TaxTMI 
TaxTMI 
2023 (6) TMI 809
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....is within the jurisdiction vested us 143(1) of the Act. 3. That the appellant craves for leave to add, amend and or modify the grounds of appeal. 3. The interconnected issue raised by the assessee is that the learned CIT(A) erred in confirming the adjustment made by the CPC under section 143(1) of the Act of the item for which adjustment was not permissible. 4. The brief facts of the case are that assessee in the present case is a public charitable trust and registered under the provisions of section 12AA of the Act. The assessee, in the year under consideration, filed the return of income declaring income at Rs. Nil. The gross total income shown by the assessee at Rs. 64,20,049/- was, inter alia, inclusive of the deemed income as specified under section 11(3) of the Act for an amount of Rs. 25,60,000 only. But the assessee has again accumulated the same under section 11(2) of the Act and claimed the deduction for the same. However, the CPC in the intimation generated under section 143(1) of the Act has denied the deduction treating the same inaccurate claim of the assessee. 5. Aggrieved, assessee preferred an appeal to the learned CIT(A) who also confirmed the....
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....5. We find that the issue in appeal is covered, in favour of the assessee, by Hon'ble Calcutta High Court, in the case of CIT Vs Natwarlal Chowdhury Charity Trust [(1991) 189 ITR 656 (Cal)] wherein Their Lordships have, inter alia, approved the view of the Tribunal to the effect that "the legal fiction contained in section 11(3) should be allowed to play to the fullest extent and there is no warrant to take restricted view for denying the exemption which is specifically allowed by the statute. In fact, as per the law as stood from 1-4-1976, the charitable trusts are permitted to accumulate up to 25 per cent of their income without complying with any formalities or condition and such accumulation is not included in the total income. Therefore, we uphold the order of the AAC as it is quite justified in law and the assessee would be entitled to accumulate 25 per cent of the total income of the previous year relevant for the assessment year 1978- 79 inclusive of the deemed income under section 11(3)". Once the views so expressed by the coordinate bench have been approved by Their Lordships, we cannot have any good reason to deviate from the same. As to whether the views expressed b....
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....ns arrived in this case. 6. That takes us to the question whether this decision stands overruled by the Hon'ble Bombay High Court's later judgment in the case of Thana Electricity Co. Ltd. (supra), as submitted by the learned Departmental Representative. 7. It is also important to bear in mind that the question requiring adjudication by Their Lordship was whether or not decision of one of the High Courts was binding on the other High Courts. This will be clear from following observations made by Their Lordships in the beginning of the judgment : "On a careful consideration of the submissions of the learned counsel for the assessee, we find that before taking up the issue involved in the question of law referred to us in this case for consideration, it is necessary to first decide.... whether this Court, while interpreting an all India statute like Income-tax Act, is bound to follow the decisions of any other High Court and to decide accordingly, even if its own view is contrary thereto, because of the practice followed in this Court. Because, if we are to accept this submission, it will be an exercise in futility to examine the real controversy be....
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....ratio of the decision and not every expression found therein'. Their Lordships have also referred to the oft quoted judgment of the Hon'ble Supreme Court in the case of CIT v. Sun Engg. Works (P.) Ltd. ( 198 ITR 297) wherein it is held that 'it is neither desirable nor permissible to pick out a word or a sentence from the judgment of this Court, divorced from the context of question under consideration, and treat it to be complete law declared by this Court." [Emphasis supplied]. 10. In this light, and bearing in mind the fact that limited question before Their Lordships was whether or not decision of one of the High Courts is binding on another High Court, it would appear to us that ratio decidendi in Thana Electricity Co. Ltd. (supra), is on the nonbinding nature of a High Court's judgment on another High Court. In any case, this Division Bench did not, and as stated in this judgment itself, could not have differed with another Division Bench of the same strength in the case of Godavari Devi Saraf (supra). Therefore, it cannot be open to a subordinate Tribunal like us to disregard any of the judgments of the Hon'ble Bombay High Court, whether in the c....
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....dgments on subordinate courts and Tribunals, these two decisions deal in two different areas. As we have noticed earlier also, in Thana Electricity Co. Ltd.'s case, a note was taken of Godavari Devi Saraf's judgment and neither the said judgment was dissented nor overruled. In any event, in Thana Electricity Co. Ltd.'s case, Hon'ble Court was alive to the fact, which was acknowledged in so many words, that a Co-ordinate Bench decision cannot be overruled. In this view of the matter, it is difficult to hold, as has been strenuously argued before us by the learned Departmental Representative, that the Hon'ble Bombay High Court's judgment in the case of Godavari Devi Saraf's case stands overruled by Their Lordship's judgment in the case of Thana Electricity Co. Ltd.'s case. The only way in which we can harmoniously interpret these judgments is that these decisions deal with two different issues and ratio decidendi of these decisions must be construed accordingly. 14. Let us also see this issue from a different perspective. Even if we are to assume that it is possible to interpret that Godavari Devi Saraf's decision stands overruled by j....
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....172 (SC)] in which Hon'ble Supreme Court itself has quoted from the decision of House of Lords as under: "We desire to add and as was said in Cassell & Co. Ltd. v. Broome [1972] AC 1027 (HL), we hope it will never be necessary for us to say so again that "in the hierarchical system of courts" which exists in our country, "it is necessary for each lower tier", including the High Court, "to accept loyally the decision of the higher tiers". "It is inevitable in hierarchical system of courts that there are decisions of the Supreme appellate Tribunal which do not attract the unanimous approval of all members of the judiciary... But the judicial system only works if someone is allowed to have the last word, and that last word, once spoken, is loyally accepted.". . . The better wisdom of the Court below must yield to the higher wisdom of the Court above. That is the strength of the hierarchical judicial system." 7. In our humble understanding, the right course for the lower authorities in the judicial hierarchy, so far as legal principles are concerned, is to humbly bow to the higher wisdom of Hon'ble Courts above rather than attempting to reinvent to the wheel. ....