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Judgment
Kuldip Singh, J.—This judgment shall dispose of IT Appeal No. 64 of 2009 and IT Appeal No. 65 of 2009, in both the appeals, common questions are involved for consideration. IT Appeal No. 64 of 2009 has arisen out of order dated 31-3-2008 passed by the Tribunal, Chandigarh Bench A in ITA No. 104/Chd/2005 for the assessment year 1998-99 and order dated 23-6-2009 passed by the Tribunal, Chandigarh Bench A in Misc. Appln. No. 152/Chd/2008. IT Appeal No. 65 of 2009 has arisen out of order dated 31-3-2008 passed by the Tribunal, Chandigarh Bench A in ITA No. 105/Chd/2005 for the assessment year 1999-2000 and order dated 23-6-2009 passed by the Tribunal, Chandigarh Bench A in Misc. Appln. No. 153/Chd/2008. The Tribunal had decided IT Appeals No. 104 and 105 along with cross-appeal Nos. 150 and 151 by common order dated 31-3-2008. Similarly Tribunal has decided Misc. Appln. Nos. 152 and 153/Chd/2008 by common order dated 23-6-2009. The Tribunal had earlier decided the aforesaid appeals by common order dated 14-6-2006. On 15-1-2007 in Misc. Appln. Nos. 239 and 240/Chd/2006 u/s 254(2) the appeals were restored for fresh decision.
The further relevant facts are that the assessee for the assessment years 1998-99 and 1999-2000 in its books of account had provided interest @ 16.5 per cent on the unpaid royalty with reference to audit paras settled upto the assessment year 1997-98. In the year 1998-99 an amount of Rs. 3,84,27,741 and in the assessment year 1999-2000 a sum of Rs. 4,06,58,901 was provided. The assessing officer had disallowed the claim of the assessee on the ground that liability to pay the interest had not crystallized or accrued during the year of claim. The payment of interest was disputed liability of the assessee.
The Commissioner (Appeals) in appeal remanded the issue to assessing officer with the direction to allow the interest on belated payment of royalty as it was compensatory in nature. The interest on interest is not permissible being penal in nature. The assessing officer was directed to verify as to whether interest @ 16.5 per cent on unpaid royalty relating to the audit paras had crystallized during the relevant year of claim.
The Tribunal in appeal, remanded the matter back to Commissioner (Appeals) with the direction to quantify the relief admissible to the assessee after verification. The finding of the Commissioner (Appeals) that interest on interest was penal in nature was also set aside by the Tribunal.
The Commissioner (Appeals) held that the copy of minutes of the pricing committee related to the minutes dated 12-6-1991 and not for the relevant years. The assessee had not provided any interest relating to audit paras settled earlier upto the assessment year 1997-98. Commissioner (Appeals) directed the assessing officer to allow deduction to the assessee after confirmation from Forest department. The grievance of the assessee in the appeal before the Tribunal was that the decision of Commissioner (Appeals) is in violation of earlier order of the Tribunal where he was directed to decide the issue himself. The order of the Commissioner (Appeals) was also in violation of amended Section 250 which does not authorize Commissioner (Appeals) to set aside the relevant orders.
The stand of the revenue before the Tribunal was that the assessee has failed to produce relevant evidence before Commissioner (Appeals), the claim should have been disallowed. The Commissioner (Appeals) has not violated Section 250 or earlier directions of the Tribunal.
The Tribunal in the impugned order has held that contention on behalf of the assessee is technically correct. The Commissioner (Appeals) was required to decide the issue himself after necessary verification. The Commissioner (Appeals) has technically violated the amended Section 250 and also earlier direction of the Tribunal vide which Commissioner (Appeals) was directed to verify the claim of the assessee himself.
The Tribunal remanded the matter to Commissioner (Appeals) with the direction to consider the claim of the assessee on the basis of evidence that may be produced by the assessee to establish that the liability to pay interest in respect of audit paras settled in assessment year 1997-98 had accrued during the relevant assessment years. In case necessary evidence is produced before Commissioner (Appeals) to support the claim that interest on royalty, sales-tax etc. with reference to audit paras had crystallized in the assessment year, the Commissioner (Appeals) shall allow the claim of the assessee. The Commissioner (Appeals) shall keep in mind earlier decision of the Tribunal for assessment year 1997-98 in ITA No. 300/Chd/2002. The deduction on account of interest relating to belated payment of royalty determined on the basis of audit paras will be allowable to the assessee in the year in which the claim of interest has been settled and not necessarily paid. The Commissioner (Appeals) shall keep in view the directions given in the impugned order.
The Tribunal in the appeals of the revenue in the impugned order has held that direction of Commissioner (Appeals) to allow the deduction to the assessee after verification is not a speaking order. The Commissioner (Appeals) should have spelt out the evidence that was produced before him. The Tribunal has ultimately held that in any case the order of Commissioner (Appeals) has been set aside to pass speaking order. The Tribunal has clarified that for the assessment years 1998-99 and1999-2000 the only issue decided by the Commissioner (Appeals) was relating to the provision for interest and not in respect of any claim on account of royalty payable on the basis of audit paras. In these circumstances, it was held that the impugned order is confined to the claim of interest with reference to unpaid royalty settled on the basis of audit paras. The assessee was given opportunity to produce evidence in support of the claim that the payment of interest on unpaid royalty with reference to audit paras was settled in the year under appeal.
We have heard the learned counsel for the parties. The order dated 31-3-2008 of the Tribunal has been assailed on the grounds that detailed written submissions dated 3-12-007 were not considered by the Tribunal. The department has accepted the order of the Commissioner (Appeals) unconditionally pertaining to the assessment years 2000-01 and 2001-02 under similar facts and circumstances. The grounds of appeal of the department before the Tribunal were vague. There was no challenge on account of allowance of provision of interest on the audit para of royalty settled by the assessee and allowed by the assessing officer in the assessment year 1997-98.Insofar as the order dated 23-6-2009 is concerned, the grievance of he assessee is again that written submissions dated 3-12-2007 have not been considered and the department had itself under similar facts and circumstances accepted the orders of the Commissioner (Appeals) for the years 2000-01 and 2001-02. In other words, the grievance of the assessee against the order dated 23-6-2009 is more or less the same as raised by it against order dated 31-3-2008.
The appeal u/s 260A is permissible if the case involves a substantial question of law. The Tribunal vide order dated 31-3-2008 has remanded the case to Commissioner (Appeals) with the observation that Commissioner (Appeals) for the assessment years 1998-99 and 1999-2000 had only decided the issue relating to the provision for interest and not in respect of any claim on account of royalty payable on the basis of audit paras. The Tribunal has thus made very clear in the order dated 31-3-2008 that the said order is confined to the claim of interest with reference to unpaid royalty settled on the basis of audit paras. It is thus clear from the order dated 31-3-2008 that only limited issue was remitted by the Tribunal to Commissioner (Appeals) and not the whole of the case. The assessee has been given liberty to adduce evidence. The Tribunal in the order dated 23-6-2009 has held that the order dated 31-3-2008 has been passed by the Tribunal on merit and the case has been remanded to Commissioner (Appeals) for fresh adjudication. The assessee through the applications u/s 254(2) is trying to get the order reviewed which is not permissible in law. In support of this view, the Tribunal has noticed several decisions. The grievance of the assessee is with respect to maintainability of the appeal before the Tribunal in view of department having accepted the similar orders pertaining to assessment years 2000-01 and 2001-02. The Commissioner (Appeals) shall decide the matter in accordance with the directions of the Tribunal given in the order dated 31-3-2008. The assessee shall also be at liberty to contend before the Commissioner (Appeals) that appeals filed by the revenue before the Commissioner (Appeals) are not maintainable. There is no question of law much less substantial question of law in the appeals which requires determination u/s 260A therefore, both the appeals are liable to be dismissed.
No other point was urged.
The result of the above discussion, both the appeals fails and are accordingly dismissed.