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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 ..... e from the order of the Tribunal de hors the context of the question under consideration and construe it to be complete law declared by the Tribunal - A judgment must be read as a whole. Recall of order u/s 254 of the Act - Rectification of mistake apparent on the record - Held that:- If the assessee is aggrieved, may give rise to first appellate proceedings there against or further appellate proceedings by the assessee - the grievance of the assessee on account of alleged mistakes in such consequential orders, either on account of interpretational differences or even on account of disrespect/disregard to the directions of the Tribunal, shall not vest any power or jurisdiction back with the Tribunal, to oversee the correctness of the correctness of the consequential orders passed, much less, to give directions to revise or rectify the same, even if there is any mistake in the same - In the absence of any specific mistake which warrants any rectification within the scope of the provisions of S.254(2) of the Act, in the order of the Tribunal – there is no reason to rectify the earlier order – Decided against Assessee. - Misc. Appln. No.119-122,/Hyd/2013 , ITA No.180/Hyd/2006, IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterial available on record. For the assessment years under appeal, the issue involved before the Tribunal relates to denial of deduction under S.80IA(4) of the Act. The Tribunal after considering the submissions of the learned counsel in the light of the grounds raised before the Tribunal, and appraising the various data furnished before the Tribunal in the paper-book, came to the conclusion that the assessee is a developer and is entitled for deduction under S.80IA(4) of the Act. For clarity, we reproduce the relevant paragraphs of the order of the Tribunal- "24. We have considered the elaborate submissions made by both the parties and also perused the materials available on record. We have also gone through all the case laws cited by both the parties. We find that the provisions of Section 80IA(4) of the Act when introduced afresh by the Finance Act, 1999, the provisions under section 80IA (4A) of the Act were deleted from the Act. The deduction available for any enterprise earlier under section 80IA (4A) are also made available under Section 80IA (4) itself. Further, the very fact that the legislature mentioned the words (i) "developing" or (ii) "operating and maintaining" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. Whether the assessee is a developer or works contractor is purely depends on the nature of the work undertaken by the assessee. Each of the work undertaken has to be analyzed and a conclusion has to be drawn about the nature of the work undertaken by the assessee. The agreement entered into with the Government or the Government body may be a mere works contract or for development of infrastructure. It is to be seen from the agreements entered into by the assessee with the Government. We find that the Government handed over the possession of the premises of projects to the assessee for the development of infrastructure facility. It is the assessee's responsibility to do all acts till the possession of property is handed over to the Government. The first phase is to take over the existing premises of the projects and thereafter developing the same into infrastructure facility. Secondly, the assessee shall facilitate the people to use the available existing facility even while the process of development is in progress. Any loss to the public caused in the process would be the responsibility of the assessee. The assessee has to develop the infrastructure facility. In the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a company has to enter into an agreement with the Government or Government undertakings. Such an agreement is a contract and for the purpose of the agreement a person may be called as a contractor as he entered into a contract. But the word "contractor" is used to denote a person entering into an agreement for undertaking the development of infrastructure facility. Every agreement entered into is a contract. The word "contractor" is used to denote the person who enters into such contract. Even a person who enters into a contract for development of infrastructure facility is a contractor. Therefore, the contractor and the developer cannot be viewed differently. Every contractor may not be a developer but every developer developing infrastructure facility on behalf of the Government is a contractor. 28. We find that the decision relied on by the learned counsel for the assessee in the case of CIT vs. Laxmi civil Engineering works [supra] squarely applicable to the issue under dispute which is in favour of the assessee wherein it was held that mere development of a infrastructure facility is an eligible activity for claiming deduction under section 80IA of the Act after consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... signed and manufactured Pre-stressed concrete pipes and it has been done in accordance with specific requirements. ii) Design and manufacturing of pipe fittings or specials iii) Transporting, Laying and Joining of pipes conforming with specifications. The activity involves earth work excavation, trench excavation, hard rook blasting, lowering and laying of testing pipe joints and pipeline. iv) Construction of pump house, providing and fitting of pump sets. Supply and fitting of submersible pumps, centrifugal pumps, turbine pumps, submersible motors, motors for turbines and centrifugal pump sets, transformer, generator, panel boards etc. iv) Design and construction of raw water pumping stations, water treatment plant, treated water pumping station, treated water transmission main, construction of surge tank and pipe connection arrangement, booster stations, internal transmission main and feeder mains, construction of service reservoirs and master reservoirs. v) Mobilisation of labourers, [preparation of plans technical expertise, supervision, co- ordination and control, set up manufacturing facility nearby the project site to manufacture project specific pipes as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of M/s. Chettinad Lignite Transport Services (P) Ltd., in ITA No. 2287/Mds/06 order dated 27th July, 2007 for the assessment year 2004-05. Later in ITA No. 1179/Mds/08 vide order dated 26th February, 2010 the Tribunal has taken the same view by inter-alia holding as follows: "7. Moreover, the reasons for introducing the Explanation were clarified as providing a tax benefit because modernisation requires a massive expansion and qualitative improvement in infrastructures like expressways, highways, airports, ports and rapid urban rail transport systems. For that purpose, private sector participation by way of investment in development of the infrastructure sector and not for the persons who merely execute the civil construction work or any other work contract has been encouraged by giving tax benefits. Thus the provisions of section 80IA shall not apply to a person who executes a works contract entered into with the undertaking or enterprise referred to in the section but where a person makes the investment and himself executes the development work, he carries out the civil construction work, he will be eligible for the tax benefit under section 80IA." .. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to the question whose decision binds whom. 10. For deciding whose decision is binding on whom, it is necessary to know the hierarchy of the courts. In India, the Supreme Court is the highest court of the country. That being so, so far as the decisions of the Supreme Court are concerned, it has been stated in article 141 of the Constitution itself that : "The law declared by the Supreme Court shall be binding on all courts within the territory of India." 11. In that view of the matter, all courts in India are bound to follow the decisions of the Supreme Court. 12. Though there is no provision like Article 141 which specifically lays downs the binding nature of the decisions of the High Courts, it is a well accepted legal position that a single judge of a High Court is ordinarily bound to accept as correct judgments of courts of co-ordinate jurisdiction and of the Division Benches and of the Full Benches of his court and of the Supreme Court. Equally well settled is the position that when a Division Bench of the High Court gives a decision on a question of law, it should generally be followed by a coordinate Bench in the subsequent case wants the earlier decision to be r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gives effect to that view, the result would be utter confusion. The position would be equally bad where a judge sitting singly in the High Court is of opinion that the previous decision of another single judge on a question of law is wrong and gives effect to that view instead of referring the matter to a larger Bench." 16. The above decision was followed by the Supreme Court in Baradakanta Mishra v. Bhimsen Dixit (AIR 1972 SC 2466), wherein the legal position was reiterated in the following words (at page 2469): "It would be anomalous to suggest that a Tribunal over which the High Court has superintendence can ignore the law declared by that court and start proceedings in direct violation of it. If a Tribunal can do so, all the subordinate courts can equally do so, for there is no specific provision, just like in the case of Supreme Court, 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 all the Tribunal subject to its supervision should conform to the law laid down by it. Such obedience would also be conducive to their smooth working; otherwise there would be confusion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions do not have any binding effect and they cannot be regarded as conclusive. As observed by the Privy Council in Baker v. The Queen [1975] 3 All ER 55 (at page 64), the court's authoritative opinion must be distinguished from propositions assumed by the court to be correct for the purpose of disposing of the particular case. This position has been made further clear by the Supreme Court in a recent decision in CIT v. Sun Engineering Works P. Ltd. [1992] 198 ITR 297, at page 320, where it was observed : "It is neither desirable nor permissible to pick out a word or a sentence from the judgment of this court, divorced from the context of the question under consideration and treat it to be the complete 'law' declared by this court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before this court. A decision of this court takes its colour from the question involved in the case in which it is rendered and, while applying the decision to a later case, the courts must carefully try to ascertain the true principle laid down by the decision of this court and not to pick out words or sentences ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iffers from another Division Bench of the same High Court, it should refer the case to a larger Bench. (iii) Where there are conflicting decisions of courts of co-ordinate jurisdiction, the later decision is to be preferred it reached after full consideration of the earlier decisions. (d) The decision of one High Court is neither binding precedent for another High Court nor for courts or Tribunals outside its own territorial jurisdiction. It is well settled that the decision of a High Court will have the force of binding precedent only in the State or territories on which the court has jurisdiction. In other States or outside the territorial jurisdiction of that High Court it may, at best, have only persuasive effect. By no amount of stretching of the doctrine of stare decisis, can judgments of one High Court be given the status of a binding precedent so far as other High Courts or Tribunal within their territorial jurisdiction are concerned. Any such attempt will go counter to the very doctrine of stare decisis and also the various decisions of the Supreme Court which have interpreted the scope and ambit thereof. The fact that there is only one decision of any one High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Ltd. (1991) 55 ELT 433(SC), it was held as follows- 45. At the same time, the appellants are correct in pointing out that once the Assistant Collector has passed an order and it is confirmed by the Collector (Appeals) and no appeal is filed against the order of the Collector (Appeals), the order attains finality. Therefore, the Department was bound to follow the Assistant Collector's order of 17/4/1989 as confirmed by the Collector (Appeals)' order dated 28-8-1991 and finalise all the pending matters in the light of these orders. These will include cases in which the assessment was made provisional as well as those in which cases demand/show cause notices had been issued but not disposed of till then as all the subordinate authorities were bound by the orders of the superior appellate/judicial authorities in view of the Hon'ble Supreme Court's decision in the case of Union of India v. Kamlakshi Finance Corporation Ltd. reported in 1991 (55) E.L.T. 433 (S.C.). However, we need not labour this point any further in view of our findings on merits recorded above. 24. It is trite that when a statute requires an act to be done in a specific manner, it has to be done in that man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the judgment is suspended. It is not permissible for the authorities and the Tribunals to ignore the decisions of the High Court or to refuse to follow the decisions of the High Court on the pretext that an appeal has been filed in the Supreme Court which is pending or that steps are being taken to file an appeal. If any authority or the Tribunal refuses to follow any decision of the High Court on the above grounds, it would be clearly guilty of committing contempt of the High Court and is liable to be proceeded against. At this juncture, it is pertinent to mention the observations of the High Court, by placing reliance on the judgment of the Bombay High Court in the case of Subramanian ITO V/s Siemens India Ltd. (156 ITR 11), which are as follows- Reference may also be invited to the decision of the Bombay High Court in Subramanian, ITO v. Siemens India Ltd. [1985] 156 ITR 11. The question that arose for consideration in this case is whether the Income-tax Officer is bound by the decision of a single Judge or a Division Bench of the Court within whose jurisdiction he is operating even if an appeal has been preferred against such decision and is pending. The followi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee on account of alleged mistakes in such consequential orders, either on account of interpretational differences or even on account of disrespect/disregard to the directions of the Tribunal, shall not vest any power or jurisdiction back with the Tribunal, to oversee the correctness of the correctness of the consequential orders passed, much less, to give directions to revise or rectify the same, even if there is any mistake in the same. If the consequential orders passed by the Assessing Officer are de hors the directions of the Tribunal, or if there is any grievance to the assessee on account of such consequential orders, as already noted above, the remedy for the assessee lies elsewhere, viz. in the fresh proceedings commencing with such consequential orders and not in the proceedings that culminated with the order of this Tribunal dated 22.3.2012. 27. In the absence of any specific mistake which warrants any rectification within the scope of the provisions of S.254(2) of the Act, in the order of the Tribunal dated 22.3.2012, we do not find reason to rectify our earlier order and accordingly, the Miscellaneous Applications of the assessee are disposed of, with the obser ..... X X X X Extracts X X X X X X X X Extracts X X X X
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