TaxTMI 
TaxTMI 
2005 (4) TMI 517
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....dated 10-9-2004], and to Tribunal's decision in the case of ITO v. Venus Jewels [IT Appeal No. 3842 (Mum.) of 2001, dated 25-10-2004]. 4. We have heard the rival contentions, perused the material on record and duly considered the factual matrix of the case as also the applicable legal position. 5. As far as Tribunal's decision in the case of Prince SWR Systems (P.) Ltd. case (supra) is concerned, we have noted that the Tribunal has not followed the co-ordinate Bench decision in Plastiblends India Ltd.'s case (supra), and has decided the case against the assessee by following the Bombay High Court judgment in the case of Indian Rayon Corpn. Ltd. v. CIT [2003] 261 ITR 98 . What is missed out, however, is the fact that in Plastiblends India Ltd.'s case (supra), the co-ordinate Bench had duly considered Indian Rayon Corpn. Ltd.'s case (supra) and then came to the conclusion that Indian Rayon Corpn. Ltd.'s case ( supra) decision has no bearing on the question before the Tribunal. Once a co-ordinate Bench comes to this conclusion, it is not open to another co-ordinate Bench to come to any other conclusion on that issue. This is so held by the Hon'ble Supreme Court in the case of Un....
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.....'s case (supra) it was not open to the Bench to take any other view of the matter than the view taken by the co-ordinate Bench. The decision in Venus Jewels' case (supra) also appears to be per incurium. 7. No doubt that when a co-ordinate Bench doubts the correctness of decision of another co-ordinate Bench, a reference can be made to the Hon'ble President for constitution of a larger Bench. However, as far as the issue before us is concerned, a request for constitution of larger Bench was already been turned down. We see no necessity to make yet another request considering that Hon'ble President has, in a considered decision, turned down earlier request to that effect. In our opinion, the issue does not call for a reconsideration at this stage. 8. As to what should be the binding effect of a per incurium decision, we can do no better than to quote the Hon'ble Andhra High Court in the case of CIT v. B.R. Constructions [1993] 202 ITR 222 ^1(FB). In his inimitable style, Justice S.S.M. Quadri (as he then was) has articulated the views of the Full Bench of Hon'ble Andhra Pradesh High Court as follows : "In a country like ours which is governed by rule of law, law has to be ....
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....AIR 1953 Mad. 351, which were approved by a Full Bench of our High Court in Subbarayudu v. State AIR 1955 AP 87 (FB)/[1955] 11 ALT (Cri.) 53. They are as follows (at page 94 of AIR 1955 AP) : 'A single judge is bound by a decision of a Division Bench exercising appellate jurisdiction. If there is a conflict of Bench decisions, he should refer the case to a Bench of two Judges who may refer it to a Full Bench. A single Judge cannot differ from a Division Bench unless a Full Bench or the Supreme Court overruled that decision specifically or laid down a different law on the same point. But he cannot ignore a Bench decision, as I am asked to do on the ground that some observations of the Supreme Court made in different context might indicate a different line of reasoning. A Division Bench must ordinarily respect another Divisional Bench of co-ordinate jurisdiction but if it differs, the case should be referred to a Full Bench. This procedure would avoid unnecessary conflict and confusion that otherwise would prevail.' The effect of binding precedents in India is that the decisions of the Supreme Court are binding on all the courts. Indeed, article 141 of the Constitution embodies....
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....ce. A decision can be said generally to be given per incuriam when the Supreme Court has acted in ignorance of a previous decision of its own or when a High Court has acted in ignorance of a decision of the Supreme Court.' As has been noticed above, a judgment can be said to be per incuriam if it is rendered in ignorance or forgetfulness of the provisions of a statute or a rule having statutory force or a binding authority. But, if the provision of the Act was noticed and considered before the conclusion arrived at, on the ground that it has erroneously reached the conclusion the judgment cannot be ignored as being per incuriam. In Salmond on Jurisprudence, Twelfth Edition, at page 151, the rule is stated as follows : 'The mere fact that (as is contended) the earlier court misconstrued a statute, or ignored a rule of construction, is no ground for impugning the authority of the precedent. A precedent on the construction of a statute is as much binding as any other, and the fact that it was mistaken in its reasoning does not destroy its binding force.' In Choudhry Bros' case [1986] 158 ITR 224 , as noticed above, the Division Bench treated the judgment in Ch. Atchaiah's cas....