The Commissioner Of Income Tax, Chennai v. M/S. Sical Logistics Limited

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 01.04.2021 CORAM THE HON'BLE MR.JUSTICE M. DURAISWAMYANDTHE HON'BLE MRS.JUSTICE T.V. THAMILSELVI Tax Case Appeal No. 536 of 2013 The Commissioner of Income Tax,Chennai. ... Appellant/Respondentvs. M/s. Sical Logistics Limited,73, Armenian Street,Chennai - 600 001. ... Respondent/Appellant Tax Case (Appeal) filed under Section 260A of the IncomeTax, 1961 against the order of the Income Tax AppellateTribunal, “A” Bench, Chennai dated 24.06.2011 inM.A.No.22/Mds/2011 in I.T.A.No.1599/Mds/2009 for the AssessmentYear 2005-2006. Against the order of the Commissioner of Income Tax(Appeals)-V,Chennai 34 dated 06/02/2009 made in ITA No.402/2006-2007 of Income Tax, Company Range V, Chennai dated 31/12/2007made in PAN/GIR No. /51004S for the assessment year2005-2006.For Appellant:Mr.J. Narayanaswamy,Senior Standing Counsel For Respondent :No Appearance Challenging the order passed in M.A.No.22/Mds/2011 inI.T.A.No.1599/Mds/2009 in respect of the Assessment Year2005-2006 on the file of the Income Tax Appellate Tribunal, “A”Bench(for brevity, the Tribunal), Chennai , the Revenue hasfiled the above appeal. https://hcservices.ecourts.gov.in/hcservices/ Assessment Year 2005-2006 on 28.11.2005 declaring an income ofRs.41,14,17,562/- . The return was processed under section 143(1). The case was selected for scrutiny proceedings by issuanceof notice under sections 142(1) and 143(2). Aggrieved over theAssessment Order, the assessee filed filed an appeal before theCommissioner of Income Tax (Appeals), who allowed the amountpaid to the Club following the Judgment in the case of CIT v.Sundaram Industries (240 ITR 335) and on the question ofadvances made to the subsidiary company amounting to Rs.73.26crores without charging interest following the Judgment of theSupreme Court in the case of S.A. Builders reported in 288 ITR1, ultimately, the Commissioner of Income Tax (Appeals),allowed the appeal. Aggrieved over the same, the Revenuefiled an appeal before the Income Tax Appellate Tribunal, whichdismissed the appeal with regard to Rule 8D being disallowancemade under section 14A. On the issue regarding section 14A, thesaid issue was restored to the Assessing Officer to compute thequantum of expenses which should not be available for deductionafter taking into consideration, provisions of Rule 8D. Afterthe dismissal of the appeal, the assessee filed a MiscellaneousApplication in M.A.No.22/Mds/2011 in I.T.A.No.1599/Mds/2009stating that the present Assessment Year is 2005-2006 and thatRule 8D came into effect only on 01.04.2007 and therefore, theorder passed should not be restored to the file of theAssessing Officer for readjudication. The Tribunal followingthe Judgment of the Hon'ble Bombay High court in the case ofGodrej Boyce and Mfg. Col. Ltd. reported in 234 CTR 7, expungedthe relevant portion of the order in the Tribunal's order dated14.10.2010 and allowed the Miscellaneous Application.Aggrieved over the order passed by the Tribunal, the Revenuehas filed the above appeal. 3. At the time of admission of the above appeal, thefollowing substantial question of law arose for consideration:- “(i) Whether on the facts and in thecircumstances of the case, the Income TaxTribunal was right in law in allowing the Misc.Application of the assessee which would amount tothe review of the earlier order passed by theTribunal and is beyond the power vested undersection 254 of the I.T. Act, 1961? (ii) Whether on the facts and in thecircumstances of the case, the Income TaxTribunal was right in allowing the Misc.Application of the assessee by which theTribunal had clarified that it had followed thedecision of the Bombay High Court in the case ofGodrej and Boyce case in the original orderpassed and the same would amount to review of the order passed? (ii) Whether on the facts and in thecircumstances of the case, the Income TaxTribunal was right in allowing the Misc.Application of the assessee by which theTribunal had clarified that it had followed thedecision of the Bombay High Court in the case ofGodrej and Boyce case in the original orderpassed and the same would amount to review of the order passed? (iii) Whether on the facts and in thecircumstances of the case, the Income TaxTribunal was right in allowing the Misc.Application of the assessee rendering a decisionwithout giving any finding on the issue raisedviz., disallowance under section 14A of theIncome Tax Act? 4. Mr. J. Narayanaswamy, learned Senior Standing Counselappearing for the appellant submitted that by allowing the theMiscellaneous Application, the Tribunal has gone beyond thescope of provision of section 254 (2) of the Income Tax Act, byexpunging the relevant portion in the order dated 14.10.2010.Further, the learned counsel submitted that the Tribunal has nojurisdiction to expunge the paragraph when the provisions ofsection 254(2) speaks only about the mistake. 5. On a reading of section 254(2), it is clear that theTribunal, with a view to rectify any mistake apparent from therecord, may amend the order. 6. In the case on hand, the non consideration of theJudgment of the Hon'ble Bombay High Court cannot be construed asmistake as contemplated under section 254(2) . When theTribunal has no jurisdiction to review the order passed by them,the remedy open to the assessee is to file an appeal againstthe order, if they are aggrieved over the same. The orderpassed by the Tribunal is beyond the scope of section 254(2).In these circumstances, the Tribunal should not have allowed theMiscellaneous Application in M.A.No.22/Mds/2011. In such viewof the matter, the the order passed by the Income TaxAppellate Tribunal is liable to be set aside. Accordingly,the same is set aside,. The questions of law raised in thisappeal are decided in favour of the appellant-Revenue. The TaxCase Appeal stands allowed. No costs. Sd/-Assistant Registrar Rj //True Copy// Sub Assistant Registrar To 1. The Income Tax Appellate Tribunal, “A” Bench, Chennai “A” Bench, Chennai https://hcservices.ecourts.gov.in/hcservices/ 2. The Commissioner of Income Tax, Chennai Chennai 3. The Commissioner of Income Tax(Appeals)-V, Chennai Chennai 4. The Additional Commissioner of Income Tax, Company Range-V, Chennai Company Range-V, Chennai NMI(CO)NS(03/05/2021) Tax Case Appeal No.536 of 2013