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Bansal Overseas 121 KM Stone, Near Namastesy Chowk, G. T. Road Karnal vs. ACIT Karnal Circle, Aayakar Bhawan, Sector- 12, Urban Estate Karnal
January, 08th 2019
                                           1                      ITA No. 1828/Del/2016



                      IN THE INCOME TAX APPELLATE TRIBUNAL
                          DELHI BENCH: `F' NEW DELHI

                BEFORE SHRI G. D. AGRAWAL, VICE PRESIDENT
                                       AND
                   MS SUCHITRA KAMBLE, JUDICIAL MEMBER

                     ITA No. 1828/DEL/2016 ( A.Y 2004-05)

          Bansal Overseas              Vs          ACIT
          121 KM Stone, Near Namastesy             Karnal Circle,
          Chowk,                                   Aayakar Bhawan,        Sector-
          G. T. Road                               12, Urban Estate
          Karnal     AADFB3375L                    Karnal
           (APPELLANT)                             (RESPONDENT)


                    Appellant by       Sh. Satish Kumar Goel, Adv
                    Respondent by      Sh. Surender Pal, Sr. DR

                      Date of Hearing              27.12.2018
                      Date of Pronouncement        08.01.2019

                                        ORDER

PER SUCHITRA KAMBLE, JM

          This appeal is filed by the assessee against the order dated 07/03/2016
passed by CIT(A)- 1, Gurgaon for Assessment Year 2004-05.

2.        The grounds of appeal are as under

     1. "That the order of the learned Commissioner of Income    Tax (Appeals)      is
     against law and facts.

     2.   That in the facts and circumstances of the case of the appellant the order
     of the learned Commissioner of Income Tax( Appeals) in not adjudicating in
     respect of ground of appeal with regard to ACIT in not following the common
     order passed by Hon'ble ITAT in M.A.No.386,387 and 388 dated 11.09.2013
     arising out of ITA Nos.3878,3879/Del/2008 dt.31.07.2009 is altogether
                                            2                     ITA No. 1828/Del/2016


     arbitrary, illegal, void and uncalled for.

     3.   That in the facts and circumstances of the case of the appellant the order
     of the learned Commissioner of Income Tax(Appeals) in not adjudicating with
     respect to orders of ACIT in not following the orders u/s 154 dated
     29.10.2013 passed by Commissioner of Income in the case of appellant for
     asstt.year 2003-04 on identical issue, identical facts and arising out of
     common ITAT orders which was also against precedent is altogether
     arbitrary, illegal, void and uncalled for.

     4. That in the facts and circumstances of the case of the appellant the order
     of the learned Commissioner of Income Tax(Appeals) in upholding the order of
     the learned ACIT in reducing the claim of deduction u/s 80IB from
     Rs.37,70,562/- to Rs.3167571/- is altogether, arbitrary, illegal and uncalled
     for."

3.        The Assessee is a partnership firm and derives income from manufacture
and export of rice. Return of income declaring income of Rs.81,85,030/- was
filed on 26.10.2004. The assessee claimed deduction u/s 80HHC and 80IB in
the return of income. The Assessing Officer disallowed claim of deduction u/s
80HHC and 80IB on DEPB income amounting to Rs. 15,39,749/-. The
Assessing Officer also assessed interest received on FDRs as income from other
sources. Thus, the income was assessed at Rs.9112645.

4.        The assessee firm filed appeal against assessment order u/s 143(3)
before Commissioner of Income Tax (Appeals) on the issues of disallowance of
deduction u/s 80HHC and 80IB on export incentives i.e. DEPB and treatment
of interest income on FDs as income from other sources. The CIT(A) vide order
dated 24.09.2007 dismissed the appeal of the assessee. The assessee filed
appeal against the orders of CIT(A) before ITAT, New Delhi and the Tribunal
vide common orders dated 31.7.2009 for A.Ys. 2003- 04, 2004-05 and 2005-06
in ITAs No.3878-3879/Del/2007 and 795/Del/2008 partly allowed the appeal
                                        3                       ITA No. 1828/Del/2016


in respect of deduction u/s 80HHC and 80IB of the Act. As regards the amount
of interest on FDRs the matter was restored to the file of assessing officer. The
Assessing Officer passed Assessment Order after the order of the Tribunal vide
order    dated   3.12.2010   u/s   143/254     and   assessed   the    income     at
Rs.9147412/-. Later on ACIT, Karnal issued notice u/s 154 dated 26.08.2011
in respect of assessment order u/s 143(3)/254 on 3.12.2010 wherein he
wanted to re-compute income already assessed by first reducing deduction u/s
80IB and thereafter allowing deduction u/s 80HHC and as such intended to
withdraw deduction of Rs. 1021379/-. The assessee pointed out to the ACIT
that this method of deduction was neither followed while framing assessment,
nor at the time of orders u/s 143(3)/254. The assessee further pointed out
that all the method sought to be adopted is debatable and requires
interpretation of provisions as such outside the provisions of u/s 154. On the
objections raised by assessee, the Assessing Officer vide order dated
12.10.2011 u/s 154 dropped proceedings initiated on 26.8.2011.






5.      The Tribunal while passing the order dated 31.7.2009 made certain
observation under Para 10 of the order on the issue of deduction u/s
80HHC/80IB on certain aspects which neither arose out of the order of the
CIT(A) nor there was any appeal or cross objection filed by the department.
Later on in lieu of those observations under Para 10 of Order of the Tribunal,
the Commissioner of Income Tax passed order dated 20.02.2013 under Section
263 for the A.Y. 2003-04 and directed the Assessing Officer to pass
reassessment order after re-computing the deduction u/s 80HHC as per the
said observations, although there were no specific directions of the Tribunal
with regard to the same.

6.      The assessee firm made strong protest before the Commissioner of
Income Tax that the issue now raised by him was never raised in appeal before
the Tribunal either by department or by assessee. The Commissioner of
Income Tax observed that the contention of the assessee appears to be correct
                                          4                        ITA No. 1828/Del/2016


but he followed the observation and proceeded to direct Assessing Officer to
frame reassessment orders for both the A.Ys. 2003-04 and 2004-05 for re-
computing deduction u/s 80HHC.

7.    The assessee moved Miscellaneous Application before the Tribunal
against common order dated 31.7.2009 in ITA No.3878/Del/2007 for A.Y.
2003-04 ITA No.3878/Del/2007 for A.Y. 2004-05 and ITA No.3878/Del/2007
for A. Y. 2004-05 and ITA No.795/Del/2008 for A.Y. 2005-06. Vide application
dated 8.9.2011, the assessee explained to the Tribunal that observation of the
Tribunal under Para 10 deserves to be deleted as it was neither a case of the
revenue nor that of the assessee and the same did not emanates from the
grounds raised on the basis of the orders of the Assessing Officer or
CIT(Appeals).   The    Tribunal    vide       order   dated   11.9.2013      in   M.A
No.386/Del/2011 arising out ITA No. 3878 & 3879/Del/07 for 2003-04 and
2004-05 as well as ITA No. 795/Del/2008 for A.Y. 2005-06 held as under :-

        "4. We find that the issue about eligibility of profits u/s 80IA(9) or
        8014(B) does not arise out of the orders of CIT(A). In view thereof the
        para 10 of ITAT orders becomes superfluous. In these circumstances,
        the mistake is apparent and we hold that Para 10 has been
        incorporated due to inadvertence view thereof we allow the assessee's
        MA by directing that Para 10 shall stand deleted from the order. "

8.    The   assessee   moved      application     u/s   154   on   07.10.2013       for
rectification/cancellation of order dated 20.02.2013 passed u/s 263(1) in lieu
of order passed by Tribunal in MA No. 386,387 388 for A.Y. 2003-04 and 2004-
05 wherein the Tribunal deleted the observation made under Para 10. The
Commissioner of Income Tax passed orders u/s 154 on 29.10.2013 for A.Y.
2003-04 and held as under:-
                                  5                       ITA No. 1828/Del/2016


"The order u/s 263(1) was passed on 20.02.2013 in the case of
assessee while giving directions to the AO to follow Para 10 of the ITAT
order dated 31.07.2009 passed in assessee's case. Para 10 of ITAT
order read as under:-

Para 10

"With regard to allowability of claim u/s 80HHC & 80IB, it is observed
that the issue is no res-integra in view of the decision of Larger Bench
in the case of Hindustan Mint & Agro Products in ITA Nos. 153 7,1538
& 1539/Del/2007 wherein vide order dated 23.06.2009, the decision
of Special Bench in the case of Rogini Garments- 108 ITD 495 was
upheld after, discussing the various judgements of High Courts and
Hon'ble Supreme Court and it was finally held that in view of the
provisions of Section 80IA(9) and 80IA(13), the assessee is eligible for
claim of deduction u/s 80HHC on the eligible profit which is worked out
after reducing the amount of deduction allowed u/s 80IB. Meaning
thereby assessee is not entitled to claim deduction on the very same
amount of eligible profit u/s 80HHC and 80IB. In view of the above,
matter is restored back to the file of the AO for computing the eligible
amount of deduction u/s 80HHC and 80IB as per the observation
made by the Special Bench in the above case:-

2. That assessee's counsel had placed all relevant facts in proceedings
u/s 263 before me and also pointed out that MA was pending before
ITAT for deletion of para 10 in ITAT order.' But on account of limitation,
order u/s 263 was passed to give directions to the AO.

3. The assessee petitioner now claims that Hon'ble. IT AT has since
deleted para 10 its order dated 31.07.2009 vide order dated
11.09.2013 passed in MA of Assessee copy of order produced).
                                        6                         ITA No. 1828/Del/2016


       In view of the same directions contained in order u/s 263(1) stand
       withdrawn and order u/s 263 is rectified accordingly that no action
       in terms of section 263 order is to be taken by the AO."



9.    The   CIT(Karnal) vide order dated 29.10.2013 withdrew the order u/s
263 and directed the Assessing Officer that no action in terms of Section 263
be taken by the Assessing Officer for A.Y. 2003-04 but identical orders u/s 154
on the same for A.Y. 2004-05 were not mentioned by him.

10.   Being aggrieved by the Assessment order dated 31.03.2014 for A.Y.
2004-05, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the
appeal of the assessee on the ground that the appeal is filed at incorrect forum,
therefore dismissed the appeal for want of jurisdiction.

11.   The Ld. AR submitted that the ACIT while following orders u/s 154
passed by CIT, Karnal for A.Y. 2003-04 vide orders u/s 143(3)/263. Identical
proceedings for A.Y. 2004-05 which were initiated on the very observation
arising out of the same orders and which were withdrawn in common MA
orders were overlooked to be dropped both by Commissioner of Income Tax,
Karnal and ACIT, Karnal which in fact raises the issue of following common
orders of Tribunal in A.Y. 2003-04 but disregarding the same for A.Y. 2004-05.
The Ld. AR further submitted that the ACIT while following orders dated
11.9.2013 passed by ITAT in MA No.386,387 and 388/Del/2011 (arising out of
ITA No.3878,3879/Del/2007 and 795/Del/2008 dated 31.7.2009 dropped
proceedings u/s 143(3) for A.Y. 2003-04 vide his orders dated 31.12.2013 and
was also requested to drop the proceedings for A.Y. 2004-05 also as the
proceedings u/s 263 were got initiated with respect to ITAT orders dated
31.7.2009 (Para 10) which now stands rectified under the plea that identical
orders u/s 154 revising the orders u/s 263 has not been passed. The Ld. AR
further submitted that the action of the Assessing Officer is against all judicial
principles i.e. to follow the common Miscellaneous orders in one year and not
                                        7                      ITA No. 1828/Del/2016


to follow the same in another year by taking umbrage under the orders of CIT.
The Ld. AR submitted that it is a matter of judicial precedent that decision of
higher judicial authority must be followed (10 TTJ 338). The Ld. AR further
submitted that the Rule of consistency is another principle of judicial
precedent and Revenue having accepted the orders of the tribunal in one year
then assessee identically placed for another year cannot be treated differently
(222 CTR 246). In this case it is the same assessee in both the years. The Ld.
AR further submitted that the decisions in favour of assessee for one year
cannot be changed in subsequent years regarding the same issue. The Ld. AR
relied upon the decision in case of CIT(A) Vs. Reita Biscuits Ltd. 309 ITR 154 (P
& H). In absence of any change in circumstances revenue is bound by earlier
decision (193 ITR 321). The decision of court in case of assessee for one year is
binding on department 367 ITR 568(Bombay). The Ld. AR further submitted
that the in the case of assessee, revenue is following orders of ITAT in one year
and not following the same on some alleged technical issue which is against
judicial precedent, arbitrary, illegal and uncalled for as also contravenes the
order of ITAT i.e. higher judicial authority. The Ld. AR submitted that the
Assessing Officer adopted calculation of deduction u/s 80HHC by fully giving
details of calculations while framing assessment u/s 143(3). The matter
travelled upto Tribunal who did not interfere with the same. The Assessing
Officer then issued notice u/s 154 vide notice dated 26.08.2011 on which he
intended to recalculate deduction u/s 80HHC (the method of calculation now
adopted u/s 263) and on the objections of the assessee dropped method of
recalculation vide orders u/s 154 dated 26.08.2011. Thus recalculation of
section u/s 80HHC by the method already dropped is arbitrary, illegal and
uncalled for as per the Ld. AR.

12.   The Ld. DR relied upon the Assessment Order and the order of the
CIT(A).

13.   We have heard both the parties and perused all the relevant material
                                        8                        ITA No. 1828/Del/2016







available on record. It is pertinent to note that the Revenue followed orders u/s
154 passed by CIT, Karnal for A.Y. 2003-04, but for A.Y. 2004-05 which were
initiated on the very observation arising out of the same orders and which were
withdrawn in common MA orders were overlooked to be dropped both by
Commissioner of Income Tax, Karnal and ACIT, Karnal which raises the issue
of following common orders of Tribunal in A.Y. 2003-04. The ACIT while
following orders dated 11.9.2013 passed by ITAT in MA No.386,387 and
388/Del/2011 (arising out of ITA No.3878,3879/Del/2007 and 795/Del/2008
dated 31.7.2009 dropped proceedings u/s 143(3) for A.Y. 2003-04 vide his
orders dated 31.12.2013 and was also requested to drop the proceedings for
A.Y. 2004-05 also as the proceedings u/s 263 were got initiated with respect to
ITAT orders dated 31.7.2009 (Para 10) which now stands rectified under the
plea that identical orders u/s 154 revising the orders u/s 263 has not been
passed. The Assessing Officer as well as the CIT(A) has overlooked these facts
and has not followed the rule of consistency and the directions of the Tribunal.
Thus, the order of the CIT(A) does not survive. Hence, appeal of the assessee is
allowed.

14.   In result, appeal of the assessee is allowed.

Order pronounced in the Open Court on 8th January, 2019.


      Sd/-                                                Sd/-
(G. D. AGRAWAL)                                       (SUCHITRA KAMBLE)
VICE PRESIDENT                                         JUDICIAL MEMBER


Dated: 08/01/2019
R. Naheed


Copy forwarded to:

1.                          Appellant
2.                          Respondent
3.                          CIT
                                 9                           ITA No. 1828/Del/2016


4.               CIT(Appeals)
5.               DR: ITAT




                                              ASSISTANT REGISTRAR
                                                 ITAT NEW DELHI




     Date of dictation                                    28.12.2018

     Date on which the typed draft is placed before the 28.12.2018
     dictating Member

     Date on which the typed draft is placed before the
     Other Member

     Date on which the approved draft comes to the Sr.
     PS/PS

     Date on which the fair order is placed before the
     Dictating Member for pronouncement

     Date on which the fair order comes back to the Sr.    .01.2019
     PS/PS

     Date on which the final order is uploaded on the     08.01.2019
     website of ITAT

     Date on which the file goes to the Bench Clerk        .01.2019

     Date on which the file goes to the Head Clerk

     The date on which the file goes to the Assistant
     Registrar for signature on the order

     Date of dispatch of the Order

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