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TMI Blog2009 (9) TMI 614X X X X Extracts X X X X X X X X Extracts X X X X ..... to the facts of the case. It is clearly a legal ground which the learned AM has rightly admitted. Mentioning of wrong income-tax appeal number on the petition is also not fatal to the admission of the additional ground. Disallowance of gross interest received from banks on deposits for securing export credit facilities - assessee made deposits in compliance of a direction issued by the banker who has extended credit facilities to them and in respect of deposits interest income was earned - appellant challenges the levy of interest under s. 234B in respect of the computation of deduction under s. 80HHC, by setting off the loss against export incentive, as per proviso to s. 80HHC(3) with retrospective effect from 1st April, 1992, since the law fastens an additional tax liability, which was not comprehended at the time of filing of the returns of income." - additional ground raised in view of the decision of the Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd. vs. CIT - Bench did hear the parties on the merits of the issue, it was subject to the admission of additional ground - before granting relief, decision on the admission of additional ground was necessary - n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deposits in compliance of a direction issued by the banker who has extended credit facilities to them and in respect of such deposits interest income was earned. The firm also paid interest on borrowings made and thus netted both interest and payments. The AO, however, taxed the entire receipt from the interest income as income from "other sources" and also did not allow deduction under s. 80HHC in respect of the interest income. 3.1 The learned CIT(A), while considering but not accepting the plea of the assessee to admit the claim as made before the AO (who disallowed the same) has considered various case law as reported in Tuticorin Alkali Chemicals & Ferilizers Ltd. vs. CIT (1997) 141 CTR (SC) 387 : (1997) 227 ITR 172 (SC), CIT vs. Autokast Ltd. (2001) 165 CTR (SC) 16 : (2001) 248 ITR 110 (SC), CIT vs. Sterling Foods (1999) 153 CTR (SC) 439 : (1999) 237 ITR 579 (SC), Pandian Chemicals Ltd. vs. CIT (2003) 183 CTR (SC) 99 : (2003) 262 ITR 278 (SC), South India Shipping Corporation Ltd. vs. CIT (2000) 163 CTR (Mad) 617 : (1999) 240 ITR 24 (Mad), Urban Stanislaus Co. vs. CIT (2003) 183 CTR (Ker) 176 : (2003) 263 ITR 10 (Ker), CIT vs. Madras Motors Ltd. (2002) 174 CTR (Mad) 221 : (2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trospective amendment of law. The assessee raised the following: "The appellant challenges the levy of interest under s. 234B in respect of the computation of deduction under s. 80HHC, by setting off the loss against export incentive, as per proviso to s. 80HHC(3) with retrospective effect from 1st April, 1992, since the law fastens an additional tax liability, which was not comprehended at the time of filing of the returns of income." The learned CIT(A), in appeal, dismissed the plea of the assessee. In further appeal, the assessee pleaded that in the case of Well Knit Industries Ltd. in ITA No. 1838/Mad/2006, for the asst. yr. 2001-02, similar ground has been allowed, therefore, in view of the Tribunal decision, the plea of the assessee should be accepted. Whereas, the learned Departmental Representative pleaded that charging of interest is being consequential, therefore, the learned CIT(A) is justified in confirming the action of the AO which may further be confirmed. 5. After having heard both the sides and considering the material on record as well as precedents relied upon, we find that though the assessee has cited Tribunal decision, but he has not filed copy of the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Hon'ble Tribunal in the case of ITO vs. Ekta Promoters (P) Ltd. (2008) 117 TTJ (Del)(SB) 289 : (2008) 10 DTR (Del)(SB)(Trib) 563 supports the assessee's claim. The petitioner in the above circumstances raises the following additional ground. Additional grounds The petitioner prays that this Hon'ble Tribunal be pleased to submit to raise the above additional grounds, against and adjudicate the same and render justice." From the above it, becomes clear that the issue raised was in respect of interest charged under s. 234D of the Act. During hearing the Bench as well as the parties on either side were very clear that the issue raised was in respect of interest charged under s. 234D of the Act. Even the arguments regarding merits of the case were heard wherein it was pointed out by the learned counsel for the assessee that the issue is covered by the decision of the Special Bench of the Tribunal in the case of ITO vs. Ekta Promoters (P) Ltd. (2008) 117 TTJ (Del)(SB) 289 : (2008) 10 DTR (Del)(SB)(Trib) 563. 9. Though the appeal number has been wrongly mentioned in the petition, if there was any problem on that account, the assessee should have been given an opportunity to rectify ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r as merits are concerned, the issue is covered in favour of the assessee by the Special Bench decision of the Tribunal in the case of Ekta Promoters wherein it was held that the provisions of s. 234D of the IT Act are substantive provisions, and cannot be applied retrospectively. Since s. 234D of the Act was introduced w.e.f. 1st June, 2003, it will have application only from the asst. yr. 2004-05 and cannot be applied to the earlier years. The assessment year before us is 1999-2000, and the s. 234D of the IT Act has been held to be applicable only with effect from 2004-05 and, therefore, the same cannot be applied. I, therefore, allow this ground. 13. Accordingly, this additional ground of the appeal is allowed. REFERENCE UNDER S. 255(4) OF THE IT ACT, 1961 U.B.S. BEDI, J.M.: 3rd June, 2009 Since there is difference of opinion between the Members constituting the Bench in some of the issues involved in this appeal, the following questions are formulated and referred for nominating Third Member: 1. Whether in view of the facts and circumstances of the case and in the absence of any additional ground having been raised and in the absence of petition in respect of concerned app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... additional ground? The learned AM has proposed the following questions as points of difference: (i) Whether on the facts and circumstances of the case the petition dt. 3rd March, 2009, wherein space for additional ground is left blank and the appeal number being wrongly written, can still be taken to be a petition for additional ground, particularly when the arguments even on merits were heard in respect of this petition? (ii) If the answer to the question No. (i) above is "yes", whether relief can be allowed in the absence of the order of the learned JM in this respect in view of the fact that the matter is covered by the decision of the Special Bench of the Tribunal which was cited on behalf of the assessee? So far as the first point in both the sets is concerned, in substance, there is no difference between the two Members. In other words, the point of difference is whether additional ground could have been admitted or not on the given facts and circumstances of the case. So far as second point is concerned, the points formulated by the two Members can be combined into one. Accordingly, I reframe the points of difference as follows: (i) Whether additiona1 ground was raised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arly sets out the fact relating to the levy of interest under s. 234D of the Act, the fact that the levy was challenged before the CIT(A) who rejected the claim and the fact that the said ground was inadvertently left out in the memo of appeal filed before the Tribunal. Page 1 also contains the plea that not raising the ground in the memo of appeal is not wilful and has drawn support from the judgment of the Supreme Court in the case of NTPC. Thus, it is clear that though the space provided by the assessee to mention the actual ground is left blank, the preceding narration sets out a plea to raise the additional ground. Leaving the earmarked space blank is nothing but an oversight. It does -not obliterate the prayer of the assessee contained in the narration preceding the blank space. To reject the prayer of the assessee on such a hypertechnical ground is to defeat the very purpose of such statutory Tribunals. In their treatise "Administrative Law", the learned authors Sir William Wade and Christopher Forsyth (9th Edn.) at p. 906 mention that Tribunals exist in order to provide simpler, speedier, cheaper and more accessible justice than do the ordinary Courts. Again, at p. 930 it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may, in appropriate cases consider such oral pleas. In the present case, there is a written petition which clearly signifies the cry of the petitioner from the rooftop to admit additional ground. The learned JM has altogether ignored this cry by not referring to p. 1 of the petition in his order and which the learned AM has referred to in his order. Moreover, the ground sought to be raised is not altogether a new ground but it arises from the order of the CIT(A). It also does not require any fresh investigation into the facts of the case. It is clearly a legal ground which the learned AM has rightly admitted. Mentioning of wrong income-tax appeal number on the petition is also not fatal to the admission of the additional ground. In fact, instead of 665, No. 666 is written. This can be safely treated as a typographical error. I could not find a word signifying higher degree of technicality than the word "hypertechnical" and hence I leave it at that. Therefore, so far as the first question is concerned. I agree with the view taken by the learned AM. 7. We now come to the second question. The question as reframed by me is whether assessee can be given relief on the basis of the order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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