TMI Blog2008 (6) TMI 576X X X X Extracts X X X X X X X X Extracts X X X X ..... taxes, that is the end of the dispute between department and Main Trust as well as Assessees on the taxability of incomes. When in the case of Main Trust where substantive assessments were made, the protective assessments made in other cases viz. beneficiaries of Main Trust should be deleted. In the present case, issue is of protective assessments and substantive assessments. Protective assessments cannot be continued in the appellate proceedings once substantive assessments become final. In the present case, revenue assessed income in the case of Main Trust on a substantive basis, which was accepted. The finding of CIT is contrary to the decision of Tribunal which is not permitted. CIT being subordinate authority to the Tribunal cannot take contrary to the decision of Tribunal - When CIT revised order, controversy was already decided by this court in Apex Court in the case of ITO V/s. C.H. Atchaiah [ 1995 (12) TMI 1 - SUPREME COURT] . The decision of CIT in the revision order is contrary to the above decision of court which cannot be permitted. Reference to the larger bench cannot be ground to revise assessment u/s.263 of I.T. Act. On this ground also we uphold the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it cannot be assessed in the case of beneficiaries. We also agree with the Tribunal that interest u/s.244A should be granted on refund of tax. If on giving effect to the appellate order, refund is due that has to be granted with interest. We find that view taken by A.O. was correct and hence CIT has no jurisdiction to revise the assessment. Mr. Soparkar has also submitted that questions raised before this court were pertaining to KVSS which do not arise from the order of Tribunal. Tribunal has allowed the appeal on the first principle about taxation on representative assessees and not on implications of KVSS. We agree that Tribunal has allowed the appeal on first principle and not of KVSS. In the result, we confirm the order of Tribunal and dismiss the appeal filed by the revenue. - <!--[if gte mso 9]> <![endif]--> Y.R.MEENA AND MR. J.C.UPADHYAYA, JJ. MRS MAUNA M BHATT for Appellant(s) : 1,MR MANISH R BHATT for THE Appellant MR S.N. SOPARKAR, SR. ADVOCATE WITH MRS SWATI SOPARKAR for RESPONDENT CAV JUDGMENT PUNITABEN K. PATEL OSDFT AND OTHERS 284 CASES TAX APPEAL NOS. 1514 TO 1797 OF 2006 MANJULABEN PRAMODBH ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n orders have been the same in all these appeals were clubbed together for joint hearing and analogous disposal. Identical questions were raised by revenue in all these 284 appeals. Common order is passed for all these 284 Tax Appeals. The controversy arising in these appeals is whether income of Main Trust assessed on a substantive basis and liabilities finally settled under Kar Vivad Samadhan Scheme, 1998 (hereinafter referred to as KVSS) could again be assessed in the hands of corresponding beneficiaries which are respondents in these Tax Appeals here assessed on a protective basis. The facts of one case, i.e. Punitaben K. Patel Oral Spec. Def. Family Trust for Asst. Year: 1983-84 was discussed by ITAT on which decision was taken by ITAT. The said trust was beneficiary in S.K. Patel Family Trust (Main Trust). Beneficiary trust filed its Return of Income showing income from Main Trust. Main Trust allocated income among beneficiaries and beneficiaries paid taxes on its returned income. Originally Income tax Officer in the order dt. 10.03.83 accepted that Main Trust is a specific trust and income should be assessed in the hands of beneficiary trust. CIT revised assessment u/S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the beneficiaries. He conceded that as far as share income is concerned, it cannot be assessed twice i.e. in the case of Main Trust as well as in the case of beneficiaries. He submitted that the beneficiaries being the right persons, they should be assessed. For this he relied on the decision of Apex Court in the case of ITO V/s. C.H. Atchaiah (218 ITR 239). He submitted that Tribunal has wrongly dealt with interest on refund, which was not subject matter of discussion of CIT in the revision order. He has also pointed out that in this group case, this court has passed order (Coram: Mr. Justice A.R. Dave and Mr. Justice D.A. Mehta) dt. 30.07.01. He also submitted that revenue has not challenged this order before Supreme Court. In the proceedings for different Asst. years, another Division Bench referred the matter before Larger Bench. Revenue wants to rely on the material not earlier produced before Tribunal. Larger Bench observed that it would be appropriate for the petitioner to raise the contention before Tribunal and Tribunal shall consider the same after hearing the concerned parties, take a decision thereon in accordance with law. Mr. Bhatt relied on the decision of Apex Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before higher appellate authorities. It was department s case that income belongs to Main Trust and not to the beneficiaries that is the reason why incomes were assessed substantively in the case of Main Trust and protectively assessed in the case of beneficiaries. When Main Trust settled the disputes under KVSS and paid due taxes, that is the end of the dispute between department and Main Trust as well as Assessees on the taxability of incomes. When in the case of Main Trust where substantive assessments were made, the protective assessments made in other cases viz. beneficiaries of Main Trust should be deleted. This controversy was already decided by this court vide order dt. 30.07.01 (Coram: Mr. Justice A.R. Dave and Mr. Justice D.A. Mehta), it was held as under: In our opinion, no question of law, much less a substantial question of law, arises in these appeals. It is a settled principle that one particular income cannot be taxed in the hands of different assessees. In the instant case, as the income has been substantively assessed in the hands of the main trust, the same income cannot be again assessed in the hands of the beneficiary trusts. For the sake of abundant cau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orization for taking action u/s.154 be action u/s.154 beyond the time limit fixed u/s.154(7) in cases of protective assessments requiring to be cancelled. Where the same income was assessed, as a protective measure, in the hands of more than one assessee or as the income of more than one assessment year, and one or more of these protective assessments needs to be cancelled as a result of some of the relevant assessments having become final and conclusive, it has been the practice of the Income tax Department to cancel the redundant assessment u/s.154 of the Income tax Act, 1961, treating these as involving mistakes apparent from the records. Hence, we find that controversy is covered by these two circulars. Circulars issued by CBDT are binding on department. This issue was also decided by this court in the case of Banyan and Berry v/s. CIT 222 ITR 831 wherein it has been held that once substantive assessment is final, protective assessment is nullity. Mr. Bhatt has conceded that as regards the share income, the same income cannot be again assessed in the case of beneficiaries. As regards refund of taxes paid on returned income, we find that facts of the present case ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. When CIT revised order, there exist order of this court dt.30.07.01. Hence, atleast this is one of the views, though we find that this is the only view, revision order u/s.263 is not permissible on jurisdictional ground. This is the decision of Hon ble Supreme Court in the cases of Malabar Industries Co. Ltd. V/s CIT 243 ITR 83 and G.M. Mittal 263 ITR 255. When the decision of High Court was reversed by Supreme Court on merits, Hon ble Supreme Court held that revision order cannot be sustained as on the date of revision order, order of High Court did exist. Following the same, we hold that CIT had no jurisdiction to pass revision order u/s.263 on 12.03.03. On that day, the order of this court dt.30.07.01 did exist. On the contrary, this order has become final. As regards grant of interest on refund, we find that Tribunal was justified in holding that refund should be granted with interest. We are in full agreement with the order of Special Bench of Tribunal. We repeat that revenue should not drag the respondents to unnecessary avoidable litigation. Accordingly, we dismiss the appeals filed by revenue except Tax Appeals Nos. 182 and 204 of 2002 with Tax Appeals Nos.27 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roneous and prejudicial to the interest of revenue. CIT was of the opinion that the matter was settled under KVSS by Ambica Trust. According to him, benefit cannot be given to the respondent beneficiaries. It does not grant any benefit or concession or immunity to the respondent beneficiaries, who were different assessees. He referred to the decision of this court in the case of Shankerlal Nebhumal Uttamchandani v/s.CIT (251 ITR 876). He was of the view that income should be assessed in the right person and the respondent beneficiaries were the right persons. He also held that interest granted by A.O. u/s.244A should not be granted in view of the decision of this court in the case of Saurashtra Cement and Chemical Ind. Ltd. 194 ITR 669. Tribunal has held that it is the option of the revenue either to assess the respondent beneficiaries or the trustees in the representative capacity. Once the option is exercised by the revenue and the income was assessed in the case of Ambica Trust, the same income cannot be again assessed in the case of respondent beneficiaries. Shri M.R. Bhatt, standing counsel for the department and Shri S.N. Soparkar, Senior Advocate for the respondents ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bica Trust was finalised. CIT had made various observations regarding KVSS which was not discussed by Tribunal. The income cannot be assessed twice. We find that section 4 of the I.T. Act is clear. Charge is on the income and charge is only once. The same income cannot be taxed in the hands of two different persons. We fully agree with the Tribunal s finding that under the theory of double taxation also if the income is assessed in the case of trustees, it cannot be again assessed in the case of respondent beneficiaries vice versa. If assessed in the case of respondent beneficiaries, it cannot be taxed in the case of representative assessees. Therefore, the same income which has been assessed in the case of trust/trustees, again it cannot be assessed in the case of beneficiaries. We also agree with the Tribunal that interest u/S.244A should be granted on refund of tax. If on giving effect to the appellate order, refund is due that has to be granted with interest. The decision of this court in the case of Saurashtra Cement and Chemical Ind. Ltd. 194 ITR 669 and Supreme Court decision in the case of Shelly Products (261 ITR 367) were not applicable to the facts of the case. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal quashed the order of CIT vide order dt.24.05.02 on the ground of jurisdiction and on merits. Revenue preferred Miscellaneous Application u/s.254(2) on 25.06.02 on the ground of interest u/s.244A of IT Act which was later on withdrawn. Revenue filed writ petitions before this court. Division bench referred the matter to larger bench as on this controversy this court has earlier decided the matter in favour of the Appellant vide order dt.31.07.01. Before larger bench, Revenue wanted to refer some new documents. Larger bench vide order dt.17.09.03 disposed off petitions with a liberty to the revenue to raise contentions sought to be raised before the High Court, not raised before Tribunal in their application for revising and/or modifying the order of Tribunal. Revenue filed application u/s.254(2) on 17.12.03. Tribunal passed order dt.31.07.07 recalling its earlier order dt.24.5.2002 completely. Mr. M.R. Bhatt on behalf of revenue objected about maintainability of the writ petitions. He supported the order of Tribunal. Mr. S.N. Soparkar submitted that writs were maintainable. He submitted that earlier order passed by Tribunal dt.24.05.02 was correct and had no infir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) No such contentions have been made in the impugned order passed u/s.263 of I.T. Act. (iv) No such finding given by the I.T.A.T. in the appellate order because no such controversy raised by either party. (v) Matter squarely covered by the decision of Gujarat High Court in the group cases. (vi) Matter squarely applicable by the decision of Special Bench of I.T.A.T. where also identical arguments raised. (vii) Squarely covered by the C.B.D.T. circular which is binding on the revenue (See Pages Nos.359360) (b) Effect of KVSS not properly considered and attention of the Tribunal not drawn to the four decisions. (i) The said decisions have no bearing in any case. (ii) Non consideration of decision not cited by party cannot be of ground for rectification. (iii) No such contentions have been made in the impugned order passed u/s.263 of I.T. Act. (iv) No such finding given by the ITAT in the appellate order because no such controversy raised by either party. (v) Matter squarely covered by the decision of Gujarat High Court in the group cases. (vi) Matter squarely applicable by the decisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e erroneous so as to be prejudicial to the interest of revenue. (i) Malabar Industrial Co. Ltd. V/s. CIT (243 ITR 83) (S.C.) (ii) Arvind Jewellers (263 ITR 645) (Guj.) (iii) Mehsana District (263 ITR 645) (Guj.) (iv) D.P. Karai (266 ITR 113) (Guj.) Hence on perusal of the above, it is found that on each ground, matter was squarely covered by the decision of this court or by Special Bench of ITAT where identical arguments were raised. Tribunal has wrongly observed that in the earlier order of Tribunal the issue relating to interest u/s.244A was not considered. Mr.Soparkar has invited our attention to paras 21 and 22 where Tribunal had discussed and held to grant interest u/s.244A of I.T. Act. Hence, we find that Tribunal was wrong on this ground. We find no substance and completely disagree with the decision of Tribunal which has recalled the order on the ground that appeals were admitted by High Court against Special Bench order dt.7.7.2006. Mere admission of Tax Appeal cannot be ground to pass order u/s.254(2) of I.T. Act. The order of Special Bench dt. 7.7.2006 continued to operate and had force. The order of Special Bench is binding on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e tax Appellate Tribunal Another 229 ITR 651 (Pat.). We fully agree with the proposition that Tribunal cannot review its own order. The order cannot be permitted to recall and that too completely when no mistake is found in the earlier order. We strongly object to the most casual way in which the Tribunal passed the order dated 31.07.2007 recalling its earlier order. We do not agree with the reasoning of the Tribunal and we allow the writ petitions and reverse the order of the Tribunal. In the result, recalling of the order is cancelled. <!--[if gte mso 9]> Normal 0 false false false EN-IN X-NONE <![endif]--><!--[if gte mso 9]> ..... X X X X Extracts X X X X X X X X Extracts X X X X
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