TMI Blog2006 (2) TMI 653X X X X Extracts X X X X X X X X Extracts X X X X ..... said questions arise in the circumstances indicated hereinbelow. 2. The assessee has been engaged in the business of manufacturing Calcium Carbonate since 1978. Initially, the manufacturing unit had an installed capacity of 5,000 MT annually, however, through the passage of time, the capacity was increased to 7,000 MT, 9,600 MT, 11,000 MT and 17,000 MT in the years 1986-87, 1988-89, 1990-91 and 1991-92 respectively. For the assessment years 1991-92 and 1992-93, the assessee claimed deduction under sections 80-HH and 80-I of the Income-tax Act, 1961 (hereinafter referred to as the said Act ). In respect of the assessment year 1991-92, the deduction claimed under sections 80HH and 80-I was not accepted by the Assessing Officer and even the CIT(A) had not accepted the claim of the assessee in appeal. For the assessment year 1992-93, the Assessing Officer by virtue of the order dated 1-3-1995 held as follows :- . . . .the assessee s plea was not accepted in the last year and even the Learned CIT(A) did not accept the plea of the assessee going by the same logic I do not accept the claim of the assessee and as such the claim of the assessee for deduction under sections 80HH and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s given a detailed and well reasoned order allowing the assessee s claim under sections 80HH and 80-I. We find no infirmity in the order of CIT(A) for assessment year 1992-93. For the same reasons as given in that order we direct the Assessing Officer to allow deduction under sections 80HH and 80-I to the assessee- company. The Assessing Officer is directed to allow deduction under sections 80HH and 80-I in accordance with law after verifying the assessee s claim. 5. In this background, the Tribunal took up the hearing of the revenue s appeal in respect of the assessment year 1992-93 and when the aforesaid facts were placed before the Tribunal, it observed as under:- In view of the above order, the Bench felt difficulty in hearing the present appeal since the said order of the Tribunal virtually tantamount to upholding the order of CIT(A) for assessment year 1992-93 against which the revenue is in appeal before us. So we asked the parties as to why the fact that the appeal against the order of CIT(A) for assessment year 1992-93 which was pending before the Tribunal was not brought to the notice of the Tribunal at the time when the appeal for assessment year 1991-92 was he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e matter ought to have been referred to a larger Bench. The learned counsel for the appellant/assessee, firstly relied upon the decision of the Supreme Court in the case of Sub-Inspector Rooplal v. Lt. Governor 2000 (1) SCC 644, wherein the Supreme Court in paras 12 and 13 held as under:- 12. At the outset, we must express our serious dissatisfaction in regard to the manner in which a Coordinate Bench of the Tribunal has overruled, in effect, an earlier judgment of another Coordinate Bench of the same Tribunal. This is opposed to all principles of judicial discipline. If at all, the subsequent Bench of the Tribunal was of the opinion that the earlier view taken by the Coordinate Bench of the same Tribunal was incorrect, it ought to have referred the matter to a larger Bench so that the difference of opinion between the two Coordinate Benches on the same point could have been avoided. It is not as if the latter Bench was unaware of the judgment of the earlier Bench but knowingly it proceeded to disagree with the said judgment against all known rules of precedents. 13. We are indeed sorry to note the attitude of the Tribunal in this case which, after noticing the earlier ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could not have disagreed with the decision rendered earlier by a Coordinate Bench of the Tribunal in relation to another assessment year and, more so, merely in the light of the concession made by the parties. 12. In view of this answer to question No. 2, it would make little difference to question No. 1 as to whether the concession would bind the appellant/assessee or not and would prevent him from relying upon the order passed by the Tribunal previously. It is clear that the parties by agreement cannot avoid an order judicially made or render it nugatory. In any event, as pointed by the Supreme Court in Central Council (supra), a wrong concession on a question of law made by counsel is not binding on his client. Therefore, the answer to question No. 1 would also have to be decided in favour of the appellant/assessee. 13. This leaves us with question No. 3 which is on merits. I feel that it would not be necessary for us to answer this question at this stage in view of the answers given to questions 1 and 2 above because once it is decided that it was not open for the Coordinate Bench to take a contrary view to an earlier Coordinate Bench, the entire order would have to be se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on for the subsequent year also. Against this order also, the assessee preferred an appeal to the Commissioner of Income-tax who allowed the same and granted the assessee s claim for deduction. This order was challenged by the Revenue before the Tribunal in appeal. 4. It so happened that the assessee s appeal for the assessment year 1991-92 came up for hearing before the Tribunal first. The attention of the Tribunal appears to have been drawn to the order passed by the Commissioner of Income-tax for the assessment year 1992-93 in which the benefit claimed by the assessee had been granted to it. The Tribunal examined the order passed by the Commissioner but unmindful of the fact that the correctness of the said order had been challenged by the revenue in a separate appeal filed before it, held that the view taken by the Commissioner deserved to be approved. The Tribunal accordingly, allowed the assessee s appeal for the year 1991-92 and directed grant of the benefit to the assessee for the said assessment year. That order is not under challenge before us. What is under attack is an order which the Tribunal has passed in the revenue s appeal for the assessment year 1992-93. When t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from another Bench, it makes little difference whether or not a litigant has made a statement permitting the Bench to do what it cannot otherwise lawfully do. Any such statement or concession would according to the assessee have no legal effect whatsoever for notwithstanding the concession made before it, the Tribunal would continue to remain bound by the principles of judicial discipline comity and judicial propriety. The net effect of a literal application of that principle would mean that a litigant can make a statement, take a chance to earn a favourable order from the Court, but go back on the statement and argue that the Court could not have acted upon the submission made before it. Is that the true legal position is what needs to be examined, but before we do so, we need to refer to the decisions upon which the assessee has placed reliance in support of the submission urged on its behalf. 8. In Rooplal scase (supra), Tripura Bar Association s case (supra), A.P. Jaiswal s case (supra) and Abdul Javed Abdul Majid s case (supra), the Apex Court has reiterated the principle that a Co-ordinate Bench cannot disagree with another Bench and that the only course open to the diss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmittee in Broken Hill Proprietary Co. Ltd. v. Broken Hill Municipal Council (1926) AC 94, where their Lordships held that a decision on liability to assessment to tax for one year is not conclusive of liability to assessment in a later year. The judicial committee observed : The decision of the High Court related to a valuation and a liability to a tax in a previous year, and no doubt as regards that year the decision could not be disputed. The present case relates to a new question - namely, the valuation for a different year and the liability for that year. It is not eadem questio, and therefore, the principle of res judicata cannot apply. 11.The above decision was approved by the House of Lords in Society of Medical Officers of Health v. Hope (1960) AC 551. The following observations made by Lord Radcliffe sums up the legal position succinctly: The system of rating involves certain consideration that are special to itself. Its nearest analogy is with the system of annual personal taxation. With regard to both one has to begin by recognizing that there is high and frequent authority for the proposition that it is not in the nature of a decision given on one rate o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of this Court in CIT v. Neo Poly Pack (P.) Ltd.(2000) 245 ITR 492 2, where the Court observed : It is true that each assessment year being independent of the other, the doctrine of res judicata does not strictly apply to income-tax proceedings, but where an issue has been considered and decided consistently in a number of earlier assessment years in a particular manner, for the sake of consistency, the same view should continue to prevail in subsequent years unless there is some material change in the facts. 15. The law on the subject therefore, is that orders passed by the authorities under the Income-tax Act including that Income-tax Appellate Tribunal which is a creature of that enactment does not operate as res judicata implying thereby that the authorities can validly take a view different from the one taken for an earlier assessment year. That statement is however subject to the rule of consistency evolved by the Courts in the interest of finality of decisions, i.e., If the facts are unchanged, the result for the subsequent assessment year must also remain unchanged. 16. Let us then view the present case in the light of the above. For the assessment ye ..... X X X X Extracts X X X X X X X X Extracts X X X X
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