TaxTMI 
TaxTMI 
2022 (10) TMI 1107
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....s capital receipt in the return, nor filed a revised return for this purpose, nor claimed during the assessment proceedings and claimed it for the first time in appeal before CIT(A)? 3. Whether the Ld. CIT(A) was right in holding that the provisions of section 244A(2) of I.T.Act 1961 are not attracted in the case of the assessee and there is no delay in claiming refund which is attributable to the assessee ? 4. The Appellant craves leave to add, amend, modify, vary, omit or substitute any of the aforesaid grounds of appeal at any time before or at the time of hearing of the appeal." 2. Briefly the facts of the case are that the assessee filed its return of income declaring total income of Rs. 83,79,59,930/- on 28/09/2011 which was processed under section 143(1) on 29/03/2013. Subsequently, the matter was selected for scrutiny and notices were issued and assessment proceedings were thereafter completed by the Assessing officer under section 143(3) vide order dt. 28/02/2014 wherein the assessed income was determined at Rs. 84,01,25,935/- after making certain additions and disallowances. 3. Being aggrieved with the order of the AO, the assessee filed an appeal before the Ld. CIT....
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....lting in the refund are delayed for reasons attributable to the assessee. It was held by the AO that in this case, since in the return of income, there was no claim as regards TUFS Subsidy but the same has been allowed only on account of additional ground of appeal taken during the course of first appeal before the Ld. CIT(A) who has since passed the order on 18/01/2019, the delay in issue of refund from 01/04/2011 to 18/01/2019 is attributable to the assessee. At the same time, it was held by the AO that the assessee is entitled to interest under section 244A for the period 18/01/2019 to the date of issue of refund i.e; 13/08/2019 whereas as per the order dt. 13/08/2019, interest has been calculated only for two months, therefore to this extent, there was a mistake apparent from the record which was rectified and matter was partly decided in favour of the assessee. 8. Against the said findings of the Ld. AO, the assessee again went in appeal before the Ld. CIT(A) and it was contended that the provision of Section 244A(2) are not applicable to the facts of the case as delay in finalization of the proceeding is not attributable to the assessee. It was submitted during the appellate....
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....11 taxmann.com 279 which has in turn followed the decision of the Hon'ble Jurisdictional Punjab and Haryana High Court decision in case of National Horticulture Board vs Union of India [2002] 253 ITR 12 and it was submitted that the said decisions squarely covers the matter in favour of the Revenue. 10. Per contra, the Ld. AR supported the order and the findings of the ld. CIT(A), it was submitted that the Ld. CIT(A) has rightly followed the decision of Coordinate Bench in case of M/s Vardhman Textiles Ltd. Vs. DCIT (supra) and therefore following the principles of consistency, the said order should be followed in the instant case and appeal so filed by the Revenue be dismissed. Regarding the decision of Hon'ble Gauhati High Court in case of CIT Vs. Assam Roofing Ltd (supra), it was submitted that the said decision was rendered in the year 2000 and thereafter, there are subsequent decisions of various High Courts which have been referred and followed by the Coordinate Bench in case of M/s Vardhman Textiles Ltd. Vs. DCIT (supra). It was accordingly submitted that there is no infirminity in the order of the ld CIT(A) and the same should be upheld. 11. We have heard the rival conten....
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....sessee in the proceedings resulting in the refund as the delay in making a claim cannot be equated with the delay in the proceedings resulting in the refund and once the refund of taxes have become due to the assessee by the order of the appellate authority, the assessee shall be eligible for refund of taxes along with interest thereon from the first day of assessment year to the date of issue of refund and as the assessee has only been granted partial interest by the AO from the date of the order of the ld CIT(A) to the date of issue of refund, the interest for the remaining period starting from first date of assessment year to the date of the order of the ld CIT(A) has to be granted and which has rightly been directed to be granted by the ld CIT(A). 14. In this regard, we refer to the decision of the Hon'ble Gauhati High Court in case of CIT vs. Assam Roofing Ltd. (supra) where, briefly, the facts of the case were that the assessee filed its return of income showing transport subsidy received by it as taxable income. In the note below the computation of income it was stated by the assessee that transport subsidy is not a revenue receipt rather it is a capital receipt. Thereafter....
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.... the provisions contained in section 240 of the Act, the entitlement of the assessee to refund is not dependent on making of any claim for refund and same is consequential to the appellate order passed by the Ld. CIT(A) dt. 27/10/1994. Further referring to the provisions of section 244A(2) of the Act, it was held by the Hon'ble Gauhati High Court that use of expression " proceedings resulting in the revision (refund)" is both significant and conspicuous and to read same only to situations covered by sections 238 and 239 of the Act which contemplates claim for refund to be made in the situations specified therein would be against the scheme of the Act. It was held by the Hon'ble Gauhati High Court that the expression "proceeding" referred to in sub section (2) of section 244A more reasonably would mean any proceeding as a result of which the refund has become due. Viewed from the said perspective, the expression "proceeding" in sub-section (2) may take within its ambit an appeal proceeding consequential to which refund may have become due. It was further held by the Hon'ble Gauhati High Court this aforesaid view would find support from the decision of Hon'ble Punjab & Haryana High C....
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.... under Article 226 of the Constitution. 17. In the aforesaid background, the Hon'ble Punjab & Haryana High Court held that it is unable to accept the contention advanced by the ld. Counsel for the assessee that the assessee is entitled to interest on the refunded amount from 09/02/1999 to 23/04/1999. It was held by the Hon'ble High Court that the assessment was framed on 07/10/1998 and it was long thereafter that the assessee applied for seeking exemption under section 10(23C)(iv) on 09/02/1999 and the notification granting exemption was published on 06/04/1999 and it was then the assessee applied for rectification of the assessment order on 09/04/1999 and therefore, we are satisfied that the delay in claiming refund was attributable to the assessee in as much as it did not apply for the same prior to 09/04/1999. 18. Further as regards the interest from 09/04/1999 till the date of refund when the application for rectification was allowed, the matter was decided by the Hon'ble high Court in favour of the assessee holding that a conjoint reading of the provisions of Section 244A shows that the assessee is entitled to receive interest on the amount of refund at the rates prescribed ....
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....(Bom) and Chetan N. Shah Vs. M.K. Moghe CIT (2015) taxmann.com 18 (Bom), Hon'ble Kerela High Court in case of CIT vs South Indian Bank Ltd (2012) 340 ITR 574 (Ker) decided the matter in favour of the assessee. It was held by the Coordinate Bench that any claim of the assessee allowed at any stage resulting in refund whether in the first appellate stage, the second appellate stage or even before the Hon'ble High Court or Hon'ble Supreme Court only recognizes the position that the assessee was never required to pay taxes on that portion of the income. The entire process emphasized under law of assessments and appeals is a continuous process of assessing true and correct income of the assessee beginning with the assessee himself disclosing the same in his return of income and the same thereafter being scrutinized in assessment and thereafter any adverse conclusion drawn thereon being challenged before the appellate authorities and higher judicial authority. The entire process, therefore, of assessment and appeals culminates in the determination of true and correct income on which the assessee was required to pay its taxes. Any claim allowed to the assessee at any stage whether made fo....
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....sessee. The Hon'ble High Court further held that in this case, the Department does not contend that the assessee had needlessly or frivolously delayed the assessment proceedings at the original or appellate stage. In absence of any such foundation, mere fact that the assessee made a claim during the course of the assessment proceedings which was allowed at the appellate stage would not ipso facto imply that the assessee was responsible for causing the delay in the proceedings resulting into refund. 21. In case of CIT Vs. Melstar Information Technology Ltd. (supra), the assessee had not claimed certain expenditure before the AO but eventually raised such a claim before the Tribunal. The Tribunal remanded the proceedings to the CIT(A) and who thereafter allowed the additional benefit claimed by the assessee which resulted in refund and the question of payment of interest on such refund arose for consideration. And on appeal the Tribunal came to the conclusion that the delay cannot be attributed to the assessee and therefore directed the payment of interest. The Hon'ble Bombay High Court upheld the findings of the Tribunal holding that there is no allegation or material on record to ....
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....e High Courts which are at variance where the Hon'ble Punjab & Haryana High Court in case of National Horticulture Board vs Union of India and Hon'ble Gauhati High Court in case of Assam Roofing Ltd have decided the matter in favour of Revenue and the Hon'ble Gujarat High Court in case of Ajanta Manufacturing Ltd. Vs. DCIT, Hon'ble Bombay High Court in cases of CIT Vs. Melstar Information Technology Ltd. and Chetan N. Shah Vs. M.K. Moghe CIT, and Hon'ble Kerela High Court in case of CIT vs South Indian Bank Ltd have decided the matter in favour of the assessee, as to whether the said additional claim/delayed claim tantamount to delayed proceedings resulting in refund and whether the same are attributable to the assessee or not and resultant exclusion thereof for the purposes of grant of refund under section 244A of the Act. 24. It goes without saying that the decision of Hon'ble High Court is binding on the Tribunal and other authorities under its superintendence throughout the territories in relation to which it exercises its jurisdiction. Where divergent views are rendered by different High Courts, an inferior authority under one of such High Courts, is bound to follow its juris....
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....rts and Tribunals in the country. The said Article in unambiguous terms lays down that the law declared by the Supreme Court shall be binding on all Courts within the territory of India. No doubt there is no such similar provision qua the High Courts, however, there can be no dispute or confusion on the impact of Article 227 of the Constitution which vests the High Court with the power to supervise the functions of the Tribunals and authorities within its territorial jurisdiction. The import and impact of the said Article has been addressed over the years in many landmark decisions. Thus, to our understanding we believe that it is well understood and accepted that for any authority within its territorial jurisdiction subjected to its superintendence, the decision rendered by the High Court is a binding precedent to be followed. The said principle, we find looking at the decision arrived at in the impugned order perhaps needs to be addressed and re-iterated again. Reference in this context may be made to the decision rendered by the Apex Court in the case of East India Commercial Co. Ltd. V Collector of Customs, AIR 1962 (S.C) 1893 where it was held as far back as in 1962 "that the ....
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....ng in the Supreme Court or that steps are being taken to file an appeal. Addressing these oft repeated pleas, the Court went on to clearly opine and hold that "// any authority or the Tribunal refuses to follow any decision of the High Court on the above grounds, it would be clearly guilty of committing contempt of the High Court and is liable to be proceeded against." The resort to the decision of another High Court by the First Appellate Authority ignoring the decisions of the jurisdictional High Court, the Court held, runs counter to judicial discipline. A perusal of decisions would show that the constant thread which binds these decisions in similar category of decisions as per the constant refrain is that it is well settled that the decision of a High Court will have the force of binding precedent only in the State or territories on which the court has jurisdiction. In other States or outside the territorial jurisdiction of that High Court it may, at best, have persuasive value for other High Courts. However, as far as the ITAT is concerned, a lone decision of any High Court of the country being higher in hierarchy in the scheme of things becomes a binding precedent for the IT....
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....ust scrupulously follow the said decision in letter and spirit. 4.4 Similarly in CIT vs. G. Dalabhai & Co-226 ITR 922, the Hon'ble Gujarat High Court again recorded its anguish in the face of the obduracy of the officers and remarked - "Before parting with the case, we notice with anguish the language used by the Income Tax Officer in his assessment order saying that "with due respect to the decision of the Gujarat High Court, I do not follow the same'. The Income Tax Officer in not following the decision of the Gujarat High Court within whose supervisory territory he was functioning, is far from satisfactory. The Court held that "it is the least we can say. The minimum decorum of the system of hierarchy that Tribunals in the administration of justice and their judicial subordination to the High Court of the territory in which they function requires that they restrain in the use of proper expression while following or not following the decision of the High Court." 4.5. The Apex Court way back in 1984 addressed in cler terms in Bishnu Ram Borah and Another vs. Parag Saikia & Ors. AIR 1984 SC 898 held that "the board of Revenue any other subordinate tribunal is subject to....
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....ecision of another Division Bench of equal strength or a Full Bench of the same High Court. If one Division Bench differs from another Division Bench of the same High Court, it should refer the case to a larger Bench. (iii) Where there are conflicting decisions of courts of co-ordinate jurisdiction, the later decision is to be preferred if reached after full consideration of the earlier decisions. (c)the decision of one High Court is neither binding precedent for another High Court nor for courts or Tribunals outside its territorial jurisdiction. (d)The decision of one High Court is neither binding precedent for another High Court nor for courts or Tribunals outside its own territorial jurisdiction. It is well-settled that the decision of a High Court have the force of binding precedent only in the State or territories on which the court has jurisdiction. In other States or outside the territorial jurisdiction of that High Court it may, at best, have only persuasive effect. By no amount of stretching of the doctrine of stare decisis, can judgments of one High Court be given the status of a binding precedent so far as other High Courts or Courts or Tribunals within their ter....
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....hat it is of utmost importance that in disposing of the quasi-judicial issues before them, revenue officers are bound by the decision of the appellate authorities. The Court while holding that the order of the Appellate Collector is binding on the Assistant Collectors working within his jurisdiction went on to hold that; "the order of the Tribunal is binding upon the Assistant Collectors and the Appellate Collectors who function under the jurisdiction of the Tribunal. The principles of judicial discipline require that the orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities. The mere fact that the order of the appellate authority is not "acceptable" to the department" The Court held; "in itself an objectionable phrase - and is the subject matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent court. If this healthy rule is not followed, the result will only be undue harassment to assessee and chaos in administration of tax laws." 4.8 The said principle has been re-iterated over the years in a number of cases. Reference may also be made to the decision of the Apex Co....
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....capital expenditure. In the circumstances, considering the fact that the registered office of the assessee in the facts of the said case was in the State of Gujrat, the Apex Court held that the law laid down by the Gujrat High Court in the aforesaid decisions was binding. Accordingly, the Court held that it can be said that as far as for an assessee within the jurisdiction of the Gujrat High Court, the issue could not be considered to be debatable. In view thereof, the orders of the CIT(A), ITAT as well as the decision of the Hon'ble Gujrat High Court were set aside as having been wrongly held that for an assessee, in the jurisdiction of the State High Court, the issue could be considered to be debatable. For ready reference, paras 11 and 12 of the aforesaid decision are extracted hereunder : 11. Even though it is a debatable issue but as Gujarat High Court in the case of Ahmedabad Mfg. & Calico (P) Ltd. (supra) had taken a view that it is capital expenditure which was subsequently followed by Alembic Glass Industries Ltd. V. CIT (supra) and the registered office of the respondent assessee being in the State of Gujarat, the law laid down by the Gujarat High Court was binding.....
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....t the clear and unambiguous directions of the Tribunal (superior authority). Deprecating it, their Lordships of the Supreme Court observed: "Such refusal is in effect a denial of justice, and is furthermore destructive of one of the basic principles in the administration of justice based as it is in this country on a hierarchy of Courts. If a subordinate tribunal refuses to carry out directions given to it by a superior tribunal in the exercise of the appellate powers, the result will be chaos in the administration of justice". A direct question arose before the Hon'ble Supreme Court in East India Commercial Co. Lid, vs. Collector of Customs AIR 1962 SC 1893. In that case, proceedings were initiated by Collector of Customs against petitioner-company on allegations that it had violated conditions of licence and illegally disposed of goods and thereby committed an offence punishable under the Customs Act. The High Court confirmed the order of acquittal passed by the trial Court holding that it cannot be said that "a condition of the licence amounted to an order under the Act" and, therefore, no offence was committed by the company. The High Court also passed an order directin....
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....nferred on a superior tribunal that all the tribunals subject to its supervision should conform to the law laid down by it. Such obedience would also be conducive to their smooth working, otherwise there would be confusion in the administration of law and respect for law would irretrievably suffer. We, therefore, hold that the law declared by the highest Court in the State is binding on authorities or tribunals under its superintendence and that they cannot ignore it either in initiating a proceeding or deciding on the rights involved in such a proceeding." The above view has been reiterated by the Supreme Court in a number of subsequent decisions (See Padmanabha Seity vs. Papiah Seitv AIR 1966 SC 1824, Kaushalya Devi vs. Land Acq. Officer, Aurangabad AIR 1984 SC 892, Bishnu Ram Bohra vs. Parae Saikia AIR 1984 SC 898). In our opinion, submission of the learned counsel for the petitioner is well founded and deserves to be upheld. It is not even the case of the Department that the decision of this Court in Bharat Textiles Works (supra) has been stayed by the Hon'ble Supreme Court. Hence, so far as this Court is concerned, the point is concluded. It is settled law that unless ....
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.... of this Court are bound by it and must scrupulously follow the said decision in letter and spirit. Since the second respondent has not decided the matter in accordance with law laid down by this Court in the case ofBharat Textiles Works (supra), the order passed by him requires to be quashed and set aside." (emphasis supplied) 5. Thus, on a consideration of the position of law as repeatedly enunciated by the different High Courts as well as the Apex Court, we hold that the CIT(A) has erred in ignoring the decision of the jurisdictional High Court on the issue and relying upon the decision of the non jurisdictional High Court when he was duty bound to follow the binding precedent available of the jurisdictional High Court in the case of Hemla Embroidery Mills P.Ltd. (supra) which decision stands in the eyes of law as on date. Accordingly, the grounds raised by the assessee is allowed. Said order was pronounced in the open Court at the time of hearing itself. 26. In light of aforesaid discussions, we are bound to follow the view taken by the Hon'ble jurisdictional Punjab & Haryana High Court in case of National Horticulture Board vs Union of India (supra). The ld. AR failed to d....