Commissioner Of Income Tax Chennai v. Tamilnadu Tourism Development Corporation Ltd., Chennai

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 20.06.2006 CORAM THE HON'BLE MR.JUSTICE P.D.DINAKARANANDTHE HON'BLE MR.JUSTICE P.P.S.JANARTHANA RAJA T.C.(A).No.609 to 611 of 2006 Commissioner of Income TaxChennai...Appellant in all TC(A)sVs. Tamilnadu Tourism Development Corporation Ltd., Chennai..Respondent in all TC (A)s Appeals under Section 260A of the Income Tax Act, 1961against the order of the Income Tax Appellate Tribunal,Madras 'C' Bench dated 24.01.2003 in ITA Nos.1163, 1164,1165/97 for the assessment years 1992-93, 1993-94 and1994-95. AGAINST the IT/WT/GI/Appeal No. ITA NOS. 46, 45 &44/96-97 - GI NO./PA.NO. 23.T Dated 14.02.1997 Assessmentyears - 1992-93, 1993-94 1994-95 on the file of the Officeof the Commissioner of Income Tax (Appeals) III Madras For Appellant :Mrs.Pushya SitaramanSr.Standing Counsel for IT Department. J U D G M E N T (Judgment of the Court was delivered by P.P.S. JANARTHANA RAJA, J.) The revenue has filed the above appeals against theorder of the Income Tax Appellate Tribunal, Madras 'C'Bench dated 24.01.2003 in ITA Nos.1163, 1164, 1165/97,raising the following substantial questions of law. "1. Whether in the facts andcircumstances of the case, the Tribunalwas right in admitting the additionalground raised by the assessee, toconsider the issues not pressed by the https://hcservices.ecourts.gov.in/hcservices/ assessee before the CIT(A)? 2. Whether in the facts andcircumstances of the case, the Tribunalwas right in setting aside the levy ofthe additional tax levied on theassessee?" 2. The Revenue preferred the above appeals against theremand order of the Income Tax Appellate Tribunal. Theorder of the Appellate Tribunal reads as follows: "These are three appeals preferred bytheassessee,aStateGovt.Undertaking. All these appeals have acommon issue. These are with referenceto the observations of the CIT(A) inthe last para of his order dt.14-2-97,viz., that the other grounds of appealare not pressed. The assessee hasraised an additional ground with regardto this aspect of the matter statingthat this was so withdrawn as insistedupon by the learned counsel on theunderstanding that the amount added toa loss figure and still the incomeremaining a loss there would be noadditional tax levied on the assessee.However, the decisions are to theeffect that additional tax is levied.The assessee was stated to havewithdrawn or not insisted upon thisground on the apprehension, which wasso observed by the Supreme Court alsoin CIT Vs. Hindustan Electro GraphitesLtd. (2000) 243 ITR 48, that the lawthat prevailed at the time the assesseefiled his return would be applicableand not that law which was introducedsubsequently with retrospective effectto bring into tax which the assesseedid not anticipate at the time offiling the return. The learned counselaccordingly insisted that the erroneousimpression of the learned counsel whoseaffidavit is filed in this regard fornot insisting upon the issue on meritsbefore the CIT(A) should be considered favourably so that the appeal on thatbasis could be directed to be heard bythe CIT(A) on merits. The learnedDepartmental Representative stronglyopposed the consideration of theadditional ground as well as theaffidavit. He further stated that onmerits the CIT(A) did not consider theissues. favourably so that the appeal on thatbasis could be directed to be heard bythe CIT(A) on merits. The learnedDepartmental Representative stronglyopposed the consideration of theadditional ground as well as theaffidavit. He further stated that onmerits the CIT(A) did not consider theissues. 2. The rival contentions in this regardhave been very carefully considered.The CIT(A) in his order has mentionedthe date of hearing as 13-2-97 and thedate of the order passed as 14-2-97.He had noted that the decision ofBombay High Court in Saiko MatexEngineering (P) Ltd. Vs. D.C.Pant,Dy.CIT(IT) reported in 108 C.T.R., hadno effect after the amendment was givenretrospectiveoperation.Heaccordingly proceeded to hold thatadditional tax was leviable even whenthe loss claimed by the assessee isreduced because of additions. TheSupreme Court in CIT Vs. HindusthanElectro Graphites Ltd. supra ahdobserved, as was stated by the learnedcounsel and that subsequently in oneother order the Supreme Court has alsoheld that additional tax could belevied even where the returned loss isreduced. It can therefore beappreciated that the claim of theassessee that it may not be imposedadditional tax could not be rejectedoutright and this was the reason fornot insisting upon the decision onmerits. In our opinion, the plea madeon behalf of the assessee soundsreasonableonthefactsandcircumstancesofthecase.Weaccordingly accept the plea of theassessee and remit the matter to thefile of the CIT(A) for considering theissue on merits. 3. The issues raised on merits couldnot be considered at this juncturewhich were not considered by the CIT(A)and therefore could not be said to arise from his order. 4. In the result, the appeals areallowed in part." 3.The Appellate Tribunal merely remanded the matterto the file of the CIT(A) with a direction to consider thecase on merits. No prejudice or interest of the revenue isaffected by the remand order. Hence, no substantialquestions of law arise for consideration of this Court andthe tax cases are dismissed. No costs. Consequently,T.C.M.P. Nos.1516 and 1517 of 2006 are closed.km Sd/Asst.Registrar/true copy/Sub Asst.RegistrarTo 1. The Assistant Registrar ofIncome Tax Appellate TribunalRajaji Bhavan, Besant nagarChennai. 2. The Commissioner of Income TaxChennai. 3. The Commissioner of Income Tax (Appeal III)Madras. 4) The Deputy Commissioner of Income taXSpecial Range III, Madras - 600 034. + one cc to M/s. Pushya Sitaraman, Advocate sr no. 25966AK(CO)NM(04.07.2006) T.C.(A).Nos.609 to 611 of 2006