TMI Blog2015 (4) TMI 1237X X X X Extracts X X X X X X X X Extracts X X X X ..... PER T.R.SOOD, A.M. The appeal filed by the assessee is directed against the order dated 17.11.2014 of CIT(A), Chandigarh. 2. In this appeal assessee has raised the following grounds:- 1. That the order of the Assessing Officer as upheld by the Commissioner of Income Tax (Appeals) Chandigarh is bad in law and is beyond all the cannons of law and justice. 2. That the order of the Assessing Officer as upheld by the Commissioner of Income Tax (Appeals) Chandigarh attributing expenses to the income which is entitle to deduction u/s 80P(2)(d) amounting to ₹ 4,53,11,101/- against the gross interest income of ₹ 7,16,47,331/- by applying the provisions of section 14-A read with rule 8D is bad in lawand is against the judicial decisions including the decisions of Hon'ble Delhi Court in the case of Commissioner of Income Tax Vs. KRIBHCO 349 ITR Page 618 in this behalf. 3. That the order of the Assessing Officer as upheld by the Commissioner of Income Tax (Appeals) Chandigarh applying section 14A read with rule 8D to the deductions admissible under chapter VI-A more so when the SLP filed in the Supreme Court of India by the department has been dismissed mea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Haryana High Court in ITA No. 530 of 2006 vide order dt. 28/03/2011. Now the only question is whether this decision has to be followed or the decision of Hon ble Delhi High Court in case of CIT Vs. Kribhco has to be followed. The issue regarding effect of dismissal of SLP was considered by the Hon ble Supreme Court in case of V.M. Salgaocar And Bros. Pvt. Ltd. Vs. CIT, 243 ITR 383 the court pointed out following observations which is as under: 1. Different considerations apply when a special leave petition under article 136 of the Constitution is simply dismissed by saying dismissed , and an appeal provided under article 133 is dismissed also with the words the appeal is dismissed. In the former case it has been laid down by this court that when a special leave petition is dismissed this court does not comment on the correctness or otherwise of the order from which leave to appeal is sought. But what the court means is that it does not consider it to be a fit case for exercise of its jurisdiction under article 136 of the Constitution. That certainly could not be so when an appeal is dismissed though by a non-speaking order. Here the doctrine of merger applies. In that case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of law by this court under article 141 of the Constitution. It was, therefore, contended that once this court in Civil Appeal No. 424 of 1999, has dismissed the appeal it has upheld the order of the High Court in the case of the assessment year 1980-81 and it cannot take a different view for the assessment year 1979-80. There appears to be substance in the submission of the assessee. This issue was again considered by Hon ble Supreme Court in case of Kunhayammed And Others Vs. State of Kerala and Another (supra). In that case this is how the question arose : A question of frequent recurrence and of some significance involving the legal implications and the impact of an order rejecting a petition seeking grant of special leave to appeal under article 136 of the Constitution of India has arisen for decision in this appeal. 10. The Hon ble Court discussed at page 368 to 370 the provisions of Article 132 to 136 of the constitution and noted the procedure of deciding Special Leave Petition. Thereafter at page 372 it was observed as under: It is not the policy of this court to entertain special leave petition and grant leave under article 136 of the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in V.M. Salgaocar and Bros. Pvt. Ltd. V. CIT[2000] 243 ITR 383; [2000]97 FIR 192; [2000] 3 Scale 240, holding that when a special leave petition is dismissed, this court does not comment on the correctness or otherwise of the order from which leave to appeal is sought. What the court means is that it does not consider it to be a fit case for exercising its jurisdiction under article 136 of the Constitution. That certainly could not be so when appeal is dismissed thought by a non-speaking order. Here the doctrine of merger applies. In that case, the Supreme Court upholds the decision of the High Court or of the Tribunal. This doctrine of merger does not apply in the case of dismissal of a special leave petition under article 136. When an appeal is dismissed, the order of the High Court merges with that of the Supreme Court. We find ourselves in entire agreement with the law so stated. We are clear in our mind that an order dismissing a special leave petition, more so when it is by a non-speaking order, does not result in merger of the order impugned into the order of the Supreme Court. The above very clearly shows that even in the decision quoted by Ld. Counsel for the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rant of leave, then the order has two implications. Firstly, the statement of law contained in the order is a declaration of law by the Supreme Court within the meaning of article 141 of the Constitution. Secondly, other than the declaration of law, whatever is stated in the order are the findings recorded by the Supreme Court which would bind the parties thereto and also the court, tribunal or authority in any proceedings subsequent thereto by way of judicial discipline, the Supreme Court being the apex court of the country. But, this does not amount to saying that the order of the court, tribunal or authority below has stood merged in the order of the Supreme Court rejecting the special leave petition or that the order of the Supreme Court is the only order binding as res judicata in subsequent proceedings between the parties. (vi) Once leave to appeal has been granted and the appellate jurisdiction of the Supreme Court has been invoked the order passed in appeal would attract the doctrine of merger; the order may be reversal, modification or merely affirmation. (vii) On an appeal having been preferred or a petition seeking leave to appeal having been converted into an ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e figures submitted by the Assessee. 10. Ground No.4 : After hearing both the parties we find that assessee had claimed deduction u/s 80P(2)(c)for ₹ 50,000/-. This deduction was denied by the Assessing Officer because the same was allowable to the cooperative society engaged in the activities of other than marketing of agricultural produce of members, purchase of agriculture implements etc, cottage industries and engaged in business of banking or a federal cooperative society engaged in supplying milk, oil seeds, fruits and vegetables. The activities carried out by the assessee society are within the aforementioned activities and, therefore, then deduction was not allowable. 11. The action of the Assessing Officer was confirmed by Ld. CIT(A). 12. Both the parties were heard. 13. After considering the rival submissions we find that though some submissions have been made but no evidence was brought before us to show that activities of the society was not within the activities mentioned in section 80P(2)(a) (b), therefore, we find nothing wrong with the order of Ld. CIT(A) and confirm the same. 14. In the result, appeal of the assessee is partly allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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