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M/s Binaguri Tea Company Pvt Ltd Versus Deputy Commissioner of Income Tax, Circle-4, Kolkata

2016 (10) TMI 361 - CALCUTTA HIGH COURT

Rectification of mistake - prayer for leave to withdraw the appeal - Applicability of Income Tax Rule-8 in assessing fringe benefit tax - Held that:- The following facts in the case before us are not disputed nor are they disputable:- - (a) The prayer for not pressing the appeal was made on 30th November, 2015 in ignorance of the judgement passed by the jurisdictional High Court in the case of Apeejay Tea Ltd. v. CIT reported in (2014 (7) TMI 1118 - CALCUTTA HIGH COURT )wherein held that the .....

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t profit and loss had to be worked out which shall be chargeable to tax. Once this was done the expenditure on account of fringe benefits would automatically stand reduced to 40 per cent. - (b) The prayer for leave to withdraw the appeal was, made, based on the earlier views taken by the Tribunal holding that Income Tax Rule-8 had no applicability in the matter of fringe benefit tax. - (c) It does not appear that the learned Tribunal was alive of the fact that the jurisdictional High Cou .....

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it would have, in fairness we believe, brought this fact to the notice of the assessee. The assessee obviously was not aware. Therefore, the prayer for leave to withdraw the appeal and the order allowing the prayer were both based on a mistake. Section 254(2) does not provide that it has to be a mistake solely on the part of the learned Tribunal. We are, as such, of the opinion that the case was covered by sub-section 2 of Section 254. - In summing up, we may indicate the question which fall .....

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Mr.Vipul Kundalia,Advocate ORDER The Court: The subject matter of challenge in this appeal is a judgement and order dated 1st June, 2016 by which the learned Income Tax Appellate Tribunal refused to exercise jurisdiction under section 254(2) of the Income Tax Act, for the following reasons:- The learned counsel for the Assessee reiterated the stand of the Assessee as contained in the miscellaneous application. We are of the view that jurisdiction u/s.254(2) of the Act can be exercised only to re .....

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x. The assessing officer answered the question in the affirmative and gave necessary relief. He, however, recalled the same in exercise of power under section 154 of the Income Tax Act. In an appeal preferred by the assessee, the appellate authority confirmed the order passed by the assessing officer. The assessee preferred an appeal before the learned Tribunal. The ground of the appeal was, inter alia, as follows:- For that on the facts and circumstances of the case the Ld.CIT (Appeals) has err .....

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ITR 775 (Cal), it was held as follows:- The amount of expenditure incurred by the assessee-employer in extending fringe benefits to its employees was not solely for the purpose of business. The expenditure incurred was both for the purpose of business and for the purpose of agriculture. The submission that the expenditure on account of fringe benefits had already been taken into account was not correct. The net profit and loss of the business had to be arrived at after deducting all the expenses .....

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2015 that the appellant was not desirous to press the appeal. Based on the aforesaid letter of the appellant the appeal was dismissed by the learned Tribunal by its order dated 3rd December, 2015. Subsequent thereto, the appellant discovered that the learned Tribunal had changed its view as regards the applicability of Income Tax Rule 8 to the fringe benefit tax. The appellant, in the circumstances, had applied under section 254(2) of the Income Tax Act within less than two months from the day w .....

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5 was passed. When the order was based on a mistake, the learned Tribunal should have, for the ends of justice, recalled that order and heard out the matter on merits. He, in support of his submission, relied on a judgement of the Apex Court in the case of ACIT vs. SAURASHTRA KUTCH STOCK EXCHANGE LTD. reported in (2008) 305 ITR 227 (SC). In that case, based on prior judgements of the jurisdictional court, the learned Tribunal had exercised power under section 254(2) and altered its decision. The .....

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of section 254 of the Act and in rectifying the mistake apparent from the record . Since no error was committed by the Tribunal in rectifying the mistake, the High Court was not wrong in confirming the said order. Both the orders, therefore, in our opinion, are strictly in consonance with law and no interference is called for. Mr. Agarwal, learned advocate for the revenue, submitted that there can be no question of any mistake because the order dismissing the appeal was passed on the basis of t .....

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tion was whether a writ petition can be presented after an earlier writ petition on the self same cause of action was withdrawn without leave to apply afresh. That question was answered in the negative. This judgement, in our opinion, has no manner of application to the facts and circumstances of the case. The second judgement cited by Mr. Agarwal is in the case of Jagtar Singh vs. Pargat Singh & Ors. reported in (1996) 11 SCC 586. The question, which came up for consideration was, whether a .....

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aborate reasoning is required to show that this judgement has no manner of application to the facts and circumstances of the case before us. The next judgement cited by Mr.Agarwal, is in the case of Mahakoshal Ceramics vs. Commissioner of Income Tax, a Division Bench judgement of Madhya Pradesh High Court, reported in (1983) 143 ITR 976 (MP). The question arose whether on the basis of a subsequent decision, a concluded matter could be reopened? That question was answered in the negative. The Mad .....

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t judgement cited by Mr.Agarwal is in the case of Paras Cold Storage and Ice Factory v. CIT reported in (2005) 272 ITR 301. What had happened in that case was that an appeal was filed by the assessee under section 260A. The assessee had also applied under section 254(2) before the learned Tribunal. The assessee withdrew the appeal under section 260A. After the application under section 254(2) had been dismissed, the assessee wanted to prefer an appeal. The Division Bench was of the opinion that .....

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are they disputable:- (a) The prayer for not pressing the appeal was made on 30th November, 2015 in ignorance of the judgement passed by the jurisdictional High Court on 3rd July, 2014; (b) The prayer for leave to withdraw the appeal was, made, based on the earlier views taken by the Tribunal holding that Income Tax Rule-8 had no applicability in the matter of fringe benefit tax. (c) It does not appear that the learned Tribunal was alive of the fact that the jurisdictional High Court had alread .....

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take is brought to its notice by the assessee or the Assessing Officer. We already have demonstrated that the mistake is apparent. True, it is that it might not have been a mistake on the part of the Tribunal but the Tribunal obviously was not aware of the judgement of the jurisdictional High Court passed on 3rd July, 2014. Had it been aware of the judgement, it would have, in fairness we believe, brought this fact to the notice of the assessee. The assessee obviously was not aware. Therefore, t .....

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