|COURT:||Bombay High Court|
|CORAM:||M. S. Sanklecha J, S. C. Gupte J|
|CATCH WORDS:||mutuality, strictures|
|COUNSEL:||Dr. K. Shivram|
|DATE:||August 22, 2016 (Date of pronouncement)|
|DATE:||September 5, 2016 (Date of publication)|
|FILE:||Click here to download the file in pdf format|
|Order of the Tribunal in refusing to follow judgement of the co-ordinate bench in the assessee’s own case (holding that transfer fees and TDR premium received by a cooperative society is not taxable on principles of mutuality) without giving reasons is not justified and is breach of principles of judicial discipline|
(i) The impugned order makes reference to the appellant’s submission that the issue arising in the appeal before it is covered by the order of a Coordinate Bench of the Tribunal dated 24 June 2011 in its own case in respect of Assessment Years 2003-04 2004-05 and 2005-06. The order dated 24 June 2011 of the Tribunal was with regard to the two issues, which arose for consideration before the Tribunal in these six Assessment Years, namely, the application of principle of mutuality in respect of transfer fees and TDR premium received by the Assessee from its members. The order dated 24 June 2011 inter alia considered the decision of this Court in Sind Co. Op. Hsg. Society vs. ITO (2009) 317 ITR 47 (Bom.) before coming to the conclusion that transfer fees as well as TDR premium received from Cooperative Societies is covered by the principle of mutuality.
(ii) The impugned order of the Tribunal after making a note of its Coordinate Bench’s order dated 24 June 2011 seeks to take a different view. This different view was taken in the impugned order inter alia by relying upon the decision of this Court in Sind Co.Op. Hsg. Society (supra) which was also subjected to consideration in its order dated 24 June 2011.
(iii) We are of the view that when an identical issue, which had earlier arisen before the Coordinate Bench of the Tribunal on identical facts and a view has been taken on the issue then judicial discipline would demand that a subsequent bench of the Tribunal hearing the same issue should follow the view taken by its earlier Coordinate Bench. No doubt this discipline is subject to the well settled exceptions of the earlier order being passed per incurim or sub silentio or in the meantime, there has been any change in law, either statutory or by virtue of judicial pronouncement. If the earlier order does not fall within the exception which affects its binding character before a coordinate bench of the Tribunal, then it has to follow it. However, if the Tribunal has a view different then the view taken by its Coordinate Bench on an identical issue, then the order taking such a different view must record its reasons as to why it does not follow the earlier order of the Tribunal on an identical issue, which could only be on one of the well settled exceptions which affect the binding nature of the earlier order. It could also depart from the earlier view of the Tribunal if there is difference in facts from the earlier order of Coordinate Bench but the same must be recorded in the order. The impugned order is blissfully silent about the reason why it chooses to ignore the earlier decision of the Tribunal rendered after consideration of Sind Co. Op. Hsg. Society (supra), and take a view contrary to that taken by its earlier Coordinate Bench. It is made clear that in case a subsequent bench of the Tribunal does not agree with the reasons indicated in a binding decision of a coordinate bench, then for reason to be recorded, it must request the President of the Tribunal to constitute a larger bench to decide the difference of view on the issue.
(iv) In the present facts, the impugned order of the Tribunal is not legally sustainable. We, therefore, set aside the impugned order and restore the appeal to the Tribunal for fresh disposal.