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Income Tax Appellate Tribunal, “H” BENCH, MUMBAI
Before: SHRI SANJAY ARORA, AM & SHRI PAWAN SINGH, JM
Per the revision order, the ld. CIT has clearly directed the AO to assess the interest income allocated by the assessee to the two units located at Baddi entitled to deduction under section 80-IC as ‘Income from other sources’. The directions are plain, clear and unambiguous, leaving no scope for any discretion with the A.O. It is not a case of a total set aside of assessment, but to a limited extent, so that it has
4 & 4866/Mum/2015 Procter & Gamble Hygiene & Healthcare Limited v. CIT/Dy. CIT to be modified to the stated extent only. The AO in the revised assessment is to interfere with the assessment only to the stated extent and, further, in doing so is only giving effect to the said directions by the ld. CIT. Clause (c) of Explanation 1 to section 263(1) is, again, specific, excluding parallel exercise of jurisdiction by the Administrative and the Appellant Commissioner. Once, therefore, the ld. CIT has, in exercise of his power of revision, held the interest income as assessable under section 56, the matter cannot be re-agitated before or revisited by the Appellant Commissioner, whose view is thus in accordance with the clear mandate of law. Reference in this context, explaining the clear position of law, may be made to the decision in the case of CIT v. Shri Arbuda Mills Ltd. [1996] 231 ITR 50 (SC), being in fact clarified, in a similar fact situation, in the case of Herdillia Chemicals Ltd. (supra), so that the matter can only be said to be no longer res integra, being squarely covered by both, the clear position of law as well as said binding decisions. This is precisely the reason for our stating, at the outset, of the assessee as having no case. The assessee’s appeal having been upheld by us as not maintainable, the question of adjudicating its grounds assailing the assessment on merits does not arise. We decide accordingly.
We next consider the appeal against the order u/s.263 which, filed only on 03.09.2015, is time barred by 458 days. The reason for the delay, as explained per an affidavit dated 12.09.2016 accompanying the condonation petition (which is dated 06.09.2016), also stating likewise, is that the appellant did not prefer an appeal as the ld. CIT had set aside the assessment, so that the same would be made afresh and, as such, the issues involved would be agitated before the AO or the appellate authorities, i.e., against the order of the A.O. Nothing could be farther from truth, i.e., in face of the clear directions by the ld. CIT, which the AO was bound to follow. How, then, we wonder, could it be said that the ‘issues’ would be agitated in the assessment proceedings before the AO and, thereafter, before the appellate authorities. That is, we find no basis for the said bona fide belief, which is stated as the reason for the assessee having not preferred an appeal against the 5 & 4866/Mum/2015 Procter & Gamble Hygiene & Healthcare Limited v. CIT/Dy. CIT revision order. That the assessee became, or was made, aware of such an interpretation (of the order by the ld. CIT) in the course of the appellate proceedings (before the ld. CIT(A)), is only a false plea. The directions by the ld. CIT are, as afore-stated, clear and explicit. And, in so stating, we are not, we may clarify, considering the aspect of interpretation from the stand-point of a legal person, but of that of a business or a layman. The assessee, in fact, being a multinational company, guided and assisted by, rather, top end counsels, well conversant with the legal language, as well as law in the matter, could hardly assume such a posture. Why, the grounds, including the additional grounds of appeal
, taken without prejudice, as raised before us, assail the impugned order on several grounds, which itself demonstrates the same. Then, again, if the assessee had so many grievances against the impugned order, or the same is, as claimed, judicially unsound on several counts, that is all the more reason for the assessee to have preferred an appeal, which it does only after the passing of the order by the first appellate authority on 28.08.2015. The very fact that the assessee states of entertaining a bona fide belief of being able to re-agitate matters in assessment and, where unsuccessful, in appeal, itself implies of that being its’ only grievance. For why else would the assessee, represented by one of the most reputed firm of CAs in India, not file an appeal? Assuming these grounds itself betrays the assessee’s case. This, we may though clarify, is independent and apart from our having found no reason for any different interpretation and, thus, no basis for a bonafide belief. In our clear view, even as expressed during hearing, the assessee had clearly, and presumably, only on the basis of a legal opinion, taken a conscious decision not appeal against the revision order, passed with reference to and relying on several decisions, including by the Apex Court. No reasonable, much less sufficient, cause has been advanced for condonation of delay. Reliance for the purpose, even as our decision is based on clear findings of fact, is placed on the decision in the case of State of A.P vs. Venkataramana Chuduva & Othrs., reported at [1986] 159 ITR
59. (A.P). The reliance by the assessee on the decision in the case of Kewalkumar Jain vs. Asst. CIT [2013] 37 taxmann.com 248 (Pune) is 6 & 4866/Mum/2015 Procter & Gamble Hygiene & Healthcare Limited v. CIT/Dy. CIT misplaced. In the facts of that case, the revisionary authority had set aside the assessment for the AO to arrive at the correct amount of the profit available for the purpose of considering the amount of deemed dividend assessable. The matter was accordingly construed by the assessee, as a tribunal found, as of a remission for fresh determination. That is, the assessee’s plea of having entertained a bona fide belief was found as so by the tribunal. In fact, it clearly states at para 6 of its order of the ld. Departmental Representative as having not doubted the bona fides of the reasons for the delay. We, on the contrary, have found no basis for taking such a plea in the present case, even considering the matter from the stand-point of a common man or a man of commerce, even as the assessee has access to the best legal advice, and that, therefore, it had taken a conscious decision, accepting the revision order, based as it is, on well-settled law. That, the plea of bona fide is misplaced, nay, false, with the assessee rather contradicting itself by assuming several independent grounds impugning the revision order. The assessee’s stand of entertaining a bona fide belief is also without basis in law in view of the clear position of law as enumerated in Shri Arbuda Mills Ltd. (supra); Herdillia Chemicals Ltd. (supra); and Ranka Jewellers v. Addl. CIT [2010] 328 ITR 148 (Bom). We are conscious of the decision in the case of the Collector of Land Acquisition vs. Mst. Katiji [1987] 167 ITR 471 (SC), also relied upon by the tribunal in the case of Kewalkumar Jain (supra). We have already expressed that the impugned order stands passed relying on several decisions, including by the Apex Court. The assessee could not make out a prima facie case, i.e., on the merits of the impugned directions issued by the ld. CIT, before us, with we on the contrary observing the assessee to have taken a conscious decision accepting the same. The said decision would thus also have no application in the present case. The instant appeal is not maintainable, and is accordingly dismissed. We decide accordingly.
7 & 4866/Mum/2015 Procter & Gamble Hygiene & Healthcare Limited v. CIT/Dy. CIT 7. In the result, both the appeals by the assessee are dismissed. Order pronounced in the open court on November 30, 2016.