INCOME TAX OFFICER WARD 8(3), PUNE, PUNE V. SAGAR UTTAM MURHE, PUNE

MA 223/PUN/2023

AI Insights

The case involves Shri Sagar Uttam Murhe, who was assessed for unexplained cash credits under Section 68 of the Income Tax Act, 1961, for the Assessment Year 2014-15. The Assessing Officer (AO) had initially made additions to the assessee's income based on unexplained cash deposits, which were contested through various appeals. The Tribunal's earlier decision quashed the AO's order due to procedural lapses in converting the assessment from 'limited' to 'complete' scrutiny as required by CBDT circulars. The Revenue's Miscellaneous Application sought to recall this decision, arguing that the Tribunal had overlooked certain facts, but the Tribunal found no grounds for recall under the stipulated legal framework.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 472563 (ITAT-PUNE)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 18-03-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Other Referred Cases: All Cargo Global Logistics Ltd Vs DCIT, NTPC Lid vs. CIT, CIT vs. Padmavati, Ras Bihari Bansal vs. CIT, CIT (IT-4) Mumbai v. Reliance Telecom Ltd.
• Laws Referred To: Income-Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARVIND DESAI
• Assessee Lawyers: PRAMOD SHINGTE
• Keywords: Reasonable cause; Question of law; Unexplained cash credit
• Section: 143(3); 143(2); 64; 254(2); 271(1)(c); 68; 20

Judgement Text

" आयकर अपीलीय अधिकरण “बी”न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, PUNE BEFORE MS. ASTHA CHANDRA, JUDICIAL MEMBER AND SHRI DIPAK P. RIPOTE, ACCOUNTANT MEMBER आयकर अपील सं. / MA Nos.223 & 224/PUN/2023 (Arising out of ITA No.1615 & 1329/PUN/2018) धििाारण वर्ा / Assessment Year: 2014-15 ITO, Ward – 8(3), Pune Vs. Shri Sagar Uttam Murhe, House No.898, At post- Kuruli, Pune Nashik Road, Tal –Khed, Pune - 410501 PAN : AQLPM2140E अपीलार्थी /Applicant प्रत्यर्थी / Respondent Assessee by : Shri Pramod Shingte Department by : Shri Arvind Desai, Date of hearing : 10-01-2025 Date of Pronouncement : 18-03-2025 आदेश / ORDER PER ASTHA CHANDRA, JM : Both these Miscellaneous Applications of the Revenue seeks to recall the Tribunal’s Order passed under section 254(1) of the Income-Tax Act, 1961 (the “Act”) in ITA Nos.1615 and 1329/PUN/2018 dated 24.08.2022 for the Assessment Year (“AY”) 2014-15. 2. The Revenue in its Miscellaneous Application(s) has raised the following contentions:- “BACKGROUND: 2. In this case the assessee had filed return of income on 15/10/2015 by declaring the total income at Rs 22,61,233/-. The AO found that the appellant had made a cash deposit of Rs 31,50,200/- on various dates in his saving bank accounts. The AO had rejected the appellant's claim of receipt of cash of Rs 17,25,000/- from Mr Rahul U. Murhe for making the cash deposits in bank The AO had assessed it as unexplained cash credit u/s 68 of the I.T. Act 1961. The AO passed assessment order u/s 143(3) of the I.T. Act 1961 on 26/12/2016 by assessing the income at Rs 39,86,230/-. The AO also initiated penalty proceedings u/s 271(1)(c) for concealing the particulars of income. Subsequently the AO passed penalty order u/s 271(1)(c) of the I.T. Act 1961 on 29/6/2017 by levying penalty at Rs. 5,33,025/- for concealing the particulars of income. 2 ITA No.223 &224/PUN/2023, (Arising out of ITA No.1615 &1329/PUN/2018) AY 2014-15 3. The assessee, being aggrieved with the both the orders filed appeals before the CIT(A)-6, Pune However, the Ld CIT(A)-6, Pune dismissed both the appeals of the assessee vide separate orders dated 20.06.2018. Being aggrieved with the CIT(A)'s orders, the assessee filed appeal before the Hon'ble ITAT, Pune 4. The Hon'ble 'SMC‟ Bench of ITAT, Pune vide ex-parte order dated 13.08.2019 had dismissed the quantum appeal of the assessee due to non-appearance from the assessee side and uphold the impugned order Thereafter, the assessee filed the Miscellaneous application before the tribunal and requested to recall the ex parte order dated 13.08.2019. The Hon'ble „SMC‟ Bench of ITAT, Pune, being satisfied with the reasonable cause for non appearance of the assessee, recalled the impugned order and allowed the MA filed by the assessee. DECISION OF THE HON'BLE ITAT: 5. The Hon'ble B Bench of ITAT Pune vide order dated 24.08.2022 had taken up the assessee's twin appeals for AY 2014-15 arising against the CIT(A)-6, Pune's separate orders, both dated 20.06.2018 passed in Appeal Nos PN/CIT(A)- 6/DCIT-Cir-8/10762/2016-17 and PN/CIT(A)-6/DCIT-Cir-8/10075/2017-18, involving proceedings under Sections 143(3) and 271(1)(c) of the Income Tax Act. 1961 (in short the Act), respectively The Hon'ble ITAT Pune in its order dated 24.08.2022 stated that in the quantum appeal ITA No 1615/Pun/2018 the assessee has raised his additional ground(s) that the impugned assessment itself is not valid as the Assessing Officer has not converted it from a \"limited\" to \"complete one as per the CBDT Circular No. 20 of 2015. Though, the Revenue raised vehement objections to admission of the assessee's instant additional ground, noting that the issue was a legal one wherein all the relevant facts are already on record in assessee‟s paper book running into 64 pages, the ITAT accepted the ground raised by the assessee. While admitting the ground raised the ITAT drew reference to the tribunal's Special Bench's decision All Cargo Global Logistics Ltd Vs DCIT (2012) 137 ITD 287 (Mum): which is stated to be rendered after considering the Hon‟bleapex court's landmark judgment in NTPC Lid vs. CIT 229 ITR 383 which held that Court entertain such a pure question of law in order to determine correct tax liability of an assessee provided all the relevant facts form part of the records. The Hon'ble Tribunal noted that page 63 of the assessee's paper book contains the assessee's limited scrutiny notice dated 30.07.2016 indicating that the sole issue in his case as \"interest income mismatch whereas in the corresponding Section 143(3) assessment dated 26.12.2016 added Section 68 unexplained cash credit of Rs.17.25,000/- and that too, without converting it into a \"complete\" scrutiny as prescribed in the CBDT circular dated 14.07.2016 baring No 5/2016 3. Noting that there was no material placed to show that the Assessing Officer had indeed undertaken all necessary steps as well as all approval(s) as prescribed in the foregoing twin CBDT circulars, the Hon'ble ITAT held that the case law (2020) 120 taxmann.com 187 CIT vs. Padmavati (Mad) (HC) which holds that such an assessment could not exceed the scope of the prescribed \"limited\" scrutiny except as per the due process of law, was attracted to the case along with other various decisions reiterating the very legal proposition. Thus, the ITAT held that order of the AO is non-est in the eyes of law and quashed the same, thereby allowing the appeals of the assessee GROUNDS ON WHICH THE MISCELLANEOUS APPLICATION IS SOUGHT TO BE FILED: 6. On going through the order of the Hon'ble Tribunal, it is found that certain factual aspects remained to be brought to the notice of the Hon'ble Tribunal, in the case in this context, it is prayed that following points emanated from the relevant records kindly be taken into consideration by the Hon'ble Tribunal:- 3 ITA No.223 &224/PUN/2023, (Arising out of ITA No.1615 &1329/PUN/2018) AY 2014-15 (i) The Hon'ble B Bench of the tribunal has accepted the additional ground(s) raised by the assessee, inner-alia, alia pleading therein that the impugned assessment itself is not valid once the Assessing Officer has not converted it from a \"Limited\" to \"complete\" one. Here, it is pertinent to mention that the assessee has never contested this issue either before CIT(Appeals) or before the Hon'ble SMC Bench of the tribunal. Also, the case was selected and completed under category as 'Limited Scrutiny‟ as per the CBDT instructions. (ii) The Hon'ble B' Bench of the tribunal has mentioned that the assessee in his paper book has submitted that the sole issue in his case was “interest income mismatch” as per limited scrutiny notice dated 30.07.2016 whereas the AO vide order dated 26.12.2016 had made addition under Section 68 unexplained cash credit of Rs. 17,25,000/- On perusal of records, it is seen that the above mentioned contention of the assessee has been derived from the notice u/s 143(2) of the Act dated 30.07.2016 which is system generated notice. The ITBA system has inadvertently mentioned issues for examination as \"interest income mismatch” which is due to some unknown technical glitch. The assessee has represented the same as a deviation of the AO from the CBDT Instructions in completing the assessment over the issues other than mentioned in limited scrutiny. However, the fact remain unaltered that the case was selected in the CASS for the reason i.e. \"Low other source income in return income as compared to very high aggregate deposits as per UCB data (CIB code-516)” and the information were called for on the same issue which is clearly evident from the Assessment Order itself and other notices issued during the assessment proceedings such as notice u/s 142(1) of the Act dated 22.08 2016. Also, the addition was made on the same issue as mentioned in the CASS reason within the purview of limited scrutiny. Hence, the fact presented before the Hon'ble B Bench of the tribunal has been found misleading as it is amply clear that the addition was made on the issue mentioned in the CASS reason and there is no deviation from the CBDT instruction by the AO in framing the assessment. 7. In view of the above, it is prayed that the order dated 24.08.2022 passed by the Hon'ble ITAT \"B\" Bench, Pune in ITA No 1615& 1329/PUN/2018, may kindly be recalled and the appeal of the assessee may be decided taking into consideration the facts as mentioned in Para 6 above. Hence, a miscellaneous application to the Hon'ble Tribunal is hereby filed”. 3. The Ld. DR at the time of hearing reiterated the above stated contentions made in the Miscellaneous Application(s) and requested to reconsider the issues decided in ITA Nos.1615 and 1329/PUN/2018 by recalling the Tribunal’s order dated 24.08.2022 in light of the facts mentioned in para 6 of the present Miscellaneous Application(s) which is reproduced in the preceding paragraph. 4. The Ld. AR submitted that the contention of the Revenue in the said Miscellaneous Application is beyond the scope of Section 254(2) of the Act as 4 ITA No.223 &224/PUN/2023, (Arising out of ITA No.1615 &1329/PUN/2018) AY 2014-15 these are not mistake apparent on record. The Ld. AR argued that by way of this Miscellaneous Application the Revenue is seeking review of the Tribunal’s order in the garb of rectification which is not permissible under the law. 5. We have heard both the parties, considered their arguments and carefully perused the Tribunal’s order dated 24.08.2022 in the main appeal being ITA Nos.1615 and 1329/PUN/2018 for AY 2014-15. 6. The Revenue by way of the present Miscellaneous Application contended that the Tribunal’s order (supra) is not acceptable as certain factual aspects of the case remained to be brought to the notice of the Tribunal and hence not considered, which according to the Revenue is mistake apparent on record. It is further contended by the Revenue that the fact presented before the Tribunal relating to the impugned issue in the said appeal has been found misleading. The Revenue in the present Miscellaneous Application has therefore prayed that Tribunal’s order dated 24.08.2022 in ITA Nos.1615 and 1329/PUN/2018 be recalled and the appeal(s) of the assessee may be decided taking into consideration the facts of the case enumerated above. 7. In exercise of powers under section 254(2) of the Act, the Tribunal may amend any order passed by it only to rectify any mistake apparent from the record. The Tribunal cannot revisit its earlier order and go into details on merit, which is beyond the scope and ambit of the power conferred under section 254(2) of the Act. 8. On perusal of the contents of the Miscellaneous Application filed by the Revenue as well as the findings of the Tribunal in its order dated 24.08.2022 in ITA Nos.1615 and 1329/PUN/2018, we find it difficult to agree with the contentions of the Revenue. In our considered view, the Tribunal in its order (supra) had adjudicated the legal issue raised by way of an additional ground challenging the assessment itself after considering the specific facts brought to its notice at the time of hearing as well as the material available on records of the Tribunal. The Tribunal allowed the appeal(s) of the assessee holding the assessment as non-est in the eyes of law by giving reasoning in detail after considering all the facts and circumstances of the case and the settled legal position in respect thereto. 9. On the other hand, we agree with the contention of the Ld. AR that what the Revenue is actually seeking by way of this Miscellaneous Application is the review of the Tribunal’s order dated 24.08.2022 in ITA Nos.1615 and 5 ITA No.223 &224/PUN/2023, (Arising out of ITA No.1615 &1329/PUN/2018) AY 2014-15 1329/PUN/2018 in the garb of rectification which is not permissible under the law. 10. It is a settled law that review in the garb of rectification is not permissible under section 254(2) of the Act. The Hon’ble Delhi High Court in the case of Ras Bihari Bansal vs. CIT (2007) 293 ITR 365 held as under:- \"Section 254 of the Income Tax Act; 1961, enables the concerned to rectify any \"mistake apparent from the record\". It is well settled that an oversight of a fact cannot constitute an apparent mistake rectifiable under this section. Similarly, failure of the tribunal to consider an argument advanced by either party for arriving at a conclusion, is not an error apparent on record, although it may be an error of judgment. The mere fact that the tribunal had not allowed a deduction, even if the conclusion is wrong, will be no ground for moving an application under section 254(2) of the Act. Further, in the garb of an application for rectification, the assessee cannot be permitted to reopen and re-argue the whole matter, which is beyond the scope of the section.” 11. In its recent judgment in CIT (IT-4) Mumbai v. Reliance Telecom Ltd. (2021) 284 taxman 517 (SC)/440 ITR 1 (SC), their Lordships of the Hon’ble Supreme Court held that while considering application under section 254(2) Tribunal is not required to revisit its original order and go in details on merits and completely recall its order as powers under section 254(2) are only to rectify/correct any mistake apparent from record. 12. In light of the above discussion and judicial precedent, we hold that there is no mistake apparent on record in the Tribunal’s order dated 24.08.2022 in ITA Nos.1615 and 1329/PUN/2018 calling for rectification of the same. Accordingly, the Miscellaneous Application(s) filed by the Revenue are dismissed. 13. In the result, both the Miscellaneous Application No.223/PUN/2023 arising out of ITA No.1615/PUN/2018 and Miscellaneous Application No.224/PUN/2023 arising out of ITA No.1329/PUN/2018 filed by the Revenue are dismissed. Order pronounced in the open court on 18th March, 2025. Sd/- Sd/- (Dr. Dipak P. Ripote) (Astha Chandra) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; दिन ांक / Dated : 18th March, 2025. 6 ITA No.223 &224/PUN/2023, (Arising out of ITA No.1615 &1329/PUN/2018) AY 2014-15 आदेश की प्रधिधलधप अग्रेधर्ि / Copy of the Order forwarded to : 1. अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT concerned. 4. दिभ गीय प्रदिदनदि, आयकर अपीलीय अदिकरण, “बी” बेंच, पुणे / DR, ITAT, “B” Bench, Pune. 5. ग र्ड फ़ इल / Guard File. //सत्य दपि प्रदि// True Copy// आिेश नुस र / BY ORDER, िररष्ठदनजीसदचि / Sr. Private Secretary आयकरअपीलीयअदिकरण ,पुणे/ ITAT, Pune "