Tribunal upholds assessment order for 2009-10, dismisses appeal on time-barred issue, citing Income Tax Act.

The Tribunal dismissed the assessee's appeal, upholding the impugned assessment order for the assessment year 2009-10. The additional ground of appeal regarding the time-barred assessment order was also dismissed. The Tribunal favored the division bench decision in Zuari Cement Ltd over the single judge decision in Vedanta Ltd, regarding the applicability of section 144C of the Income Tax Act. The matter was scheduled for further hearing on November 14, 2022, with other grounds of appeal remaining unresolved.

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Issues Involved:

1. Admission of additional ground of appeal regarding the time-barred assessment order.
2. Applicability of section 144C of the Income Tax Act for the assessment year 2009-10.
3. Conflicting judgments from non-jurisdictional High Courts.
4. Binding nature of non-jurisdictional High Court decisions on lower judicial forums.

Detailed Analysis:

1. Admission of Additional Ground of Appeal:
The assessee moved a petition to admit an additional ground of appeal, contending that the Assessing Officer (AO) erred in passing the final order under section 143(3) read with section 147 of the Income Tax Act beyond the time limit prescribed under section 153, making the order liable to be quashed. The Tribunal admitted this additional ground as it was purely a legal issue.

2. Applicability of Section 144C:
The assessee argued that section 144C, inserted by the Finance (No 2) Act 2009, applied only from the assessment year 2010-11 onwards. They cited explanatory notes and circulars supporting this view, along with the Hon'ble Madras High Court's judgment in Vedanta Ltd vs ACIT, which held that amendments effective from October 1, 2009, apply only to assessment years 2010-11 and subsequent years. The assessee contended that the AO should have passed the final assessment order by March 31, 2013, for the assessment year 2009-10, thus rendering the impugned order illegal.

3. Conflicting Judgments from Non-Jurisdictional High Courts:
The Departmental Representative opposed the assessee's submissions, citing the Hon'ble Andhra Pradesh High Court's judgment in Zuari Cement Ltd vs ACIT, which held that section 144C applies to proceedings after October 1, 2009. This decision was supported by the dismissal of an SLP against it by the Hon'ble Supreme Court. The Departmental Representative argued that the circular dated November 19, 2013, had retrospective effect and that the assessee never objected to the assessment order being time-barred.

4. Binding Nature of Non-Jurisdictional High Court Decisions:
The Tribunal noted the conflicting judgments from the Hon'ble Madras High Court in Vedanta Ltd and the Hon'ble Andhra Pradesh High Court in Zuari Cement Ltd. The Tribunal emphasized that while non-jurisdictional High Court decisions are not binding, they are given utmost respect and consideration. The Tribunal highlighted the need for an objective criterion to decide which decision to follow, favoring the decision of a division bench over a single judge bench due to the collective decision-making process.

Conclusion:
The Tribunal concluded that the division bench decision in Zuari Cement Ltd, which held that section 144C applies to proceedings after October 1, 2009, should be followed over the single judge decision in Vedanta Ltd. Consequently, the Tribunal upheld the impugned assessment order and dismissed the additional ground of appeal. The remaining grounds of appeal were not addressed, and the matter was scheduled for further hearing on November 14, 2022.

Result:
The assessee's appeal was dismissed to the extent indicated, and the hearing on other grounds of appeal was scheduled for a later date. The judgment was pronounced in the open court on October 11, 2022.

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