By TIOL News Service

KOLKATA, APRIL 06, 2018: THE issue is - Whether the action of the Tribunal in not making a reference of distinguished cases, amounts to error apparent on the face, and hence merits rectification u/s 254(2). NO IS THE ANSWER.

Facts of the case:

The Assessee company, engaged in the business of brewery and bottling plant, had claimed deduction u/s 80IE on income derived from bottling charges. During assessment, the AO was of the view that income derived from bottling charges was not eligible for deduction as the condition precedent for claiming such deduction was that the assessee was required to manufacture or produce an article or thing as listed in the fourteenth schedule of the Act. Besides these, the AO also noticed that the return had been filed by assessee for A.Y 2010-11 only beyond the due date for filing the return u/s 139(1). Since the assessee had not complied with the conditions, the AO refused to allow deduction u/s 80IE. On appeal, both the FAA and the ITAT confirmed the order of AO. The Assessee therefore preferred present miscellaneous application seeking rectification of Tribunal's order, on the ground that the Tribunal had failed to consider the decisions cited by Assessee.

On appeal, the Tribunal held that,

++ when the issue is squarely and admittedly covered by the decision of the Calcutta High Court, then reference to the decision of ITAT, Delhi Bench in the case of M/s Fibrefill Engineers is not necessary. As far as the decision of Delhi High Court in the case of M/s Unitech Ltd. is concerned, it did not deal with the question whether provisions of sec.80AC of the Act are mandatory or directory. The fact that an appeal against the said decision is pending before the Supreme Court is not of any relevance because as on the date when the Tribunal passed its order it was bound to follow the decision of Calcutta High Court in the case of M/s. Shelcon Properties (P)Ltd. Therefore, not making a reference to the decision of Delhi High Court in the case of M/s. Unitech Ltd. is neither a mistake apparent from the record nor does it cause any prejudice to the assessee. For the very same reasons not making a reference to the decisions of Supreme Court in the case of Straw Board Manufacturing Ltd. and Poddar Cements Pvt. Ltd. by the Tribunal in it's order does not give rise to any mistake apparent on the face of the order of Tribunal. The decisions of the Supreme Court are on the principle (a) a liberal construction should be put on the language of a statute when concessional rates are provided for encouraging an industrial activity and (b) when two interpretations are possible, the view in favour of the assessee has to be adopted. Both these decisions cannot be applied by the Tribunal to hold that provisions of sec.80AC of the Act are directory only, contrary to the decision of Calcutta High Court in the case of M/s Shelcon Properties (P)Ltd. Therefore, this Tribunal is of the view that there is no mistake apparent on the face of the record of the Tribunal.

(See 2018-TIOL-502-ITAT-KOL)