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2022 (12) TMI 250 - AT - Income TaxSupremacy of decision division bench of a non-jurisdictional High Court and a single judge bench of a non-jurisdictional High Court - judicial hierarchy - Applicability of the provisions of section 144C inserted vide Finance (No 2) Act 2009 to the assessment year 2010-11 - Diversified views - Reopening of assessment u/s 147 beyond the time limit u/s 153 - HELD THAT - So far as choice between a division bench decision of a non-jurisdictional High Court and a single judge bench of a non-jurisdictional High Court is concerned, it is clear that a simple objective criterion of choice will require the division bench decision to be preferred over the single judge bench decision. Therefore, even though the decision of the Hon ble Madras High Court, in Vedanta Ltd s case 2020 (1) TMI 168 - MADRAS HIGH COURT cannot be said to per incuriam, for the simple reason that a Hon ble High Court judgment does not constitute a binding precedent for any other Hon ble High Court other than the Hon ble High rendering such a judgment, division bench decision of Hon ble non-jurisdictional High Court, is required to be followed even if it is contrary to a single bench judgment of another High Court in the case of Vedanta Ltd (supra). The impugned assessment order thus cannot be said to be barred by limitation. We uphold the impugned assessment order on this count, and decline to interfere in the matter on this jurisdictional ground. As we are deciding this issue on this short ground alone, all other contentions on merits remain open. The additional ground of appeal is dismissed. As no arguments were advanced by the parties on the remaining grounds of appeal, we deem it fit and proper to direct the Registry to fix the matter for hearing on the other grounds of appeal taken by the parties.
Issues Involved:
1. Admission of additional ground of appeal regarding the time-barred assessment order. 2. Applicability of section 144C of the Income Tax Act for the assessment year 2009-10. 3. Conflicting judgments from non-jurisdictional High Courts. 4. Binding nature of non-jurisdictional High Court decisions on lower judicial forums. Detailed Analysis: 1. Admission of Additional Ground of Appeal: The assessee moved a petition to admit an additional ground of appeal, contending that the Assessing Officer (AO) erred in passing the final order under section 143(3) read with section 147 of the Income Tax Act beyond the time limit prescribed under section 153, making the order liable to be quashed. The Tribunal admitted this additional ground as it was purely a legal issue. 2. Applicability of Section 144C: The assessee argued that section 144C, inserted by the Finance (No 2) Act 2009, applied only from the assessment year 2010-11 onwards. They cited explanatory notes and circulars supporting this view, along with the Hon'ble Madras High Court's judgment in Vedanta Ltd vs ACIT, which held that amendments effective from October 1, 2009, apply only to assessment years 2010-11 and subsequent years. The assessee contended that the AO should have passed the final assessment order by March 31, 2013, for the assessment year 2009-10, thus rendering the impugned order illegal. 3. Conflicting Judgments from Non-Jurisdictional High Courts: The Departmental Representative opposed the assessee's submissions, citing the Hon'ble Andhra Pradesh High Court's judgment in Zuari Cement Ltd vs ACIT, which held that section 144C applies to proceedings after October 1, 2009. This decision was supported by the dismissal of an SLP against it by the Hon'ble Supreme Court. The Departmental Representative argued that the circular dated November 19, 2013, had retrospective effect and that the assessee never objected to the assessment order being time-barred. 4. Binding Nature of Non-Jurisdictional High Court Decisions: The Tribunal noted the conflicting judgments from the Hon'ble Madras High Court in Vedanta Ltd and the Hon'ble Andhra Pradesh High Court in Zuari Cement Ltd. The Tribunal emphasized that while non-jurisdictional High Court decisions are not binding, they are given utmost respect and consideration. The Tribunal highlighted the need for an objective criterion to decide which decision to follow, favoring the decision of a division bench over a single judge bench due to the collective decision-making process. Conclusion: The Tribunal concluded that the division bench decision in Zuari Cement Ltd, which held that section 144C applies to proceedings after October 1, 2009, should be followed over the single judge decision in Vedanta Ltd. Consequently, the Tribunal upheld the impugned assessment order and dismissed the additional ground of appeal. The remaining grounds of appeal were not addressed, and the matter was scheduled for further hearing on November 14, 2022. Result: The assessee's appeal was dismissed to the extent indicated, and the hearing on other grounds of appeal was scheduled for a later date. The judgment was pronounced in the open court on October 11, 2022.
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