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TMI Blog2007 (9) TMI 336X X X X Extracts X X X X X X X X Extracts X X X X ..... ty Supply Ltd.'s case, one cannot be oblivious to the fact that an interpretation is indeed possible to the effect that even non-jurisdictional High Court's judgment, for the reasons set out, is binding on the Tribunal . This non-jurisdictional High Court's judgment is in favour of the assessee. Now, as held by the Hon'ble Supreme Court's judgment in the case of CIT vs. Vegetable Products Ltd.[ 1973 (1) TMI 1 - SUPREME COURT] , when two interpretations are possible, one in favour of the assessee must be adopted. For this reason, in our humble understanding, the plea of the assessee deserves to be accepted. The issue is covered by a Special Bench decision in the case of Rahul Kumar Bajaj vs. ITO [ 1998 (12) TMI 115 - ITAT NAGPUR] which holds that once the issue is decided on the question of jurisdiction, it is not necessary to address the merits of the matter as well. Respectfully following the Same, we reject the contention of the ld DR. We are not really concerned with as to what should be done in ideal situation, but, as at present and given the fact that the assessment itself is quashed, we see no need to address matters which are rendered academic in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch the block returns were filed, the assessment of income of the block period was invalid and without jurisdiction. 2. Learned counsel for the assessee, as a preliminary issue, raises this grievance and submits that the issue is now covered by the judgment of Hon'ble Gauhati High Court in the case of Smt. Bandana Gogoi vs. CIT Anr. (2007) 209 CTR (Gau) 31 : (2007) 289 ITR 28 (Gau). Their Lordships have held that when the AO does not issue notice under s. 143(2) within one year from the end of the month in which block return is filed, it cannot be open to him to start the scrutiny assessment proceedings after the end of that period. It is submitted that as there is no contrary decision by the Hon'ble jurisdictional High Court and as indeed by any other High Court, this Tribunal must follow the Hon'ble Gauhati High Court. Amongst other things, he invites our attention to the decision to that effect by the Hon'ble jurisdictional High Court in the case of CIT vs. Smt. Godavaridevi Saraf (1978) 113 ITR 589 (Bom). 3. Learned Departmental Representative, however, contends that decision of a non-jurisdictional High Court is not a binding precedent for us. Our atten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s whether or not decision of one of the High Courts was binding on the other High Courts. This will be clear from following observations made by their Lordships in the beginning of the judgment: On a careful consideration of the submissions of the learned counsel for the assessee, we find that before taking up the issue involved in the question of law referred to us in this case for consideration, it is necessary to first decide...............whether this Court, while interpreting an all India statute like IT Act, is bound to follow the decisions of any other High Court and to decide accordingly, even if its own view is contrary thereto, because of the practice followed in this Court. Because, if we are to accept this submission, it will be an exercise in futility to examine the real controversy before us.... 8. One of the propositions that their Lordships took note of was that the decisions of the High Court on the subordinate Courts and authorities or Tribunals under its superintendence throughout the territories in relation to which it exercises jurisdiction (but) it does not extend beyond its territorial jurisdiction . Their Lordships, in the same para, also noted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his light, and bearing in mind the fact that limited question before their Lordships was whether or not decision of one of the High Courts is binding on another High Court, it would appear to us that ratio decidendi in Thana Electricity Supply Ltd., is on the non-binding nature of a High Court's judgment on another High Court. In any case, this Division Bench did not, and as stated in this judgment itself, could not have differed with another Division Bench of the same strength in the case of Godavaridevi Saraf. Therefore, it cannot be open to a subordinate Tribunal like us to disregard any of the judgments of the Hon'ble Bombay High Court, whether in the case of Thana Electricity Supply Ltd. or in the case of Godavaridevi Saraf. It is indeed our duty to loyally extend utmost respect and reverence to the Hon'ble High Court, and to read these two judgments by the Division Benches of equal strength of the Hon'ble jurisdictional High Court, i.e. in the cases of Thana Electricity Supply Ltd. and Godavaridevi Saraf, in a harmonious manner. 11. Let us now take a look at the Hon'ble jurisdictional High Court's judgment in the case of Godavaridevi Saraf. In this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt's judgment in the case of Godavaridevi Saraf's stands overruled by their Lordships' judgment in the case of Thana Electricity Supply Ltd. The only way in which we can harmoniously interpret these judgments is that these decisions deal with two different issues and ratio decidendi of these decisions must be construed accordingly. 14. Let us also see this issue from a different perspective. Even if we are to assume that it is possible to interpret that Godavaridevi Saraf's decision stands overruled by judgment in the case of Thana Electricity Supply Ltd.'s case, one cannot be oblivious to the fact that an interpretation is indeed possible to the effect that even non-jurisdictional High Court's judgment, for the reasons set out above, is binding on the Tribunal. This non-jurisdictional High Court's judgment is in favour of the assessee. Now, as held by the Hon'ble Supreme Court's judgment in the case of CIT vs. Vegetable Products Ltd. 1973 CTR (SC) 177 : (1973) 88 ITR 192 (SC), when two interpretations are possible, one in favour of the assessee must be adopted. For this reason, in our humble understanding, the plea of the assessee deserves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as they exist today, assessment by scrutiny is an option available to the AO and it is not always required to be followed in all the block assessment cases. We, however, see no need to go into all these issues. Suffice to say that respectfully following the Hon'ble Gauhati High Court's judgment in the case of Bandana Gogoi and having noted the position that notice under s. 143(2) was admittedly not issued within one year from the end of the month in which block assessment return was filed, we quash the assessment proceedings. 18. In the result, appeal filed by the assessee is allowed. 19. As far as the appeals filed by the AO are concerned, these appeals challenge the part relief granted by the CIT(A) to the assessee in respect of additions made by the AO. However, as we have quashed the very assessment proceedings, these grievances are only academic in nature. We dismiss these grievances as infructuous. 20. In the result, the appeal filed by the AO is dismissed. 21. To sum up, while the appeal filed by the assessee is allowed, the appeal filed by the AO is dismissed. It was so pronounced in the open Court upon conclusion of hearing of these appeals. - - Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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