Itta/446/2014 Of Commissioner Of Income Tax-Ii v. Janapriya Engineers Syndicate

HIGH COURT OF JUDICATURE AT HYDERABADFOR THE STATE OF TELANGANA AND THE STATE OF ANDHRAPRADESH THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTISENGUPTA AND THE HON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A. No. 446 OF 2014 DATE: 07.10.2014 Between: Commissioner of Income Tax-II,Hyderabad. … Appellant And M/s. Janapriya Engineers Syndicate,Hyderabad. … Respondent This Court made the following: THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTAANDTHE HON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A. No. 446 of 2014 JUDGMENT:(Per the Hon’ble The Chief Justice Sri Kalyan Jyoti Sengupta) Mr. S. Ravi, learned senior advocate, appears in response to thepre-admission notice on behalf of the assessee. We have heard Mr. B.Narasimha Sarma, learned counsel for the appellant. We admit the appeal for statistical purpose on the following substantial questions of law. “In the facts and circumstances of the case, whether theHon’ble Tribunal (ITAT) is correct in law in setting aside the matter tore-decide the disallowance under Section 40(a)(ia) of the Income TaxAct, 1961, in consonance with the view that the Hon’ble High Courtmay take in the case of M/s. Merilyn Shipping and Transport despitethe fact that the consequential set aside order on this issue has to becompleted by the Assessing Officer within one (1) year from thefinancial year in which the order of the Hon’ble Tribunal (ITAT) isreceived? In the facts and circumstances of the case, whether theHon’ble Tribunal (ITAT) is correct in law in setting aside the matter tore-decide the disallowance under Section 40(a)(ia) of the Income TaxAct, 1961 by following the decision of the Hon’ble Tribunal in the caseof M/s. Merilyn Shipping and Transport despite the fact that the saidorder of the Hon’ble Tribunal (ITAT) was stayed by the Hon’ble HighCourt?” We find that the learned Tribunal taking note of the pendency ofthe appeal in this Court, preferred by the Revenue against the decision ofthe Special Bench of the Tribunal in M/s. Merilyn Shipping & Transport in I.T.A. No.477/Viz/2008 dated 29-03-2012, directed the Assessing Officerto re-decide the issue after the disposal of the appeal by this Court. We are of the view that until and unless the decision of theSpecial Bench is upset by this Court, it binds smaller Bench andcoordinate Bench of the Tribunal. Under the circumstances, it is not opento the Tribunal, as rightly contended by Mr. Narasimha Sarma, learnedcounsel, to remand on the ground of pendency on the same issue beforethis Court, overlooking and overruling, by necessary implication, thedecision of the Special Bench. We simply say that it is not permissibleunder quasi judicial discipline. Under the circumstances, we set asidethe impugned judgment and order, and restore the matter to the file of theTribunal which will decide the issue in accordance with law and it wouldbe open to the Tribunal either to follow the Special Bench decision or notto follow. If the Special Bench decision is not followed, obviously remedylies elsewhere. The appeal is thus allowed only on the point of remand. Wedirect the Tribunal to decide the matter on remand afresh within a periodof two months from the date of communication of this order. No costs. ___________________ K.J. SENGUPTA, CJ ___________________ SANJAY KUMAR, J