Judgment:
1. By this miscellaneous petition assessee claims that a mistake has crept into the order of the Tribunal being ITA No. 812/Nag/1994, dt.
11th Aug., 1997, and requests that the mistake may appropriately be rectified and justice be done.
2. At the outset Mrs. Anita Gupta, learned CIT (Departmental Representative) invited our attention on the delay of 19 days in filing the miscellaneous application. It was stated that such delay cannot be condoned. Section 254(2) prescribes that Tribunal could rectify the error only within a period of four years. Since the application was filed beyond four years, delay cannot be condoned. Next it was argued that the assessee did not have any reasonable cause in filing the belated miscellaneous application.
3. Both the parties were heard on this point. Section 254(2) of the IT Act, 1961 (hereinafter called the "Act"), prescribes as under: "The Appellate Tribunal may, at any time within four years from the date of the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under Section (1), and shall make such amendment if the mistake is brought to its notice by the assessee or the AO." After Tribunal may, there is coma.
Thereafter the words are at any time within four years'. This setting of the section suggests that the words "at its own" are implied, therefore, the time-limit of four years is in the context of suo motu rectification. Where rectification is to be done in accordance with the prayer made by either of the parties such time-limit is not much relevant. The requirement of justice is the paramount factor. It is to be seen that how best justice could be done. If the error is palpable Tribunal, in the interest of justice can proceed with the matter and set the things right.
4. Coming to the next aspect we find that Shri Kapil S Bahri, counsel of the assessee vide his affidavit dt. 7th Nov., 2001 stated in very clear and unequivocal terms that the delay in filing the application was attributable to him only. He explained the circumstances under which it could not be filed in time. It is clear from the said affidavit that assessee was not responsible for the delay. Delay due to mistake of the counsel constitutes a reasonable cause for filing the belated application. Taking into consideration the totality of facts, we are of the opinion that there existed a reasonable cause in filing the belated application. As such we condone the delay.
5. In arriving at this conclusion we have taken into consideration the legal pragmatism vis-a-vis the basic tenets of law. We are reminded of the dictum : Fiat Justitia Ruat et Coelum (justice should be done even if the heaven falls). The procedure should be the handmaid and not the mistress of legal justice. Cause of justice should not be subservient to the rules of procedure. We have gone through the life. The issue involved in the present case is prima facie appears to be covered by the decision of the apex Court rendered in the case of Mysore Minerals Ltd v. CIT (1999) 239 ITR 775 (SC). Under Article 141 of the Constitution of India, the decision pronounced by the Supreme Court is a binding precedent. The law is interpreted by the apex Court is the law as it always has been. Denying the opportunity to the parties to argue the miscellaneous application on the jejune ground of processual lapse would tantamount to denying the justice. Not only that it will prolong litigation on a point which stands adjudicated by the decision of the apex Court. It has been well said declared Lord Coke. "Interest republica ut sit finis litum". Translation loses terseness, but what Lord Coke put in Latin tag conveys that the law suits be not protracted, otherwise great oppression might be done under the colour and pretence of law. We have considered the panoply of law on which the Tribunal based its decision. To be precise it was the concept of ownership. The concept has been redefined by the apex Court. The Tribunal is bound to follow the law propounded by the Hon'ble Supreme Court. We, therefore, for the palladium of justice condone the delay in filing the miscellaneous application and proceed to decide the issue on merits.
6. We have heard the rival submissions in the light of material placed before us and precedents relied upon. The assessee is a company duly registered under the Indian Companies Act. Assessee purchased a flat bearing No. 368, DDA SFS Category III, at Mandakini Enclave (WCC), Kalkaji, New Delhi, for a total consideration of Rs. 5,00,000. The agreement in respect of the said property was executed on 19th Feb., 1990. The entire amount of sale consideration was paid to the vendor and vacant physical possession of the flat was delivered to the assessee. As per the terms of the agreement, the assessee was liable and responsible for all the dues and demands from the date of execution of the said agreement. The general power of attorney was also executed in favour of one of the persons nominated by the company thereby authorising to execute, sign and deliver all the documents which might be required for the transfer of the said property in favour of the third party.
7. The AO found during the course of assessment proceedings that registered sale deed was not executed in respect of the said property till the closing of the year i.e., 31st March, 1991. As such, he denied depreciation claimed on the said property. He opined that assessee cannot be considered as legal owner of the property. As such requirement of Section 32 of the Act was not fulfilled. The first appellate authority upheld the action of the AO apropos the disallowance of depreciation.
8. On second appeal before the Income-tax Appellate Tribunal (hereinafter called the Tribunal) the assessee was found not to be the owner of the property for want of registration. We find that the decision of the Hon'ble apex Court rendered in the case of CIT v. Podar Cement (P) Ltd. and Ors. (1997) 226 ITR 625 (SC) was relied upon before the Tribunal. But the contention of the assesses was not accepted on the ground that in the case of Podar Cement (P) Ltd. apex Court considered the ownership in the context of Section 22 of the Act.
Tribunal was concerned with the ownership in the context of Section 32 of the Act.
9. Tribunal while distinguishing the order of Hon'ble Supreme Court in the case of Podar Cement (supra) in para 21 at p. 12 observed as under: "The Supreme Court was not deciding the issue of depreciation of an asset in the hands of an assessee who was not the legal owner. What the Supreme Court decision in the case of Podar Cement (P) Ltd. (supra) was that the view adopted by the High Courts of Allahabad, Punjab & Haryana, Rajasthan, Calcutta and Patna regarding the interpretation of the Supreme Court's earlier decision in the case of R.B. Jodha Mal Kuthiala v. CIT (1971) 82 ITR 570 (SC) was correct and that of the Bombay, Delhi and Andhra Pradesh High Courts was erroneous. The said decision of the Supreme Court, therefore, is not an authority for the proposition that depreciation under Section 32 of the Act is admissible even to an owner who does not hold legal title to the asset. On the contrary in para 53 of the judgment the Supreme Court has clearly mentioned that except in the context of Section 22 of the Act and under the common law, owner means a person who has got valid title legally conveyed to him after complying with the requirements of law such as, Transfer of Property Act, Registration Act, etc." 10. Shri Ganeshnan, learned counsel for the assessee invited our attention to the decision of the apex Court rendered in the case of Mysore Minerals Ltd. v. CIT (supra). In this case Hon'ble Supreme Court held that Section 32 of the Act confers benefit on the assessee. The provision should be so interpreted and the words used therein should be assigned such meaning, as would enable the assessee to secure the benefit intended to be given, by the legislature. It is well settled that where there are two possible interpretations of a taxing provision one, which is favourable to the assessee, should be preferred.
Section 32 of the Act allows certain deductions, one of them being depreciation of building, etc. owned by the assessee and used for the purpose of business or profession. The terms "owner", "ownership" and "owned" are generic and relative terms. They have a wide and also a narrow connotation. The meaning would depend on the context in which the terms are used. The case of Podar Cement (P) Ltd. (supra) has to be taken as a trend-setter in regard to the concept of ownership.
Assistance from the law laid down therein can be taken for finding out the meaning of the term "owned" as occurring in Section 32(1) of the Act. The term "owned" as occurring in Section 32(1) of the Act must be assigned a wider meaning, Any one in possession of property in his own title exercising domain over it can be construed to be the owner of the property even if a formal deed of title may not have been executed and registered as contemplated by the Transfer of Property Act, the Registration Act. etc. "Building owned by the assessee" the expression as occurring in Section 32(1) of the IT Act means the person who having acquired possession over the building in his own right uses the same for the purpose of business though a legal title has not been conveyed to him consistently with the requirements of the law such as the Transfer of Property Act and the Registration Act, etc.
11. It is a trite taw canonised in the dictum "Stare decisis et non quieta movere". The idea inculcated in the dictum is to adhere to precedent and not to unsettle things which are settled. It applies to litigated facts in necessarily decided questions. Apart from Article 141 of the Constitution of India, the policy of Courts is to stand by precedent and not to disturb settled points. When Court has once laid down a principle of law as applicable to certain set of facts, it will adhere to that principle, and apply it to all future cases where facts are substantially the same. Every new discovery of argumentative novelty cannot compel reconsideration of a binding precedent.
12. It was contended on behalf of the Revenue that in the case of Mysore Minerals Ltd. (supra) Hon'ble apex Court decided the meaning of term "ownership" in the context of depreciation. In this case houses were allotted to the assessee by the Housing Board directly whereas in the present case assessee purchased the property from the allottee.
This was stated to be a distinguishing feature. A precedent is binding for what it explicitly decides and no more. The words in a judgment are not used after weighing the pros and cons of all conceivable situations that may arise. They constitute just the reasoning of the Judges in the particular case, tailored to the given facts and circumstances. What is made relevant and binding is only the ratio deadendi and no more.
Undoubtedly the ratio of the decision laid down in the case of Mysore Minerals Ltd. is that registration is not, sine qua non, for being the owner to enable the benefit of Section 32. This law laid down by the apex Court is to be followed. On this principle the case was decided.
Now the question arises that whether subsequent decision of the apex Court can be the basis for rectification. In the case of Walchand Nagar Industries Ltd v. G.S. Gaitonde (1962) 44 ITR 260 (Bom), excess dividend tax was levied. This levy was subsequently held to be invalid by the apex Court. The question before the Court was whether the assessment where such levy was made could be rectified. It was held that the effect of the decision of the Supreme Court was that the levy of excess dividend tax was at no time good and, therefore, the assessment made by the AO levying excess dividend tax was bad at its inception, on the date it was made, notwithstanding that the decision of the Supreme Court was given subsequent to that date. It was held to be a mistake apparent from the record. There are catena of cases where it was decided that an assessment order, which was on the face of it a good order at the time when it was passed, may subsequently reveal a mistake apparent from the record in the light of a subsequent Supreme Court decision, and the officer who made the order will then have jurisdiction to rectify the order so as to eliminate the error.
13. Hon'ble Supreme Court in the case of Poothundu Plantations (P) Ltd. v. Agrl. ITO and Ors. (1996) 221 ITR 557 (SC) has held that if the Supreme Court has construed the meaning of a section, then any decision to the contrary given by any other authority must be held to be erroneous and such error must be treated as an error apparent on the record. In the case of B.V.K. Seshavataram v. CIT (1994) 210 ITR 633 (AP).
Hon'ble High Court has held that subsequent decision of the Supreme Court can form basis of order of rectification. In the case of CED v.V.G. Badamia (1990) 186 ITR 270 (Bom) the Tribunal was held to be justified in rectifying the order so as to bring it in conformity with the Supreme Court decision.
14. We have taken into consideration the entire conspectus of the case.
We have considered the text and context of the ratio laid down by the apex Court in the case of Mysore Minerals Ltd. v. CIT (supra). In our opinion, to bring the issue involved in the present case in conformity with the decision of the apex Court, the order of the Tribunal needs to be rectified. Accordingly we modify the order of the Tribunal pro tanto. We direct the Registry to place the matter before the Division Bench so it could decide the issue in conformity with the decision of the Hon'ble Supreme Court-15. In the result, Miscellaneous Application of the assessee stands allowed.