Sonepat Co-operative Marketing Society Ltd. Vs. Income-tax Appellate Tribunal, Delhi Bench - Court Judgment

Excerpt:
- sections 100-a [as inserted by act 22 of 2002], 110 & 104 & letters patent, 1865, clause 10: [dr. b.s. chauhan, cj, l. mohapatra & a.s. naidu, jj] letters patent appeal order of single judge of high court passed while deciding matters filed under order 43, rule1 of c.p.c., - held, after introduction of section 110a in the c.p.c., by 2002 amendment act, no letters patent appeal is maintainable against judgment/order/decree passed by a single judge of a high court. a right of appeal, even though a vested one, can be taken away by law. it is pertinent to note that section 100-a introduced by 2002 amendment of the code starts with a non obstante clause. the purpose of such clause is to give the enacting part of an overriding effect in the case of a conflict with laws mentioned with the non obstante clause. the legislative intention is thus very clear that the law enacted shall have full operation and there would be no impediment. it is well settled that the definition of judgment in section 2(9) of c.p.c., is much wider and more liberal, intermediary or interlocutory judgment fall in the category of orders referred to clause (a) to (w) of order 43, rule 1 and also such other orders which poses the characteristic and trapping of finality and may adversely affect a valuable right of a party or decide an important aspect of a trial in an ancillary proceeding. amended section 100-a of the code clearly stipulates that where any appeal from an original or appellate decree or order is heard and decided by a single judge of a high court, no further appeal shall lie. even otherwise, the word judgment as defined under section 2(9) means a statement given by a judge on the grounds of a decree or order. thus the contention that against an order passed by a single judge in an appeal filed under section 104 c.p.c., a further appeal lies to a division bench cannot be accepted. the newly incorporated section 100a in clear and specific terms prohibits further appeal against the decree and judgment or order of a single judge to a division bench notwithstanding anything contained in the letters patent. the letters patent which provides for further appeal to a division bench remains intact, but the right to prefer a further appeal is taken away even in respect of the matters arising under the special enactments or other instruments having the force of law be it against original/appellate decree or order heard and decided by a single judge. it has to be kept in mind that the special statute only provide for an appeal to the high court. it has not made any provision for filing appeal to a division bench against the judgment or decree or order of a single judge. no letters patent appeal shall lie against a judgment/order passed by a single judge in an appeal arising out of a proceeding under a special act. sections 100-a [as inserted by act 22 of 2002] & 104:[dr. b.s. chauhan, cj, l. mohapatra & a.s. naidu, jj] writ appeal held, a writ appeal shall lie against judgment/orders passed by single judge in a writ petition filed under article 226 of the constitution of india. in a writ application filed under articles 226 and 227 of constitution, if any order/judgment/decree is passed in exercise of jurisdiction under article 226, a writ appeal will lie. but, no writ appeal will lie against a judgment/order/decree passed by a single judge in exercising powers of superintendence under article 227 of the constitution. ashok bhan, j. 1. the assessee-petitioner (hereinafter referred to as 'the assessee') has filed this petition under section 256(2) of the income-tax act, 1961 (hereinafter referred to as 'the act'), for a direction to the income-tax appellate tribunal, delhi bench, new delhi (hereinafter referred to as 'the tribunal'), to refer the following question of law to this court stated to be arising from the order of the tribunal dated may 25, 1990 (annexure 'p-4') : 'whether, on the facts and circumstances of the case, the amount to be deducted under section 80p(2)(a)(iv) of the act, is the gross income from sale of fertilizers to its members or whether proportionate expenses are to be reduced from such income before allowing the said deduction ?' 2. the assessee is a co-operative marketing society engaged in the sale of agricultural produce to its members and is providing agricultural inputs to its members and also to others. it also procures foodgrains on behalf of the governmental agencies. for the assessment year 1982-83, the assessee filed its return of income of rs. 31,200 after claiming exemption under section 80p(2)(a)(iv) on the gross income of rs. 2,00,900 on account of sale of fertilizers to its members. as the assessee was not maintaining separate account of expenses incurred for sale of fertilizers to its members, the income-tax officer asked the assessee to work out proportionate expenses for such sales. proportionate expenses came to rs. 77,400 and the income-tax officer after reducing the gross income of rs. 2,00,900 by the proportionate expenses of rs. 77,400 allowed a deduction of rs. 1,30,500 undersection 80p(2)(a)(iv). 3. before the income-tax officer, the assessee had claimed exemptionin respect of full income for sale of fertilizers to its members. the income-tax officer was however of the view that though under the provisions of section 80p(2)(a)(iv) the income on account of sale and purchase of articles intended for agricultural use of the members is exempted but the word 'income' meant the income earned by the assessee after deducting the expenses incurred for earning the said income. thus, according to the income-tax officer, the gross income was not exempted under section 80p(2)(a)(iv). 4. the commissioner of income-tax (appeals) confirmed the order of the income-tax officer on this point against which the assessee filed an appeal before the tribunal. the contention raised before the tribunal by the assessee was that while computing deduction under section 80p(2)(a)(iv) no proportionate deduction from the gross profit earned from the sale of fertilizers to the members of the assessee-society should have been made and that exemption under section 80p(2)(a)(iv) was allowable on gross profit earned from sale of fertilizers to its members. in support of this contention, reliance was placed on a decision of this court in punjab stateco-operative supply and marketing federation ltd. v. cit . 5. on behalf of the department it was submitted before the tribunal that while computing the deduction under section 80p(2)(a)(iv) its net profits from sale of fertilizers to the members has to be taken into consideration and not the gross profit. in support of this contention, attention was invited to the provisions of section 80ab which came into force with effect from april 1, 1981, and was applicable to the assessment order under consideration. reliance was also placed on the decision of the supreme court in distributors (baroda) p. ltd. v. union of india : [1985]155itr120(sc) . 6. the tribunal held that section 80ab lays down that where any deduction is required to be made under any section in chapter vi-a under the heading 'c-deductions in respect of certain incomes' in respect of any income of the nature specified in that section which is included in the gross total income, then, notwithstanding anything contained in that section, for the purpose of computing the deduction under that section, the amount of income of that nature as computed in accordance with the provisions of the act (before making any deduction under chapter vi-a) shall alone be deemed to be the income of that nature which is derived or received by the assessee and which is included in its gross total income. it was held that provisions of section 80ab made it abundantly clear that exemption or deduction under section 80p(2)(a)(iv) is to be made in respect of the net income falling under that section and not of gross income as was the assessee's case. for this reliance was placed upon a decision of the supreme court in distributors (baroda) p. ltd.'s case : [1985]155itr120(sc) . the tribunal further held that the decision of the punjab and haryana high court in punjab state co-operative's case does not support the assessee's case that the deduction under section 80p(2)(a)(iv) is allowable on gross profit and not on net profit. the tribunal, therefore, held that in the instant case the expenditure attributable to the earning of profit from fertilizers to the members amounted to rs. 70,400. proportionate expenditure was deducted from gross profit for the purpose of allowing deduction under section 80p(2)(a)(iv). 7. the tribunal declined to refer the question claimed by the assessee to this court for its opinion on the premise that the controversy in question stands concluded in favour of the revenue by the decision of the supreme court in distributors (baroda) p. ltd.'s case : [1985]155itr120(sc) and, therefore, no referable question of law arose from the order of the tribunal. 8. counsel for the parties have been heard.9. the point in issue is squarely covered in favour of the assessee by the judgment of this court in punjab state co-operative's case which fully covers the controversy in question. against this decision, the department had filed s.l.p. (civil) nos. 10321 and 10322 of 1980 (see : [1983]143itr64(ap) ) which were dismissed by the supreme court on august 8, 1983. it was held that where the assessee incurred expenses in the course of business and some of its income was not liable to income-tax but the business was indivisible, the whole of the expenses had to be allowed. in distributors (baroda) p. ltd.'s case : [1985]155itr120(sc) the interpretation of section 80m(1) of the act which deals with deductions in respect of certain inter-corporate dividends which is not under consideration in the present case (sic). the two subsequent judgments of the rajasthan high court in kota co-operative marketing society ltd. v. cit and cit v. rajasthan rajya sahkari upbhokta sangh ltd, do support the contention raised by counsel for the revenue. the rajasthan high court has placed reliance upon the judgment of the supreme court in distributors (baroda) p. ltd.'s case : [1985]155itr120(sc) . there is no subsequent judgment of this court after the decision of the supreme court in distributors (baroda) p. ltd's case : [1985]155itr120(sc) . final opinion is not to be given at this stage and the only point to be considered is as to whether a question of law arises from the order of the tribunal or not. in view of the decision of this court in punjab state co-operative's case in our opinion, a question of law does arise from the order of the tribunal. 10. accordingly, we direct the tribunal to refer the following question of law along with the statement of the case for the opinion of this court : 'whether, on the facts and circumstances of the case, the amount to be deducted under section 80p(2)(a)(iv) of the act, is the gross income from the sale of fertilizers to its members or whether proportionate expenses are to be reduced from such income before allowing the said deduction?'