HIGH COURT OF JUDICATURE AT HYDERABAD FOR THE STATE OF TELANGANA AND THE STATE OF ANDHRA PRADESH THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A. No. 463 OF 2014 DATE: 07.10.2014 Between:
Commissioner of Income Tax-II, Hyderabad.
… Appellant And M/s. Janapriya Engineers Syndicate, Hyderabad.
… Respondent This Court made the following:
THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A. No. 463 of 2014 JUDGMENT: (Per the Hon’ble The Chief Justice Sri Kalyan Jyoti Sengupta) Mr. S. Ravi, learned senior advocate, appears in response to the pre-admission notice on behalf of the assessee. We have heard Mr. B. Narasimha Sarma, learned counsel for the appellant.
We admit the appeal for statistical purpose on the following substantial questions of law.
“In the facts and circumstances of the case, whether the Hon’ble Tribunal (ITAT) is correct in law in setting aside the matter to re-decide the disallowance under Section 40(a)(ia) of the Income Tax Act, 1961, in consonance with the view that the Hon’ble High Court may take in the case of M/s. Merilyn Shipping and Transport despite the fact that the consequential set aside order on this issue has to be completed by the Assessing Officer within one (1) year from the financial year in which the order of the Hon’ble Tribunal (ITAT) is received?
In the facts and circumstances of the case, whether the Hon’ble Tribunal (ITAT) is correct in law in setting aside the matter to re-decide the disallowance under Section 40(a)(ia) of the Income Tax Act, 1961 by following the decision of the Hon’ble Tribunal in the case of M/s. Merilyn Shipping and Transport despite the fact that the said order of the Hon’ble Tribunal (ITAT) was stayed by the Hon’ble High Court?”
We find that the learned Tribunal taking note of the pendency of the appeal in this Court, preferred by the Revenue against the decision of the Special Bench of the Tribunal in M/s. Merilyn Shipping & Transport in I.T.A. No.477/Viz/2008 dated 29-03-2012, directed the Assessing Officer to re-decide the issue after the disposal of the appeal by this Court.
We are of the view that until and unless the decision of the Special Bench is upset by this Court, it binds smaller Bench and coordinate Bench of the Tribunal. Under the circumstances, it is not open to the Tribunal, as rightly contended by Mr. Narasimha Sarma, learned counsel, to remand on the ground of pendency on the same issue before this Court, overlooking and overruling, by necessary implication, the decision of the Special Bench. We simply say that it is not permissible under quasi judicial discipline. Under the circumstances, we set aside the impugned judgment and order, and restore the matter to the file of the Tribunal which will decide the issue in accordance with law and it would be open to the Tribunal either to follow the Special Bench decision or not to follow. If the Special Bench decision is not followed, obviously remedy lies elsewhere.
The appeal is thus allowed only on the point of remand. We direct the Tribunal to decide the matter on remand afresh within a period of two months from the date of communication of this order. No costs.
K.J. SENGUPTA, CJ SANJAY KUMAR, J
Date: 07.10.2014 ES