$~17.
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ INCOME TAX APPEAL NO. 574/2009
Date of decision: 29th July, 2013
ESTER INDUSTRIES LTD
..... Appellant
Through Mr. R. Santhanam, Advocate.
versus
COMMISSIONER OF INCOME TAX
..... Respondent
Through Mr. Sanjeev Sabharwal, Sr.
Standing Counsel.
CORAM:
HON'BLE MR. JUSTICE SANJIV KHANNA
HON'BLE MR. JUSTICE SANJEEV SACHDEVA
SANJIV KHANNA, J. (ORAL):
This appeal by the assessee-M/s Ester Industries Limited
impugns order of the Income Tax Appellate Tribunal dated 14th
December, 2007, which relates to Assessment Year 1997-98.
2. Learned counsel for the appellant submits that adjustments
required for computing book profits under Section 115JA of the
Income Tax Act, 1961 (Act, for short) have been wrongly made by the
Assessing Officer and benefit of Section 80HHC has not been granted.
3. For the assessment year in question, the assessee had filed return
on 28th November, 1997 declaring "nil" taxable income under the
normal provisions. The assessee did not compute taxable income
ITA No. 574/2009 Page 1 of 5
under MAT provisions, i.e., Section 115JA and a specific note was
attached that the said provisions were not applicable.
4. The Assessing Officer passed an order under Section 143(1)(a)
of the Act making adjustments and computing 30% of the book profit
at Rs.4,07,72,346/-. This was made subject matter of challenge in the
appellate proceedings but we need not refer to the orders passed as this
aspect is not relevant.
5. In the meanwhile, the Assessing Officer passed a regular
assessment order and calculated the tax payable under Section 115JA
at Rs.4,07,72,346/-. The Assessing Officer directed levy of interest
under Sections 234B and 234C and observed that penalty proceedings
under Section 271(1)(c) had already been initiated.
6. The assessee filed first appeal but was not successful before the
Commissioner of Income Tax (Appeals). Order passed by the first
appellate authority has, however, not been placed on record. The
assessee thereupon filed second appeal before the Income Tax
Appellate Tribunal raising the following grounds:-
"1. In upholding Rs.14,175/- U/s
40A(3) of the Income Tax Act illegally and
unjustifiably.
2. In disallowing the appellant's
claim for gratuity liability of Rs.22,48,530/-.
3. In confirming a disallowance of
50% of the expenditure as if it is in the nature
ITA No. 574/2009 Page 2 of 5
of entertainment when it is not at all falling U/s
37(2) as entertainment expenditure for
disallowance.
4. In confirming an illegal demand of
Rs.1,75,32,108/- towards Minimum Alternate
Tax U/s 115JA ignoring the fact that U/s 115
JAA the deposit of any amount will be
considered as available as credit and in the
absence of any deposit, the credit would be
denied and in the absence of any tax liability
being determined in the normal assessment and
adjusted within the 5 years period, the entire
amount of credit would be swallowed by the
Government and non-payment of any amount
towards interest-free credit cannot, therefore, be
considered as tax payable by the appellant and
hence the imposition of Minimum Alternate
Tax on the appellant is clearly illegal and
unauthorised by law and must be set aside and
quashed.
5. In not directing the disallowance
U/s 43 43B of Rs.72,17,146/- to be deleted
instead of remanding the matter to the
Assessing Officer who does not act in a fair and
just manner."
7. Subsequently, an application raising two additional grounds was
filed but the said application was rejected by the tribunal by the
impugned order. Additional grounds raised but were not entertained
read:-
"1. On the facts and in the circumstances of
the case, the entire amount of MAT sought to
be levied and collected is required to be given
credit mandatorily and the amount of such
credit ought to be refunded with interest to the
assessee in the event of there being no such
ITA No. 574/2009 Page 3 of 5
liability in the next five years in the case of the
appellant, the refund of the entire amount
collected with interest being granted to the
appellant.
2. On the facts and in the circumstances of
the case, the authorities below have erred, both
on facts and in law, in disregarding the
provisions for grant of credit u/s 115 JAA and
the consequent non-existence of liability to
MAT during the five years following the year
1997-98 and hence, the orders passed by the
authorities below and denied refund with
interest to the appellant cannot be upheld."
8. It is noticeable from the grounds of appeal raised before the
tribunal as well as the additional grounds that the assessee never
challenged the computation made under Section 115JA or challenged
or questioned the assessment order on the ground that adjustments had
not been made, as required and mandated by law. The assessee in the
grounds of appeal as well as additional grounds did not challenge the
assessment on the said ground. To this extent, he did not raise
grievance or protest. Tribunal in the impugned order dated 13 th/14th
December, 2007 has dealt with the grounds as originally raised on
merits and has dismissed the appeal of the assessee. There is no
discussion in the impugned order on the question of adjustments,
which should be permitted and allowed under Section 115JA or
computation of taxable book profits under Section 115JA. It is
apparent and crystal clear that this issue/question was not raised before
ITA No. 574/2009 Page 4 of 5
the tribunal as the petitioner, who appears, did not want to raise the
said contention and issue. The tribunal in the impugned order has
specifically recorded as under:-
"The grounds of appeal raised by the assessee does
(sic) do not challenge the manner of determination of
book profits under Section 115JA of the Act."
9. In view of the aforesaid position, we do not think the assessee
can now in the fourth appeal, (maintainable only on the ground of
substantial question of law arising out of the order of the tribunal) can
be allowed and permitted to raise this contention and set the ball
rolling back once again to the Assessing Officer, after lapse of several
years. The appeal relates to the Assessment Year 1997-98. Allowing
the appellant to now question the computation will be allowing a
person to raise stale issue and to question a decision which was
accepted. In these circumstances, we do not think the appellant-
assessee should be permitted and allowed to raise this ground belatedly
at this stage. The issue was not raised before the tribunal, and has not
been dealt and decided by them. The appeal is accordingly dismissed.
SANJIV KHANNA, J.
SANJEEV SACHDEVA, J.
JULY 29, 2013
VKR
ITA No. 574/2009 Page 5 of 5
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