TMI Blog2012 (11) TMI 1199X X X X Extracts X X X X X X X X Extracts X X X X ..... disposed of by this common order for the sake of convenience. 2. First, we will take up ITA No. 692/Hyd/2011 for A.Y. 2006-07. In this appeal, the assessee mainly challenged assumption of jurisdiction by the CIT u/s. 263 of the Act and also challenged direction of the CIT with regard to disallowance of Trade Scheme Expenditure of ₹ 3,35,17,143 paid to M/s. Gayatri Marketing Agencies and M/s. ARK Marketing Agencies. In this case assessment was framed for A.Y. 2006-07 u/s. 143(3) vide assessment order dated 30.12.2008 determining the income at ₹ 27,26,773 and capital gain of ₹ 1,44,360. The CIT while examining the records found that an expenditure towards Trade Scheme Expenditure paid to M/s. Gayatri Marketing Agencies at ₹ 73,45,191 and M/s. ARK Marketing Agencies at ₹ 2,61,71,952 was allowed by the Assessing Officer without verifying the genuineness of the activities or services rendered by these parties to the assessee. According to the CIT the assessee claimed similar expenditure for A.Ys. 2003-04 and 2004-05 and the disallowance was confirmed by the CIT(A). Similarly for A.Y. 2005-06, the assessee claimed the expenditure on the same head of inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee and substitute his own decision in place of an order of a higher forum. On merit, he relied on the order of the Tribunal for earlier years and also filed gist of arguments which is kept on record. 4. On the other hand, the learned DR relied on the order of the CIT. 5. We have heard both the parties and perused the material on record. Admittedly, the issue relating to Trade Scheme Expenditure came before this Tribunal in assessee s own case for A.Ys. 2003-04, 2004-05 in ITA Nos. 478/Hyd/2007 and 1055/Hyd/2007. The Tribunal vide order dated 30th September, 2009 held as follows: 11. We have considered the rival submissions and perused the material available on record. There is no dispute either with regard to the identity of the marketing agents, who in fact are income-tax assessees and their returns of income for the relevant years are also brought on record. by the assessee. Though certain doubts have been expressed by the lower authorities with regard to the nature of services rendered or the justification for such services, we find no basis for the same. The lower authorities have not brought any record to establish the falsity of the assessee's claim with rega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the learned counsel for the assessee that the lower authorities were not justified in disallowing the claim of the assessee. We accordingly set aside the impugned order of the CIT(A) and delete the addition of ₹ 2,83,50,920 made by the assessing officer and confirmed by the CIT(A). Assessee's grounds on this issue are allowed. 6. Once again the same issue came before this Tribunal for A.Y. 2005-06 in ITA No. 611/Hyd/2010. The Tribunal vide order dated 29.10.2010, after considering the entire issue passed a detailed order cancelling the order passed by the CIT u/s. 263 by holding as follows: 17. On careful consideration of the matter, we find that there is merit in the contentions of the assessee in this appeal. Since the issue relatable to the allowance of trade scheme expenses is covered in favour of the assessee by the decision of this Tribunal dated 30th September, 2009 in the appeals for the immediately preceding two assessment years, and since the action of the Assessing Officer in allowing the trade scheme expenses for the year under appeal, is in accordance with the decision of the Tribunal for the earlier years, it cannot be said that the assessment ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... because according to him, if those directions are strictly complied with by the Assessing Officer, the conclusions with regard to allowability of totality of expenses claimed would have been different, and at least a part of the trade scheme expenses, which represent the inflated portion, is disallowable. Even this conclusion of the Commissioner of Income-tax reveals that the Commissioner of Income-tax in the impugned order has been sitting on the order of the Tribunal rather than questioning the actions of the Assessing Officer and the Addl. CIT in relation to a particular issue, and is merely seeking to substitute his judgment against that of Tribunal. That being so, when the Assessing Officer as well as the Addl. CIT who gave directions under S. 144A, have applied their mind to a particular issue, it cannot be said that the assessment order is either erroneous or prejudicial to the interests of the Revenue when it is in accordance with the earlier years order of the Tribunal on similar issue. The CIT has any right and jurisdiction to come to a conclusion entirely contrary to the one reached by Tribunal in assessee s own case in earlier years on the same facts. Otherwise, it wil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct matter of appeal before the Higher Forum. If he is permitted to take such a view, it would introduce nothing but judicial indiscipline which is not called for. It would lead to chaotic situation. The grievance of the Revenue may be real and substantial in certain cases but such situation cannot be provided for by judicial interpretation by Courts but only by an appropriate agency. In the present case, the Order of the Tribunal in assessee own case in earlier years which is delivered on similar set facts is binding on authorities below and they cannot ignore it either in initiating a proceeding or deciding on the rights involved in such proceeding. This is breach of judicial discipline which cannot be allowed to happen. The Tribunal also in fact, has any right or jurisdiction to come to the conclusion entirely contrary to the one reached by another Bench of the same Tribunal on the same facts. It may be that the members who constituted the Tribunal and decided on the earlier occasion were different from the members who decided the case on the present occasion. But what is relevant is not the personality of the officers presiding over the Tribunal or participating in the hearing b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incurred by the assessee. Hence, the directions of the JCIT tax issued u/s 144A to allow the expenditure claimed towards trade scheme expenses appear to be both erroneous and prejudicial to the interest of revenue. 18.2. The other issues dealt by the CIT in para 4.11 , 4.12, 4.13. and 4.14 which did not find place in the notice cited supra. In our opinion, it was always open to CIT to put such issues, found by him based on material on record, to the assessee. It is admitted fact that there is nothing on record which would show that the assessee was given an opportunity to these issues which form part of the order in revision dated 29.3.2010, but were not part of notice dated 2.3. 2010. Though, the learned DR agreed that there was nothing on record which would establish the contrary. It was, however, contended that the assessee would have get its opportunity to give explanation to the issue raised in the revisional order before the assessing officer and that such an opportunity would meet the requirement of the provision. In our opinion, this is not the position envisaged in law. If one were to permit correct of such a grievous error in such a manner, it would tantamount to comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prejudicial to the interests of the Revenue. We accordingly cancel the same, allowing the grounds of the assessee in this appeal. 7. Now the CIT, u/s. 263 of the Act, cannot reopen a settled issue and take a different view by alleging various irrelevant facts. The CIT is bound by the order of a higher forum on this issue. More so, the payment of Trade Scheme Expenditure to the same party is subject matter of appeal before this Tribunal. Being so, on the same issue the CIT is not expected to take a different view. It is needless to say that an order delivered by the Tribunal is binding on the Assessing Officer as well as the CIT/CIT(A). He is bound to follow the order of the Tribunal in its true letter and spirit. The Assessing Officer/CIT being an inferior officer vis-a-vis the Tribunal, was bound by the judgement of the Tribunal and, therefore, he should not have tried to distinguish the same on untenable grounds. It is also necessary for judicial unity and discipline that all the authorities below the Tribunal must accept a binding judgement of the Tribunal. A reference to this may be had to the judgement of Bombay High Court in the case of Bank of Baroda vs. H.C. Shrivast ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the Tribunal. The CIT is not justified in finding a hole in the order of the Tribunal so as to disallow the claim of the assessee towards Trade Scheme Expenditure. In our opinion, the comments of the CIT regarding the interpretation taken by the Tribunal on earlier occasion deserves to be repudiated as a fact of gross judicial indiscipline. Certainly, the earlier view of the Tribunal is to be followed. Contrary view by the CIT subsequent to the order of the Tribunal cannot be upheld. The principles of judicial discipline require the CIT/CIT(A) to follow the order of the Tribunal on the issue unreservedly. The approach of the CIT in the present case is in utter disregard to the accepted norms of judicial discipline. The impression of the CIT that the claim of the assessee is spurious deduction is against the findings of the Tribunal in the earlier assessment years. The reasons given by the CIT to disregard the binding nature of the Tribunal order which was pressed into service before him by the assessee would be in violation of the laws. Utmost regard should be paid by the adjudicating authority and appellate authorities to the requirement of maintaining judicial discipline a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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