TMI Blog2015 (1) TMI 1265X X X X Extracts X X X X X X X X Extracts X X X X ..... AB AND HARYANA High Court ) and Kil Kotagiri Tea and Coffee Estates Ltd. (1988 (7) TMI 54 - KERALA High Court), we are of the view that there is a mistake apparent from record which is rectifiable u/s 154 of the Act and the Ld. CIT(A) has rightly directed the AO to carry out the necessary rectification and the order of the Ld. CIT(A) is found to be well reasoned one and we find no infirmity in the same. - I.T.A. No.130(Asr)/2014, C.O. Nos. 10 & 11(Asr)/2014 - - - Dated:- 16-1-2015 - SH. A.D.JAIN, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER Appellant by: Sh.Tarsem Lal, DR Respondent by:Sh.Tarun Bansal, Advocate ORDER PER B.P. JAIN, AM : This appeal of the Revenue arises from the order of the CIT(A)-1, Ludhiana, dated 16.12.2013 for the assessment year 2007-08. The Revenue has raised the following grounds of appeal: 1.(a) That the Ld. CIT(A) has erred in law and on facts in directing the AO to carry out the rectification as requested by the assessee treating the amounts of interest subsidy and excise duty refund as capital receipts in view of the order passed by the Hon ble Court of Jammu Kashmir, in the case of M/s. Shree Balaji Alloys ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceipt. As the return of income has been processed at an income declared by the assessee, the application u/s 154 as moved by the assessee is hereby rejected. Moreover, the department has already filed an SLP before Hon ble Supreme Court of India by respectfully not accepting the decision of Hon ble J K High Court in the case of Shree Balaji Alloys reported as (2011) 333 ITR 335 ( J K) decided on 31.03.2011 regarding the issue of treating Excise Duty refund and interest subsidy as capital receipt. 3. The Ld. CIT(A) allowed the claim of the assessee and the relevant findings of the ld. CIT(A) are reproduced hereinbelow: 2. The appellant is aggrieved against the order of the Assessing Officer passed u/s 154 of the Income Tax Act, 1961 wherein the assessee s claim of interest and excise duty subsidy being capital receipt had been rejected. The AO has recorded in the impugned order that the assessee had itself categorized the impugned items as revenue receipts and also the Income Tax Department had filed an SLP before Hon ble Supreme Court of India against the decision of Hon ble Jammu Kashmir High Court in the case of Shree Balaji Alloys reported as 333 ITR 335. The appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Co. Ltd vs. Income Tax Appellate Tribunal Others (1988) 174 ITR 579 (Ker). 6. We have heard the rival contentions and perused the facts of the case. The undisputed facts in the present case are that the assessee claimed excise duty refund and interest subsidy as revenue receipt in the return of income and the assessment order was passed on 17.12.2009. The Hon ble Jurisdictional High Court of J K in the case of Shree Balaji Alloys vs CIT (supra) vide order dated 31.03.2011, has held the said excise duty refund and interest subsidy as capital receipt. The assessee moved an application u/s 154 of the Act before the AO which was rejected. The arguments made by the Ld. DR that there cannot be any rectification, if the mistake is committed by the assessee and it can only be rectified when it is a mistake done by the AO. Now, the question arises whether power u/s 154 can be invoked when the issue is decided in favour of assessee by the Jurisdictional High Court after the order by an authority has been passed. In this regard, the Ld. Counsel for the assessee, Mr. Tarun Bansal, relied upon the decision of the Hon ble Punjab Haryana High Court (FB) in the case of CIT vs. Smt. Aruna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of the High Court hold that the transactions did not involve any taxable income or revenue expenditure, the Assessing Officer added the sum in question, in proceedings u/s 154. The Tribunal held in favour of the assessee. On appeal: Held, that the dispute related to the assessment year 1987-88. The parties had been litigating for more than 13 years. The ultimate tax effect was limited. Thus, even though the decision on the question of law was in favour of the Revenue, the order passed by the Tribunal was not being interfered with. 6.1. Also the decision of the Hon ble Kerala High Court, in the case of Kil Kotagiri Tea and Coffee Estates Co. Ltd. (supra) relied upon by the Ld. Counsel for the assessee, Mr. Tarun Bansal, Advocate, is reproduced for the sake of convenience (Head Note) hereinbelow:- An order of assessment, based upon an interpretation or application of law which is ultimately found to be wrong in the light of judicial pronouncements rendered subsequently, discloses a mistake apparent from the record When the court decides a matter, it does not make the law in any sense but all it does is that it interprets the law and states what the law has always been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payments of tax made within the financial year, though not within specified dates should be treated as advance tax and the assessee was entitled to interest on the excess tax paid. The assessee filed an application u/s 154 for rectification of the order of the Tribunal dated October 31, 1981, in view of the decision of the Division Bench in Santha S.Shenoy v. Union of India (1982) 135 ITR 39 (Ker.), holding that interest was admissible even for belated payments of advance tax. The Tribunal dismissed the application on the ground that rectification u/s 154 of the Act must be of a mistake which was a mistake in the light of the law in force at the time when the order sought to be rectified was passed and the subsequent decision of the Division Bench of the High Court had no retrospective operation as in the case of subsequent legislation or the decision of the Supreme Court. On an original petition filed by the assessee challenging the order of the Tribunal: Held: that the order passed by the Appellate Tribunal dated October 31, 1981, relying on the decision of the single judge in Sethumadhavan s case (1980) 122 ITR 587 (Ker.), disclosed a mistake apparent from the record, in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rocedures and technicalities. This is particularly so when there is no specific bar in the Act to correct an order passed on rectification. 13. It is fundamental principle of law that no party should be prejudiced on account of any mistake in the order of the Tribunal. Though not necessary for the disposal of this Petition, we express our disapproval of the stand taken in the impugned order that section 254(2) of the Act are meant only for rectifying the mistakes of the Tribunal and not of the parties. The Tribunal and the parties are not adversarial to each other. In fact, the Tribunal and the parties normally represented by Advocates/Chartered Accountants are comrades in arms to achieve justice. Therefore, a mistake from any source be it-the parties or the Tribunal so long as it becomes a part of the record, would require examination by the Tribunal under section 254(2) of the Act. It cannot be dismissed at the threshold on the above ground. 8. Thus, this issue, it is seen, has been decided in favour of the assessee by the Hon ble Supreme Court as well as by various Hon ble High Courts across the country. The Department has not been able to cite any decision to the contrar ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
