2013 (8) TMI 832 - AT - Income Tax

Contrary decision passed by A.O. against remand back order of Tribunal - Deduction u/s 80IA - Power of Tribunal to review its own decision - Held that - Once the Tribunal has set aside the orders impugned in the appeals before it on the issue and restored the matter to the file of the Assessing Officer with the above findings the duty of Assessing Officer is to pass orders giving effect to the order of the Tribunal - Tribunal has not rejected the claim of the assessee under S.80IA and on the other hand it was held that the assessee is entitled for deduction under S.80IA - assessee has carried on infrastructure projects and it is for the purpose of considering other projects if any and to quantify the deduction the issue was remitted back to the file of the Assessing Officer. If the Assessing Officer fails to properly understand or appreciate the directions of the Tribunal all that can be done at this stage is to mention that the assessee has liberty to explore and pursue the remedies available under law as the Assessing Officer is duty bound to pass the consequential orders in conformity with the order of the Tribunal cited and he has no discretion or choice to overlook the order of the Tribunal - Having decided the appeals of the assessee before it with its common order the Tribunal is ceased of its jurisdiction over those appeals except to the limited extent of rectifying any mistake therein in terms of provisions of S.254(2) of the Act - Assessee has not mentioned any mistake in Tribunal s order which warrants rectification - Therefore decided against assessee. Doctrine of Precedent - Whose decision is binding on whom - Held that - It would be anomalous to suggest that a Tribunal over which the High Court has superintendence can ignore the law declared by that court and start proceedings in direct violation of it. If a Tribunal can do so all the subordinate courts can equally do so for there is no specific provision just like in the case of Supreme Court making the law declared by the High Court binding on subordinate courts. It is implicit in the power of supervision conferred on a superior Tribunal that all the Tribunal subject to its supervision should conform to the law laid down by it. Such obedience would also be conducive to their smooth working; otherwise there would be confusion in the administration of law and respect for law would irretrievably suffer - It is elementary that what is binding on the court in a subsequent case is not the conclusion arrived at in a previous decision but the ratio of that decision for it is the ratio which binds as a precedent and not the conclusion Following decision of Baradakanta Mishra v. Bhimsen Dixit 1972 (9) TMI 142 - SUPREME COURT . Decision of the tribunal is binding on the Assessing Officer and he cannot pick up a word or sentence from the order of the Tribunal de hors the context of the question under consideration and construe it to be complete law declared by the Tribunal. A judgment must be read as a whole. Being so the Assessing Officer cannot sit in judgment over the order of the Tribunal and he is required to give just effect to the order of the Tribunal. If he has any grievance he is at liberty to appeal against that order of the Tribunal before higher forum

Summary

Issues Involved:
1. Allowability of deduction under Section 80IA(4) of the Income-tax Act.
2. Interpretation and application of the Tribunal's directions by the Assessing Officer.
3. Binding nature of Tribunal and High Court decisions on subordinate authorities.

Issue-wise Detailed Analysis:

1. Allowability of Deduction under Section 80IA(4) of the Income-tax Act:
The assessee sought rectification in the Tribunal's order regarding the allowability of deduction under Section 80IA(4). The Tribunal had previously determined that the assessee, being a developer of infrastructure projects, was entitled to this deduction. The Tribunal reviewed 28 infrastructure projects for the assessment year 2005-06, deeming 21 eligible for the deduction. For subsequent years, similar evaluations were made: 7 out of 18 projects for 2006-07 and 5 out of 20 projects for 2007-08. The Tribunal emphasized that the deduction should be computed proportionately based on the total turnover of eligible projects.

2. Interpretation and Application of the Tribunal's Directions by the Assessing Officer:
The assessee contended that the Assessing Officer, despite clear directions from the Tribunal, issued a fresh show-cause notice and denied the deduction under Section 80IA(4). The Tribunal clarified that the Assessing Officer's role was to pass orders in line with the Tribunal's findings, which were clear and categorical. The Tribunal had directed that contracts involving development, operating, maintenance, financial involvement, and defect correction should be eligible for the deduction, and the Assessing Officer should segregate contracts accordingly.

3. Binding Nature of Tribunal and High Court Decisions on Subordinate Authorities:
The Tribunal reiterated the well-settled legal position that subordinate authorities are bound to follow the decisions of higher judicial bodies. It emphasized that the Assessing Officer cannot reinterpret or sit in judgment over the Tribunal's order. The Tribunal cited multiple legal precedents affirming that decisions of higher courts and Tribunals must be followed unless overturned by a higher authority. The Tribunal noted that the Assessing Officer's failure to properly implement its directions could lead to further legal remedies for the assessee.

Conclusion:
The Tribunal found no specific mistake warranting rectification in its previous order and disposed of the Miscellaneous Applications with detailed observations. It emphasized the binding nature of its directions and the necessity for the Assessing Officer to comply with them accurately. The Tribunal underscored the importance of judicial discipline and the proper hierarchy in the administration of law.