B.RAMALINGA RAJU,HYDERABAD V. ACIT., CENTRAL CIRCLE-3(1), HYDERABAD

MA 52/HYD/2025

AI Insights

The case involves a Miscellaneous Application (MA) filed by Shri B. Ramalinga Raju concerning an earlier Tribunal order related to the assessment year 2002-03. The MA was filed under Section 254(2) of the Income Tax Act, 1961, claiming that there were errors in the Tribunal's previous order. The main contention was regarding the inclusion of certain financial figures in the Tribunal's order, which the assessee argued were beyond the scope of the Revenue's appeal and constituted a mistake apparent from the record. The Departmental Representative opposed the MA, arguing it was an attempt to seek a review of the Tribunal's order, which is not allowed under the Act. The Tribunal agreed with the Departmental Representative, citing a Supreme Court decision that restricted the scope of Section 254(2) to rectification of mistakes apparent from the record and not rehearing or reviewing the Tribunal's order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 713367 (ITAT-HYDERABAD)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 30-07-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Assessment Year: 2002-2003
• Other Referred Cases: Reliance Telecom Ltd. v. Union of India [(2021) 432 ITR 1 (SC)]
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: K.C.DEVDAS
• Keywords: Set aside; Opportunity of being heard; Rectification of order

Judgement Text

" आयकर अपीलीय अधिकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘A’ Bench, Hyderabad श्री रविश सूद, न् याययक सदस् य एवं श्री मिुसूदन सावडिया, लेखा सदस् य क े समक्ष । BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER AND SHRI MADHUSUDAN SAWDIA, ACCOUNTANT MEMBER M.A. No.52/Hyd/2025 आ.अपी.सं / In ITA No.55/Hyd/2020 (निर्धारण वर्ा/Assessment Year:2002-03) Shri B. Ramalinga Raju, Hyderabad. PAN:ACVPB8311J Vs. Asst. Commissioner of Income Tax, Central Circle-3(1), Hyderabad. (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee by: Shri K.C. Devdas, C.A. रधजस् व द्वधरध/Revenue by:: Shri Gurpreet Singh, SR-DR सुिवधई की तधरीख/Date of hearing: 25/07/2025 घोर्णध की तधरीख/Pronouncement: 30/07/2025 आदेश/ORDER PER MADHUSUDAN SAWDIA, A.M.: 1. The present Miscellaneous Application (“MA”) has been filed by Sri B. Ramalinga Raju (“the assessee”), under section 254(2) of the Income Tax Act, 1961 (“the Act”), in respect of the order passed by this Tribunal dated 11.02.2025 in ITA No. 55/Hyd/2020 for the assessment year 2002–03. Printed from counselvise.com MA No.52/Hyd/2025 2 2. In this MA the assessee has raised many objections, the relevant portion of the application is reproduced as under : Printed from counselvise.com MA No.52/Hyd/2025 3 Printed from counselvise.com MA No.52/Hyd/2025 4 ----Left blank intentionally--- Printed from counselvise.com MA No.52/Hyd/2025 5 Printed from counselvise.com MA No.52/Hyd/2025 6 2.1 On the basis of the aforesaid submission of the assessee, the Learned Authorised Representative (“Ld. AR”) argued that errors have been crept in the order of the Tribunal and accordingly the same is required to be rectified under section 254(2) of the Act. 3. Per contra, the learned Departmental Representative (“Ld. DR”) submitted that the MA filed by the assessee is nothing but an attempt to seek a review of the order of the Tribunal, which is impermissible under section 254(2) of the Act. The Ld. DR placed reliance on the decision of the Hon’ble Supreme Court in the case of Reliance Telecom Ltd. v. Union of India [(2021) 432 ITR 1 (SC)], wherein the Hon’ble Supreme Court has held that Section 254(2) permits only rectification of mistakes apparent from the record and does not allow a rehearing or review of the Tribunal’s order. Accordingly, the Ld. DR prayed before the bench to dismiss the MA of the assessee. Printed from counselvise.com MA No.52/Hyd/2025 7 4. We have carefully considered the submissions of both parties and perused the material available on record including the reliance placed on various case laws by both the parties. On perusal of application of the assessee, we found that the assessee’s principal objection is that the grounds of appeal raised by the Revenue before the Tribunal were only in relation to the suspense account pending reconciliation of Rs.1,122 crores as on 01.04.2002. However, at various paragraphs of the Tribunal’s order, reference has been made to ADS proceeds of Rs.193 crores as per the KPMG forensic audit and Rs.397 crores as per the SFIO report. The assessee contends that these references go beyond the scope of the Revenue’s appeal and constitute a mistake apparent from the record. It is not in dispute that the only ground raised by the Revenue in its appeal pertained to the suspense account of Rs.1,122 crores appearing as the opening debit balance as on 01.04.2002. We note that the references to Rs.193 crores (KPMG audit) and Rs.397 crores (SFIO report), which are the subject matter of objection by the assessee, appear in various paragraphs of the Tribunal’s order only as part of the factual narration based on the materials placed before the lower authorities. These Printed from counselvise.com MA No.52/Hyd/2025 8 figures were not made the subject of any conclusive finding given by this Tribunal at para nos.27 to 29 of its order, which is to the following effect : “ 27. However, during the course of arguments, we directed both the parties to provide a copy of the forensic report, as well as the order of Addl. Chief Metropolitan Sessions Judge – XXI, Hyderabad on which the LD.CIT(A) had relied to grant relief to the assessee. Despite our direction, neither the assessee nor the Revenue was able to produce the copy of said order. In fact, the Revenue categorically stated that no such order is in existence and therefore, it could not be provided. This contention of the Revenue remains unrebutted by the ld.AR till date. From our examination of Paras 7.2 to 7.2.2 of the CIT(A)’s order, it is evident that the sole basis for granting relief to the assessee was the alleged order of the Addl. Chief Metropolitan Sessions Judge – XXI, Hyderabad, which has not been produced before us, wherein the Sessions Judge allegedly acquitted the assessee and further had not made any order about diversion of funds. We further find that neither the alleged order nor the forensic report has been borne out from the records placed before us, and even the lower authorities nor the assessee could provide it. 28. In light of the above, we are left with no other option but to remand the matter back to the file of the Ld. CIT(A) for fresh adjudication. The Ld.CIT(A) is directed to reconsider the issue of addition of Rs.1122 crores, and other grounds raised by the assessee. Additionally, the Ld.CIT(A) shall consider any other documents or submissions filed by the assessee during the appellate proceedings. A remand report shall be obtained from the AO based on these documents. Thereafter, the Ld. Printed from counselvise.com MA No.52/Hyd/2025 9 CIT(A) shall grant both parties an opportunity of being heard and decide the issue afresh. Accordingly, the appeal filed by the Revenue is allowed for statistical purposes. 29. In the result, the appeal of Revenue in ITA No.55/Hyd/2020 is allowed for statistical purpose.” 5. On perusal of above, we found that the Tribunal had to set aside the issue to the file of Ld. CIT(A) due to the reason that, the very basis of the addition of Rs.1,122 Crores i.e. the forensic report as well as the order of Addl. Chief Metropolitan Sessions Judge – XXI, could not produce before the Tribunal for verification. Further, as far as the other objection of the assessee in this MA is concerned, on perusal of para no.28 of the order of Tribunal, it is abundantly clear that the Tribunal while setting aside the issue of addition of Rs.1,122 Crores to the file of Ld. CIT(A), also set aside the other grounds raised by the assessee. Accordingly, we do not find any apparent mistake in the order of Tribunal. In this regard, we relied on the decision of the Hon’ble Supreme Court in the case of Reliance Telecom Ltd. v. Union of India [(2021) 432 ITR 1 (SC)], wherein the Hon’ble Supreme Court has held that Section 254(2) permits only rectification Printed from counselvise.com MA No.52/Hyd/2025 10 of mistakes apparent from the record and does not allow a rehearing or review of the Tribunal’s order. 6. Further we have gone through the case laws relied upon by the Ld. AR, which are misplaced and not applicable to the facts of the present case, as none of those decisions deal with the situation where rectification is being sought on factual references that were neither determinative nor adjudicated upon in the final conclusion. 7. In view of the above discussion, we hold that there is no mistake apparent from the record in the order passed by the Tribunal. The MA filed by the assessee is nothing but a disguised attempt to review the order of the Tribunal, which is not permissible under the Act. 8. In the result, the Miscellaneous Application filed by the assessee is dismissed. Order pronounced in the open Court on 30th July, 2025. Sd/- Sd/- (RAVISH SOOD) (MADHUSUDAN SAWDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad. Dated: 30.07.2025. * Reddy gp Printed from counselvise.com MA No.52/Hyd/2025 11 Copy of the Order forwarded to : 1. Shri B. Ramalinga Raju, Plot No.1242, Road No.62, Jubilee Hills, Hyderabad-500 033 2. ACIT, Central Circle 3(1), Hyderabad. 3. Pr.CIT (Central), Hyderabad. 4. DR, ITAT, Hyderabad. 5. Guard file. BY ORDER, Printed from counselvise.com "