAINST THE ASSESSEE HOLDING THE FREE RESIDENTIAL ACCOMMODATION TO BE A PERQUISITE U/S. 17(2) OF THE ACT. THE ASSESSEE HAD NO NOTICE OF THE SAID DECISION. NO DOUBT THE TRIBUNAL COULD RELY ON THE SAME BEING E VEN OTHERWISE BINDING ON IT BUT THE FACT OF THE MATTER IS THAT THE SAID DECISION IS IN FAVOUR OF THE ASSESSEE AND THE TRIBUNAL HAS WRONGLY CONSTRUED THE SAME. TOWARD THIS THE ASSESS EE HAS QUOTED SOME OBSERVATIONS BY THE HONBLE COURT AT PAGES 91 AND 92 OF THE REPORT TO THE EFFECT THAT WHERE THE BENEFIT OR FACILITY FURTHERS THE COMMERCIAL INTEREST OF THE EM PLOYER THE SAME WOULD NOT PER SE BECOME A `PERQUISITE. 4. WE HAVE HEARD THE PARTIES AND PERUSED THE MATERIAL ON RECORD AS WELL AS THE CITED DECISIONS. 4.1 THE ASSESSEE IS FOR THE RELEVANT YEARS WORKI NG AS A SENIOR MANGER OPERATIONS WITH M/S. HIGH LAND PRODUCE CO. LTD. HIS CASE IS T HAT HE IS NECESSARILY REQUIRED TO STAY AT THE ESTATE BUNGALOW PASUPPARA ESTATE TO SUPERV ISE THE ESTATE OPERATIONS; THE COMPANY RULES ITSELF NOT PERMITTING HIM TO STAY OUTSIDE THE ESTATE. AS SUCH THE RENT-FREE ACCOMMODATION PROVIDED TO HIM INCLUDING THE VALUE OF THE MAINTENANCE SERVICES OF THE GARDENER SWEEPER ETC. WOULD NOT FALL TO BE COVER ED WITHIN THE MEANING OF A `PERQUISITE U/S. 17(2) OF THE ACT. THE TRIBUNAL HAS IN ITS IMPU GNED ORDER DULY NOTED THE FACTS OF THE CASE; THE BASIS OF THE DECISION BY THE LOWER AUTHOR ITIES BEFORE WHOM THE ASSESSEES CASE M.P. NOS.33-35 /COCH/2011 P.S.KING V. ITO WARD 2 KOTTAYAM 3 WAS THE SAME; THE RIVAL CONTENTIONS INCLUDING THE DECISION IN THE CASE OF SAIPEM SPA V. ITO (SUPRA). THERE HAS BEEN NO WRONG ASSUMPTION OF ANY FACT WHICH ARE THE SAME AS BEFORE THE REVENUE AUTHORITIES. THE DECISION BY THE SPECIAL BENCH OF THE TRIBUNAL WAS CONSIDERED AS NOT APPLICABLE IN VIEW OF THE SAME FA LLING WITHIN THE EXEMPTIONS LISTED U/R. 3 OF THE RULES. WHATEVER BE THE MERITS OF THE SAID CONSIDERATION THE SAME CAN BY NO MEANS BE CONSIDERED AS A `MISTAKE RECTIFIABLE U/S. 254(2) OF THE ACT WHICH PRECLUDES REVIEW. THE TRIBUNAL ALSO NOTES THAT A WRONG DEDUCT ION (OF TAX AT SOURCE) BY AN EMPLOYER OR A WRONG DECLARATION BY THE ASSESSEE PER ITS RETU RN; THE SAME HAVING BEEN CONSIDERED AS A `PERQUISITE AT 100% AND 25% (OF THE VALUE OF THE RENT-FREE ACCOMMODATION) RESPECTIVELY THEREBY WOULD NOT BY ITSELF MAKE IT A TAXABLE PERQUISITE AND WHERE A CLAIM IS (VALIDLY) RAISED BY THE ASSESSEE THE REVENUE IS BOUND TO CONSIDER IT AND ACT IN ACCORDANCE WITH THE LAW. FURTHER THE PLEA BY THE L D. DR IN THIS REGARD MADE BEFORE US BY ADVERTING TO THESE `DISTINGUISHING FACTS OF THE IN STANT CASE WOULD THUS ALSO BE TO NO EFFECT WHICH WE ARE EVEN OTHERWISE PRECLUDED TO VI SIT IN THE RECTIFICATION PROCEEDINGS HAVING ALREADY NOTED THAT NO WRONG ASSUMPTION OF AN Y FACT (BY THE TRIBUNAL) HAS BEEN BROUGHT FORTH. 4.2 SO HOWEVER IT CANNOT BE DENIED THAT THE TR IBUNAL IN ARRIVING AT ITS CONCLUSION/S RELIED ON THE STATEMENT OF LAW AS MADE BY THE APEX COURT PER ITS DECISION IN THE CASE OF ARUN KUMAR & OTHRS. V. UNION OF INDIA (SUPRA). AGAIN AN INCORRECT APPRECIATION OR UNDERSTANDING OF THE SAID BINDING DECISION WHICH M AY WELL BE A MATTER OF DEBATE AS EACH DECISION IS RENDERED IN A GIVEN CONTEXTUAL BACKGROU ND AND HAS TO BE APPLIED WITH REGARD TO THE OBTAINING FACTS MAY NOT BY ITSELF GIVE RISE TO A RECTIFIABLE MISTAKE. AT THE SAME TIME DUE OPPORTUNITY TO THE PARTY AGAINST WHOM THE DECISION IS BEING SUO MOTU APPLIED BY THE TRIBUNAL/COURT HAS TO BE AFFORDED TO ACCORD WITH THE PRINCIPLES OF NATURAL JUSTICE WHICH ARE FUNDAMENTAL TO OUR JUDICIAL OR THE JUSTIC E DELIVERY SYSTEM. THIS IS PARTICULARLY SO WHERE AS IN THE PRESENT CASE THE APPELLANT-PET ITIONER HAS BEEN ABLE TO DEMONSTRATE PRIMA FACIE A PREJUDICE CAUSED TO IT BY THE SAID RELIANCE INA SMUCH AS WITH REFERENCE TO THE OBSERVATIONS BY THE HONBLE COURT IT IS CONTEN DED THAT THE SAID DECISION IN FACT HOLDS IN FAVOUR OF HIS (ASSESSEES) CASE. WE SAY SO AS IN A GIVEN CASE EVEN THOUGH NO M.P. NOS.33-35 /COCH/2011 P.S.KING V. ITO WARD 2 KOTTAYAM 4 OPPORTUNITY FOR MEETING A BINDING DECISION MAY HAVE BEEN AFFORDED WHERE NO CASE EVEN PRIMA FACIE ON ACCOUNT OF ANY MISAPPLICATION OR MISCONSTRUCTI ON OF THE SAME OR IN ANY OTHER MANNER OF PREJUDICE IS MADE OUT DOING SO WO ULD AMOUNT TO AN EMPTY FORMALITY RESULTING IN A DECISION RENDERED ON MERITS IN ACCOR D WITH THE SETTLED LAW BEING STRUCK DOWN ON THE PLEA OF NON-GRANT OF OPPORTUNITY. IN OT HER WORDS THE SAID PLEA CANNOT OPERATE AS AN ALIBI OR TOWARD AN ABUSE OF THE DUE PROCESS OF LAW WHIC H CANNOT BE ALLOWED TO BE REDUCED TO A FARCE; THE COURTS/ TRIBUNALS BEI NG DUTY BOUND TO FOLLOW THE LAW OF THE LAND AS LAID DOWN BY THE HIGHER COURTS OF LAW AND/O R THE BINDING PRECEDENTS. THE MATTER UNDER REFERENCE THUS BECOMES ESSENTIALLY A QUESTION OR ISSUE OF FACT AND THERE IS NO SCOPE FOR A MECHANICAL APPLICATION OF ANY FIXED METHOD/PR OCEDURE. IN THE INSTANT CASE HOWEVER THE APPLICANT HAS CLEARLY MADE OUT A PRIMA FACIE CASE OF HAVING BEEN PREJUDICED BY THE NON-GRANT OF OPPORTUNITY OF HEARING IN THE MATTER B Y ADVERTING TO SOME OBSERVATIONS BY THE APEX COURT; IN FACT REPRODUCING THE SAME IN HI S APPLICATION AS WELL. IT IS WELL-SETTLED PRINCIPLE OF JURISPRUDENCE THAT NO PREJUDICE COULD POSSIBLY BE CAUSED TO ANY PARTY BEFORE IT BY ANY ACTION OR OMISSION BY A COURT OR TRIBUNAL WHOSE PURVIEW IS TO ADJUDICATE THE ISSUE/S BEFORE IT IN A FAIR AND OPEN MANNER. THERE HAS THUS OCCURRED A `MISTAKE BY THE TRIBUNAL IN DECIDING THE APPEALS UNDER REFERENCE IN THE MANNER DONE. 4.3 UNDER THE GIVEN FACTS AND CIRCUMSTANCES OF TH E CASE WE ONLY CONSIDER IT FIT AND PROPER THAT THE IMPUGNED ORDER BY THE TRIBUNAL IS R ECALLED FOR HEARING THE PARTIES ON THE APPLICABILITY OR OTHERWISE OF THE DECISION BY THE A PEX COURT IN THE CASE OF ARUN KUMAR & OTHRS. V. UNION OF INDIA (SUPRA) IN THE INSTANT CASE. FURTHER AS THE RELIA NCE ON THE SAID JUDGMENT IS ONLY TOWARD THE STATEMENT OF LAW IN THE MATTER AS CLARIFIED BY THE HIGHER COURTS OF LAW BOTH THE PARTIES ARE AT LIBERTY TO R EFER TO ANY OTHER CASE LAW FOR THE PURPOSE WHICH THEY CONSIDER AS APPLICABLE OR RELEVANT. WE D ECIDE ACCORDINGLY. M.P. NOS.33-35 /COCH/2011 P.S.KING V. ITO WARD 2 KOTTAYAM 5 5. IN THE RESULT THE ASSESSEES MISCELLANEOUS APPLICATIONS ARE ALLOWED ON THE AFORESAID TERMS. SD/- SD/- (N.R.S.GANESAN) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: ERNAKULAM DATED: 30TH DECEMBER 2011 GJ COPY TO: 1. P.S.KING PASUPPARA ESTATE PASUPPARA P.O. 2. THE INCOME TAX OFFICER WARD-2 KOTTAYAM. 3. THE COMMISSIONER OF INCOME-TAX (APPEALS)-IV KOC HI. 4. THE COMMISSIONER OF INCOME-TAX KOTTAYAM. 5. D.R. I.T.A.T. COCHIN BENCH COCHIN. 6. GUARD FILE .