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TMI Blog2014 (2) TMI 677X X X X Extracts X X X X X X X X Extracts X X X X ..... he case observed that the assessee is a developer of infrastructure projects and is entitled for deduction under S.80IA(4) of the Act. While giving such findings, the Tribunal considered the infrastructure projects carried out by the assessee for these assessment years as projects eligible for deduction under S.80IA(4). Further, learned counsel submitted that the Tribunal has given a clear factual finding that the deduction under S.80IA(4) would be allowable proportionately based on the total turnover of the projects. 3. The learned Authorised Representative submitted that in spite of the clear-cut direction of the Tribunal, the Assessing Officer issued fresh show-cause notice to make further enquiries and proceeded to pass a consequential orders thereafter again declining to grant deduction under S.80IA(4) of the Act, which action of the Assessing Officer amounts to his sitting in judgment over the order of the Tribunal. 4. The Learned Departmental Representative relied on the order of the Tribunal and submitted that the Tribunal has remitted the issue back to the file of the Assessing Officer for fresh consideration. Being so, the Assessing Officer correctly proceeded to enquir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... velopment should be owned by the company and not that the infrastructure facility should be owned by a company. The provisions are made applicable to the person to whom such enterprise belongs to is explained in sub-clause (a). Therefore, the word "ownership" is attributable only to the enterprise carrying on the business which would mean that only companies are eligible for deduction under section 80IA (4) and not any other person like individual, HUF, Firm etc. 25. We also find that according to sub-clause (a), clause (i) of sub section (4) of Section 80-IA the word "it" denotes the enterprise carrying on the business. The word "it" cannot be related to the infrastructure facility, particularly in view of the fact that infrastructure facility includes Rail system, Highway project, Water treatment system, Irrigation project, a Port, an Airport or an Inland port which cannot be owned by any one. Even otherwise, the word "it" is used to denote an enterprise. Therefore, there is no requirement that the assessee should have been the owner of the infrastructure facility. 26. The next question is to be answered is whether the assessee is a developer or mere w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s suffered either by the Govt. or the people in the process of such development would be that of the assessee. The assessee hands over the developed infrastructure facility to the Government on completion of the development. Thereafter, the assessee has to undertake maintenance of the said infrastructure for a period of 12 to 24 months. During this period, if any damages are occurred it shall be the responsibility of the assessee. Further, during this period, the entire infrastructure shall have to be maintained by the assessee alone without hindrance to the regular traffic. Therefore, it is clear that from an un-developed area, infrastructure is developed and handed over to the Government and as explained by the CBDT vide its Circular dated 18-05-2010, such activity is eligible for deduction under section 80IA (4) of the Act. This cannot be considered as a mere works contract but has to be considered as a development of infrastructure facility. Therefore, the assessee is a developer and not a works contractor as presumed by the Revenue. The circular issued by the Board, relied on by learned counsel for the assessee, clearly indicate that the assessee is eligible for deduction unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be eligible for deductions under section 80IA of the Act. But, certainly, the Explanation cannot be read to do away with the eligibility of the developer; otherwise, the parliament would have simply reversed the Amendment made in the Finance Act, 2001. Thus, the aforesaid Explanation was inserted, certainly, to deny the tax holiday to the entities who does only mere works contact or sub-contract as distinct from the developer. This is clear from the express intension of the parliament while introducing the Explanation. The explanatory memorandum to Finance Act 2007 states that the purpose of the tax benefit has all along been to encourage investment in development of infrastructure sector and not for the persons who merely execute the civil construction work. It categorically states that the deduction under section 80IA of the Act is available to developers who undertakes entrepreneurial and investment risk and not for the contractors, who undertakes only business risk. Without any doubt, the learned counsel for the assessee clearly demonstrated before us that the assessee at present has undertaken huge risks in terms of deployment of technical personnel, plant and machinery, techn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as (i) developing or (ii) operating and maintaining or (iii) developing, operating and maintaining any infrastructure facility, prior to amendment the "or" between three activities was not there, after the amendment "or" has been inserted w.e.f. 1-4-2002 by Finance Act 2001. 31. Accordingly, the assessee is entitled for deduction under section 80IA of the Act on the projects which involve above activities. Therefore, in our considered view, the assessee should not be denied the deduction under section 80IA of the Act if the contracts involves development, operating, maintenance, financial involvement, and defect correction and liability period, then such contracts cannot be called as simple works contract to deny the deduction u/s 80IA of Act. In our opinion the contracts which contain above features to be segregated on this deduction u/s. 80-IA has to be granted and the other agreements which are pure works contracts hit by the explanation section 80IA(13), those work are not entitle for deduction u/s 80IA of the Act. The profit from the contracts which involves development, operating, maintenance, financial involvement, and defect correction and liability period i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch are pure works contracts hit by the explanation section 80IA(13), those work are not entitled for deduction u/s. 80IA of the Act. 7. According to the learned Authorised Representative, the Assessing Officer has not properly understood the order of the Tribunal and the same has been too widely interpreted and there appears to be misconceptions about the nature thereof and the binding effect of the order of the Tribunal. In this regard, it may be appropriate to point out the well settled legal position that an Assessing Officer is bound to follow the order of the Tribunal. 8. It is necessary to first decide the last submission of learned counsel that this Tribunal, while interpreting of an all-India statute like the Income-tax Act, is bound to follow the decision of any other High Court and to decide accordingly even if its own view is contrary thereto, in view of the practice followed by this court in such matters. Because, if we are to accept this submission, it will be an exercise in futility to examine the real controversy before us with a view to decide the issue. 9. At the outset, it may be appropriate to point out the well settled legal position that what is binding on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cisions be perpetuated by invoking the doctrine of stare decisis. The doctrine of stare decisis cannot be stretched that far as to make the decision of one High Court a binding precedent for the other. This doctrine is applicable only to different Benches of the same High Court. 14. It is also well-settled that though there is no specific provision 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 the Tribunals subject to its supervision would confirm to the law laid down by it. It is in that view of the matter that the Supreme Court in East India Commercial Co. Ltd. v. Collector of Customs (AIR 1962(SC) 1893 (at p.1905) : "We, therefore, hold that the law declared by the highest court in the State is binding on authorities or Tribunals under its superintendence, and they cannot ignore it......." 15. This position has been very aptly summed up by the Supreme Court in Mahadeolal Kanodia v. Administrator General of West Bengal (AIR 1960 SC 936) (at p.941) : "Judicial decorum no less than legal propriety forms the basis of judicial procedure. If one thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ). While following precedents, the court should keep in mind the following observations in Mumbai Kamgar Sabha v. Abdulbhai Faizullabhai (AIR 1976 SC 1455 ) (at p.1467-68) : "It is trite, going by Anglophonic principles, that a ruling of a superior court is binding law. It is not of scriptural sanctity but is of ratio-wise luminosity within the edifice of facts where the judicial lamp plays the legal flame. Beyond those walls and de hors the milieu we cannot impart eternal vernal value to the decision, exalting the doctrine of precedents into a prisonhouse of bigotry, regardless of varying circumstances and myriad developments. Realism dictates that a judgment has to be read, subject to the facts directly presented for consideration and not affecting those matters which may lurk in the record. Whatever be the position of a subordinate court's casual observations, generalisations and subsilentio determinations must be judiciously read by courts of coordinate jurisdiction." 18. Decision on a point not necessary for the purpose of the decision or which does not fall to be determined in that decision becomes an obiter dictum. So also, opinions on questions which are not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sp; (a) The law declared by the Supreme Court being binding on all courts in India, the decisions of the Supreme Court are binding on all courts, except, however, the Supreme Court itself which is free to review the same and depart from its earlier opinion if the situation so warrants. What is binding is, of course, the ratio of the decision and not every expression found therein. (b) The decisions of the High Court are binding on the subordinate courts and authorities or Tribunals under its superintendence throughout the territories in relation to which it exercises jurisdiction. It does not extend beyond its territorial jurisdiction. (c) The position in regard to the binding nature of the decisions of a High Court on different Benches of the same court may be summed up as follows : (i) A single judge of a High Court is bound by the decision of another single judge or a Division Bench of the same High Court. It would be judicial impropriety to ignore that decision. Judicial comity demands that a binding decision to which his attention had been drawn should neither be ignored nor overlooked. If he does not find himself in agreement wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsideration 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. 22. It is needless to say that the income-tax authorities are required to exercise their powers in accordance with law, as per the power given to them in specific sections. If the powers conferred on a particular authority are exercised by another authority without mandate of law, it would create chaos in the administration of law and hierarchy of administration would mean nothing. Judgment of a higher forum cannot be substituted by the decisions of the lower authorities. Judicial discipline requires that there cannot be any amount of disregard to the superior authority in the hierarchy by the Assessing Officer. When once the Tribunal decides an issue in one way, the only course available to the Assessing Officer is to follow the order of the Tribunal in true spirits, and it is not permissible for the Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s contracts. It has also given a categorical finding that as the contracts involve development, operating, maintenance, financial involvement and defection correction and liability period, such contracts should be treated as eligible for deduction under S.80IA(4). 25. It is needless to mention here that the 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 of the Act, as noted in para 31 of its order, if the assessee has carried on infrastructure projects, and it is for the purpose of analyzing such other projects, if any, which are not in the nature of works contracts, 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 (supra) and he has no discretion or choice to overlook the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioning), but if the conflict is between decisions of other High Courts, he must take the view which is in favour of the assessee and not against him. Similarly, if the Incometax Appellate Tribunal has decided a point in favour of the assessee, he cannot ignore that decision and take a contrary view, because that would equally prejudice the assessee." (Emphasis supplied) 26. It is, however, pertinent to emphasise and mention here that having decided the appeals of the assessee, being ITA Nos.180/Hyd/2006 & ITA Nos.167 and 168/Hyd/2007 and Revenue's appeal being ITA No.221/Hyd/2009 before it, with its common order dated 22.3.2012, 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. In the present Miscellaneous Applications and the arguments made before us in support thereof, the assessee has not pointed out any mistake in the order of this Tribunal dated 22.3.2012, which warrants rectification in terms S.254(2) of the Act. All that the assessee speaks of is about the grievance that it has suffered on account of the consequent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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