TaxTMI 
TaxTMI 
2019 (9) TMI 627
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to the appellant. 3. The Learned Commissioner of Income-tax (Appeals) has erred in law and in facts in not appreciating that the Rectification order passed by the assessing officer u/s 154 of the Act was bad in law and invalid. 4. The Learned Commissioner of Income-tax (Appeals) has erred in law and in facts in not appreciating that the order passed by him suffered from mistake apparent on record and hence was liable to be rectified u/s. 154 of the Act." 3. Briefly put, the relevant facts are that assessee is an individual engaged in the business of manufacturing and export of garments. He filed his return of income for Assessment Year 2003-04 on 20.10.2003 declaring a total income of Rs. 96,25,198/- after claiming deduction u/s 80HHC of Rs. 99,73,059/-. The case of the assessee was selected for scrutiny assessment. In the course of scrutiny assessment, the Assessing Officer noted that assessee carried on business in the name and style of M/s Fair Lady and M/s Fair Lady (Exports). The first concern is doing business in local markets only and the other concern is 100% export unit. The assessee had furnished separate Profit & Loss account and Capital account of both the co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ctified under Section 154 of the Act and not something which can be determined by the long drawn process of reasoning. Accordingly, he rejected the assessee's application under Section 154 of the Act. On appeal before the CIT(A) against the order of the Assessing Officer under Section 154 of the Act, the CIT(A) firstly held this cannot be termed as a mistake apparent from record and thus, the same cannot be rectified under Section 154 of the Act and agreed with the contention of the Assessing Officer that the issue is debatable. Secondly, on merits, the CIT(A) held that the issue of allowance of deduction under Section 80HHC of the Act has been decided against the assessee by the order of the Hon'ble Bombay High Court in the case of Kalpataru Colours [2010] 192 taxman 435 (Bom). Accordingly, the CIT(A) dismissed the appeal of the assessee vide order dated 24.01.2011. The assessee did not prefer further appeal against the order of the CIT(A). Subsequently, the Hon'ble Supreme Court in the case of Topman Exports vs. CIT, 342 ITR 49 (SC) reversed the decision of the Hon'ble Bombay High Court in the case of Kalpataru Colours (supra) vide its order dated 08.02.2012. The assessee thu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ief and that no malafide intentions are involved in filing the appeal late. 10. I say that the application for condonation of delay is being separately filed and I confirm the facts stated therein to be correct." From above, it can be seen that the assessee chose not to file the appeal before the Tribunal based on the advice of the Consultant that the jurisdictional High Court decision, which is binding on the assessee, has decided the issue against the assessee; and, as such, filing appeal before Tribunal will not be fruitful. Subsequently, since the Hon'ble Supreme Court decided the issue in favour of the assessee in another case, the assessee was advised to file appeal before the Tribunal. As such, delay in filing the appeal was solely due to the bona fide and genuine belief and that no mala fide intentions were involved. 5. In this regard, the learned Representative placed reliance on the following decisions, wherein delay in filing appeal before Tribunal due to the subsequent decision of the Hon'ble Supreme Court was condoned: a) Magnum Exports vs. ACIT, ITA No. 1111/Kol/2012 b) My Favourite Lady Exports Pvt. Ltd. vs. ITO, ITA No. 5152/Mum/2014 c) Pahil....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e assessee's request for condonation of delay in filing the appeal. As discussed in the earlier part of the order, the delay in filing the appeal before us was solely on the ground that the CIT(A) has decided the issue against the assessee following the decision of the Jurisdictional High Court in the case of Kalpataru Colours (supra); and, as such, based on the advice of the Consultant, assessee did not prefer further appeal before the Tribunal. On subsequent favorable decision of the Hon'ble Supreme Court in the case of Topman Exports (supra), the assessee was advised to file the appeal before the Tribunal and accordingly assessee filed the appeal before us after a delay of 420 days. The learned Representative for the assessee relied on various decisions of the Tribunal to hold that delay in filing appeal due to subsequent decision of the Hon'ble Supreme Court is a valid ground for condonation of delay. In this regard, we find that the learned DR has not controverted the factual matrix explained by the assessee due to which there was a delay in filing the appeal. We shall thus now examine whether the reason cited by the assessee is a good ground for delay in filing the appeal and....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... is not the function of the Court to pronounce a 'new rule' but to maintain and expound the 'old one'. In other words, the 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 one, it (the later decision) does not make a new law. It only discovers the correct principle of law which has to be applied retrospectively. To put it differently, even where an earlier decision of the Court operated for quite sometime, the decision rendered later on would have retrospective effect, clarifying the legal position which was earlier not correctly understood.[Para 42]" It is evident from the above that the decisions rendered by the Hon'ble Courts do not make any new law; they only clarify the legal position which was earlier not correctly understood. Further, such legal position clarified by the courts has retrospective effect as the law was always the same and no amendment has been made to the law by the decision rendered by the Courts. Once the legal position clarified by the Courts have retrospective effect, it can be inferred that such legal position was always the correct position o....