TMI Blog2013 (8) TMI 831X X X X Extracts X X X X X X X X Extracts X X X X ..... n’ble Tribunal in support of their claim, the assessee did not pointed out any mistake in the order dated 16.03.2012 of Tribunal, which warrants rectification in terms S.254(2) of the Act - Consequential orders passed by the Assessing Officer constitute independent proceedings, and not part of the proceedings which led to the passing of the order of the Tribunal dated 16.3.2012 - Grievance of the assessee on account of alleged mistakes in such consequential orders, either on account of interpretational differences or even on account of disrespect/disregard to the directions of the Tribunal, shall not vest any power or jurisdiction back with the Tribunal, to oversee the correctness of the correctness of the consequential orders passed, much less, to give directions to revise or rectify the same, even if there is any mistake in the same - Remedy for the assessee lies elsewhere, viz. in the fresh proceedings commencing with such consequential orders and not in the proceedings that culminated with the order of this Tribunal dated 16.3.20120 - In the absence of any specific mistake which warrants any rectification within the scope of the provisions of S.254(2) of the Act, in the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the file of the Assessing Officer for fresh consideration. Being so, the Assessing Officer correctly proceeded to enquire about each project, so as to determine the projects which are entitled for deduction under S.80IA(4) of the Act, while giving effect to the order of the Tribunal. 5. We heard both the parties and perused the material available on record. For the assessment years under appeal, the assessee came in appeal before the Tribunal, challenging the action of the Revenue authorities in denying the deduction under S.80IA(4) of the Act. The Tribunal after considering the submissions of the learned counsel in the light of the grounds raised before the Tribunal, and appraising the various data furnished before the Tribunal in the paper- book, came to the conclusion that the assessee is a developer and is entitled for deduction under S.80IA(4) of the Act. For clarity, we reproduce the relevant paragraphs of the order of the Tribunal- 44. We have considered the elaborate submissions made by both the parties and also perused the materials available on record. We have also gone through all the case laws cited by both the parties. We find that the provisions of Section 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... requirement that the assessee should have been the owner of the infrastructure facility. 46. The next question is to be answered is whether the assessee is a developer or mere works contractor. The Revenue relied on the amendments brought in by the Finance Act 2007 and 2009 to mention that the activity undertaken by the assessee is akin to works contract and he is not eligible for deduction under section 80IA (4) of the Act. Whether the assessee is a developer or works contractor is purely depends on the nature of the work undertaken by the assessee. Each of the work undertaken has to be analyzed and a conclusion has to be drawn about the nature of the work undertaken by the assessee. The agreement entered into with the Government or the Government body may be a mere works contract or for development of infrastructure. It is to be seen from the agreements entered into by the assessee and the Government. We find that the Government/Government body handed over the possession of the premises or the existing road to the assessee till the development of infrastructure facility. It is the assessee's responsibility to do any act till the possession of property is handed over to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee is a developer and not a works contractor as presumed by the Revenue. The circular issued by the Board, relied on by learned counsel for the assessee, clearly indicate that the assessee is eligible for deduction under section 80IA(4) of the Act. The department is not correct in holding that the assessee is a mere contractor of the work and not a developer. 47. We also find that as per the provisions of the section 80IA of the Act, a person being a company has to enter into an agreement with the Government. Such an agreement is a contract and for the purpose of the agreement a person may be called as a contractor as he entered into a contract. But the word contractor is used to denote a person entering into an agreement for undertaking the development of infrastructure facility. Every agreement entered into is a contract. The word contractor is used to denote the person who enters into such contract. Even a person who enters into a contract for development of infrastructure facility is a contractor. Therefore, the contractor and the developer cannot be viewed differently. Every contractor may not be a developer but every developer developing infrastructure facility on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 80IA of the Act is available to developers who undertakes entrepreneurial and investment risk and not for the contractors, who undertakes only business risk. We have carefully gone through the various activities carried on by the assessee. An analysis of the works undertaken by the assessee clearly indicates that it carried on the activities of development of infrastructure facility. For clarity we reproduce one of the projected undertaken by the assessee. Nature of work :: Widening to four lanes and strengthening of existing two lane carriageway in km. 27.80 to km. 61.00 Jagatpur- Chandikhol Section of National Highway No.5 in the State of Orissa. The said work is financed by :: Overseas Economic Co-operation Fund, Japan to the Government of India. The Government of India authorized to get the work done by Invitation of Tender. The source of fund as mentioned in the tender (herein Document after referred to as the Fund ) : The Government of India has received a loan from the Overseas Economic Cooperation Fund towards the cost of Widening to four tender (herein lanes and strengthening of existing two lane carriageway in km. 27.80 to km 61.00 in Jagatpur- Chandik ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts it is clear that the assessee is converting the area entrusted to it into more useful and more profitable area and handing over the developed one to the Government/Government Bodies. Therefore, the activity of the assessee is to develop an existing two lane road into four lane road thereby making the road more useful and profitable. 51. Without any doubt, the learned counsel for the assessee clearly demonstrated before us that the assessee at present has undertaken huge risks in terms of deployment of technical personnel, plant and machinery, technical know-how, expertise and financial resources. 52. Therefore, in our considered view, the assessee should not be denied the deduction under section 80IA of the Act as the contracts involve development/construction, operating/maintenance, financial involvement, and defect correction and liability period, then such contracts cannot be called as simple works contract. In our opinion the contracts which contain above features are to be segregated and on these contracts deduction u/s. 80-IA has to be granted and the other agreements which are in the nature of pure works contracts hit by the explanation to section 80IA(13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be granted and the other agreements which are pure works contracts hit by the explanation section 80IA(13), those work are not entitled for deduction u/s. 80IA of the Act. 7. According to the learned Authorised Representative, the Assessing Officer has not properly understood the order of the Tribunal and the same has been too widely interpreted and there appears to be misconceptions about the nature thereof and the binding effect of the order of the Tribunal. In this regard, it may be appropriate to point out the well settled legal position that an Assessing Officer is bound to follow the order of the Tribunal. 8. It is necessary to first decide the last submission of learned counsel that this Tribunal, while interpreting of an all-India statute like the Income-tax Act, is bound to follow the decision of any other High Court and to decide accordingly even if its own view is contrary thereto, in view of the practice followed by this court in such matters. Because, if we are to accept this submission, it will be an exercise in futility to examine the real controversy before us with a view to decide the issue. 9. At the outset, it may be appropriate to point out the well s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g law nor could the ratio decidendi of those decisions be perpetuated by invoking the doctrine of stare decisis. The doctrine of stare decisis cannot be stretched that far as to make the decision of one High Court a binding precedent for the other. This doctrine is applicable only to different Benches of the same High Court. 14. It is also well-settled that though there is no specific provision making the law declared by the High Court binding on subordinate courts, it is implicit in the power of supervision conferred on a superior Tribunal that the Tribunals subject to its supervision would confirm to the law laid down by it. It is in that view of the matter that the Supreme Court in East India Commercial Co. Ltd. v. Collector of Customs (AIR 1962(SC) 1893 (at p.1905) : We, therefore, hold that the law declared by the highest court in the State is binding on authorities or Tribunals under its superintendence, and they cannot ignore it....... 15. This position has been very aptly summed up by the Supreme Court in Mahadeolal Kanodia v. Administrator General of West Bengal(AIR 1960 SC 936) (at p.941) : Judicial decorum no less than legal propriety forms the basis of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State of Punjab (1985) 1 SCC 345 ). While following precedents, the court should keep in mind the following observations in Mumbai Kamgar Sabha v. Abdulbhai Faizullabhai (AIR 1976 SC 1455 ) (at p.1467-68) : It is trite, going by Anglophonic principles, that a ruling of a superior court is binding law. It is not of scriptural sanctity but is of ratio-wise luminosity within the edifice of facts where the judicial lamp plays the legal flame. Beyond those walls and de hors the milieu we cannot impart eternal vernal value to the decision, exalting the doctrine of precedents into a prison- house of bigotry, regardless of varying circumstances and myriad developments. Realism dictates that a judgment has to be read, subject to the facts directly presented for consideration and not affecting those matters which may lurk in the record. Whatever be the position of a subordinate court's casual observations, generalisations and subsilentio determinations must be judiciously read by courts of co- ordinate jurisdiction. 18. Decision on a point not necessary for the purpose of the decision or which does not fall to be determined in that decision becomes an obiter dictum. So also, op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following propositions emerge: (a) The law declared by the Supreme Court being binding on all courts in India, the decisions of the Supreme Court are binding on all courts, except, however, the Supreme Court itself which is free to review the same and depart from its earlier opinion if the situation so warrants. What is binding is, of course, the ratio of the decision and not every expression found therein. (b) The decisions of the High Court are binding on the subordinate courts and authorities or Tribunals under its superintendence throughout the territories in relation to which it exercises jurisdiction. It does not extend beyond its territorial jurisdiction. (c) The position in regard to the binding nature of the decisions of a High Court on different Benches of the same court may be summed up as follows : (i) A single judge of a High Court is bound by the decision of another single judge or a Division Bench of the same High Court. It would be judicial impropriety to ignore that decision. Judicial comity demands that a binding decision to which his attention had been drawn should neither be ignored nor overlooked. If he does not find himself in agreement with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it to be complete law declared by the Tribunal. A judgment must be read as a whole. Being so, the Assessing Officer cannot sit in judgment over the order of the Tribunal, and he is required to give just effect to the order of the Tribunal. If he has any grievance, he is at liberty to appeal against that order of the Tribunal before higher forum. 22. It is needless to say that the income-tax authorities are required to exercise their powers in accordance with law, as per the power given to them in specific sections. If the powers conferred on a particular authority are exercised by another authority without mandate of law, it would create chaos in the administration of law and hierarchy of administration would mean nothing. Judgment of a higher forum cannot be substituted by the decisions of the lower authorities. Judicial discipline requires that there cannot be any amount of disregard to the superior authority in the hierarchy by the Assessing Officer. When once the Tribunal decides an issue in one way, the only course available to the Assessing Officer is to follow the order of the Tribunal in true spirits, and it is not permissible for the Assessing Officer to take a differen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee, soas to grant deduction in respect of those which are not in the nature of works contracts. It has also given a categorical finding that as the contracts involve development, operating, maintenance, financial involvement and defection correction and liability period, such contracts should be treated as eligible for deduction under S.80IA(4). 25. It is needless to mention here that the Tribunal has not rejected the claim of the assessee under S.80IA and on the other hand, it was held that the assessee is entitled for deduction under S.80IA of the Act in respect of projects listed in pages 11 to 13 of its order, as the assessee has carried on infrastructure projects, and it is for the purpose of analyzing such other projects, if any, which are not in the nature of works contracts, and to quantify the deduction, the issue was remitted back to the file of the Assessing Officer. If the Assessing Officer fails to properly understand or appreciate the directions of the Tribunal, all that can be done at this stage is to mention that the assessee has liberty to explore and pursue the remedies available under law, as the Assessing Officer is duty bound to pass the consequenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... follow the decision of the High Court within whose jurisdiction he is (functioning), but if the conflict is between decisions of other High Courts, he must take the view which is in favour of the assessee and not against him. Similarly, if the Income- tax Appellate Tribunal has decided a point in favour of the assessee, he cannot ignore that decision and take a contrary view, because that would equally prejudice the assessee. (Emphasis supplied) 26. It is, however, pertinent to emphasise and mention here that having decided the appeals of the assessee, viz. ITA Nos.558/Hyd/2006; 1223/Hyd/2007, 1027/Hyd/2007, 338/Hyd/2009 and 84/Hyd/2010 before it, with its common order dated 16.3.2012, the Tribunal is ceased of its jurisdiction over those appeals, except to the limited extent of rectifying any mistake therein in terms of provisions of S.254(2) of the Act. In these elaborate Miscellaneous Applications or the Written Submissions furnished before us in support thereof, the assessee has not pointed out any mistake in the order of this Tribunal dated 16.3.2012, which warrants rectification in terms S.254(2) of the Act. All that the assessee speaks of is about the grievance tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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