High courts can't reappraise evidence: SC
High courts cannot reappraise evidence to determine whether a criminal charge is made out or not, as the power is vested only with the trial court, the Supreme Court has ruled.
A bench of justices Swatanter Kumar and Ranjana Prakash Desai said it is for the trial court to decide whether prima facie the case is made out for framing of the charges and the high courts cannot interfere with such decisions.
"The high court has in its revisional jurisdiction appraised the evidence which it could not have done. It is the trial court which has to decide whether evidence on record is sufficient to make out a prima facie case against the accused so as to frame charge against him.
"Pertinently, even the trial court cannot conduct roving and fishing inquiry into the evidence. It has only to consider whether evidence collected by the prosecution discloses prima facie case against the accused or not," the apex court said.
It passed the ruling while upholding the appeal filed by one Ashish Chadha challenging a Himachal Pradesh High Court judgement setting aside the criminal charges framed by the special court, Chamba against former MLA Asha Kumari and her husband Brijender Singh.
Though the special court had framed charges of criminal conspiracy, cheating and grabbing of government land, against the accused, the high court set aside the charges framed and also transferred the trial to the special court, Kangra on an application moved by the the ex-legislator.
The apex court said such a transfer has a demoralising effect on the trial courts as it can be done only in cases where there is concrete material that the trial cannot be held in a fair and free manner.
The apex court regretted that the high court interfered in the matter and formed a prima facie opinion by going through the entries in the records and virtually acquitted the accused.
"The high court unnecessarily observed that the charge is vague. It overstepped its revisional jurisdiction. In our opinion, whether revenue entries concerned are genuine or not will also have to be decided by the trial court after perusing the evidence led by the parties," the bench said.
According to the apex court, a prima facie opinion of the high court in such a strongly worded language is likely to influence the trial court.
"By expressing opinion on merits of the case, the high court almost decided the matter in favour of respondent no. 1 thus frustrating the remand and virtually acquitting respondent no. 1.
"The high court, therefore, should not have transferred the case to the special judge, Kangra. Needless to say that such transfers ordered merely on the say-so of a party have a demoralising effect on the trial courts.
"Unless a very strong case based on concrete material is made out, such transfers should not be ordered," the apex court said, while restoring the trial judge's order framing the charges.
However, the court said the trial shall not be influenced by any of the observations made by it in the present
High courts cannot reappraise evidence to determine whether a criminal charge is made out or not, as the power is vested only with the trial court, the Supreme Court has ruled.
A bench of justices Swatanter Kumar and Ranjana Prakash Desai said it is for the trial court to decide whether prima facie the case is made out for framing of the charges and the high courts cannot interfere with such decisions.
"The high court has in its revisional jurisdiction appraised the evidence which it could not have done. It is the trial court which has to decide whether evidence on record is sufficient to make out a prima facie case against the accused so as to frame charge against him.
"Pertinently, even the trial court cannot conduct roving and fishing inquiry into the evidence. It has only to consider whether evidence collected by the prosecution discloses prima facie case against the accused or not," the apex court said.
It passed the ruling while upholding the appeal filed by one Ashish Chadha challenging a Himachal Pradesh High Court judgement setting aside the criminal charges framed by the special court, Chamba against former MLA Asha Kumari and her husband Brijender Singh.
Though the special court had framed charges of criminal conspiracy, cheating and grabbing of government land, against the accused, the high court set aside the charges framed and also transferred the trial to the special court, Kangra on an application moved by the the ex-legislator.
The apex court said such a transfer has a demoralising effect on the trial courts as it can be done only in cases where there is concrete material that the trial cannot be held in a fair and free manner.
The apex court regretted that the high court interfered in the matter and formed a prima facie opinion by going through the entries in the records and virtually acquitted the accused.
"The high court unnecessarily observed that the charge is vague. It overstepped its revisional jurisdiction. In our opinion, whether revenue entries concerned are genuine or not will also have to be decided by the trial court after perusing the evidence led by the parties," the bench said.
According to the apex court, a prima facie opinion of the high court in such a strongly worded language is likely to influence the trial court.
"By expressing opinion on merits of the case, the high court almost decided the matter in favour of respondent no. 1 thus frustrating the remand and virtually acquitting respondent no. 1.
"The high court, therefore, should not have transferred the case to the special judge, Kangra. Needless to say that such transfers ordered merely on the say-so of a party have a demoralising effect on the trial courts.
"Unless a very strong case based on concrete material is made out, such transfers should not be ordered," the apex court said, while restoring the trial judge's order framing the charges.
However, the court said the trial shall not be influenced by any of the observations made by it in the present
IT: Where assessment order itself was dismissed by High Court, consequential penalty order becomes infructuous
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[2013] 34 taxmann.com 278 (Rajasthan)
HIGH COURT OF RAJASTHAN
Commissioner of Income-tax, Kota
v.
Krishi Upaj Mandi Samiti*
AJAY RASTOGI AND ARUN BHANSALI, JJ.
D.B. IT APPEAL NO. 540 OF 2011
MARCH 18, 2013
Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income [Deletion of additions in quantum appeal] - In appeal filed by assessee against assessment order, Commissioner (Appeals) confirmed additions made by Assessing Officer - Tribunal while setting aside order of authorities, directed Assessing Officer to make assessment afresh after affording adequate opportunity of being heard to assessee - In meanwhile, Assessing Officer imposed penalty under section 271(1)(c) on basis of additions sustained by Commissioner (Appeals) - Commissioner (Appeals) cancelled penalty - Tribunal held that there was no reason to interfere with order of Commissioner (Appeals) as very basis of levy of penalty i.e. assessment order making assessment treating assessee as trust was not eligible for exemption from income as a trust had been ultimately set aside by Tribunal with direction to treat assessee as trust and make assessment afresh in accordance with law - Appeal preferred by revenue against order of assessment came to be dismissed by High Court - Whether, therefore, appeal preferred by revenue against penalty order on account of changed circumstances deserved to be dismissed as having become infructuous - Held, yes [Para 4] [In favour of assessee]
CASES REFERRED TO
CIT v. Krishi Upaj Mandi Samiti [2011] 331 ITR 174/199 Taxman 124 (Mag.)/9 taxmann.com 117 (Raj.) (para 1).
Mrs. Parinitoo Jain for the Appellant.
ORDER
1. It has been informed to this court that the appeal preferred by the Revenue against the order of assessment being D.B.Income Tax Appeal No. 167/2010 came to be dismissed by this Court vide judgment dt. 18th August, 2010 in CIT v. Krishi Upaj Mandi Samiti [2011] 331 ITR 174//199 Taxman 124 (Mag.)/9 taxmann.com 117 (Raj.).
2. As it reveals from the record, the assessment order was initially passed by the assessing authority on 11th December, 2006 and that was challenged in appeal before the CIT (Appeals) which was partly allowed and while confirming the additions made by the Assessing Officer, the CIT (Appeals) directed to allow depreciation on various assets. The assessee further approached the ITAT against the order of CIT (Appeals) and the IT AT while setting aside the order of the authorities directed the Assessing Officer to make assessment afresh after affording adequate opportunity of being heard to the assessee. Against the order of ITAT dt.30th April, 2008, the department preferred appeals U/s.260A of the Act and such appeals came to be dismissed by the Division Bench of this court vide judgment dt.l8th August, 2010 in Krishi Upaj Mandi Samiti's case (supra).
3. It further reveals that in the meanwhile, the Assessing Officer in accordance with the provisions of the Act considered the order of CIT (Appeals) and proceeded with penalty proceedings U/s.271(l)(c) and imposed penalty on the basis of additions sustained by CIT (Appeals) vide order dt.26th February, 2007. However, an appeal came to be preferred by the assessee before the CIT (Appeals) who vide order dt.l8th November, 2008 cancelled the penalty observing that the assessment which formed the basis of the penalty order has been set aside by the ITAT with the direction to make assessment afresh and there was no justification for levy of penalty. However, against the order of CIT (Appeals), the revenue preferred appeal before the ITAT that came to be rejected vide order dt.20th March, 2009 observing that there is no reason to interfere with the first appellate order on the issue as the very basis of levy of penalty i.e. the assessment order making assessment treating the assessee as Trust is not eligible for exemption from income as a Trust has been ultimately set aside by ITAT with direction to treat the assessee as Trust and make assessment afresh in accordance with law.
4. In view of the judgment of this court dt.l8th August, 2010 since the appeals preferred by the revenue have been dismissed, the present appeal preferred against the order of ITAT on account of these changed circumstances, does not hold any merit. However, the ITAT itself while dismissing the appeal vide order dt.20th March, 2009 granted liberty to the department to initiate fresh penalty proceedings U/s.271(l)(c) of the Act in case they succeed in appeal before the High Court but that appeal has been dismissed by this court, therefore, the present appeal deserves to be dismissed as having become infructuous.
5. Consequently, in the light of above changed circumstances, the present appeal preferred by the department stands dismissed as having become infructuous.
LATASECTION 139, READ WITH SECTION 199 OF THE INCOME-TAX ACT, 1961 - RETURN OF INCOME - CREDIT OF TDS U/S 199 TO AN ASSESSEE WHEN THE TAX DEDUCTED HAS BEEN DEPOSITED WITH REVENUE BY DEDUCTOR - DIRECTION OF HON'BLE DELHI HC IN THE CASE 'COURT ON ITS OWN MOTION VS. UNION OF INDIA &ORS. IN WP(C) 2659/2012 & WP(C) 5443/2012'
INSTRUCTION NO. 5/2013 [F.NO.275/03/2013-IT(B)], DATED 8-7-2013
1. The CBDT issues instructions with respect to processing of Income-tax returns and giving credit for TDS thereon in the case of TDS mismatch. A few of the instructions on this subject issued in previous years are Instruction No. 1/2010 (25-2-2010) for returns pertaining to A.Y, 2008-09; Instruction No. 05/2010 (21-7-2010), Instruction No. 07/2010 (16-8-2010) and Instruction No. 09/2010 (9-12-2010) for returns pertaining to AY. 2009-10; Instruction No. 02/2011 (9-2-2011) for returns pertaining to A.Y. 2010-11; and Instruction No. 1/2012 (2-2-2012) and Instruction No. 04/2012 (25-5-2012) for returns pertaining to A.Y. 2011-12. The instructions gave decisions and the manner in which the TDS claims were to be given credit while clearing the backlog of returns pending processing. In the cases that did not fall under the specific TDS amount limit or refund amount computed, the residuary clause in these instructions gave the manner of processing those returns and it stated that "TDS credit shall be given after due verification ".
2. The Hon'ble Delhi High Court vide its judgment in the case 'Court On its Own Motion v. UOI and Ors. (W.P. (C) 2659/2012 & W.P. (C) 5443/2012 dated 14-3-2013) has issued seven mandamuses for necessary action by Income-tax Department, one of which is regarding the issue of non-credit of TDS to the taxpayer due to TDS mismatch despite the assessee furnishing before the Assessing Officer, TDS certificate issued by the deductor.
3. In view of the order of the Hon'ble Delhi High Court (reference: para 50 of the order); it has been decided by the Board that when an assessee approaches the Assessing Officer with requisite details and particulars in the form of TDS certificate as an evidence against any mismatched amount, the said Assessing Officer will verify whether or not the deductor has made payment of the TDS in the Government Account and if the payment has been made, credit of the same should be given to the assessee. However, the Assessing Officer is at liberty to ascertain and verify the true and correct position about the TDS with the relevant AO (TDS). The AO may also, if deemed necessary, issue a notice to the deductor to compel him to file correction statement as per the procedure laid down.
4. Thus, the manner laid down by the Hon'ble HC in the above mandamus may be one of the method of due verification as mentioned in the various instructions referred in para (1) above.
5. This may be brought to notice of all Officers working under your jurisdiction for compliance
IT : Deduction claimed under section 80-IB(10) in return filed under section 153A cannot be denied on ground that claim was not made earlier in return filed under section 139(1)
IT: Where assessee filed return of income in response to notice issued under section 153A, interest under section 234A was liable to be charged from date of expiry of notice period given in notice under section 153A to date of completing assessment under section 143(3)
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[2013] 32 taxmann.com 133 (Chennai - Trib.)
IN THE ITAT CHENNAI BENCH 'A'
Assistant Commissioner of Income-tax, Central Circle -1(3), Chennai
v.
V.N. Devadoss*
Dr. O.K. Narayanan, VICE-PRESIDENT
AND Vikas Awasthy, JUDICIAL MEMBER
AND Vikas Awasthy, JUDICIAL MEMBER
IT Appeal Nos. 1219 to 1223 (Mds.) of 2012
[ASSESSMENT YEARS 2008-09 TO 2010-11]
[ASSESSMENT YEARS 2008-09 TO 2010-11]
FEBRUARY 4, 2013
I. Section 80-IB, read with sections 80AC, 132, 139 and 153A, of the Income-tax Act, 1961 - Deductions - Profits and gains from industrial undertakings other than infrastructure development undertakings [Housing projects] - Assessment years 2008-09 to 2010-11 - Whether to avail benefit of deduction under section 80-IB(10) it is necessary that assessee must file return of income before due date prescribed under section 139(1) - Held, yes - Whether a return filed in pursuance of a notice issued under section 153A is as good as a return filed under section 139 and more particularly under section 139(1) - Held, yes - Whether deduction claimed under section 80-IB(10) in a return filed under section 153A can be denied on ground that claim was not made earlier in a return filed under section 139(1) - Held, no [Paras 26 to 42] [In favour of assessee]
II. Section 234A, read with sections 139, 143 and 153A, of the Income-tax Act, 1961 - Interest, chargeable as [Computation of period of interest] - Assessment years 2008-09 to 2010-11 - For relevant assessment years, assessee filed returns of income in response to notices issued under section 153A on 23-9-2011 - Assessing Officer levied interest under section 234A upon assessee - Commissioner (Appeals) directed Assessing Officer to charge interest under section 234A from date of expiry of notice period given in notices under section 153A to date of completing assessment under section 143(3) - Whether Commissioner (Appeals) was justified in his view - Held, yes [Para 45] [In favour of assessee]
The due date for filing personal tax returns for FY13 is July 31. Many of us are aware that salary, rental income, etc., are taxable. However, we tend to overlook incomes like interest, gifts, etc., which need to be declared.Here is a list of some such incomes.
Interest from fixed deposit
Interest from fixed deposit
Interest from fixed deposit is liable to tax under the Income Tax Act, 1961. Some people believe that interest from fixed deposit is not taxable. This is not true. Banks will deduct tax at 10% on interest above R10,000 and the balance tax needs to be deposited by the assessee. A person has the liberty to choose whether he wants to offer the interest on accrual or cash basis.
Interest from savings bank account
Interest from savings bank account is taxable. Interest up to R10,000 is allowed as a deduction under Section 80TTA of the IT Act and the balance is liable to tax.
Interest accrued on NSC
Interest from savings bank account is taxable. Interest up to R10,000 is allowed as a deduction under Section 80TTA of the IT Act and the balance is liable to tax.
Interest accrued on NSC
Interest earned on NSC gets reinvested in the scheme and becomes eligible for a deduction. The deduction for reinvested interest is available for first five years. However, such interest income is first taxable and needs to be included in the total income.
Cash gifts
Cash gifts
If you have received any cash gifts during the year exceeding R50,000, the entire amount is taxable under the head 'income from other sources'. However, cash gifts received from specified relatives, a local authority or on occasion of marriage or under a will, etc., are not considered taxable.
DGCEI finds Rs 200 cr tax evasion by debt recovery agents
The Central Excise Intelligence has found service tax evasion of about Rs 200 crore by around 2,000 debt recovery agencies working for ICICI Bank.
'Our estimate is that the evasion is to the tune of Rs 200 crore by the agencies which are engaged in recovering debts for ICICI Bank,' said a source at the Directorate General of Central Excise Intelligence (DGCEI).
Till now, the DGCEI has come across tax evasion worth Rs 25 crore, the source said.
The bank has disbursed around Rs 2,000 crore to these agencies in the last five years but they (agencies) are yet to pay service tax on it. Out of the 2,000 evaders, around 400 are from Maharashtra, he said.
A DGCEI official said that other banks pay service tax to the agents separately, which these agents would pay to the service tax department.
But the commission paid by ICICI Bank includes the service tax and it is the duty of these agencies to pay tax, he said.
'Some of them are not even responding to our summons and we are searching for them,' he said.
Sources said that it is a nationwide operation and they are in touch with ICICI, which had shared the details with DGCEI after the investigation started.
Officials said that when some of the agents were questioned, they admitted evasion of Rs 20 crore.
When contacted, an ICICI bank spokesperson said, 'As per service tax law, the responsibility of payment of service tax in these cases lies with the service providers (agencies). As per the bank's agreements with collection agents, the overall commission paid by the bank to the agents is inclusive of all taxes. Hence it is the responsibility of the collection agents to pay the requisite service tax.'
ICICI Bank pays service tax wherever applicable, he added.
'Our estimate is that the evasion is to the tune of Rs 200 crore by the agencies which are engaged in recovering debts for ICICI Bank,' said a source at the Directorate General of Central Excise Intelligence (DGCEI).
Till now, the DGCEI has come across tax evasion worth Rs 25 crore, the source said.
The bank has disbursed around Rs 2,000 crore to these agencies in the last five years but they (agencies) are yet to pay service tax on it. Out of the 2,000 evaders, around 400 are from Maharashtra, he said.
A DGCEI official said that other banks pay service tax to the agents separately, which these agents would pay to the service tax department.
But the commission paid by ICICI Bank includes the service tax and it is the duty of these agencies to pay tax, he said.
'Some of them are not even responding to our summons and we are searching for them,' he said.
Sources said that it is a nationwide operation and they are in touch with ICICI, which had shared the details with DGCEI after the investigation started.
Officials said that when some of the agents were questioned, they admitted evasion of Rs 20 crore.
When contacted, an ICICI bank spokesperson said, 'As per service tax law, the responsibility of payment of service tax in these cases lies with the service providers (agencies). As per the bank's agreements with collection agents, the overall commission paid by the bank to the agents is inclusive of all taxes. Hence it is the responsibility of the collection agents to pay the requisite service tax.'
ICICI Bank pays service tax wherever applicable, he added.
IT : Where nursing home was equipped viz. scientific instruments, same would be treated as plant and machinery and depreciation should be allowed on it accordingly
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[2013] 35 taxmann.com 10 (Allahabad)
HIGH COURT OF ALLAHABAD
Commissioner of Income-tax, Ghaziabad
v.
Shri Shashi Nursing Home Ltd.*
R. K. AGRAWAL AND RAM SURAT RAM (MAURYA), JJ.
IT APPEAL NO. 189 OF 2005†
JANUARY 2, 2013
Section 32 of the Income-tax Act, 1961 - Depreciation - Allowance/rate of [Hospital building] - Assessment year 1995-96 - Whether where nursing home was equipped with scientific instruments, same would be treated as plant and machinery and depreciation should be allowed on it accordingly - Held, yes [Para 8] [In favour of assessee]
FACTS
| ■ | The assessee was a public limited company and was running a nursing home in the name and style of Shashi Nursing Home Limited. It had claimed depreciation on hospital building at the rate of 25 per cent treating it as a plant and machinery. | |
| ■ | The Assessing Officer did not allow the same and held that depreciation would be allowed at normal rate applicable to building rather than plant and machinery. | |
| ■ | On appeal, the Commissioner (Appeals) held that the depreciation of 25 per cent as applicable to plant and machinery be allowed. | |
| ■ | On revenue's appeal, the Tribunal upheld the order of the Commissioner (Appeals). | |
| ■ | On further appeal to the High Court: |
HELD
| ■ | In the case of Dr. B. Vankata Rao [2000] 243 ITR 81/111 Taxman 635 the Apex Court upheld the decision of this Court in the case of S.K. Tulsi & Sons v. CIT [1991] 187 ITR 685/54 Taxman 100 wherein this Court has held that functional test ought to have been applied for claiming depreciation in respect of building structure. The Apex Court has held that if it was found that the building or structure constituted an apparatus or a tool of the taxpayer by means of which business activities were carried on, it amounted to a 'plant', but where the structure played no part in the carrying on of those activities but merely constituted a place wherein they were carried on, the building could not be regarded as a plant. In case ofDr. B. Venkata Rao (supra) the Apex Court found that the assessee nursing home is equipped to enable the sterlization of surgical instruments and bandages to be carried on which cover 250 sq. ft. and that nursing home is also equipped with an operation theatre. Therefore, the plant and nursing home stated as plant and machinery and the depreciation should be allowed on it accordingly. In the instant case, the nursing home of the respondent is equipped with operation theatre, pathological laboratory, x-ray plant, plant for sterlization of cloths, plant for sterlization of other surgical equipments, an air conditioning plant etc. Thus, the decision of the Apex Court in case of Dr. B. Venkata Rao (supra)would be squarely applicable in the present case. The plea of revenue that the decision of the Apex Court in the case of CIT v. Anand Theatres [2000] 244 ITR 192/110 Taxman 338 which is a subsequent decision ought to have been applied cannot be applied for the reason that the case of Anand Theatres(supra) did not relate to nursing home whereas decision of the Apex Court. In the case of Dr. B. Venkata Rao (supra) directly related to nursing home and, therefore, the principle laid down in case of Dr. B. Venkata Rao (supra) ought to be applied in the instant case. Moreover, it is find that in the earlier assessment year and subsequent assessment year the Income-tax Officer has allowed the depreciation on the building treating it as part of plant and machinery. [Para 8] | |
| ■ | In view of the foregoing discussions no legal infirmity in the order passed by the Tribunal was found. [Para 9] |
CASE REVIEW
CIT v. Dr. B. Venkata Rao [2000] 243 ITR 81/111 Taxman 635 (SC) (para 8) followed.
CIT v. Anand Theaters [2000] 244 ITR 192/110 Taxman 338 (SC) (para 8) distinguished.
CASES REFERRED TO
CIT v. Anand Theatres [2000] 244 ITR 192/110 Taxman 338 (SC) (para 5), CIT v. Dr. B. Venkata Rao [2000] 243 ITR 81/111 Taxman 635 (SC)(para 6) and S.K. Tulsi & Sons v. CIT [1991] 187 ITR 685/54 Taxman 100 (SC) (para 8).
S. Chopra, A. Kumar, A.N. Mahajan, B.J. Agarwal, D. Awasthi, G. Krishna and R.K. Upadhyay for the Petitioner. K. Agarwal and R.R. Kapoor for the Respondent.
ORDER
1. The present appeal has been filed under Section 260 (A) of the Income Tax Act, 1961 (hereinafter referred to as the 'Act') against the order dated 25.2.2004 passed by the Income Tax Appellate Tribunal, Delhi Bench "E" New Delhi (hereinafter referred to as the 'Tribunal'). The appeal has been admitted vide order dated 5.9.2007 on the two substantial questions of law said to be arising out of the Tribunal's order : -
| "1. | Whether on the facts and circumstances of the case, the Hon'ble ITAT was legally justified in allowing depreciation on the nursing home building at a higher rate as claimed by the assessee treating it as plant and machinery and holding that the decision in case of CIT v. Dr. B. Vankata Rao , 243 ITR 81 (SC) is applicable in the case, overlooking the later decision of the Apex Court in the case of CIT v. Anand Theater 244 ITR 192 and thereby ignoring the test of functionality? | |
| 2. | Whether on the facts and circumstances of the case, the Hon'ble ITAT was legally justified in holding that the Department is expected to adopt consistent approach without appreciating the fact that under the tax law every year is independent and the principle or res-judicata is not applicable to tax proceedings?" |
2. Briefly stated, the facts giving rise to the present appeal are as follows:
3. The appeal relates to the Assessment Years 1995-96. The respondent-assessee is a public limited company and running a nursing home in the name and style of M/s Shashi Nursing Home Limited. It had filed its return of income declaring a loss of income Rs.4,12,680/- which was processed under Section 143 (1) (a) of the Act. In response to the notice issued respondent's representative attended the proceedings. The respondent-assessee had claimed depreciation on Hospital building @ 25% treating it as a plant and machinery. The Assessing Officer did not allow the same and held that the depreciation will be allowed to the respondent-assessee as per normal rate applicable to building rather than plant and machinery. Feeling aggrieved the respondent-assessee preferred an appeal before the Commissioner of Income Tax (Appeals), Meerut, who vide order dated 28.7.1999 had accepted the claim of the respondent-assessee and held that the depreciation of 25% is applicable to the plant and machinery be allowed. Feeling aggrieved, Revenue filed appeal before the Tribunal. The Tribunal by the impugned order upheld the order of the Commissioner of Income Tax (Appeals) and dismissed the appeal by holding as follows:
"8. We have carefully considered the facts and circumstances relating to this matter and the rival submissions. According to the learned CIT(A), nursing home building fulfilled the conditions as laid down by the Hon'ble Karnataka High Court in the case of Dr. D. Venkata Rao (supra). Thus, the learned CIT(A) has taken the nursing home as plant & machinery and allowed the depreciation accordingly. He has also pointed out that in A.Y. 1993-94 also the depreciation was allowed by the Department in the assessment which was completed u/s 143(3) and in subsequent years also similar approach has been adopted. The department has not controverted the findings of fact recorded by the Ld. CIT(A) and in view of various equipments fitted in the hospital building, it fulfills the functional test also. It is not the case of the deptt, that the hospital building of the assessee is meant merely for housing the patients. If the building is mainly used for diagnosis or treatment of patients and fully equipped with scientific and pathological instruments like X-Ray plant, oxygen plant and sterilization system, etc., then it is covered within the definition of plant and machinery. The Ld. D.R. could not show us any authority in favour of his submissions that the nursing home/hospital of the assessee is not a plant whereas the claim of the assessee is found to be supported by the decision of Hon'ble Supreme Court of India in the case of CIT v. Dr. B. Venkata Rao 243 ITR 81 in which case the Hon'ble Apex Court made the following observations:-
"We find from the order of the Tribunal as also the assessment order that the assesses nursing home is equipped to enable the sterilization of surgical instruments and bandages to be carried on. It is reasonable to assume in the circumstances, particularly having regard to the Tribunal's order which states that the sterilization room covers about 250 sq. ft. that the nursing home is also equipped with an operation theatre. In the circumstances, we think that the finding of the High Court should be accepted."
9. In view of the above and on going through the entire material we find that the nursing home of the assessee which was equipped with scientific instruments should be treated as plant & machinery and depreciation should be allowed on it accordingly. It may be pointed out that the Department has also treated the nursing home of the assessee as plant in subsequent years and in earlier years and therefore the Department is expected to adopt consistent approach. In view of the above, we do not find any scope to interfere on this issue also. Hence, this ground stands rejected."
4. We have heard Sri Shambhu Chopra, learned Senior Standing Counsel for the Revenue. Sri Krishna Agrawal has appeared for the respondent assessee.
5. Sri Chopra submitted that the building of a Nursing Home cannot be treated as a plant & machinery and therefore, normal depreciation as applicable to the building ought to have been allowed treating it as part of plant and machinery and has placed reliance upon a decision of the Apex Court in the case of CIT v. Anand Theaters [2000] 244 ITR 192/110 Taxman 338 where the Apex Court had held that a building of a cinema theatre cannot be treated as plant and machinery and normal depreciation applicable to a building is admissible.
6. Sri Agrawal, learned counsel for respondent-assessee further relied the decision of the Apex Court in the case of in case of CIT v. Dr. B. Vankata Rao [2000] 243 ITR 81/111 Taxman 635 wherein the Apex Court while considering the case clearly has held that depreciation to the building used for Nursing Home were plant equipment, sterilisation room has been established is to be treated as plant & machinery and depreciation admissible for plant and machinery is allowable.
7. In reply Sri Chopra submitted that subsequent decision of the Apex Court in the case of CIT v. Anand Theaters , 244 ITR 192 ought to be followed.
8. We have given our thoughtful consideration to the various pleas raised by the learned counsel for the parties. We find that in the case of Dr. B. Vankata Rao (Supra), the Apex Court upheld the decision of this Court in the case of S.K. Tulsi & Sons v. CIT [1991] 187 ITR 685/54 Taxman 100wherein this Court has held that functional test ought to have been applied for claiming depreciation in respect of building structure. The Apex Court has held that if it was found that the building or structure constituted an apparatus or a tool of the taxpayer by means of which business activities were carried on, it amounted to a "plant" ; but where the structure played no part in the carrying on of those activities but merely constituted a place wherein they were carried on, the building could not be regarded as a plant. In case of Dr. B. Vankata Rao (supra) the Apex Court found that the assesses nursing home is equipped to enable the sterilisation of surgical instruments and bandages to be carried on which cover 250 sq. ft. and that nursing home is also equipped with an operation theatre. Therefore the plant and nursing home stated as plant and machinery and the depreciation should be allowed on it accordingly. In the present case we find that the nursing home of the respondent is equipped with operation theatre, pathological laboratory, x-ray plant, plant for sterilization of cloths, plant for sterilization of other surgical equipments, an air conditioning plant etc. Thus the said decision of the Apex Court in case ofDr. B. Vankata Rao (supra) would be squarely applicable in the present case. The plea of Sri Chopra that the decision of the Apex Court in the case ofAnand Theaters (supra) which is a subsequent decision ought to have been applied cannot be applied for the reason that the case of Anand Theatres did not relate to nursing home whereas decision of the Apex Court. In the case of Dr. B. Vankata Rao (supra) directly related to nursing home and therefore the principle laid down in case of Dr. B. Vankata Rao (supra) ought to be applied in the present case. Moreover, we find that in the earlier assessment year and subsequent assessment year the Income Tax Officer has allowed the depreciation on the building treating it as part of plant and machinery.
9. In view of the foregoing discussions we do not find any legal infirmity in the order passed by the Tribunal.
The appeal fails and is dismissed.
RITESHDEBTS RECOVERY TRIBUNAL (REFUND OF COURT FEE) RULES, 2013
NOTIFICATION NO. GSR 311(E)[F.NO.3/2/2013-DRT], DATED 15-5-2013
In exercise of the powers conferred by clause (cc) of sub-section (2) of Section 36 read with sub-section (3A) of section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (51 of 1993), the Central Government hereby makes the following rules regulating the refund of court fee in the Debts Recovery Tribunals (hereinafter called the Tribunal) namely:-
Short title and commencement
1. (1) These rules may be called the Debts Recovery Tribunals (Refund of Court Fee) Rules, 2013.
(2) They shall come into force on the date of their publication in the Official Gazette.
Applicability
2. These rules shall be applicable in all cases filed before the Tribunal which are settled prior to the commencement of the hearing before that Tribunal or at any stage of the proceedings before the final order is passed by the Presiding Officer.
Provided that no refund shall be allowed when the recovery proceedings are pending with the Recovery Officer.
Definitions
3. In these rules, unless the context otherwise requires, -
| (a) | "Act" means the Recovery of Debts due to Banks and Financial Institutions Act, 1993; | |
| (b) | "Presiding Officer" means the Presiding Officer of the Debts Recovery Tribunal appointed under sub-section (1) of section 4 of the Act; | |
| (c) | "Tribunal" means the Debts Recovery Tribunal established under sub-section (1) of section 3 of the Act; | |
| (d) | The words and expressions used in these rules and not defined but defined in the Act shall have the meanings respectively assigned to them in the Act. |
Amount of refund
4. The Presiding Officer of the Tribunal before which any case is filed for settlement of the dues of the Banks and Financial Institutions may order refund of fee remitted at the time of filing the case at the following rates:
| (a) | 50 per cent of the fee remitted in the cases which are settled prior to the commencement of the hearing before the Tribunal; | |
| (b) | 25 per cent of the fee remitted in the cases which are settled at any stage of the proceedings before the final order by the Presiding Officer is passed. |
Procedure for refund
5. (1) The applicants and the defendant(s) shall file a joint application before the Registrar of the Tribunal for refund of court fee indicating the details of the settlement.
(2) On receipt of such application, the Registrar shall certify the amount of court fee remitted in the case and the amount to be refunded and place the application before the Presiding Officer.
(3) The Presiding Officer shall pass orders for refund of the court fee indicating the amount of refund in the order;
(4) The Registrar shall accordingly take further action for issue of financial sanction and presentation of bill in Pay and Accounts Office and refund of the due amount to the applicant.
IT: Assessment done pursuant to directions issued by Additional Commissioner under section 144A cannot be reopened; however, revisionary power under section 263 can be exercised
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[2013] 35 taxmann.com 53 (Calcutta)
HIGH COURT OF CALCUTTA
Amrit Sales Promotion (P.) Ltd.
v.
Union of India*
SOUMITRA PAL, J.
W.P. NO. 1347 OF 2006
APRIL 4, 2013
Section 144A, read with sections 147 and 263, of the Income-tax Act, 1961 - Deputy Commissioner, power of to issue directions in certain cases [Binding force of directions] - Assessment year 2001-02 - Whether directions issued by Additional Commissioner under section 144A are not only to guide Assessing Officer to enable him to complete assessment but such directions are also binding on such officer - Held, yes - Whether, where an assessment order passed pursuant to directions given by Additional Commissioner under section 144A on an issue attains finality, issuing notice for reopening of assessment on same issue cannot be held as justified - Held, yes - Whether, however, revisionary power under section 263 can be invoked in respect of an order passed under section 144A - Held, yes [Paras 10 & 11] [In favour of assessee]
FACTS
| ■ | In the assessment proceedings, the Assessing Officer proposed to apply the Explanation to section 73 to treat share trading loss as deemed speculation loss. However, the assessee approached the Additional Commissioner, to call for the records and to issue appropriate direction in this regard. Thereafter, the Additional Commissioner issued direction that Explanation to section 73 would not be applied. | |
| ■ | Pursuant to the order issued by the Additional Commissioner, the Assessing Officer completed the assessment under section 143(3)/144A. | |
| ■ | However, after completion of the assessment proceedings a notice was issued to the assessee for reopening of the assessment on the ground that there were reasons to believe that the income of the said assessment year had escaped assessment with regard to loss in share dealing business. | |
| ■ | Thereafter, the assessee filed writ petition against the reopening of the assessment and contended that the issue, which had already been negatived by the higher authority pursuant to the directions given by the Additional Commissioner could not be reopened. Since the direction given by the Additional Commissioner are binding on the Assessing Officer. Further, contended that issues which had attained finality could not be reopened on mere change of opinion. | |
| ■ | On the other hand the revenue contended that the directions issued by the Additional Commissioner were limited for the purpose of making assessment and therefore, notice issued for reassessment was justified. |
HELD
| ■ | The question is, whether the Assessing Officer could issue the notice under section 148 for reopening the assessment proceedings. So far the facts are concerned it is evident from the records that there has been no change. Rather facts are similar. Therefore, as the Assessing Officer tried to reopen and reappraise the assessment on the same set of facts, it was a mere change of opinion. Secondly, had the Department considered the order passed under section 144A prejudicial to the interests of the Revenue, it could have invoked the provisions contained in section 263, which it did not. Therefore, the order passed under section 144A, which has a 'binding' effect on the Assessing Officer, became final and could not be reopened by issuing the impugned notice under section 148. That direction under section 144A has a 'binding' effect is clear since statute postulates that Joint Commissioner, may issue such directions as he thinks fit for the guidance of the Assessing Officer to enable him to complete the assessment, making his jurisdiction very wide. | |
| ■ | Therefore, in view of the settled position of law, since the Department did not take steps to revise the order passed under section 144A by invoking the provisions of section 263, the impugned notice under section 148 cannot be sustained and is, thus, set aside and quashed. Accordingly, all consequential proceedings are also set aside and quashed. The writ petition is allowed. |
V. Murarka and Ms. S. Roychowdhury for the Petitioner. Dipak Shome and Md. Nizamuddin for the Respondent.
JUDGMENT
Soumitra Pal, J. - In the writ petition, the petitioner, a company under the Companies Act, 1956, has challenged the reassessment notice dated March 31, 2006, issued by the Assistant Commissioner of Income-tax, Circle-5, Kolkata, respondent No. 2, under section 148 of the Income-tax Act, 1961 ("the Act" for short), for the assessment year 2001-02 and all proceedings relating thereto.
2. It appears from the facts, as stated in the petition, that during the relevant assessment year, the petitioner carried on the business, inter alia, of actual delivery based purchase and sale of shares and speculation business in shares. The petitioner suffered a loss of Rs. 11,49,39,400 in business of share dealing and a loss of Rs. 5,50,95,999 in speculation business. The petitioner earned short-term capital gain of Rs. 1,57,23,404 and long-term capital gain of Rs. 10,86,84,635 and dividend income of Rs. 9,26,000 during the previous year.
3. On October 22, 2001, the petitioner filed return under the Act for the said assessment year showing a total income of Rs. 94,68,640 comprising the said business loss, the said speculation loss, the said short-term capital gain and the said long-term capital gain. In the assessment proceedings, the Income-tax Officer, Ward-4(3) (Kolkata), respondent No. 3, as the Assessing Officer, proposed to apply the provisions contained in the Explanation to section 73 of the Act to the said business loss in actual share dealing business. During the said proceedings, the petitioner by letter dated November 6, 2003, submitted that as non-speculative business was much less than the income from capital gain, the provisions contained in section 73 were not applicable. However, as respondent No. 3 insisted upon applying the provisions contained in the Explanation to section 73, the petitioner by a letter dated December 18, 2003, invoked the provisions in section 144A of the Act requesting the Additional Commissioner of Income-tax, Range-4, Kolkata, to call for the assessment records and to issue appropriate direction. Thereafter, the Additional Commissioner of Income-tax directed respondent No. 3 to send the draft assessment order, which was duly sent by respondent No. 3 proposing to include the said speculation loss for the purpose of deciding the applicability of section 73 to the said business loss. Assailing the said proposal, the petitioner on February 20, 2004, made a written submission before the Additional Commissioner of Income-tax and oral hearing was granted. Thereafter, by direction dated March 23, 2004, under section 144A, the Additional Commissioner decided the issue regarding the applicability of the Explanation to section 73 and directed respondent No. 3 not to treat the share trading loss of Rs. 11,11,77,739 as deemed speculation loss within the meaning of the Explanation to section 73 of the Act and the Assessing Officer was directed to frame the assessment in the light of the direction contained in the said order. Pursuant to the order under section 144A, respondent No. 3 by assessment order dated March 31, 2004, under section 143(3)/144A completed the assessment by passing an assessment order. However, after completion of the assessment proceedings, the petitioner received the impugned notice dated March 31, 2006, under section 148 of the Act for the said assessment year on the ground that the said respondent had reasons to believe that the income of the petitioner chargeable to tax under the Act for the said assessment year had escaped assessment within the meaning of section 147 and, therefore, the petitioner was required to file a return. In compliance with the notice under section 148, the petitioner filed the return and requested respondent No. 2 to furnish the recorded reasons on which the impugned notice was issued.
4. In the recorded reasons, respondent No. 2 had observed that the interest income and incentive of investments were treated as business income along with share loss in share dealing business and, thus, the business loss of Rs. 11,49,39,400 and speculation loss of Rs. 5,50,95,999 were shown separately and not considered as business income. Moreover, capital gains and dividend income were shown separately and total income was computed at Rs. 9,48,640. Thereafter, the petitioner filed his objection to the recorded reasons on the ground that it was contrary to the Explanation to section 28 and section 43(5) and since assessment was made under the provisions of sections 143(3)/144A of the Act, wherein the question of applicability of the Explanation to section 73 of the Act as proposed in the recorded reasons by respondent No. 2 was disapproved by the higher authority by exercising its discretion under section 144A, the same issue could not be reopened or reexamined and could not be gone afresh or did not constitute a relevant material for formation of belief under section 147. Moreover, such reopening was violative of the directions under section 144A, which has a binding effect. After notice under section 148 was served, the petitioner by a representation dated August 21, 2006, prayed for its cancellation. Thereafter, writ petition was moved on September 19, 2006, when direction was issued for filing of affidavits and an interim order was passed restraining the respondents from reopening the assessment. Further, the Assessing Officer was directed to pass a reasoned decision on the objection filed by the petitioner to the impugned notice. Consequently, the Assessing Officer by letter dated September 22, 2006, replied.
5. Mr. Murarka, learned advocate appearing on behalf of the petitioner, supporting the statements in the writ petition has contended that a view taken by the Assessing Officer which was negatived by the higher authorities pursuant to the directions under section 144A cannot be reopened by taking recourse to the procedure under section 147 of the Act. Since the directions by the Additional Commissioner under section 144A are binding on the Assessing Officer, he cannot pass an order contrary to the directions under section 144A since it is apparent from the reply dated September 22, 2006, that the Assessing Officer was trying to reopen the issues which have been concluded pursuant to the assessment order under section 143(3)/ 144A. Moreover, the order under section 144A had achieved its finality since the Commissioner did not revise the order passed under section 144A by invoking the provisions contained in section 263.
6. Mr. Shome, learned senior advocate, appearing on behalf of the respondents, has submitted that since the directions under section 144A was limited to assessment and its purpose was to make assessment, the Department was justified in issuing the notice under section 148. Moreover, since the order dated September 22, 2006, by respondent No. 2 was an order in answer to the representation dated August 21, 2006, and since it raised fresh cause of action, no order may be passed.
7. The question is whether the Department by taking recourse to the proceedings under section 147/148 can reopen an assessment which was done pursuant to the directions issued by the Additional Commissioner under section 144A.
8. In order to answer the question it is necessary to refer to the relevant portion of section 144A, which is as under :
"A Joint Commissioner may, on his own motion or on a reference being made to him by the Assessing Officer or on the application of an assessee, call for and examine the record of any proceeding in which an assessment is pending and, if he considers that, having regard to the nature of the case or the amount involved or for any other reason, it is necessary or expedient so to do, he may issue such directions as he thinks fit for the guidance of the Assessing Officer to enable him to complete the assessment and such directions shall be binding on the Assessing Officer:" (emphasis supplied)
9. As seen, section 144A envisages that not only the Joint Commissioner has been granted discretion to issue such directions to guide the Assessing Officer to enable him to complete the assessment but such directions are also "binding" on such officer.
10. Looking at the facts I find that it is an admitted position that the petitioner at the stage of assessment had objected to the application of the provisions contained in the Explanation to section 73 of the Act and had invoked the provisions of section 144A. Pursuant thereto, on March 19, 2004, the Additional Commissioner after considering the various provisions of the Act had passed an order under section 144A holding, "I, therefore, direct the Assessing Officer not to treat the share trading loss of Rs.11,11,77,739 as deemed speculation loss within the meaning of the Explanation to section 73 of the Act. The Assessing Officer shall now frame the assessment in the light of the directions contained in this order". Thereafter, on March 31, 2004, assessment order was passed under section 143/144A of the Act. However, after the assessment was made, respondent No. 2 had issued the impugned notice under section 148 of the Act. It is evident from the recorded reasons that respondent No. 2 is trying to reopen the assessment on the same ground on which earlier the Assessing Officer proceeded to assess before order under section 144A was passed. Now, the moot question is, in such circumstances can the Assessing Officer issue the notice under section 148 for reopening the assessment proceedings ? So far the facts are concerned it is evident from the records that there has been no change. Rather facts are similar. Therefore, as the Assessing Officer is trying to reopen and reappraise the assessment on the same set of facts, in my view, it is a mere change of opinion. Secondly, had the Department considered the order passed under section 144A prejudicial to the interests of the Revenue, it could have invoked the provisions contained in section 263, which it did not. Therefore, the order passed under section 144A, which has a "binding" effect on the Assessing Officer, became final and cannot be reopened by issuing the impugned notice under section 148. That direction under section 144A has a "binding" effect is clear since statute postulates that "A Joint Commissioner...., may issue such directions as he thinks fit for the guidance of the Assessing Officer to enable him to complete the assessment....." making his jurisdiction very wide. In this context, it is appropriate to refer to the judgment of the apex court in CIT v. Rao Thakur Narayan Singh [1965] 56 ITR 234, relied on by the petitioner, wherein the Assessing Officer was seeking to reopen the assessment on the same set of facts, wherein it was held (page 240) :
"The finding of the Tribunal is, therefore, binding on the Income-tax Officer and he cannot, in the circumstances of the case, reopen the assessment and initiate proceedings over again. If that was not the legal position, we would be placing an unrestricted power of review in the hands of an Income-tax Officer to go behind the findings given by a hierarchy of tribunals and even those of the High Court and the Supreme Court with his changing moods."
11. Therefore, in view of the settled position of law and since in the instant case, the Department did not take steps to revise the order passed under section 144A by invoking the provisions of section 263, the impugned notice under section 148 of the Income-tax Act, 1961, dated March 31, 2006, issued by respondent No. 2, cannot be sustained and is, thus, set aside and quashed. Accordingly, all consequential proceedings are also set aside and quashed. The writ petition is allowed.
12. No order as to costs.
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