TMI Blog2009 (7) TMI 169X X X X Extracts X X X X X X X X Extracts X X X X ..... rs, i.e., Pramod Kumar, decided to make some observations on the separate order proposed by Shri Singhal cannot, and does not, obliterate the fact that he had signed and 'concurred' with the order proposed by Dr. Narayanan. The confusion has arisen because of omission of words my concurring note attached , as also by omission of the fact that Pramod Kumar signed the original order proposed for the Bench by Dr. Narayanan, in the copy of the order sighted before us. The original records are now inspected by the assessee, and the assessee does not dispute that these words as also the signatures of Pramod Kumar are placed on the original order proposed by Dr. Narayanan. Even otherwise the second AM is disassociating with the order proposed by Shri K.C. Singhal and that he has signed the original order proposed by Dr. O.K. Narayanan is clear from record. There is thus a clear majority view with reasoning on all issues. In this view of the matter, the mistake, as alleged to have crept in the third part of the order, did not exist at all. The other procedural mistake is on account of not holding the joint conference and discussions before the order is passed - The difference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntitled to relief under the above provision? - assessee's contention that it was not required to satisfy the condition regarding rendering eligible telecommunication services because no such objection was raised by the Departmental Representative, and as it was not raised by the AO in the assessment order, is devoid of any merit - Once a legal claim was before the Tribunal, it was duty bound to consider and examine that all the conditions are satisfied before relief is allowed. This is precisely what the Tribunal has done and assessee is not justified in contending that question of basic or cellular services could not have been examined by the Tribunal. In the above background, we do not see any error in the order of the Tribunal which could be said to have materially affected the decision of the Tribunal. Therefore, a stray observation in the first order of the AM cannot be made basis for claiming relief u/s 254(2) of the IT Act. The contention has to be rejected. As further be pointed out that legal question relating to entitlement of the assessee to deduction u/s 80-IA has already been admitted by the Hon'ble Bombay High Court - Whether on the facts and in the cir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nch (i.e. the author of this order) who signed the draft order proposed by Dr. Naraynan on 17th Aug., 2007 by appending the words my concurring note attached on the said draft, and also added a small concurring note (hereinafter referred to as 'the third part') specifically disassociating himself with the separate order proposed by Shri Singhal. The order was finally pronounced on 22nd Aug., 2007. In the copies of order issued by the Registry of the Tribunal, however, the fact that the other AM had signed the draft order proposed by Dr. O.K. Naraynan and appended the words my concurring note attached appears to have been omitted. It is in this backdrop that the order pronounced by the Tribunal on 22nd Aug., 2007 was passed in the three parts. So far as 'first part' is concerned, the mistakes are alleged to have crept in the reasoning adopted in the said order. So far as 'second part' is concerned, that has not been called into question at all. Finally, as regards 'third part', the mistake is said to be that the specific and detailed reasons of dismissing the appeal ought to have been set out in the said part as well. One common grievance against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I also respectfully endorse the same. I have, however, a few observations to make. Since both the orders have reached as signed orders, after my transfer from Mumbai Benches, I have to add my own little note for this purpose.' 4.3 Thereafter, in the third order, the observations are confined only to paras 92 and 93 of the second order, which deal with the effect of the later amendment and the legal position for later years. The third order deals only with the above issue in paras 98 and 99 and with these observations, the Hon'ble Member disassociates himself with the second order. Thereafter, the third order simply agrees on the dismissal of the appeal, but does not at all express any opinion with regard to the merits of the matter. Stated in other words, the highlights of the third order are as follows: (i) The reasoning adopted in the first two orders is 'so radically different that there is hardly any other meeting ground'. (ii) The majority view is that the appeal be dismissed and the third order endorses this view without expressing its agreement with either of the reasoning which is so radically different. (iii) The third order is passed onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd his separate reasons for dismissing the appeal. It cannot be, and is not, the assessee's case that the second AM must give his separate reasons for agreeing with the proposed draft order. When the above position was put to the learned counsel for the assessee, he fairly admitted that in case two Members agree on a draft, it is not at all necessary for the second Member to give his separate reasons, but he submitted that the copy of order, as issued to the assessee, did not show that the second AM has signed the draft order. Learned counsel however, was shown the original records in the course of hearing and he was satisfied that the second AM had signed the original draft proposed by Dr. O.K Narayanan and also added the words my concurring note attached . The majority view is evident from the fact that the draft order proposed by Dr. Naraynan is signed and approved by two of the Members on the Bench, i.e., Dr. O.K Narayanan and Pramod Kumar. The fact that one of the Members, i.e., Pramod Kumar, decided to make some observations on the separate order proposed by Shri Singhal cannot, and does not, obliterate the fact that he had signed and 'concurred' with the order p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e at an unanimous judgment'. It is safe to assume in view of the above facts and circumstances that there was no conference and discussion and any scope to bring the minds together in order to judge the present matter before the Hon'ble Special Bench. It seems that the basic ingredient of the adjudication process is missing in the present case, rendering the order of the Hon'ble Special Bench non est and non-sustainable. The third order, it is submitted with respect, leads one to the conclusion that the three separate orders passed separately have been passed without a joint conference and discussion in an endeavour to arrive at a unanimous judgment and also without a collaboration amongst the Members constituting the Special Bench. 5.2 In view of the above, it is submitted that the order of the Hon'ble Special Bench in its totality is non est and not at all capable of being implemented. Having regard to the inherent powers of the Tribunal, it is for this reason, the entire order of the Hon'ble Special Bench is required to be recalled with a direction for a fresh hearing. Reliance is placed on the decision of Supreme Court in the case of ITO vs. M.K. Mohamm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery appropriately points out, the joint conference and discussions are an integral and significant part of the decision making process in the multiple Member Benches-whether Division Benches or Special Benches. The importance and utility of such conferences can never be over emphasized and it is a standard practice in our Tribunal to have such discussions. Wherever Members on Special Benches are at different locations and it has been considered expedient 'and necessary to have further joint conferences before the order can be finalized, tours have been granted to the Members for such purposes. In the case of Sumit Bhattacharya vs. Asstt. CIT (2008) 113 TTJ (Mumbai)(SB) 633 : (2008) 2 DTR (Mumbai)(SB)(Trib) 25 : (2008) 112 ITD 1 (Mumbai)(SB), and as evident from para 61 of the Special Bench order in the said case, President of the Tribunal granted tour to one of the Members only for attending the joint conference and it was only after such conference that the Special Bench order was finalized. The relevant observation is as follows: .......... shortly after the appeal was heard, one of us (i.e., the author) was transferred out of Mumbai Benches, and the meeting of the Membe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing was given to the effect that the assessing authority held that the services rendered by the assessee company could not be construed as basic telecommunication services . (III) Certain CBDT circulars and judicial precedents, which were relied upon by the assessee, have not been considered by the Tribunal. 12. As regards the grievance against non adjudication on the judicial precedents and the Board circular, we are unable to see much merits in the same. The order passed by the Tribunal has adequately and comprehensively dealt with all the relevant aspects of the matter and merely because there is no specific mention of each argument, the order cannot be said to be vitiated by mistake apparent from record and particularly as all the relevant aspects have been dealt with anyway. As far as first two issues are concerned, the alleged mistakes pointed out by the assessee are as follows: 1.1 Applicant's specific objection not adjudicated. 1.1.1 It may be kindly noted that the Special Bench was constituted to decide the following question: 'Whether, on the facts and in the circumstances of the case, the telecommunication earth station, as is commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epartment cannot now be permitted to take a contrary/different stand before the Hon'ble Tribunal.' 1.1.4 The applicant submits that the above specific objection raised by the applicant has not been adjudicated upon in any of the above three separate orders passed by the Hon'ble Members constituting the Special Bench. In this connection, if further requires to be noted that the applicant, having raised the basic and fundamental objection, had, in the course of the hearing, provided material and explanation only with a view to comply with the directions of the Hon'ble Special Bench and only in the alternative and without prejudice to and without conceding the basic stand that 'the Department cannot now be permitted to take a contrary /different stand before the Hon'ble Tribunal'. 1.1.5 It is submitted that it was required of the Hon'ble Special Bench to adjudicate upon this fundamental objection raised on behalf of the applicant that the above point cannot be permitted to be taken before the Hon'ble Special Bench for the first time. 1.1.6 In law, the Hon'ble Special Bench ought to have adjudicated the above objection raised by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raised by the lower authorities is that the assessee-company being engaged in telecommunication services relating to international telephone is not providing any basic services and therefore not entitled for the deduction'. The first order, it is submitted with respect, creates an impression as if on behalf of the applicant, a principal argument was made that the applicant provides basic or cellular telecommunication services. As stated above, the lower authorities had never denied that the applicant does render eligible telecommunication services and, therefore, there was no need to advance such an argument, since this proposition was not disputed by lower authorities. 1.2.3 It is humbly submitted that the Hon'ble Tribunal may be pleased to rectify the above mistake under s. 254(2) of the Act, in the interest of justice by recalling its order and hearing the matter afresh. 1.2.4 In support of the above proposition, reliance is placed on the following decisions: (a) CIT vs. Shakuntala Rajeshwar (1986) 58 CTR (Del) 34 : (1986) 160 ITR 840 (Del); (b) Vesta Investment Trading Co. (P) Ltd. vs. Asstt. CIT (2006) 104 TTJ (Chd) 284; (c) B.D. Patnaik ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rence: 80-IA. Deduction in respect of profits and gains from industrial undertakings, etc., in certain cases.-(1) Where the gross total income of an assessee includes any profits and gains derived from any business of an industrial undertaking or a hotel or operation of a ship or developing, maintaining and operating any infrastructure facility or scientific and industrial research and development or providing telecommunication services whether basic or cellular including radio paging, domestic satellite service or network of trunking and electronic data interchange services or construction and development of housing projects or operating an industrial park or commercial production or refining of mineral oil in the North Eastern Region or in any part of India on or after the 1st day of April, 1997 (such business being hereinafter referred to as the eligible business), to which this section applies, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains of an amount equal to the percentage specified in sub-s. (5) and for such number of assessment years as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation and distribution, of power, the period ending shall have effect as if for the figures '1998', the figures '2003' had been substituted; (c) in the case of an industrial undertaking located in such industrially backward District as the Central Government may, having regard to the prescribed guidelines, by notification in the Official Gazette, specify in this behalf, as an industrially backward District of Category A or an industrially backward District of Category B, and, it begins to manufacture or produce articles or things or to operate its cold storage plant or plants at any time during the period beginning on the 1st day of October, 1994, and ending on the 31st day of March, 2000; (d) in the case of an industrial undertaking being a small scale industrial undertaking, not specified in sub-cl. (b) or in sub-cl. (c), it begins to manufacture or produce articles or things or to operate its cold storage plant at any time during the period beginning on the 1st day of April, 1995 and ending on the 31st day of March, 2000. 14. It is obvious from above that all the conditions mentioned above are to be satisfied to claim relief under the above provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any namely, VSNL, itself. Since VSNL did not begin operations in the prescribed period, it is not eligible for the deduction claimed. (c) The assessee's method of calculating the deduction under s. 80-IA is totally unacceptable. The assessee's basic presumption is that all the profit is attributable to the earth stations and by reducing various costs the total profit attributable to the earth stations can be arrived at. In my opinion, this approach is totally baseless and unacceptable. By the same analogy it can be said that the entire profit is because of the telephone instrument. The assessee can then deduct all other expenses and come to the conclusion that the entire profits arise from the telephone instrument. In reality the profits are attributable to the whole claim of inter-connection, equipment and manpower which collectively represents the undertaking viz., VSNL. The assessee's attempt to split up this is unacceptable. The deduction under s. 80-IA is, therefore, not granted. 15. It is evident from above that AO rejected the assessee's claim on the ground that earth station by itself is not an undertaking. He did not go into other requirements of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4) of the 1922 Act, of course, restricts the jurisdiction of the Tribunal to the subject-matter of appeal. The words 'pass such orders as the Tribunal think fit' include all the powers (except possibly enhancement) which are conferred on AAC under s. 31................. 10. In the present case, the subject-matter of appeal before the Tribunal was the question as to what should be the proper WDV of the building, machinery, etc. of the assessee for calculating depreciation under s. 10(2)(vi) of the Act. It was certainly open to the Department, in the appeal filed by the assessee before the Tribunal, to support the findings of the AAC with regard to WDV on any of the grounds decided against it................. We are accordingly of the view that the Tribunal had jurisdiction to entertain the argument of the Department in this case and direct the ITO to find out whether any depreciation was actually allowed................ and whether such depreciation should be taken into account for computing the WDV. 16. The facts of the case before us are materially similar to the above case before the Hon'ble Supreme Court. In the present case also, the condition regarding pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concerned, the position was exactly the same before and after the appeal was disposed of by the Tribunal, i.e., the assessee was disallowed deduction under s. 80-IA. 18. In the light of above, assessee's contention that it was not required to satisfy the condition regarding rendering eligible telecommunication services because no such objection was raised by the Departmental Representative, and as it was not raised by the AO in the assessment order, is devoid of any merit. Once a legal claim was before the Tribunal, it was duty bound to consider and examine that all the conditions are satisfied before relief is allowed. This is precisely what the Tribunal has done and assessee is not justified in contending that question of basic or cellular services could not have been examined by the Tribunal. In the above background, we do not see any error in the order of the Tribunal which could be said to have materially affected the decision of the Tribunal. Therefore, a stray observation in the first order of the AM cannot be made basis for claiming relief under s. 254(2) of the IT Act. The contention has to be rejected. 19. It may further be pointed out that legal question rel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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