Itta/183/2010 Of Commissioner Of Income Tax-Ii v. M/S Charminar Bottling Co. Lt.d

THE HON’BLE SRI JUSTICE V.V.S.RAOANDTHE HON’BLE SRI JUSTICE RAMESH RANGANATHAN INCOME TAX TTRIBUNAL APPEAL No.183 of 2010 September 20, 2010 Between: The Commissioner of Income Tax – II, Hyderabad. … Appellant And M/s.Charminar Bottling Co. Ltd., Pothireddypally,Sangareddy, Medak District ... Respondent THE HON'BLE SRI JUSTICE V.V.S.RAO AND THE HON'BLE SRI JUSTICE RAMESH RANGANATHANINCOME TAX TRIBUNAL APPEAL No.183 of 2010 JUDGMENT:(Per Hon’ble Sri Justice V.V.S. Rao) For the assessment year 2001-2002, the respondent assesseeclaimed depreciation at 50% on crates. The same was disallowed bythe assessing officer. The Commissioner of Income Tax (Appeals),however, held in favour of the assessee, aggrieved by which theRevenue preferred the appeal under Section 254 of the Income Tax Act,1961 (the Act). The appeal was dismissed. The Revenue, then, movedan application being M.A.No.95/Hyd/2007 under Section 254(2) of theAct. Inter alia they contended that the issue, as to whether thedepreciation is permissible at 25% or 50%, stood concluded by theorder of the Tribunal in respect of the assessment year 1998-1999 of thesame assessee. Nonetheless, by the impugned order dated23.11.2007, the learned Tribunal rejected the application under Section254(2) of the Act observing as follows. If now, the learned Departmental Representative brings to ournotice, an order of the Tribunal in the earlier year, it amounts toarguing the appeal again. If this is permitted, then we would bereviewing our own order which is beyond the purview of Section254(2) of the Income Tax Act, 1961 (the Act). In other words,though the learned Departmental Representative wasvehement and insistent that we rectify the order because theearlier order is binding on us, we may only say that we canrectify the order only if there is a mistake apparent on record. Here, there may be a mistake in the present order, but it is notapparent on record because the earlier order of the Tribunal,and that too an unreported decision, was not placed on recordwhen there was an opportunity for the learned DepartmentalRepresentative while arguing the appeal. If such a practice ispermitted, then the casual approach at the time of arguing theappeal will persist and the parties would always take shelterunder miscellaneous applications of which there will be no end. The Senior Counsel for appellant relying on Honda Siel PowerProducts Ltd v CIT[[1]]and CIT v Sourashtra Kuch Stock Exchange Limited[[2]]contends that the binding precedent of a coordinate Bencheven it is not brought to the notice at the time of exercise of the appellatejurisdiction, the same can be brought to the notice in an application filedunder Section 254(2) of the Act. According to the Senior Counsel, non-consideration of such precedent is certainly an error apparent on theface of the record and, therefore, the jurisdiction under Section 254(2) ofthe Act is very much attracted. Per contra, the Counsel for therespondent submits that the decision relied on by the Revenue is in an appeal before this Court and that, as observed by the learned Tribunaleven if it is considered, the respondent is entitled to claim depreciationat 50% on crates. We have perused the two precedents cited by the SeniorCounsel. In Sourashtra Kuch Stock Exchange Limited considering appeal before this Court and that, as observed by the learned Tribunaleven if it is considered, the respondent is entitled to claim depreciationat 50% on crates. We have perused the two precedents cited by the SeniorCounsel. In Sourashtra Kuch Stock Exchange Limited considering the scope of Section 254(2) of the Act, the Apex Court held as follows.The core issue, therefore, is whether non-consideration of adecision of jurisdictional court (in this case a decision of theHigh Court of Gujarat) or of the Supreme Court can be said tobe a “mistake apparent from the record”? In our opinion, both,the Tribunal and the High Court, were right in holding that sucha mistake can be said to be a “mistake apparent from therecord” which could be rectified under Section 254(2). … … Asimilar question came up for consideration before the HighCourt of Gujarat in Suhrid Geigy Ltd. v Commr. of Surtax,(1999) 237 ITR 834 (Guj). It was held by the Division Bench ofthe High Court that if the point is covered by a decision of thejurisdictional court rendered prior or even subsequent to theorder of rectification, it could be said to be “mistake apparentfrom the record” under Section 254(2) of the Act and could becorrected by the Tribunal. The conspectus of the ratio above is that for non-consideration ofa binding precedent, whether prior to or subsequent to the order,rectification application would lie and the non-consideration of suchjudgment would amount to, “an error apparent on the face of the record”. In that view of the matter, we are inclined to allow the appeal andremand the matter to the learned Tribunal for considering afresh inaccordance with law. The Income Tax Tribunal Appeal is accordingly allowed. Nocosts. _______________ (V.V.S.RAO, J) September 20, 2010YS ______________________________ (RAMESH RANGANATHAN, J) [1](2007) 12 SCC 596 : (2007) 295 ITR 466 (SC) [2](2008) 14 SCC 171 : (2008) 305 ITR 227 (SC)