ORDER SHEET G.A.No.1926 of 2014 ITAT 77 of 2014 IN HIGH COURT AT CALCUTTA Special Jurisdiction (Income Tax) ORIGINAL SIDE COMMISSIONER OF INCOME TAX - KOLKATA - II , KOLKATA VS. NATIONAL INSURANCE CO.LTD. BEFORE: Hon'ble JUSTICE SOUMITRA PAL Hon'ble JUSTICE DEBANGSU BASAK Date : 15TH SEPTEMBER, 2014. Appearance : MS.SOMA CHATTERJEE,ADVOCATE FOR APPELLANT/REVENUE Mr.N.K.PODDAR, SR.ADVOCATE MR.D.MITRA,ADVOCATE MR.A.AGARWAL,ADVOCATE FOR RESPONDENT. Court : This appeal under section 260A of Income Tax Act, 1961 has been preferred by appellant/revenue against order dated 10th January, 2014 passed by Income Tax Appellate Tribunal, C Bench, 2 Kolkata in ITA No.930 & 931/Kol/2010 relating to assessment years 2000-01 and 2001-02 respectively on following questions : 1. Whether on facts and circumstances of case, Learned Income Tax Appellate Tribunal is justified in holding that provision of Rs.2,19,68,919/- towards unidentified motor third party claim is ascertained liablity to be deducted while computing book profit under section 115JB of Income Tax Act, 1961. 2. Whether on facts and circumstances of case, learned Income Tax Appellate Tribunal erred in deleting sum of Rs.4,53,25,000/- made by assessing officer under section 14A read with 8D of Income Tax Rule 1962 ? It is submitted by Mrs.Chatterjee, learned advocate for revenue that second question is covered by order of High Court dated 4th January, 2013 passed in G.A.No.3019 of 2012, ITAT 243 of 2012 (Commissioner of Income Tax, Kolkata-IV, Kolkata v. M/s.R.R.Sen & Brothers(P) Ltd.) whereby appeal was dismissed and is thus against revenue and in favour of assessee. So far as first question is concerned, it is submitted that though she has no instruction whether any appeal has been preferred from orders passed by Tribunal in favour of assessee for assessment years 1997-98, 1998-99, 1999-2000 and 2001-02, however, since principles of res judicata do not apply to revenue proceeding, first question may be admitted. 3 Mr.Poddar, learned Senior Advocate appearing on behalf of respondent/assessee relying on judgements of Hon ble Supreme Court of India and Calcutta High Court submits that in view of several decisions issue is covered in favour of assessee. Heard learned advocates for parties. We find, Supreme Court in Radhasoami Satsange v. Commissioner of Income-tax : (1992) 193 ITR 321 had found, inter alia, as under: This court in Parashuram Pottery Works Co.Ltd. v. ITO (1977) 106 ITR 1 at p.10 stated : At same time, we have to bear in mind that policy of law is that there must be point of finality in all legal proceedings, that stale issues should not be reactivated beyond particular stage and that lapse of time must induce repose in and set at rest judicial and quasi- judicial controversies as it must in other spheres of human activity. Assessments are certainly quasi-judicial and these observations equally apply. We are aware of fact that, strictly speaking, res judicata does not apply to income-tax proceedings. Again, each assessment year being unit, what is decided in one year may not apply in following year but where fundamental aspect permeating through different assessment years has been found as fact one way or other and parties have allowed that position to be sustained by not challenging 4 order, it would not be at all appropriate to allow position to be changed in subsequent year. Further, Supreme Court in CIT v. Smt.Sarita Aggarwal & Anr : (2001) 167 CTR 105 (SC) held as under : High Court rejected application of Revenue to call for reference of two questions on ground that no question of law arose. Tribunal, in Revenue s application under s.256(1) of IT Act, had noted that questions were covered against Revenue by its earlier decisions, particulars whereof it gave. It also stated that reference applications against those decisions had been moved and had been rejected by Tribunal. It would appear from statement made by learned counsel for Revenue before Tribunal that in respect of these questions application under s.256(2) had been moved but counsel for Revenue cannot tell us what happened thereafter. And assessee has filed affidvit to state that it has no information in this behalf. Having regard to fact that, under these circumstances, earlier decisions of Tribunal on same question remain unchallenged, these appeals and Special Leave Petitions are dismissed with costs. Again in Union of India v. Kaumudini Narayan Dalal : (2001) 249 ITR 219 (SC) while dismissing civil appeal had held, inter alia, as under : If Revenue did not accept correctness of judgment in case of Pradip Ramanlal Sheth (1993)204 ITR 866 (Guj), it should have preferred appeal there against and instructed counsel as to 5 what fate of that appeal was or why no appeal was filed. It is not open to Revenue to accept that judgment in case of assessee in that case and challenge its correctness in case of other assessees without just cause. For this reason, we decline to consider correctness of decision of High Court in this matter and dismiss civil appeal. In Commissioner of Income Tax v. Narendra Doshi : (2002)254 ITR 606, Supreme Court while dismissing civil appeal had held, inter alia, as under : Revenue has not challenged correctness of two decisions of Gujrat High Court. They must, therefore, be bound by principle laid down therein. Following that principle, question has, as we find, been rightly answered in affirmative and in favour of assessee. Subsequently, Supreme Court in Berger Paints India Ltd. v. Commissioner of Income-tax : (2004) 266 ITR 99 while allowing appeal held, inter alia, as follows : principle established is that if Revenue has not challenged correctness of law laid down by High Court and has accepted it in case of one assessee, then it is not open to Revenue to challenge its correctness in case of other assessees, without just cause. 6 In M/s. Ponds India Ltd. (merged with H.L.Ltd.) v. Commissioner of Trade Tax, Lucknow : (2008) 8 SCC 369 (SC), Supreme Court had relied on judgement in Bharat Sanchar Nigam Ltd. & Anr. V. Union of India & Ors.: (2006) 3 SCC wherein it was, inter alia, held as under : Courts will generally adopt earlier pronouncement of law or conclusion of fact unless there is new ground urged or material change in factual position. reason why Courts have held parties to opinion expressed in decision in one assessment year to same opinion in subsequent year is not because of any principle of res judicata but because of theory of precedent or precedential value of earlier pronouncement. Where facts and law in subsequent assessment year are same, no authority where quasi judicial or judicial can generally be permitted to take different view. This mandate is subject only to usual gateways of distinguishing earlier decision or where earlier decision is per incuriam. However, these are fetters only on coordinate bench which, failing possibility of availing of either of these gateways, may yet differ with view expressed and refer matter to bench of superior strength or in some cases to bench of superior jurisdiction. 7 We find Calcutta High Court while considering whether principles of res judicata apply to income tax proceedings in CIT v. Hindusthan Motors Ltd. : (1991) 192 ITR 619, inter alia, held as under : It is true that there is no res judicata but there must be some substantial ground for one Income-tax Officer to differ from view taken by another income-tax Officer in earlier assessment year. same view was taken in Mukti Properties P.Ltd. v. Commissioner of Income-tax : (2012) 344 ITR 177, wherein inter alia, it was held as under: It is true principle of res judicata has no application in tax assessment but when it is found that on same facts and point on earlier occasion without there being any change of position of law decides matter there cannot be different decision in subsequent year for same assessee. It is not question of res judicata but question of quasi-judicial discipline which demands that decision of superior authority should not be attempted to be upset on identical facts and law on plea of different assessment years. Therefore, judgment and order of learned Tribunal is not sustainable and judgment of Commissioner of Income-tax (Appeals) is restored on file. Thus, we answer third question in affirmative. We direct Assessing Officer in terms of this judgment to do needful in accordance with law. Thus, appeal is disposed of without any order as to costs. 8 Therefore, so far as first question is concerned, we find that Tribunal while partly allowing appeal of assessee on this issue had held as under : Ld.Sr.DR has not contested that there is any factual difference in facts of this case and as decided by Tribunal in earlier year and also conceded that issue is covered by Tribunal s decision in favour of assessee. We find that this issue is squarely covered by decision of Tribunal in assessee s own case, cited supra. Hence, for sake of consistency, we allow this ground of appeal of assessee. Since we find that learned advocate for appellant/revenue has no instruction whether for assessment years 1997-98,1998- 99,1999-2000 and 2001-2002 any appeal has been preferred on same point and since it is well settled that it is not open to revenue to challenge correctness of earlier assessment years without just cause and as there is no substantial ground before us to differ from position of law for earlier assessment years in question, we are of view that so far as first question is concerned, it is not substantial question of law. So far as second question is concerned, since it is admitted by learned advocate for revenue that it stands covered by order dated 4th January, 2013 in G.A.No.3019 of 2012, ITAT 243 of 2012 against 9 revenue, said question is answered in negative and in favour of assessee. Therefore, application and appeal are dismissed. Urgent certified copy of this order, if applied for, be furnished to parties on priority basis. (SOUMITRA PAL, J.) (DEBANGSU BASAK, J.) ssaha AR(CR) Commissioner of Income Tax - Kolkata - II , Kolkata v. National Insurance Co.Ltd