- (1.) The present appeal has been filed under s. 260A of the IT Act, 1961 (hereinafter referred to as the Act) against the order dt. 9th Jan., 2003 passed by the Income-tax Appellate Tribunal, Lucknow Bench. Lucknow (hereinafter referred to as the Tribunal) in ITA No. 2466/A11/1990. The appellant has proposed the following substantial questions of law in the memorandum of appeal: 1. Whether without pointing out any specific error in its original order dt. 26th Feb., 2002, can Tribunal recall its order under s. 254(2) of the IT Act, 1961? 2. Whether on the facts and circumstances of the case, the Tribunal was justified in law in recalling its earlier order dt. 26th Feb., 2002 without recording a finding that the said order suffered from a mistake apparent from the record? 3. Without prejudice to question No. 2, whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in allowing miscellaneous application of the assessee on the ground that its order dt. 26th Feb., 2002 suffers from mistakes apparent from the record? 4. Whether on the facts and circumstances of the case, (order of) the Tribunal is liable to be set aside on the ground that the Tribunal has no inherent power like a Court of law to review its own order? 5. Whether on the facts and circumstances of the case, the Tribunal was correct in law in allowing the claim of the assessee on account of market fee while the AO disallowed the claim of the assessee on account of market fee amounting to Rs. 11,05,123 by following the decision of the Tribunal rendered in ITA No. 586/A11/1984 for the asst. yr. 1980-81 and holding that it was contingent liability not due and covered under s. 43B of the IT Act, 1961? 6. Whether on the facts and circumstances of the case, the Tribunal was correct in law in allowing the claim of the assessee on account of market fee collected on past transactions prior to the date of Hon'ble Supreme Court's order in the case of Belsund Sugar Co. Ltd. vs. State of Bihar, 1999 AIR(SC) 3125 according to which the Bihar Market Act was not enforceable and market fees collected before the date of the Supreme Court order would not be required to be paid? The facts in short giving rise to the present appeal are as follows: The dispute relates to the asst. yr. 1987-88. Moti Lal Padampat Udyog Ltd., Kanpur (the assessee) is a company registered under the Companies Act, 1956, having its registered office at Kanpur. The assessee owned a sugar factory at Majholia, District West Champaran (Bihar) and one vanaspati factory and one steel unit at Kanpur. The assessee filed its IT return on 24th June, 1987 declaring total income of Rs. 2,18,14,040 which was revised on 26th Oct., 1988 declaring total income of Rs. 2,10,15,647 and again revised on 22nd Dec., 1989 declaring total income of Rs. 2,06,32,867. The dispute in the present appeal is confined to the deduction of Rs. 11,05,123 claimed by the assessee. which was payable by the sugar factory towards 'market fee' levied under the Bihar Agricultural Produce Market Act, 1960 and the Bihar Agricultural Produce Market Rules. 1975, on the purchase of sugarcane and sale of sugar, while calculating his business income. The assessee stated that crushing season was started on 25th Nov., 1985 and ended on 16th April, 1986. Accounting period of the assessee ended on 31st July, 1986. Total cane crushed in this year was 24,19,365 quintals and total sugar produced was 2,49,275 quintals. Total sale of sugar was of Rs. 10.04.26,169. On the purchase of sugarcane and sale of sugar, it was alleged that an amount of Rs. 11,05,123 was payable as 'market fee' as such this amount is liable to be deducted while calculating the business income. The assessee claimed that for the asst. yr. 1980-81, the Tribunal has allowed this benefit in its order passed in ITA No. 598/A11/1984.
(2.) The AO by order dt. 30th Jan., 1990 held that Bihar Government imposed tax in the name of 'market fee' under the Bihar Agricultural Produce Market Act, 1960 and the Bihar Agricultural Produce Market Rules, 1975. The assessee has challenged imposition of market fee before Patna High Court on the ground that nature of levy of market fee' was tax on the purchase of sugarcane and sale of sugar and had actually not paid any amount in the head of 'market fee'. Change of the nomenclature as 'market fee' under the Bihar Agricultural Produce Market Act, 1960 and the Bihar Agricultural Produce Market Rules, 1975 does not make any difference, as according to own case of the assessee, it was tax. Under s. 43B of the Act, deduction can only be allowed on actual payment. Since no payment was made in this head as such the assessee is not entitled for any deduction in this head. On these findings, the AO made addition of Rs. 11,05,123. The assessee filed an appeal from the aforesaid order. The appeal was heard by the CIT(A), Kanpur who by order dt. 13th Aug., 1990 affirmed the findings of the AO in this respect. The assessee filed a second appeal before the Tribunal. The Tribunal by order dt. 26th Feb., 2002 held that s. 43B of the Act was amended by Finance Act, 1987. The amendment is curative in nature and applied retrospectively as held by the Supreme Court in Allied Motors (P) Ltd. vs. CIT & Ors., 1997 224 ITR 677 as such s. 43B of the Act applies to the assessee. Since no payment of 'market fee' was made by the assessee as such no deduction can be allowed on this head under s. 43B of the Act. On these findings, the appeal was dismissed.
(3.) The assessee filed an application under s. 254 of the Act for rectification of the order of the Tribunal dt. 26th Feb., 2002 on the ground that judgment of Supreme Court in Allied Motors (P) Ltd. vs. CIT & Ors. , was in respect of deductions on account of sales-tax while deduction claimed by the assessee was in respect of 'market fee' as such this judgment of the Supreme Court has been wrongly applied in his case. On the other hand in the matter of assessee the Tribunal by order dt. 21st Dec., 2001 passed in ITA No. 2115/A11/1989 and ITA No. 2129/A11/1989 has held that the assessee was entitled for deductions on account of 'market fee'. The Tribunal by order dt. 29th Aug., 2002, relying upon its earlier order dt. 21st Dec, 2001, recalled the order dt. 26th Feb., 2002 and fixed 9th Jan., 2003 for further hearing. The Tribunal relying upon the order dt. 21st Dec., 2001 passed in ITA No. 2115/A11/1989 and ITA No. 2129/A11/1989 allowed the appeal of the assessee on 9th Jan., 2003 and held that the assessee was entitled to deduction of 'market fee' and addition made by the AO is illegal.;