PER BENCH ; These two appeals of the assessee arise from two different orders of CIT(A), Jalandhar dated 26.03.2012 and CIT-1, Jalandhar dated 16.03.2012 for the assessment year 2004-05 against his order u/s 263 of the Act.

2. In ITA No.172(Asr)/2012, the assessee has raised following grounds of appeal: 2

1. That the CIT (A) was not justified in upholding the action of Addl. CIT in initiating the proceedings u/s 147/148 of the Income Tax Act, 1961. 2 That while upholding the action of the A.O. the CIT(A) has shown gross judicial indiscipline by not following the order of the I.T.A.T. in assessees own case of Assessment year 2003-04. Thus his acts are not only bad in law but amounts to the contempt of the I.T.A.T. 3 That the CIT(A) was not justified in upholding the action A.O. in reduction of the deduction u/s 80 IB amounting to Rs. 14,82,429/- from the profit of the business for the purpose of computation of deduction u/s 80HHC.

4. That the CIT(A) has wrongly upheld the action of the A.O. in reducing the deduction of Rs. 14,82,429/- allowable u/s 80 IB from the deduction of Rs. 18,64,059/- allowable u/s 80 HHC.

5. That the CIT(A) while upholding this action in ground no. 4 has passed the order with a prejudiced mind and has unsettled his own findings in Assessment Year 2003-04 which were accepted by the department. Thus, this action of CIT(A) is totally inconsistent and he had no power to differ with his own judgment in previous year.

6. That the orders of the CIT(A) and the A.O. are against the law and facts of the case.

3. In ITA No.173(Asr)/2012, the assessee has raised following grounds of appeal against the order of the CIT-1, Jalandhar, for the A.Y. 2004-05.

1. That the CIT was not justified in holding that the order passed u/s 143(3) of the Income Tax Act was erroneous and prejudicial to the interest of the Revenue to the extent of non charging of interest u/s 234B(3) of the Income Tax Act,1961. 2 That the CIT has wrongly interpreted the provisions of section 234B(3) despite the objections filed by the assessee and simply on the 3 basis of his own interpretations was not justified in cancelling the order passed u/s 143(3) and give directions to charge interest u/s 234B(3) 3 That the order of the CIT is against the law and facts of the case.

4. Since the issues involved in both the appeals are inter-connected, therefore, we are deciding both the appeals by this consolidated order.

5. First of all, we shall take up appeal of the assessee in ITA No.172(Asr)/2012 for the A.Y. 2004-05. The brief facts as per AOs order are that the return of income was filed by the assessee on 28.10.2004. Assessment was made u/s 143 of the I.T. Act, 1961 on 27.10.2006. A notice u/s 148 dated 19.03.2009 was served on the assessee on 26.03.2009. The reasons recorded by the AO for issuing the notice u/s 148 are that the AO believed that the deduction 80HHC had been allowed more than that permissible to the assessee because of non-application of the provisions of section 80IA(9) of the Act. The AO also noted that the assessee had claimed excess deduction u/s 80IB by not providing for the interest payable to the partners in respect of their capital, which worked out to Rs. 14,01,245/-. He was of the view that the eligible profit of the undertaking was required to be reduced by this amount in view of the provision of section 80IA(10). The 4 AO noted that by virtue of such non-application of these provisions the assessee had been allowed excess deduction of Rs. 22,82,525/- u/s 80IB and 80HHC of the Act. The assessee filed objections to the issue of the notice u/s 148 vide letter dated 17.06.2009. These objections were disposed off by the Assessing Officer in his order dated 16.11.2009. Thereafter, the A.O. passed the assessment order on 07.12.2009 making addition of Rs. 22,82,525/-.

6. The submissions of the assessee before the ld. CIT(A) for the sake of clarity are reproduced as under:

3.In the appellate proceeding the Ld. A.R. for the appellant has submitted in support of grounds no. 1 and 2 of appeal, that the AO had been informed vide assessees letter dated 27.11.2009 to limit himself to the reasons recorded and not to make any fishing inquiries. He has submitted that the AO had also been supplied a copy of the CIT(Appeals)s order dated 04.11.2009 relevant to the A.Y. 2006-07 requesting him to drop the proceedings initiated u/s 148 since the basis on which the proceedings had been initiated had been held in the favour of the assessee by the CIT(Appeals). He has further submitted that the objection to the re-opening of the case had not been dealt with properly by the AO. The Ld. A.R. has submitted that the department had not filed appeal against the CIT(Appeals)s order for the A.Y. 2006-07 in which the disallowance u/s 801A(10) relating to the interest on the capital of the partners had been deleted. 5

3.1 The Ld. AR has further submitted that on the issue of reworking of the deduction u/s 80IB and 80HHC it had been submitted before the AO that several judgments were in favour of the assessee on this issue. These judgments included: i. 218 CTR 126 (Mad.) SCM Creations Vs. ACIT ii. 118 TTJ 109 (Del.) ACIT Vs. Gold Star Industries iii. 122 TTJ 849 (Chennai) ACIT Vs. Sreeja Hoshieries

3.2 The Ld. AR has also submitted that this was a case of change of opinion since the AO had originally allowed deduction u/s 80HHC and 80IB in the proceedings u/s 143(3) and now he proposed the rework the same which was not permissible. The Ld. AR relied on several judgment for this proposition including in the cases of Carlton Overseas Pvt. Ltd. Vs. ITO 318 ITR 295 (Del), CIT Vs. Kelvinator of India Ltd. 174 CTR 617 (Del) (FB) and CIT Vs. Foromer France 264 ITR 566 (SC). The ld. AR submitted that the AO had placed reliance on the decision of the Honble Special Bench Delhi in the case of ACIT Vs. Hindustan Mint & Agro Products Pvt. Ltd. 114 ITD 107 (Del) (SB) which amounted to a change in opinion. Subsequently, the Ld. AR for the appellant submitted that the Honble I.T.A.T., Amritsar Bench had, vide their order dated

24.02.2012 on similar facts in the assessees own case for the Assessment Year 2003-04, held in the favour of the assessee on the issue of change of opinion. He has, therefore, requested that grounds nos. 1 & 2 may be decided in the favour of the assessee.

7. The Ld. CIT(A) vide para 4 to 6 of his order relying upon the decisions of Friends Castings (P) Ltd. vs. CIT (2011) 238 CTR (P&H) 377 , Jawand Sons vs. CIT 326 ITR 39 (P&H) and Atlas Cycle (Haryana) Ltd. vs. 6 DCIT, CWP 10390 of 2010 dated 2.12.010 of Honble Punjab & Haryana High Court gave his findings in para 7, which for the sake of clarity are reproduced as under:

7. It appears that these judgments of the Honble Jurisdictional High Court in the cases of Friends Casting Ltd. Vs. CIT (supra), Jawand Sons Vs. CIT (supra) and Atlas Cycle (Haryana) Ltd. Vs. DCIT (supra) were not brought to the notice of Honble Jurisdictional Tribunal in the assessees appeals for A.Y. 2003-04 (supra) because of which these were not considered while adjudicating the aforesaid appeal for the Assessment Year 2003-04 (supra). These decisions laid down that if the income of the assessee has escaped assessment as per the provisions of law, notwithstanding the fact that and assessment has been done u/s 143(3) and there was no allegation of non- disclosure of facts in the original proceedings, yet the A.O. would be justified in the reassessing the assessees income by issue of notice u/s148. Since in the present case the application of the provisions of section 80IA(9) by the A.O. to limit the deduction allowed u/s 80 HHC has been upheld by the Honble High court in the case of Friends Casting (P) Ltd. Vs. CIT(supra), and this issue was not discussed by the A.O. or even examined by him in the original assessment proceedings, the issue of notice u/s 148 is held to be justified in light of the law laid down by the Honble Jurisdictional High Court in the case of Jawand Sons Vs. CIT (supra) and Atlas Cycle Haryana Ltd. Vs. DCIT (supra). The decision of the Honble Jurisdictional I.T.A.T. on this issue in the appellants case for the Asstt. Year 2003-04 is, respectfully and most humbly not followed because the binding judgments of the Honble Jurisdictional High court on the position of law were not brought to their notice. Ground nos. 1 & 2 of appeal are rejected.

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8. Before us, the ld. counsel for the assessee, Mr. Y.K. Sud, CA argued grounds No. 1 & 2 being the legal grounds and did not argue the grounds on merits. Therefore, in the interest of justice, we proceed to decide the legal grounds as under: i) The Ld. counsel for the assessee, Mr. Y.K. Sud, CA argued that the present issue is identical to the facts in assessees own case for the assessment year 2003-04 in which on legal issue, the assessee had succeeded vide order dated 24.02.2012 of ITAT, Amritsar Bench, in ITA No.83(Asr)/2011. Copy of the said order of ITAT is placed on record at PB 1 to 7. It was brought to our notice that the reasons recorded in the said order i.e. in A.Y. 2003-04 by the AO are placed on record at PB 17 to 19 and the reasons recorded in the impugned order are placed at PB 20 to 22. On perusal of the reasons, it was brought to our notice that the reasons recorded are identically worded for both the assessment years 2003-04 & 2004-05 except the amounts of income and deduction etc. and it cannot be disputed by the Revenue. ii) It was argued at the outset by the ld. counsel for the assessee, Mr. Y.K.Sud, CA any court has to adhere to the consistency in interpretation of law which lead to public confidence in our judicial 8 system. Relying upon the decision of Honble Supreme Court in the case of S.I. Rooplal v. Lt. Governor, Delhi, reported in A.I.R. 2000 S.C.598 placed on record. The relevant paras of the said decision were read by the ld. counsel for the assessee in this regard. Therefore, the order of the ld. CIT(A) for not following the order of the ITAT, Amritsar Bench, on identical facts, is matter of fact, is not following the decision of higher court of law. iii) As regards the decision relied upon by the Ld. CIT(A) in the case of Jawand Sons v. CIT(Appeals) reported in (2010) 326 ITR 39 , dated 18 th Nov; 2009, the same is with respect to wrong disallowance and is different from the present facts of the case. iv) As regards the decision in the case of Friends Castings (P) Ltd. vs. CIT (2011) 238 CTR (P&H) 377 , the same has been decided on merits only. v) As regards the decision in the case of Atlas Cycles (Haryana) Limited vs. DCIT in CWP No.10390 of 2010 dated 2.12.2010, the decision, in fact given vide para 16 & 17 of the order of the Honble Punjab & Haryana High Court goes in favour of the assessee. In any 9 case, all the three decisions cited by the ld. CIT(A) are distinguishable. vi) In view of the above, the ld. counsel for the assessee prayed to allow the legal grounds in view of the arguments made hereinabove.

9. The Ld. DR, Mr. Tarsem Lal, on the other hand, argued that there was a mistake apparent from record in the first order of the ITAT, Amritsar Bench, passed in ITA No.83(Asr)2011 for the A.Y. 2003-04 dated

24.02.2012 and therefore, the said order cannot be followed in the present case.

10. We have heard the rival contentions and perused the facts of the case. First of all, we meet with the arguments of the Ld. DR with respect to the mistake apparent from records pointed out in our earlier order passed in ITA No.83(Asr)/2011 dated 24.02.2012. In this regard, a query was raised by the Bench from the Ld. DR, Mr. Tarsem Lal whether there is any misc. application filed by the Revenue against the aforesaid order of the Tribunal for the A.Y. 2003-04 passed in ITA No.83(Asr)/2011 (supra), it was replied that there was no misc. application filed by the Revenue though the facts in the present case are identical to the facts in the case of the assessee for the 10 assessment year 2003-04. In this regard, we are of the view that when there is no misc. application pending on record for the A.Y. 2003-04, the order in assessees own case for the A.Y. 2003-04 passed in ITA No.83(Asr)/2011 (supra) has attained finality. It was agreed by the Ld. DR that when the facts and circumstances of the present case are identical to assessees own case for the A.Y. 2003-04, which has been decided by us in ITA No.83(Asr)/2011 (supra) and therefore, the said order has to be followed under doctrine of consistency.

11. It has been stated by the Honble Supreme Court in the case of S.I. Rooplal v. Lt. Governor, Delhi (supra), the relevant portion of which for the sake of clarity is reproduced as under:

Precedents which enunciate rules of law from the foundation of administration of justice under our system. This is a fundamental principle which every Presiding Officer of a Judicial Forum ought to know, for consistency in interpretation of law alone can lead to public confidence in our judicial system. Supreme Court has laid down time and again precedent law must be followed by all concerned; deviation from the same should be only on a procedure known to law. A subordinate court is bounded by the enunciation of law made by the superior courts. A coordinate Bench of a Court cannot pronounce judgment contrary to declaration of law made by another Bench. It can only refer it to a larger Bench if it disagrees with the earlier pronouncement. The supreme Court expressed serious dissatisfaction over the attitude of the tribunal in this case which, after noticing the earlier judgment or a coordinate Bench and after noticing the judgment of the Supreme Court has still thought it fit to proceed to take a view totally contrary 11 to the view taken in the earlier judgment thereby creating a judicial uncertainty in regard to the declaration of law involved in this case.

12 At the outset, we must express our serious dissatisfaction in regard to the manner in which a coordinate Bench of the tribunal has overruled, in effect, an earlier judgment of another coordinate Bench of the same tribunal. This is opposed to all principles of judicial discipline. If at all, the subsequent Bench of the tribunal was of the opinion that the earlier view taken by the coordinate Bench of the same tribunal was incorrect, it ought to have referred the matter to a larger Bench so that the difference of opinion between the two coordinate Benches on the same point could have been avoided. It is not as if the latter Bench was unaware of the judgment of the earlier Bench but knowingly it proceeded to disagree with the said judgment against all known rules of precedents. Precedents which enunciate rules of law from the foundation of administration of justice under our system. This is a fundamental principle which every Presiding Officer of a Judicial Forum ought to know, for consistency in interpretation of law alone can lead to public confidence in our judicial system. This Court has laid down time and again precedent law must be followed by all concerned; deviation from the same should be only on a procedure known to law. A subordinate court is bound by the enunciation of law made by the superior courts. A coordinate Bench of a Court cannot pronounce judgment contrary to declaration of law made by another Bench. It can only refer it to a larger Bench if it disagrees with the earlier pronouncement.

It is hardly necessary to emphasis that considerations of judicial propriety and decorum require that if a learned single Judge hearing a matter is inclined to take the view that the earlier decisions of the High Court, whether of a Division Bench or of a single Judge, need to be re-considered, he should not embark upon that enquiry sitting as a single Judge, but should refer the matter to a Division Bench, or, in a proper case, place the relevant papers before the Chief Justice to enable him to constitute a larger Bench to examine the question. That is the proper and traditional way to deal with such matters and it is founded on healthy principles of judicial decorum and propriety. We are indeed sorry to note the attitude of the tribunal in this case which, after noticing the earlier judgment of a coordinate Bench and after noticing the judgment of this Court, has still thought it fit to proceed 12 to take a view totally contrary to the view taken in the earlier judgment thereby creating a judicial uncertainty in regard to the declaration of law involved in this case. Because of this approach of the latter Bench of the tribunal in this case, a lot of valuable time of the Court is wasted and parties to this case have been put to considerable hardship.

12. As regards the decisions in the cases of Friends Castings (P) Ltd. vs. CIT (supra), Jawand Sons vs. CIT (supra) and Atlas Cycle (Haryana) Ltd. vs. DCIT (supra) cited by the ld. CIT(A) in his order, the same are distinguishable as argued by the Ld. counsel for the assessee, Mr. Y.K.Sud, CA and therefore, cannot be applied in the facts and circumstances of the present case.

13. Thus, in the facts and circumstances of the present case, following our decision in assessees own case in ITA No.83(Asr)/2011 for the assessment year 2003-04 (supra) which is squarely applicable to the facts of the present case, grounds No. 1 & 2 of the assessee are allowed. Accordingly, the appeal of the assessee in ITA No.172(Asr)/2012 is allowed.

14. Now, we take up appeal of the assessee in ITA No.173(Asr)/2012 for the A.Y. 2004-05. The brief facts as arising from the order of the Ld. CIT-1, Jalandhar, passed u/s 263 of the Act are reproduced for the sake of clarity as under: 13

The Return of Income was filed by the assessee on 28.10.2004, declaring net income of Rs. 34,66,312/- which was processed u/s 143(1) of the Act. Subsequently, the case was taken up for Scrutiny. Assessment u/s 143(3) of the Act was completed on 27.10.2006 at an income of Rs.36,61,953/- after allowing deduction of Rs. 23,09,058/- u/s 80HHC of the Act. An appeal was filed by the assessee before the ld. CIT(A) Jalandhar, who decided the same vide his order dated

30.01.2008. The income of the assessee was reduced to Rs. 36,41,810/- as a result of the appeal effect. Later on, proceedings u/s 147 of the Act were initiated in this case after recording reasons. The assessment u/s143(3) read with section 147 of the Act was completed on 07.12.2009, at an income of Rs. 59,24,335/-. An appeal before Ld. CIT(A) is pending against the assessment order. Tax was charged at Rs. 8,18,855/- along with intt. u/s 234 of the Act. It was, later on, noticed that the intt. u/s 234B(3) of the Act was omitted to be charged. As this mistake was apparent from record a notice u/s 154 of I.T. Act was issued vide No. 421 dated 18.05.2011 and served upon the assessee by speed-post, seeking the reply by

30.05.2011. In response the assessee filed reply vide letter dated 31.05.2011, stating that since the mistake is not apparent from record, as the levy of interest u/s 234B(3) of the Act is a debatable issue because interest u/s 234B(1) of the Act was not leviable, the proceeding u/s154 of the Act should be dropped. Subsequently, a notice u/s 263 of the Act was issued in order to charge interest u/s 234B(3) of the Act.

15. The Ld. CIT(A) after considering the reply of the assessee held vide para 5 of his order as under: 14 The simple reading of the provisions of section 234B(3) of the Act shows that the focus is on amount on which interest was payable u/s 234B(1) of the Act. This amount is calculated as per the modalities given in Explanation 1 to 234B(1) of the Act. As per this Explanation, the amount on which interest is payable is the amount of assessed tax, the figure of which is derived from reducing taxes already paid/deducted from the amount of taxes due on returned or assessed income. When, as a result of reassessment, the amount of taxes due increase, the amount on which interest is payable also increases as it is derived from the figure of taxes due as reduced by taxes paid/deducted. Moreover, the intention of the Legislature to introduce the sub-section (3) of section 234B of the Act was to increase the amount of interest payable, with the corresponding increase in the tax payable as a result of reassessment. It is thus held that the order passed by the AO u/s 143(3) was both erroneous and prejudicial to the interest of the revenue as he failed to charge interest u/s 234B(3) of the Income Tax Act, 1961. The AO is therefore directed to revise this assessment order by charging interest u/s 234B(3) of the Act.

16. It was argued by the ld. counsel for the assessee, Mr. Y.K. Sud, CA that since the issue in ITA No.172(Asr)/2012 is squarely covered by the decision of the ITAT, Amritsar Bench, in assessees own case for the assessment year 2003-04 in ITA No.83(Asr)2011, dated 24.02.2012 and as a matter of rule of consistency, as discussed in earlier appeal, hereinabove, if the assessee succeeds in grounds No. 1 & 2 being legal grounds, the present appeal becomes infructuous. 15

17. The Ld. DR, also agreed to the above proposition of assessees counsel.

18. We have heard the rival contentions and perused the facts of the case. Since the assessee has succeeded in legal grounds No. 1 & 2 in ITA No.172(Asr)/2012 decided by us hereinabove, and therefore, the present appeal has become infructuous. Accordingly, all the grounds of the assessees appeal are allowed.

19. In the result, both the appeals of the assessee in ITA Nos. 172 & 173(Asr)/2012 are allowed Order pronounced in the open court on 19th March, 2013. Sd/- Sd/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 19th March, 2013 /SKR/ Copy of the order forwarded to:

1. The Assessee:M/s. Dynamech, Jalandhar,

2. The Addl. CIT, Range-1, Jalandhar,

3. The CIT(A), JLR

4. The CIT-1, JLR

5. The SR DR, ITAT, Amritsar. True copy By order (Assistant Registrar) Income Tax Appellate Tribunal, Amritsar Bench: Amritsar.