TaxTMI 
TaxTMI 
2009 (7) TMI 169
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....9;s proposed order. Shri Singhal thus proceeded to pass, what he termed as, 'a separate order' on 10th July, 2007 (hereinafter referred to as 'the second part'). These two orders were then placed before the other AM on the Bench (i.e. the author of this order) who signed the draft order proposed by Dr. Naraynan on 17th Aug., 2007 by appending the words "my concurring note attached" on the said draft, and also added a small concurring note (hereinafter referred to as 'the third part') specifically disassociating himself with the separate order proposed by Shri Singhal. The order was finally pronounced on 22nd Aug., 2007. In the copies of order issued by the Registry of the Tribunal, however, the fact that the other AM had signed the draft order proposed by Dr. O.K. Naraynan and appended the words "my concurring note attached" appears to have been omitted. It is in this backdrop that the order pronounced by the Tribunal on 22nd Aug., 2007 was passed in the three parts. So far as 'first part' is concerned, the mistakes are alleged to have crept in the reasoning adopted in the said order. So far as 'second part' is concerned, that has not been ca....
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....hough the reasoning adopted by my learned colleagues, is so radically different that there is hardly any other meeting ground. Be that as it may, the majority view of this Special Bench already is that the appeal filed by the assessee is to be dismissed. I also respectfully endorse the same. I have, however, a few observations to make. Since both the orders have reached as signed orders, after my transfer from Mumbai Benches, I have to add my own little note for this purpose.' 4.3 Thereafter, in the third order, the observations are confined only to paras 92 and 93 of the second order, which deal with the effect of the later amendment and the legal position for later years. The third order deals only with the above issue in paras 98 and 99 and with these observations, the Hon'ble Member disassociates himself with the second order. Thereafter, the third order simply agrees on the dismissal of the appeal, but does not at all express any opinion with regard to the merits of the matter. Stated in other words, the highlights of the third order are as follows: (i) The reasoning adopted in the first two orders is 'so radically different that there is hardly any oth....
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....s not covered by the said order. The concurring note attached by him only dealt with the reasons as to why he was disassociating himself with the second part of the order which was authored by Shri Singhal. It was thus not at all necessary for the second AM to record his separate reasons for dismissing the appeal. It cannot be, and is not, the assessee's case that the second AM must give his separate reasons for agreeing with the proposed draft order. When the above position was put to the learned counsel for the assessee, he fairly admitted that in case two Members agree on a draft, it is not at all necessary for the second Member to give his separate reasons, but he submitted that the copy of order, as issued to the assessee, did not show that the second AM has signed the draft order. Learned counsel however, was shown the original records in the course of hearing and he was satisfied that the second AM had signed the original draft proposed by Dr. O.K Narayanan and also added the words "my concurring note attached". The majority view is evident from the fact that the draft order proposed by Dr. Naraynan is signed and approved by two of the Members on the Bench, i.e., Dr. O.K....
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....dge or Member is that they should collaborate amongst themselves and bring their minds together in order to judge the matter before them'. If they differ, they should not pronounce separate judgments until by 'conference and discussion they have endeavoured to arrive at an unanimous judgment'. It is safe to assume in view of the above facts and circumstances that there was no conference and discussion and any scope to bring the minds together in order to judge the present matter before the Hon'ble Special Bench. It seems that the basic ingredient of the adjudication process is missing in the present case, rendering the order of the Hon'ble Special Bench non est and non-sustainable. The third order, it is submitted with respect, leads one to the conclusion that the three separate orders passed separately have been passed without a joint conference and discussion in an endeavour to arrive at a unanimous judgment and also without a collaboration amongst the Members constituting the Special Bench. 5.2 In view of the above, it is submitted that the order of the Hon'ble Special Bench in its totality is non est and not at all capable of being implemented. ....
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....ecord' under s. 254(2) of the Act. Therefore, on merits as also on limited scope of rectification proceedings that we are currently in seisin of, the grievance of the assessee is devoid of any legally sustainable basis. 8. We may, however, add that, as learned counsel very appropriately points out, the joint conference and discussions are an integral and significant part of the decision making process in the multiple Member Benches-whether Division Benches or Special Benches. The importance and utility of such conferences can never be over emphasized and it is a standard practice in our Tribunal to have such discussions. Wherever Members on Special Benches are at different locations and it has been considered expedient 'and necessary to have further joint conferences before the order can be finalized, tours have been granted to the Members for such purposes. In the case of Sumit Bhattacharya vs. Asstt. CIT (2008) 113 TTJ (Mumbai)(SB) 633 : (2008) 2 DTR (Mumbai)(SB)(Trib) 25 : (2008) 112 ITD 1 (Mumbai)(SB), and as evident from para 61 of the Special Bench order in the said case, President of the Tribunal granted tour to one of the Members only for attending the joint conf....
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....objection (i.e., the IT Department cannot take a different stand before the Tribunal than the stand taken at the assessment stage, and, therefore, it cannot be contended that the assessee was not rendering basic telecommunication services) raised by the assessee. (II) A wrong finding was given to the effect that "the assessing authority held that the services rendered by the assessee company could not be construed as basic telecommunication services". (III) Certain CBDT circulars and judicial precedents, which were relied upon by the assessee, have not been considered by the Tribunal." 12. As regards the grievance against non adjudication on the judicial precedents and the Board circular, we are unable to see much merits in the same. The order passed by the Tribunal has adequately and comprehensively dealt with all the relevant aspects of the matter and merely because there is no specific mention of each argument, the order cannot be said to be vitiated by mistake apparent from record and particularly as all the relevant aspects have been dealt with anyway. As far as first two issues are concerned, the alleged mistakes pointed out by the assessee are as follows....
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....nication service since 1986 and the earth stations are not undertakings, which have started providing telecommunication service after the prescribed date. Thus, it is not a disputed fact that VSNL does render telecommunication services, which are otherwise eligible for deduction under s. 80-IA(4C). Accordingly, the Department cannot now be permitted to take a contrary/different stand before the Hon'ble Tribunal.' 1.1.4 The applicant submits that the above specific objection raised by the applicant has not been adjudicated upon in any of the above three separate orders passed by the Hon'ble Members constituting the Special Bench. In this connection, if further requires to be noted that the applicant, having raised the basic and fundamental objection, had, in the course of the hearing, provided material and explanation only with a view to comply with the directions of the Hon'ble Special Bench and only in the alternative and without prejudice to and without conceding the basic stand that 'the Department cannot now be permitted to take a contrary /different stand before the Hon'ble Tribunal'. 1.1.5 It is submitted that it was required of t....
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....not render basic services. Therefore, it is self evident and apparent from the records that the above observations are factually incorrect and contrary to the records and hence constitute a mistake apparent from the records having a pivotal effect. 1.2.2 Further, on behalf of the applicant, it was never explained that '......... One of the objections raised by the lower authorities is that the assessee-company being engaged in telecommunication services relating to international telephone is not providing any basic services and therefore not entitled for the deduction'. The first order, it is submitted with respect, creates an impression as if on behalf of the applicant, a principal argument was made that the applicant provides basic or cellular telecommunication services. As stated above, the lower authorities had never denied that the applicant does render eligible telecommunication services and, therefore, there was no need to advance such an argument, since this proposition was not disputed by lower authorities. 1.2.3 It is humbly submitted that the Hon'ble Tribunal may be pleased to rectify the above mistake under s. 254(2) of the Act, in....
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....unal in the case of Integrated Container Feeder Service vs. Jt. Director of IT (2005) 98 TTJ (Mumbai) 327. Accordingly, it is prayed that the Hon'ble Special Bench be pleased to recall its order and a fresh hearing be directed." 13. The contentions so advanced on behalf of the assessee are devoid of any merit. The assessee is seeking relief under s. 80-IA which is reproduced below for ready reference: "80-IA. Deduction in respect of profits and gains from industrial undertakings, etc., in certain cases.-(1) Where the gross total income of an assessee includes any profits and gains derived from any business of an industrial undertaking or a hotel or operation of a ship or developing, maintaining and operating any infrastructure facility or scientific and industrial research and development or providing telecommunication services whether basic or cellular including radio paging, domestic satellite service or network of trunking and electronic data interchange services or construction and development of housing projects or operating an industrial park or commercial production or refining of mineral oil in the North Eastern Region or in any part of India on or after the....
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....e or set up in any part of India for the generation, or generation and distribution, of power, it begins to manufacture or produce articles or things or to operate its cold storage plant or plants or to generate power at any time during the period beginning on the 1st day of April, 1993 and ending on the 31st March, 2000: Provided that in the case of an industrial undertaking set up in any part of India for the generation, or generation and distribution, of power, the period ending shall have effect as if for the figures '1998', the figures '2003' had been substituted; (c) in the case of an industrial undertaking located in such industrially backward District as the Central Government may, having regard to the prescribed guidelines, by notification in the Official Gazette, specify in this behalf, as an industrially backward District of Category A or an industrially backward District of Category B, and, it begins to manufacture or produce articles or things or to operate its cold storage plant or plants at any time during the period beginning on the 1st day of October, 1994, and ending on the 31st day of March, 2000; (d) in the case of an i....
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....ble or immovable, used in the course of or for the purpose of such business can more accurately be described as the tools of business or undertaking, i.e., things or articles which are necessarily to be used to keep the undertaking going or to assist the carrying on of the activities leading to the earning of profits.' In terms of the above definition the sub-station most certainly does not quality as an undertaking. The undertaking in this case is the whole company namely, VSNL, itself. Since VSNL did not begin operations in the prescribed period, it is not eligible for the deduction claimed. (c) The assessee's method of calculating the deduction under s. 80-IA is totally unacceptable. The assessee's basic presumption is that all the profit is attributable to the earth stations and by reducing various costs the total profit attributable to the earth stations can be arrived at. In my opinion, this approach is totally baseless and unacceptable. By the same analogy it can be said that the entire profit is because of the telephone instrument. The assessee can then deduct all other expenses and come to the conclusion that the entire profits arise from the ....
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.... of the Tribunal under s. 33(4) of the 1922 Act, which are exactly the same as under s. 254(1) of the present IT Act. 1961, Hon'b1e Supreme Court, inter alia, observed as follows: "8. ................ Tribunal had jurisdiction to permit the question to be raised before it for the first time in appeal. The powers of the Tribunal, in dealing with the appeals are expressed in s. 33(4) in the widest possible manner................ 9. The word 'thereon' in s. 33(4) of the 1922 Act, of course, restricts the jurisdiction of the Tribunal to the subject-matter of appeal. The words 'pass such orders as the Tribunal think fit' include all the powers (except possibly enhancement) which are conferred on AAC under s. 31................. 10. In the present case, the subject-matter of appeal before the Tribunal was the question as to what should be the proper WDV of the building, machinery, etc. of the assessee for calculating depreciation under s. 10(2)(vi) of the Act. It was certainly open to the Department, in the appeal filed by the assessee before the Tribunal, to support the findings of the AAC with regard to WDV on any of the grounds decided ag....
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....ssments for the other assessment years, it is not open to us to deal with those assessment years at this stage. 17. It is also contended that the appellant cannot be worse off as a result of being in appeal but that argument proceeds on a factual misconception in as much as the assessee was never allowed the deduction, even partly, under s. 80-IA by any of the authorities below and, therefore, no disadvantage is caused to the assessee by being in appeal. So far as the issue in appeal was concerned, the position was exactly the same before and after the appeal was disposed of by the Tribunal, i.e., the assessee was disallowed deduction under s. 80-IA. 18. In the light of above, assessee's contention that it was not required to satisfy the condition regarding rendering "eligible telecommunication services" because no such objection was raised by the Departmental Representative, and as it was not raised by the AO in the assessment order, is devoid of any merit. Once a legal claim was before the Tribunal, it was duty bound to consider and examine that all the conditions are satisfied before relief is allowed. This is precisely what the Tribunal has done and assessee is not ju....