2012 (8) TMI 274 - AT - Income Tax

Petition seeking rectification of the orders passed by the Tribunal on ground that subsequent decision of the Tribunal arrived at a contrary view - denial of deduction u/s 80IA on ground that business activity carried on by the assessee was not manufacturing activity - assessee engaged in business of manufacturing and filling of argon gas - denial - Held that - The subsequent decision of the Tribunal arriving at a contrary view cannot render the earlier decision of the Tribunal suffer from mistake apparent on record particularly when the earlier decision of the Tribunal was delivered after sensibly considering the materials available before it and relying upon various decisions of the Apex Court and the jurisdictional High Court. Further Tribunal has dissected the activities involved in the processing/manufacturing/ filling of argon gas in cylinders and with the relevant materials on record came to a thoughtful conclusion that the applicant does not deserve the benefit u/s. section 80 IA since it was not carrying on any activity of manufacturing as envisaged under the Act, we are of the considered view that there is no mistake apparent on record to invoke the provisions of section 254(2) even though the decision of the Tribunal is subsequently held to be incorrect - Decided against assessee

Summary

Issues:
Rectification of orders related to deduction u/s 80-IA of the IT Act for multiple assessment years.

Analysis:
The applicant filed four Misc. Applications seeking rectification of Tribunal orders for different assessment years related to the claim of deduction u/s 80-IA of the IT Act. The Tribunal had rejected the claim based on the premise that the business activity of manufacturing and filling argon gas did not fulfill the conditions for the deduction. The applicant argued that the Tribunal erred in rejecting the claim despite recognition by government authorities and payment of excise duty. Reference was made to relevant case laws emphasizing that recognition as a manufacturer entitles the assessee to claim benefits under section 80-IA. The applicant also highlighted a decision in their own case where a deduction was allowed based on similar grounds.

The learned AR reiterated the applicant's submissions, emphasizing that the activity should be considered manufacturing for claiming the deduction. On the contrary, the learned DR opposed, stating that registration under Excise Laws does not equate to manufacturing activity. The Tribunal had analyzed the nature of the activity and concluded it did not qualify as manufacturing for the deduction under section 80-IA. The learned DR argued that the Tribunal's decision was well-founded and did not warrant rectification.

Upon careful consideration of the submissions and materials, the Tribunal upheld its initial decision, stating that the activity of processing and filling argon gas did not constitute manufacturing for the purpose of claiming the deduction u/s 80-IA. The Tribunal had extensively reviewed relevant case laws and distinguished them based on the facts of the case at hand. It was noted that the Tribunal's decision was based on a thorough examination of the activities involved and the applicable legal principles. The Tribunal concluded that there was no mistake apparent on record to invoke rectification under section 254(2) of the Act, despite subsequent decisions holding the initial decision incorrect.

In conclusion, all four Misc. Applications filed by the assessee seeking rectification of Tribunal orders related to the deduction u/s 80-IA were dismissed. The Tribunal maintained its decision that the activity of processing and filling argon gas did not qualify as manufacturing for the purpose of claiming the deduction under the IT Act.