Assistant Commissioner of Income-tax Vs. Maini Precision Products P. Ltd. - Court Judgment

Excerpt:
- [a.v. srinivasa reddy, j.] when order 8 rule 11 cpc is to be adhered to -- held -- it is only where there is furnishing of a copy of the plaint or petition is made mandatory that the provision of order 8 rule 11 cpc could be adhered to. as there is no such provision on the act or in the rules, making it mandatory on the part of the petitioner to serve a copy of the petition on the defendant along with notice, order 8 rule 11 cpc can have no application at all to a proceedings under the act. the order passed is without application of mind and in total disregard of the facts and circumstances of the case as also the provisions governing the procedure that ought to be mandatorily followed under the act. (b) karnataka rent act, 1999 (karnataka act no. 34/2001) - section 42 -- karnataka rent rules, 2001 -- rule 33 -- civil procedure code, 1908 ( central act no. 5 of 1908) --order 5 rule 2, order 8 rule 11 -- trial court took exception to the filing of the objection statement beyond the outer period prescribed in the civil procedure code and rejected it -- order of trial court set aside and applicability of section 42(1) of the act read with order 5 rule 2 and order 8 rule 11 cpc discussed. held: the impugned order prejudicially affects the right of the petitioners since he is estopped from meeting the case as pleaded by the respondent in her petition. in the absence of pleadings by the petitioner-tenant the court may well refuse to consider the oral evidence that maybe led by him in support of any defence that may be open to him. before passing such an order the court was duty-bound to call upon the petitioner in terms of section 42 (1) of the act to show cause why such an order should not be passed against him. it is quite regrettable that the court-below passed the order when the petitioner-tenant had not even taken a single adjournment for filing the objections. the order is passed overlooking sub-section(3) of section 42 which provides that a party is entitled to request and obtain three adjournments throughout the proceedings and the adjournments could be obtained at any stage of the proceedings. the order-sheet discloses that even this benefit had not been availed of by the petitioner-tenant for filing the statement as he had promptly filed it on the very next date of hearing. passing of the impugned order in the said facts and circumstances of the case was not only most unreasonable but highly regrettable. it smacks of an approach which is injudicious and totally lop-sided. the impugned order betrays a total lack of understanding of the laws of procedure and the manner in which they should be applied to specific instances. the impugned order is, therefore, liable to be set aside. (c) civil procedure code, 1908 ( central act no. 5 of 1908) - order 5, rule 2 , order 8, rule 11 -- karnataka rent act, 1999( (karnataka act no. 34/2001) -- section 42 --summons not accompanied by a copy of the petition --held -- copy of petition was furnished to him only on the date previous to the date of filing of the statement by the tenant. in fact, the provisions of order 8 rule 11 cpc could not have been applied at all to the case on hand as the summons was not accompanied by a copy of the petition as required under order 5 rule 2 cpc. the court-below before applying the principle enunciated in merchant and ors. v. shrinath chaturvedi, ought to have noticed that there is no legislative mandate in the present act mandating that the statement of objections is to be filed within 30, 60 or 90 days. on the contrary section 42(3) speaks of the entitlement of a party to seek for three adjournments in the entire course of the case which could be at any stage of the proceedings. the court-below failed to notice that it was by reason of the fact that such a mandate was there in the act, which was under its consideration, that the apex court while interpreting the said provision laid down the said principle. while interpreting the provisions of an act the court should try and give effect to the object of the act and in so doing it should be guided by the principles of purposive construction. the court-below misled itself in applying the provision contained in order 8, rule 11 c.p.c. disregarding the fact that the petitioner-tenant could have filed the statement of objections only after the copy of the eviction petition was served on him. in the present case the same was furnished to him only on the date previous to the date of filing of the statement by the tenant. in fact, the provisions of order 8, rule 11 c.p.c. could not have been applied at all to the case on hand as the summons was not accompanied by a copy of the petition as required under order 5, rule 2 cp.c. (d) civil procedure code, 1908 (central act no. 5 of 1908) - order 5 rule 2, order 8 rule 11 -- due service -- notice served on the defendant -- without tendering a copy of the plaintiff along with --cannot be construed as "due service". revision is allowed. - 5. the respondent-assesses is a company in which the public are not substantially interested and is engaged in the business of manufacture and supply of precision products like lapping mandrels and sleeves and components of automobile ancillaries, apart from supply of the said products. thus, the assessee's business consists of exports as well as local sales.deepak verma, j.1. sri indra kumar, senior counsel with sri e. i. san-mathi appeared for the appellant and sri k. p. kumar, senior counsel appeared for the respondent.2. this appeal under section 260a of the income-tax act, 1961 (hereinafter shall be referred to as 'the act'), is at the instance of the revenue against the order of the income-tax appellate tribunal dated april 28, 2000, passed in i.t.a. nos. 244, 245 and 266/bang/1998 for the assessment years 1995-96 and 1996-97. these appeals before the tribunal were filed by the assessee against the order passed by the commissioner of income-tax (appeals). along with this appeal, we have also heard the connected appeals, the details of which are given in the later part of the order and with this order they will also stand disposed of on the similar directions.3. even though four substantial questions of law have been formulated by learned counsel for the appellant, but after having heard and after perusing the record, we find that only the following substantial question of law would arise for adjudication:whether, on the facts and circumstances of the case, the tribunal was right in law in holding that the machining charges are not to be excluded for the purposes of determining the 'profits of the business' as defined in clause (baa) of the explanation to sub-section (4b) of section 80hhc of the act?4. the short facts material for deciding the said appeal are mentioned hereinbelow.5. the respondent-assesses is a company in which the public are not substantially interested and is engaged in the business of manufacture and supply of precision products like lapping mandrels and sleeves and components of automobile ancillaries, apart from supply of the said products. the assessee also manufactures these products on job work basis and receives service charges. thus, the assessee's business consists of exports as well as local sales.6. the only issue in this appeal is whether the machining charges which arise directly from the activity of manufacturing or processing-cum-sup-ply of products by the assessee can be excluded from the profits of the business for the purpose of computing deduction under section 80hhc of the act.7. after considering the rival contentions as advanced before the tribunal, it recorded a finding that machining charges are not to be excluded for the purpose of determining the 'profits of the business' as defined in clause (baa) of the explanation to sub-section (4b) of section 80hhc of the act. this appeal is only against this part of the order, by which the finding has been recorded on this issue, in favour of the assessee and against the revenue.8. learned counsel for the parties informed us that for prior assessment years for 1993-94, 1994-95 and 1995-96 and for subsequent assessment year for 1997-98, the tribunal on the same facts and features of the case between the same parties, had taken just a contra view, i.e., to say in the orders passed for those assessment years, the view expressed by the tribunal was that machining charges to the extent of 90 per cent. are to be excluded for the purposes of determining of 'profits of the business' as defined in clause (baa) of the explanation to sub-section (4b) of section 80hhc of the act.9. it is also pertinent to point out here that for the assessment year 2001-02, the tribunal has taken a midway, i.e., to say while excluding 90 per cent. of the machining charge's in the job work performed by the assessee for that assessment year, has taken the remainder after netting off the expenditure incurred in rendering the job work from the business profits.10. on account of the inconsistent views expressed by the tribunal with regard to the question of law formulated hereinabove, we are of the considered opinion that all the orders passed by the tribunal for these assessment years deserve to be set aside and the matters deserve to be remitted to the tribunal for fresh adjudication, after affording opportunity of hearing of both sides.11. after having heard learned counsel for the parties and on a perusal of the records, at one point of time, we thought it condign and seemly to decide the appeal ourselves on the merits, but when we came to know that the tribunal had been taking inconsistent view for different assessment years, we thought it fit and more appropriate to remand the matters so that all the contentions which have been put forth before us can be hammered, canvassed and advanced before the tribunal itself, so as to set the controversy at rest, at least at the level of the tribunal. even otherwise, it is more appropriate to remit the matters to the tribunal, as it was not sure with regard to correct interpretation of law applicable to the facts and legal aspects to the cases.12. in the light of the aforesaid contention and for the reasons mentioned hereinabove, we are of the considered opinion that ends of justice would be met if the impugned orders passed by the tribunal are set aside, which are also the subject-matter in the connected appeals, i.e., i. t. a. nos. 462-465 of 2004 and i.t.a. no. 1046 of 2006 arid then to remand the matters to the tribunal for de novo hearing on the merits, after affording an opportunity of hearing to both sides.13. however, we may hasten to clarify that in any case we have not touched the merits of the matter and both parties would be at liberty to put forth all their contentions before the tribunal, which we are sure, would be considered by it in accordance with law.14. in the light of the aforesaid, we refrain from answering the question of law framed by us.