2013 (8) TMI 831 - AT - Income Tax

Eligibility for deduction under section 80IA of the Income Tax Act Held that - Assessee should not be denied deduction under S.80IA of the Act as the contracts involves, development, operating, maintenance, financial involvement, and defect correction and liability period, then such contracts cannot be called as simple works contract - Contracts which contain the above features to be segregated and on this deduction u/s. 80IA has to be granted and the other agreements which are pure works contracts hit by the explanation section 80IA(13), those work are not entitled for deduction u/s. 80IA of the Act Decided in favor of Assessee. Rectification of mistake in the order by Hon ble Tribunal u/s 254(2) of the Income Tax Act - Assessee speaks of is about the grievance that it has suffered on account of the consequential orders passed by the Assessing Officer for the years under consideration, while giving effect to the order of this Tribunal dated 16.3.2012 Held that - In Miscellaneous Applications or the Written Submissions furnished before Hon ble Tribunal in support of their claim, the assessee did not pointed out any mistake in the order dated 16.03.2012 of Tribunal, which warrants rectification in terms S.254(2) of the Act - Consequential orders passed by the Assessing Officer constitute independent proceedings, and not part of the proceedings which led to the passing of the order of the Tribunal dated 16.3.2012 - Grievance of the assessee on account of alleged mistakes in such consequential orders, either on account of interpretational differences or even on account of disrespect/disregard to the directions of the Tribunal, shall not vest any power or jurisdiction back with the Tribunal, to oversee the correctness of the correctness of the consequential orders passed, much less, to give directions to revise or rectify the same, even if there is any mistake in the same - Remedy for the assessee lies elsewhere, viz. in the fresh proceedings commencing with such consequential orders and not in the proceedings that culminated with the order of this Tribunal dated 16.3.20120 - In the absence of any specific mistake which warrants any rectification within the scope of the provisions of S.254(2) of the Act, in the order of the Tribunal dated 16.3.2012, no rectification in the order required Decided against the Assessee.

Issues Involved:
1. Allowability of deduction under Section 80IA(4) of the Income-tax Act.
2. Interpretation and application of Tribunal's direction by the Assessing Officer.
3. Binding nature of Tribunal's order on the Assessing Officer.
4. Jurisdiction and authority of the Tribunal in rectifying its order under Section 254(2) of the Income-tax Act.

Detailed Analysis:

1. Allowability of Deduction under Section 80IA(4) of the Income-tax Act:
The assessee appealed to the Tribunal regarding the allowability of deduction under Section 80IA(4) of the Income-tax Act. The Tribunal, after examining the facts and circumstances, concluded that the assessee, being a developer of infrastructure projects, is entitled to the deduction under Section 80IA(4). The Tribunal considered 19 infrastructure projects carried out by the assessee as eligible for this deduction. The Tribunal clarified that the deduction would be allowable proportionately based on the total turnover of the projects. The Tribunal emphasized that the term "developer" includes entities involved in developing, operating, and maintaining infrastructure facilities, and not just those executing works contracts.

2. Interpretation and Application of Tribunal's Direction by the Assessing Officer:
Despite the Tribunal's clear directions, the Assessing Officer issued a fresh show-cause notice and declined the deduction under Section 80IA(4), effectively sitting in judgment over the Tribunal's order. The Departmental Representative argued that the Tribunal had remitted the issue for fresh consideration, thus justifying the Assessing Officer's actions. However, the Tribunal's findings were explicit that the assessee should not be denied the deduction as the contracts involved development, operating, maintenance, financial involvement, and defect correction, which are not mere works contracts.

3. Binding Nature of Tribunal's Order on the Assessing Officer:
The Tribunal reiterated that the Assessing Officer is bound to follow its order. Judicial discipline mandates that the Assessing Officer cannot interpret the Tribunal's order in a manner that contradicts its clear directions. The Tribunal highlighted the well-settled legal position that an Assessing Officer must adhere to the Tribunal's decision and cannot take a different view or sit in judgment over it. The Tribunal emphasized that if the Assessing Officer had any grievances, the appropriate course would be to appeal to a higher forum.

4. Jurisdiction and Authority of the Tribunal in Rectifying its Order under Section 254(2) of the Income-tax Act:
The Tribunal addressed the assessee's Miscellaneous Applications seeking rectification of the Tribunal's order dated 16.3.2012. The Tribunal noted that it has jurisdiction to rectify any mistakes in its order under Section 254(2) of the Act. However, the Tribunal found no specific mistakes in its earlier order that warranted rectification. The Tribunal clarified that the assessee's grievances about the consequential orders passed by the Assessing Officer should be addressed through fresh appellate proceedings, not through rectification of the Tribunal's earlier order.

Conclusion:
The Tribunal disposed of the Miscellaneous Applications, emphasizing that the Assessing Officer must adhere to the Tribunal's directions and grant the deduction under Section 80IA(4) for eligible projects. The Tribunal underscored the importance of judicial discipline and the binding nature of its orders on lower authorities. The Tribunal also clarified its limited jurisdiction under Section 254(2) to rectify mistakes in its orders, directing the assessee to seek remedies through appropriate appellate channels for grievances related to consequential orders.

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