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1 IN THE HIGH COURT OF KARNATAKA AT BANGALORE DATED THIS THE 28TH DAY OF OCTOBER 2013 P R E S E N T THE HON’BLE MR. JUSTICE N. KUMAR A N D THE HON’BLE MRS. JUSTICE RATHNAKALA ITA Nos.331 C/w 332/ 2012
BETWEEN:
M/S. NATURAL STONES EXPORTS LTD., REP. BY ITS DIRECTOR SRI SURESH PARASMAL CHOPRA NO.197, 2ND FLOOR, 6TH CROSS, 5TH MAIN, GANDHINAGAR, BANGALORE – 560 009.
... APPELLANT COMMON.
(BY SRI A SHANKAR & M LAVA, ADV.)
AND:
THE ASST. COMMISSIONER OF INCOME TAX CIRCLE-11 (1) OPP. RBI R.P. BHAVAN NRUPATUNGA ROAD BANGALORE-560 001.
…RESPONDENT COMMON.
(BY SRI K V ARAVIND, ADV.)
ITA NO.331/2012 IS FILED UNDER SEC.260-A OF I.T. ACT, 1961, ARISING OUT OF ORDER DATED 04/05/2012 PASSED IN ITA NO.600/BANG/2011, FOR THE ASSESSMENT YEAR 1995-1996, PRAYING THIS HON'BLE COURT TO:
2 I. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN, II. ALLOW THE APPEAL AND SET ASIDE THE FINDINGS TO THE EXTENT AGAINST THE APPELLANT IN THE ORDER PASSED BY TRIBUNAL IN ITA NO.600/BANG/2011 DATED 04/05/2012 REFERRED AS ANNEXURE-A.
ITA NO.332/2012 IS FILED UNDER SEC.260-A OF I.T. ACT, 1961, ARISING OUT OF ORDER DATED 04/05/2012 PASSED IN ITA NO.851/BANG/2011, FOR THE ASSESSMENT YEAR 1996-1997, PRAYING THIS HON'BLE COURT TO:
I. FORMULATE THE SUBSTANTIAL QUESTION OF LAW STATED THEREIN, II. ALLOW THE APPEAL AND SET ASIDE THE FINDINGS TO THE EXTENT AGAINST THE APPELLANT IN THE ORDER PASSED BY TRIBUNAL IN ITA NO.851/BANG/2011 DATED 04/05/2012 REFERRED AS ANNEXURE-A.
THESE ITAs COMING ON FOR ADMISSION THIS DAY, N. KUMAR, J., DELIVERED THE FOLLOWING: -
JUDGMENT
These two appeals are preferred by the assessee challenging the common order 04.05.2012 passed by the Tribunal in I.T.A. Nos.600 & 851 (Bang.) /2011 for the assessment years 1995-1996 and 1996-1997.
The assessee is a company engaged in the business of export of granites. The assessee filed its returns declaring ‘Nil’ income after claiming exemption under Section 10B of
3 the Income Tax Act, 1961 (for short ‘the Act’). The Assessing Authority completed the scrutiny of the assessment under Section 143(3) of the Act and determined taxable income. Assessing Authority denied the benefit of exemption under Section 10B of the Act also. Aggrieved by the said orders, the assessee preferred an appeal to the Commissioner of Income Tax (Appeals). The assessee was granted relief under Section 80HHC of the Act in respect of the granites purchased and exported. Aggrieved by the said order the revenue preferred appeals before the Tribunal. The Tribunal dismissed the appeals preferred by the Department. The said order was challenged before this Court. This Court by order dated 31.05.2010 in ITA No. 397/2003 set aside the order passed by the Tribunal and remitted the matter back to the Commissioner of Income Tax (Appeals) for consideration in accordance with law after affording opportunity to both the parties and dispose of the same strictly in compliance with the relevant provisions of the Act and Rules as expeditiously. All the contentions
4 urged by the parties were left open. The substantial questions of law were left unanswered.
After such remand the Commissioner of Income Tax (Appeals) passed an impugned order rejecting the assesse’s claim under Section 10B of the Act as well as under Section 80HHC of the Act. Aggrieved by the said order the assessee preferred an appeal before the Tribunal. The Tribunal was of the view the issues raised in the appeal is squarely covered by the judgment of this court in Assessee’s own case for the assessment years 1994-1995, wherein it was held the assessee is not entitled to exemption both under Section 10B of the Act as well as under Section 80HHC of the Act and therefore, the appeal came to be dismissed. For the same reason, the appeal filed in respect of the subsequent order also came to be dismissed. Aggrieved by the said order appellant – assessee is before this Court.
Learned counsel appearing for the assessee assailing the impugned order contends that reliance placed by the
5 Tribunal on the judgment of this Court for the assessment year 1994-1995 is not correct. Firstly it was an ex-parte order. Secondly an application for review is filed, which is pending consideration. Thirdly and more importantly the assessee has produced material to show that he is entitled to the benefit, which he claimed and which material was not placed before the High Court in the earlier proceedings. As there cannot be any res-judicata in tax matters without proper application of mind, the Tribunal has decided the case of the appellant in the light of the material, which was produced on record and therefore, he submits that the order requires to be set aside. Moreover for the assessment years 1995-1996, which are the subject matter of these proceedings, this court has remanded the matter leaving all the contentions open, which have not been considered by the Tribunal. Therefore, he prayed for allowing of the appeals.
6 5. Per contra, learned counsel appearing for the Revenue do no dispute the legal position, but he contends that an application filed seeking review would make no change in law, unless the appellant is able to establish his claim for exemption, the judgment rendered in his case earlier squarely applies to these appeals also.
From the aforesaid facts it is clear the judgment rendered by this Court for the assessment years 1994-1995 is an ex-parte order. In the absence of certificate under Section 14 of the Industries (Development and Regulation) Act, 1951, it was held that the assessee is not entitled for exemption under Section 10B of the Act. Similarly benefit under Section 80HHC of the Act was declined for non-filing of the audit report. It is the case of the appellant that both the audit report as well as the certificate were available but not produced, however, subsequently the assessee has produced the said documents and claiming exemption. Authorities declined the assessee’s claim and proceeded on the assumption that the appellant is not entitled to the
7 benefit. In fact in the earlier proceedings, this court after considering all these arguments set aside the order and remanded the matter back to look into the documents and then record a finding. After remand the Tribunal has not looked into the documents and has refused to grant exemption sought for by the appellant without looking into the documents whether the certificate enabled the assessee to claim exemption or not and whether the audit report is available. It is settled law, that the documents may be filed before the first appellate authority, which is also justified. Therefore, the authorities having not properly applied their mind to the contentions raised as well as to the statutory provisions has passed the orders in the assesse’s case on two occasions. Therefore, the orders cannot be sustained in the facts of this case.
We deem it proper to send the entire matter to the assessing authority, who shall look into the entire material produced by the assessee in respect of his claim for exemption and take note of the statutory provisions and
8 also take note of the two orders passed by the High Court in the assessee’s case and consider all contentions urged by the appellant and this would meet the ends of justice.
In that view of the matter, both the appeals are allowed. The common impugned order dated 04.05.2012 passed by the Tribunal ( Annexure –A ) is set aside. The entire matter is remanded back to the Assessing Authority to pass orders in accordance with law, keeping in mind the observations made above.
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