ANOOP GOPIKISHAN JAJU,AURANGABAD V. ASSISTANT COMMISSIONER OF INCOME-TAX, JALNA CIRCLE, JALNA

MA 11/PUN/2024

AI Insights

The case involves Anoop Gopikishan Jaju, who filed a Miscellaneous Application seeking rectification or recall of an earlier Tribunal order concerning the assessment year 2011-12. The application was based on alleged errors in the Tribunal's understanding of the facts and law, particularly regarding the jurisdiction of the assessing officer and the legality of the reassessment proceedings. The Tribunal had previously dismissed additional grounds raised by the assessee during the appeal, which challenged the jurisdiction and procedural validity of the reassessment. The Tribunal's decision to dismiss the Miscellaneous Application was influenced by the Supreme Court's ruling in CIT vs. Reliance Telecom Ltd., which clarified the limits of the Tribunal's powers under Section 254(2) of the Income Tax Act.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 474223 (ITAT-PUNE)
• Duration Of Justice: 8 month(s) 21 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 04-11-2024
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 09-08-2024
• Assessment Year: 2011-2012
• Appeal Filed On: 14-02-2024
• Other Referred Cases: Ashok Devichand Jain v. UOI - [W.P. No. 3489 of 2019, Order dated 08.03.2022], National Thermal Power Company Ltd. Vs. CIT (1998) 229 ITR 383 (SC), CIT vs. Reliance Telecom Ltd. (2022) 440 ITR 1 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SOURABH NAYAK
• Assessee Lawyers: SHUBHAM N. RATHI
• Keywords: Set aside; Question of law; Loose papers
• Section: 148; 143(3); 142(1); 292BB; 254(2); 139(1)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND MS ASTHA CHANDRA, JUDICIAL MEMBER MA No.11/PUN/2024 (Arising out of ITA No.538/PUN/2023) Assessment Year : 2011-12 Anoop Gopikishan Jaju Bankat Niwas, Bharat Nagar, Jalna, Aurangabad – 431203, Maharashtra Vs. ACIT, Jalna Circle, Jalna PAN : AEJPJ0360B (Applicant) (Respondent) Assessee by : Shri Adv. Shubham N. Rathi Department by : Shri Sourabh Nayak Date of hearing : 09-08-2024 Date of pronouncement : 04-11-2024 O R D E R PER R. K. PANDA, VP : The assessee through this Miscellaneous Application has requested the Tribunal to rectify / recall the order of the Tribunal on the ground that certain errors have crept in the order of the Tribunal within the meaning of section 254(2) of the Income Tax Act, 1961. 2. The Ld. Counsel for the assessee drew the attention of the Bench to the contents of the Miscellaneous Application which read as under: “1. The above appeal filed by the Applicant was disposed of by “A” Bench of the Hon’ble Tribunal by its order dated 23.06.2023. 2 MA No.11/PUN/2024 2. As, in the humble opinion of the Applicant, certain mistakes have crept in the above order of the Hon'ble Tribunal, the Applicant most respectfully prefers this Miscellaneous Application with a request to the Hon'ble Tribunal to rectify these mistakes by passing such order or direction as it may deem fit. 3. In order to appreciate the mistakes that are sought to be rectified in this application, it may be necessary to revisit the background leading to the present application, though very briefly. 3.1 The Applicant is an individual and filed his return of income for A.Y. 2011 – 12 declaring total income of Rs.49,84,260/-. The notice u/s 148 of the Income - tax Act, 1961 ['the Act'] dated 31.03.2018 was issued by the Income Tax Officer, Ward- 1, Jalna ['the AO']. On the basis that some loose papers / diaries allegedly impounded in course of a survey proceedings carried on the premise of one M/s Mahalaxmi Properties and Developers, Jalna, and other documents concerning the said concern, were impounded from its premise, it was alleged by the AO that the Applicant/the mother of the Applicant had paid a sum of Rs. 60.94 lakh against purchase of a plot, out of which Rs.43,00,000/- was paid during the relevant year. On the ground that such alleged advance of Rs.43,00,000/- was from an undisclosed source, the notice u/s 148 was issued. 3.2 In response, the Applicant strongly objected the reason / initiation of the reassessment proceeding and denied having paid any such amount. The Applicant also requested for copies of all such alleged material and for an opportunity to cross examine the concerned parties. Disregarding the objections and without passing any order disposing the objections, and without supplying any such copy / opportunity, the AO proceeded to finalise the assessment and issued various notices in course of the assessment proceedings. 3.3 Subsequently, on realising the jurisdictional error with respect to issuing the notices as the income declared by the Applicant in the original return of income was exceeding Rs.15 lakh - the AO transferred the case to the Asst. Commissioner of Income Tax ['the New AO']. The New AO thereafter passed assessment order u/s 143 (3) r. w. 147 of the Act, making addition of Rs.43,00,000/- u/s 69 of the Act and disallowed commission paid to Mr. Deepak Agrawal and Mrs. Anuja Jaju, aggregating to Rs.4,00,000/-. 3.4 Aggrieved by such assessment order, the Applicant preferred an appeal before Commissioner of Income Tax (Appeals), NFAC ['the Ld. CIT(A)'], who dismissed the appeal, solely relying upon the same material. 3.5 Against the order of the Ld. CIT(A), the Applicant filed an appeal before this Hon'ble 1TAT, Pune. During the appellate proceedings, The Ld. AR of the Applicant requested the Hon'ble Tribunal to admit two additional 3 MA No.11/PUN/2024 grounds challenging the jurisdiction of the New AO The additional grounds were as follows: Additional Ground No. I: a. The notice u/s 148 issued by the Income Tax Officer, who has no jurisdiction as return of income filed u/s 139(1) itself was of Rs.49,84,260/-. The Appellant prays for cancellation of order passed n/s 143(3) r.w.s. 147 as bad in law b. Without prejudice to above ground, even transfer of jurisdiction is without approval u/s 127 of the Act as required. Through under charge of the same commissioner. Additional Ground No. 2: a. The Assessing Officer has passed order u/s 143(3) r.w.s. 148 without passing speaking order on objections. b. The Appellant therefore, prays to cancel the order passed as bad in law and without jurisdiction. 3.6 A bare perusal of the additional grounds reveals, ex facie, that- (i) The grounds related purely legal issue and went to the root of the very jurisdiction to make the assessment; (ii) Importantly, these grounds did not at all related to merits of the case; (iii) In any case, the grounds were based on the documents / necessary facts already on records; (iv) In no way entertaining the additional grounds entailed investigation into any facts on merits, much less any additional fact; and (v) Clearly, the additional grounds were totally unrelated to the another objection/ argument raised by the Applicant relating to merits of the addition - on the aspect of violation of the principle of natural justice, as the Applicant was not provided with copies of the relevant material. 3.7 The Department Representative ['Ld. DR'] obtained pointwise comment from the New AO, vide letter dated 25.04.2023, on the additional grounds. In response, the Applicant filed his rejoinder to the same, giving detailed submissions on both the grounds. In support of the additional ground regarding the proceeding initiated by non-jurisdictional officer, reliance was placed on, a circular issued by the CBDT as well various judicial precedents directly covering the issue, including decision of the 4 MA No.11/PUN/2024 jurisdictional Hon'ble Bombay High Court in case of Ashok Devichand Jain v. UOI - [W.P. No. 3489 of 2019, Order dated 08.03.2022]. 3.8 Most importantly, in his pointwise comment, the New AO admitted / did not dispute the defect in issuance of the notice u/s 148, but simply took shelter of the provisions of section 292BB of the Act in defence. With respect to the challenge to the transfer of the jurisdiction without approval u/s 127, the New AO simply commented that the provisions of section 127 of the Act are not applicable as the case was transferred considering the provisions of section 120 of the Act. 3.9 On 06.06.2023, the Ld. AR of the Applicant filed Paper Book containing various case laws wherein, considering the similar additional ground of challenge to the jurisdiction, the assessment orders were quashed for invalid assumption of the jurisdiction. 3.10 The Hon'ble ITAT rejected the request to admit the additional grounds holding as follows: \"2. The assessee has raised two additional grounds. The Id. DR strongly objected to their admission by submitting that fresh investigation of facts was required to decide the grounds and necessary facts were not available on record. It was further submitted that the assessee raised these grounds without any corroborating evidence to support them. In the guise of these grounds, the assessee was seeking to verify the record of the Department on all possible scores without showing noncompliance by the Revenue of all the requisite procedures. The Id. AR could not controvert the submissions advanced on behalf of the Revenue. 3. The Hon'ble Supreme Court in the case of National Thermal Power Company Ltd. Vs. CIT (1998) 229 ITR 383 (SC) has held that the Tribunal has jurisdiction to examine a question of law which arises from the facts as found by the authorities below and having a bearing on the tax liability of the assessee notwithstanding the fact that the same was not raised before the lower authorities. The requisite condition for accepting an additional ground is that the relevant facts on that legal issue must be available on record. In view of rival but common submission, it is seen that the relevant facts for deciding these grounds are not available on record inasmuch as the assessee was just exploring the options without anything to substantiate that there was noncompliance of the requisite conditions or procedures by the Revenue in this regard. As such, we are not inclined to admit the additional grounds.\" 3.11 The Hon'ble then proceeded to adjudicate merits of the case. While adjudicating the present case on merits, the Hon'ble ITAT has recorded the following findings, among other- (para7, page 5 of the Order) 5 MA No.11/PUN/2024 \"............. It is not disputed that the plot against which the name of the assessee was recorded with the amount of on-money, was actually purchased in the name of his mother. Not only this, the piece of land so purchased was subsequently sold as is emanating from the orders of the authorities below indicating the names of further buyers............ \" 4. In the above background, the Applicant most respectfully submits that, some mistakes have crept in the order of the Hon'ble Tribunal, in as much as certain observations of the Hon'ble Tribunal are based on mistaken understanding / assumption of the facts; some of which are highlighted as under- 4.1 As regards the observations relating to the additional grounds at para 2 and 3, with respect, the same appear to be based on erroneous assumptions about the facts already on records, as highlighted at para 3.6 above. More particularly, all necessary facts required to admit the additional grounds were already available on record. 4.2 For admission of the additional ground challenging the jurisdiction for issuance of notice u/s 148 by the wrong authority, the following documents were available on record before the Hon'ble Tribunal: (i) The observations of the New AO himself at para 3 of the assessment order, wherein he has mentioned that the case was transferred to him as the Applicant's return of income exceeds Rs.15 lakhs. (ii) The pointwise comment letter obtained by the Ld. DR from the New AO vide dated 25.04.2023, wherein the legal issue raised has not been controverted by the Ld. Officer and, instead, he accepted the same by taking shelter of the provisions of section 292BB of the Act. (iii) Detailed submission filed before the Hon'ble Tribunal, including the CBDT circular and the legal precedents thereof. 4.3 Similarly, the facts required to admit the additional ground - that transfer jurisdiction was without approval u/s 127 of the Act - were duly available on record as follows: (i) In the pointwise comment letter obtained by the Ld. DR from the New AO vide dated 25.04.2023, wherein this legal issue raised was not controverted by the New AO and, in fact, he had submitted that the provisions of section 127 were not applicable. As such, the fact that no approval u/s 127 of the Act was obtained was affirmed by me Ld. ITO. 4.4 Further, with respect to the additional ground challenging the jurisdiction on account of non-passing of a speaking order disposing of the objection, 6 MA No.11/PUN/2024 this fact clearly emerges from para Para 8.2 of the assessment order, the same is reproduced as follows: \"Further, vide notice issued u/s 142(1) of the Act on 07.12.2018, at point no.8, the objection raised by the assessee was not accepted as the copies of the reasons recorded was provided to the assessee on 09.04.2018 and the assessee has objected the reopening proceedings after the lapse of 8 months and. accordingly informed the assessee that no such cognizance can be taken on such objection.\" 4.5 Further, as regards the finding given by the Hon'ble Tribunal at Para 5 and 7 of the order, to the effect that the plot was purchased by the Applicant, this fundamental fact recorded by the Hon'ble ITAT is erroneous as no plot was purchased by the Applicant or his mother, nor any such payment was ever made. In fact, the said plots were sold by M/s Mahalaxmi Properties and Developers to Mr. Sachin Patni and Mr. Adesh Pathi oh 31.03.2011 and sale deeds were accordingly entered into between them on 15.03.2012. In these deeds, neither the Applicant or his mother were a party, nor any reference about them is made therein. The said agreement to sale as well as the sale deed were part of the paper book filed before the Hon'ble ITAT on 19.06.2023. As such, these findings are contrary to the documents available on record. 5. In the circumstances, the Applicant most respectfully submits that all vital facts required to admit the additional grounds / adjudicate the ground on merit, as well as the judgements in support thereof were duly available on record, and it appears that the same remained to be considered. This Hon'ble Tribunal is the final fact-finding authority under the Act within the meaning of section 254 (2) of the Act. Under the circumstances, with respect, this has resulted into mistakes apparent from record. 6. In view of the above, the Applicant most respectfully seeks to prefer this Miscellaneous Application with a request that the Hon'ble Tribunal may be pleased to suitably amend the order to rectify the aforesaid mistakes or pass such order or direction(s) which it may deem fit.” 3. Referring to the above, he submitted that the same is self explanatory and therefore, the Tribunal should pass appropriate order either by rectifying the same or by recalling the order for fresh adjudication. 7 MA No.11/PUN/2024 4. The Ld. DR on the other hand strongly opposed the Miscellaneous Application filed by the assessee and submitted that all the issues have been thoroughly discussed by the Tribunal and there is no apparent mistake in the same. The assessee through this Miscellaneous Application is requesting the Tribunal to rectify / amend the order of the Tribunal which amounts to review of its own order by the Tribunal which is not permissible in law. He accordingly submitted that the Miscellaneous Application filed by the assessee should be dismissed. 5. We have heard the rival arguments made by both the sides and perused the record. A perusal of the contents of the Miscellaneous Application filed by the assessee shows that the assessee basically is aggrieved on account of dismissal of the additional grounds raised by it as well as the dismissal of the appeal on merit by holding that the assessee indeed had paid on-money for purchase of the plot by the assessee. A perusal of the order of the Tribunal shows that the Tribunal has thoroughly discussed all the issues and has decided the appeal against the assessee. The assessee through this Miscellaneous Application is now requesting the Tribunal to rectify / recall the order passed by it, which, in our opinion amounts to review of its own order by the Tribunal, which is not permissible in law. Further, the Hon'ble Supreme Court in the case of CIT vs. Reliance Telecom Ltd. (2022) 440 ITR 1 (SC) / vide Civil Appeal Nos.7110 & 7111/2021, judgment dated 03.12.2021 while deciding the power of the Tribunal in rectifying its order has observed as under: 8 MA No.11/PUN/2024 “3.1 We have considered the order dated 18.11.2016 passed by the ITAT allowing the miscellaneous application in exercise of powers under Section 254(2) of the Act and recalling its earlier order dated 06.09.2013 as well as the original order passed by the ITAT dated 06.09.2013. 3.2 Having gone through both the orders passed by the ITAT, we are of the opinion that the order passed by the ITAT dated 18.11.2016 recalling its earlier order dated 06.09.2013 is beyond the scope and ambit of the powers under Section 254(2) of the Act. While allowing the application under Section 254(2) of the Act and recalling its earlier order dated 06.09.2013, it appears that the ITAT has re- heard the entire appeal on merits as if the ITAT was deciding the appeal against the order passed by the C.I.T. In exercise of powers under Section 254(2) of the Act, the Appellate Tribunal may amend any order passed by it under sub-section (1) of Section 254 of the Act with a view to rectifying any mistake apparent from the record only. Therefore, the powers under Section 254(2) of the Act are akin to Order XLVII Rule 1 CPC. While considering the application under Section 254(2) of the Act, the Appellate Tribunal is not required to re-visit its earlier order and to go into detail on merits. The powers under Section 254(2) of the Act are only to rectify/correct any mistake apparent from the record. 4. In the present case, a detailed order was passed by the ITAT when it passed an order on 06.09.2013, by which the ITAT held in favour of the Revenue. Therefore, the said order could not have been recalled by the Appellate Tribunal in exercise of powers under Section 254(2) of the Act. If the Assessee was of the opinion that the order passed by the ITAT was erroneous, either on facts or in law, in that case, the only remedy available to the Assessee was to prefer the appeal before the High Court, which as such was already filed by the Assessee before the High Court, which the Assessee withdrew after the order passed by the ITAT dated 18.11.2016 recalling its earlier order dated 06.09.2013. Therefore, as such, the order passed by the ITAT recalling its earlier order dated 06.09.2013 which has been passed in exercise of powers under Section 254(2) of the Act is beyond the scope and ambit of the powers of the Appellate Tribunal conferred under Section 254 (2) of the Act. Therefore, the order passed by the ITAT dated 18.11.2016 recalling its earlier order dated 06.09.2013 is unsustainable, which ought to have been set aside by the High Court. 5. From the impugned judgment and order passed by the High Court, it appears that the High Court has dismissed the writ petitions by observing that (i) the Revenue itself had in detail gone into merits of the case before the ITAT and the parties filed detailed submissions based on which the ITAT passed its order recalling its earlier order; (ii) the Revenue had not contended that the ITAT had become functus officio after delivering its original order and that if it had to relook/revisit the order, it must be for limited purpose as permitted by Section 254(2) of the Act; and (iii) that the merits might have been decided erroneously but ITAT had the jurisdiction and within its powers it may pass an erroneous order and that such objections had not been raised before ITAT. 9 MA No.11/PUN/2024 6. None of the aforesaid grounds are tenable in law. Merely because the Revenue might have in detail gone into the merits of the case before the ITAT and merely because the parties might have filed detailed submissions, it does not confer jurisdiction upon the ITAT to pass the order de hors Section 254(2) of the Act. As observed hereinabove, the powers under Section 254(2) of the Act are only to correct and/or rectify the mistake apparent from the record and not beyond that. Even the observations that the merits might have been decided erroneously and the ITAT had jurisdiction and within its powers it may pass an order recalling its earlier order which is an erroneous order, cannot be accepted. As observed hereinabove, if the order passed by the ITAT was erroneous on merits, in that case, the remedy available to the Assessee was to prefer an appeal before the High Court, which in fact was filed by the Assessee before the High Court, but later on the Assessee withdrew the same in the instant case. 7. In view of the above and for the reasons stated above, the impugned common judgment and order passed by the High Court as well as the common order passed by the ITAT dated 18.11.2016 recalling its earlier order dated 06.09.2013 deserve to be quashed and set aside and are accordingly quashed and set aside. The original orders passed by the ITAT dated 06.09.2013 passed in the respective appeals preferred by the Revenue are hereby restored. 8. Considering the fact that the Assessee had earlier preferred appeal/s before the High Court challenging the original order passed by the ITAT dated 06.09.2013, which the Assessee withdrew in view of the subsequent order passed by the ITAT dated 18.11.2016 recalling its earlier order dated 06.09.2013, we observe that if the Assessee/s prefers/prefer appeal/s before the High Court against the original order dated 06.09.2013 within a period of six weeks from today, the same may be decided and disposed of in accordance with law and on its/their own merits and without raising any objection with respect to limitation. 9. Both the appeals are accordingly allowed in the aforesaid terms. However, there shall be no order as to costs.” 6. Since in the instant case, a detailed order has been passed by the Tribunal, therefore, respectfully following the decision of the Hon'ble Supreme Court cited (supra), we are of the considered opinion that if the assessee is aggrieved by the order of the Tribunal either on facts or in law, then the only remedy available to the assessee is to prefer an appeal before the Hon’ble High Court. A perusal of the contents of the Miscellaneous Application shows that the assessee through this 10 MA No.11/PUN/2024 Miscellaneous Application is trying to persuade the Tribunal to re-adjudicate the issues which amounts to review of its own order by the Tribunal which is not permissible in law. In view of the above discussion, we are of the considered opinion that the Miscellaneous Application filed by assessee being de void of merit, is liable to be dismissed. Accordingly, the same is dismissed. 7. In the result, the Miscellaneous Application filed by the assessee is dismissed. Order pronounced in the open Court on 4th November, 2024. Sd/- Sd/- (ASTHA CHANDRA) (R. K. PANDA) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; दिन ांक Dated : 4th November, 2024 GCVSR आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: 1. अपीलार्थी / The Appellant; 2. प्रत्यर्थी / The Respondent 3. 4. The concerned Pr.CIT, Pune DR, ITAT, ‘A’ Bench, Pune 5. गार्ड फाईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अधिकरण ,पुणे / ITAT, Pune 11 MA No.11/PUN/2024 S.No. Details Date Initials Designation 1 Draft dictated on 01.11.2024 Sr. PS/PS 2 Draft placed before author 01.11.2024 Sr. PS/PS 3 Draft proposed & placed before the Second Member JM/AM 4 Draft discussed/approved by Second Member AM/AM 5 Approved Draft comes to the Sr. PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr. PS/PS 7 Date of uploading of Order Sr. PS/PS 8 File sent to Bench Clerk Sr. PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R. 11 Date of Dispatch of order "