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Issues Involved:
1. Inordinate delay in filing the revision applications. 2. Deduction of disputed statutory liability not provided for in the accounts and not paid. 3. Binding precedent and judicial discipline. Summary: 1. Inordinate Delay in Filing the Revision Applications: The petitioner challenged the order dated 9th/15th Dec., 1993, passed by the CIT, Central-I, Calcutta, rejecting the revision application u/s 264 of the IT Act, 1961, for allowing deduction of excise duty for the assessment years 1971-72 to 1975-76. The CIT rejected the applications citing inordinate delay. The petitioner argued that the delay was justified as the right to apply for revision accrued only on 15th March, 1984, when the CIT(A) decided the petitioner was entitled to deduction for the assessment year 1977-78. The Court held that the CIT failed to exercise jurisdiction lawfully by not considering whether the petitioner was prevented by sufficient cause from making the application within the prescribed period. The Court found that the petitioner had sufficient cause due to bona fide proceedings with the appeal before the CIT(A) and the Tribunal. 2. Deduction of Disputed Statutory Liability Not Provided for in the Accounts and Not Paid: The petitioner maintained the mercantile system of accounting and claimed deduction of excise duty liability on accrual basis, irrespective of whether a provision was made in the accounts or the liability was disputed and unpaid. The CIT(A) and Tribunal had previously allowed such deductions for the assessment years 1976-77 and 1977-78, which was upheld by the High Court and the Supreme Court. The Court held that the CIT misdirected himself by not following the binding precedent and judicial discipline, and thus the petitioner was entitled to the deduction of excise duty for the assessment years 1971-72 to 1975-76. 3. Binding Precedent and Judicial Discipline: The Court emphasized that the CIT should have followed the binding precedent set by the High Court and the Supreme Court, which allowed deduction of excise duty liability on accrual basis for the assessment years 1976-77 and 1977-78. The CIT's refusal to follow the precedent on the ground that a special leave petition was contemplated was deemed a blatant breach of judicial discipline. The Court cited the Supreme Court's decision in Union of India vs. Kamakshi Finance Corporation Ltd., which mandates that orders of higher appellate authorities should be followed unreservedly by subordinate authorities. Conclusion: The Court set aside the impugned order of the CIT and held that the petitioner is entitled to deduction of excise duty for the "hot rolled rods" manufactured during the previous years referable to the assessment years 1971-72 to 1975-76. However, if the petitioner succeeds in the pending writ petition challenging the excise authority's decision, this benefit will not apply. The application succeeded.
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