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TMI Blog2004 (8) TMI 709X X X X Extracts X X X X X X X X Extracts X X X X ..... terised Accounting and Management Service (P.) Ltd.[ 1998 (2) TMI 86 - KERALA HIGH COURT] respectively have held that data processing activity fulfils all the three conditions of section 32A(2)(b)( iii) which includes a condition of manufacture and production of an article or thing, not being an article or thing specified in the list in the Eleventh Schedule. The claim of the assessee has been disallowed only on the ground that data processing activity is not an activity of manufacture or production of an article or thing. This view is contrary to the view of jurisdictional High Court as expressed in the case of Emirates Commercial Bank Ltd. (supra) (the case relied upon by the Learned A.R.). Thus, non-consideration of a judgment of jurisdictional High Court constitutes a mistake apparent from record, regardless of judgment being rendered prior to or subsequent to the order proposed to be rectified and after the mistake is corrected, consequential order must follow and the Tribunal has power to pass all necessary consequential orders. Therefore, we hold that non-consideration of existing and binding decision of jurisdictional High Court constitutes a mistake apparent from the recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5] 58 ITR 811 (Guj.) (vii) CIT v. Southern Roadways Ltd. [2003] 133 Taxman 350 (Mad.) affirming the Madras High Court decision of CIT v. Comp-Help Services (P.) Ltd. [2000] 246 ITR 722 (viii)Unreported decision of Mumbai Tribunal C Bench (ITA Nos. 1734 and 1735/M/2001) (refer 34 BCAJ 987-) order dated 18-1-2002 (ix) Hyderabad Industries Ltd. v. CIT [2001] 252 ITR 401 3 (AP) 4. The Tribunal after considering the submission of both the parties decided the issue against the assessee following two decisions of Hon ble Bombay High Court in the case of CIT v. R. Shroff Consultants (P.) Ltd. [1999] 238 ITR 10184 and CIT v. Prudential Management and Services (P.) Ltd. [2001] 250 ITR 1365 . In the later decision, i.e., CIT v. Prudential Management and Services (P.) Ltd., the Hon ble High Court has followed its earlier decision in the case of R. Shroff Consultants (P.) Ltd. (supra). 5. Referring to the above mentioned facts, it was argued by the Authorised Representative of the assessee that there is a mistake in the order of the Tribunal which is apparent from record as the Tribunal did not consider the later decision of jurisdictional High Court on the relevant issue in the case of Emirate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g information to customers on the basis of which the customers would make investments. All this is based on the print outs which constitute information, computations and statements. In the circumstances, we are of the view that all the three conditions of section 32A(2)(b)(iii ) are satisfied. Our view is supported by the judgment of the Madras High Court in the case of CIT v. Comp-Help Services (P.) Ltd. [2000] 246 ITR 722 as also by the judgment of the Kerala High Court in the case of CIT v. Computerised Accounting Management Service (P.) Ltd. [1999] 235 ITR 502. We do not find any merit in the argument of the Department that these two judgments do not apply because, in those cases, the assessee was in the business of data processing. The nature of the services rendered by the bank to its customers does involve the work of data processing. It is on the basis of this data processing that the information is provided to its customers by the bank. It is on the basis of this data processing done by the computers that the management information reports come out. Answer : In the circumstances, we answer the above question No. III in the affirmative, i.e., in favour of the assessee and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that when there are two conflicting decisions of the Supreme Court, one given by the larger Bench should be followed and that if both Benches of the Supreme Court consist of equal number of Judges, the later of the two decisions should be followed by High Courts and other courts. We are in complete agreement with the principle laid down by the Bombay and Karnataka High Courts in Vasant Tatoba Hargude v. Dikkaya Muttaya Pujari AIR 1980 Bom. 341 and Govindanaik G. Kalaghatigi v. West Patent Press Co. Ltd. AIR 1980 Kar. 92 (FB) respectively. In this view we hold that the decision reported in Himalaya Tiles and Marble (P.) Ltd. v. Francis Victor Countinho AIR 1980 SC 1118 holds the field and that the petitioner herein is an interested party whose presence is necessary to effectually and completely decide the issue in question. (3)Nandanam Construction Co. v. Asstt. Commissioner (Intelligence) 1983 Tax Law. He invited our attention towards the following observations :- 17. But we are now confronted with conflicting decisions rendered by Benches of same strength. The decision in Pio Food Packer s case is a subsequent or later decision. 18. In the circumstances, we choose to follow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. (supra), 2. Prudential Management Services (P.) Ltd. (supra), 3. Emirates Commercial Bank Ltd. (supra) were not relied upon by either party. The Tribunal itself took note of the decisions in the cases of R. Shroff Consultants (P.) Ltd. (supra) and Prudential Management and Services (P.) Ltd. (supra). The case of assessee in this M.A. is that the Tribunal in its order has committed a mistake which is apparent from record as the Tribunal did not consider the later existing and binding decision of jurisdictional High Court in the case of Emirates Commercial Bank Ltd. (supra) and took into consideration an old decision which was not followed by the jurisdictional High Court in its later decision. To establish that it is a mistake apparent from record, as it has been pointed out earlier, the submissions are two fold. Firstly that the later decision of jurisdictional High Court of co-equal strength expressing different view has a precedent over earlier decision. Secondly if this proposition is accepted then non-consideration of existing later decision of jurisdictional High Court give rise to a mistake which is apparent from the record and has to be rectified accordingly. 7. Consideri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision of Tribunal was rendered in contradiction of the existing binding decision of jurisdictional High Court in the case of Emirates Commercial Bank Ltd. (supra). 9. There cannot be any dispute to the proposition under Article 227 of the Constitution, the High Court is vested with the power of superintendence over the Courts and Tribunals in the State. This Tribunal is subject to the superintendence of Hon ble Bombay High Court. Accordingly, the later decision of jurisdictional High Court (as discussed above) was binding on this Tribunal. Any order of a subordinate appellate authority rendered in contradiction of existing and binding decision of the jurisdictional High Court can give rise to a mistake which has to be considered as a mistake apparent from record within the meaning of section 154/254(2) of the Act. The case law relied upon by the Learned Authorised Representative of the assessee in this context establishes the proposition of law that even a subsequent decision of jurisdictional High Court can give rise to mistake apparent from record. Here also, the case of assessee is on sound footing as the Tribunal in the present case did not consider the existing and binding de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al opinions differ, and what is a mistake apparent from the record cannot be defined precisely and must be left to be determined judicially on the facts of each case; (f)Non-consideration of a judgment of the jurisdictional High Court would always constitute a mistake apparent from the record, regardless of the judgment being rendered prior to or subsequent to the order proposed to be rectified; (g)After the mistake is corrected, consequential order must follow, and the Tribunal has power to pass all necessary consequential orders. 11. Thus, non-consideration of a judgment of jurisdictional High Court constitutes a mistake apparent from record, regardless of judgment being rendered prior to or subsequent to the order proposed to be rectified and after the mistake is corrected, consequential order must follow and the Tribunal has power to pass all necessary consequential orders. Therefore, we hold that non-consideration of existing and binding decision of jurisdictional High Court constitutes a mistake apparent from the record in the order of the Tribunal dated 27th January, 2004 and we rectify the said order to the extent that assessee is entitled to get benefit of deduction under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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