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TMI Blog2014 (2) TMI 518X X X X Extracts X X X X X X X X Extracts X X X X ..... it is not open to the Lower Authority to ignore the binding decision of a Superior Authority unless the order of the Superior Authority has been stayed – the decision in Union of India v/s Kamlakshi Finance Corporation Ltd. [1991 (9) TMI 72 - SUPREME COURT OF INDIA] followed - The principles of judicial discipline require that the order of the higher appellate authorities should be followed unreservedly by the subordinate authorities. The mere fact that the order of the appellate authority is not “acceptable” to the department in itself an objectionable phrase and is the subject matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent Court - If this healthy rule is not follow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner to pay the balance of Rs.95,22,48,125/by 30 January 2014. 4 The petitioner carries business of life insurance under the certificate of registration granted by Insurance Regulatory Development Authority of India (IRDA) under the Insurance Act, 1938. In terms of the requirement of the IRDA, (Preparation of Financial Statements and Auditors' Report of Insurance Companies) Regulations, 2002 read with Section 211 of the Companies Act, 1956, it has to maintain its two separate accounts namely Share holders Account and Policy holders Account which are treated as separate and distinct. There are internal transfer of funds between the two accounts. However, as the petitioner carries a single business its taxable income is worked out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 9 January 2014 rejected the petitioner's request for early hearing. 7 In the meantime, on 8 January 2014, the petitioner filed an application under Section 220(6) of the Act with the Assessing Officer seeking a stay of the demand of Rs.493,19,16,310/which had primarily arising by seeking to tax interse transfer of funds from share holder account to policy holder accounts and viceaversa. It was pointed out by the petitioner that the Assessment Order dated 17 December 2013 was contrary to and in defiance of the binding orders of the Tribunal dated 14 September 2012 for Assessment Years 200506 to 200809 and of the CIT (A) dated 20 June 2013 for the Assessment Years 2009-10 to 2011-12 in the petitioner's own case. In particular, attentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isposed of as laid down by this Court in the matter of KEC International Limited v/s. B. R. Balakrishnan Others 251 ITR 158 and the UTI Mutual Funds v/s. Income Tax Officer 345 page 171. The impugned order ignores the prima fcie case of the petitioner as reflected in the binding orders of the Tribunal and CIT(A) for the Assessment Years 200506 to 2011-12. (b) The Assessment Order dated 17 December 2013 for the Assessment Year 201213 was passed, ignoring the binding decision of the Tribunal dated 12 September 2012 in the petitioner's own case on an identical issue, covering the Assessment Years 200506 to 200809 by merely holding that the view of the Tribunal is untenable. (c) The impugned order ignores the fact that the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground that the view of the Tribunal is not tenable. In our hierarchical system of jurisprudence, it is not open to the Lower Authority to ignore the binding decision of a Superior Authority unless the order of the Superior Authority has been stayed. In fact, the Supreme Court in the matter of Union of India v/s.Kamlakshi Finance Corporation Ltd. 55 ELT 433 has in similar circumstances held that: 6: ... It cannot be too vehemently emphasized that it is of utmost importance that, in disposing of the quasijudicial issues before them, revenue officers are bound by the decisions of the appellate authorities. The order of the Appellate Collector is binding on the Assistant Collectors working within his jurisdiction and the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rly submitted that the issue is covered in their favour by order of the Tribunal and CIT(A) in their own case. In view thereof, the demand itself was not sustainable. The reliance placed upon the Circular No.530 dated 6 March 1989 by the petitioner specifically provides that an assessee would not be considered to be an assessee in default, if the demand in dispute relates to an issue which has been decided in favour of assessee by an order of Appellate Authority. The aforesaid circular was issued in the context of the manner in which the Assessing Officer has to exercise its discretion under Section 220(6) of the Act while granting a stay of the demand. 14 Besides, the impugned order does not comply with the parameters laid down for di ..... X X X X Extracts X X X X X X X X Extracts X X X X
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