Beed Taluka Dhud Vasayik Sahakari Sangh Ltd, Beed V. Income-tax Officer, Beed

ITA 1025/PUN/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6060 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 24-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRASHANT GUDEKAR
• Keywords: Rectification of order; Set aside
• Section: 143(3); 80P; 54; 154; 15

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO.1025/PUN/2017 / ASSESSMENT YEAR : 2010-11 BEED TALUKA DHUD VAVSAYIK SAHAKARI SANGH LIMITED, MANJARI PHATA, AT POST PALI, DIST BEED. PAN : AAATB8131F. . / APPELLANT. V/S THE INCOME TAX OFFICER, WARD 1, BEED. . / RESPONDENT ASSESSEE BY : NONE. REVENUE BY : SHRI PRASHANT GUDEKAR. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY THE ASSESSEE IS EMANATING OUT OF THE ORDER OF COMMISSIONER OF INCOME TAX (A)-2, AURANGABAD DATED 15.03 .2017 FOR THE ASSESSMENT YEAR 2010-11. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- ASSESSEE IS A CO-OPERATIVE SOCIETY STATED TO BE ENGAGE D IN THE BUSINESS OF COLLECTION OF MILK FROM THE MEMBERS OF THE ASSESS EE SOCIETY AND SELLING THE SAME TO MAHARASHTRA STATE CO-OPERATIVE MILK FEDERATION, MUMBAI. ASSESSEE FILED ITS RETURN OF INCOME FOR A.Y. 2010-11 ON / DATE OF HEARING : 17.07.2019 / DATE OF PRONOUNCEMENT: 01.08.2019 2 15.10.2010 DECLARING TOTAL INCOME OF RS.50,74,224/- AFTER CLAIM ING DEDUCTION U/S 80P OF THE ACT. THE CASE WAS SELECTED FO R SCRUTINY AND THEREAFTER ASSESSMENT WAS FRAMED U/S 143(3) OF THE ACT V IDE ORDER DT.06.11.2012 WHEREIN THE AO ALLOWED THE DEDUCTION U/S 80 P OF THE ACT CLAIMED BY THE ASSESSEE AND ACCEPTED THE RETURN OF INC OME. THEREAFTER, AO PASSED ORDER U/S 154 OF THE ACT VIDE ORDER DT.30.09.2 014 WHEREIN HE HELD THAT ASSESSEE WAS NOT ENTITLED FOR DEDUCTION U/S 80 P(2)(B) OF THE ACT AND WAS ONLY ENTITLED TO DEDUCTION OF RS.50,000/- U/S 80 P(2)(C) OF THE ACT AND THUS ACCORDING TO HIM THERE WAS EXCESS DEDUCTION O F RS.50,74,224/-. HE ACCORDINGLY PASSED ORDER U/S 154 OF THE ACT WHERE IN HE DISALLOWED THE CLAIM OF DEDUCTION OF RS.50,74,224/- U/S 80P(2)(B) OF THE ACT. AGGRIEVED BY THE ORDER OF AO PASSED U/S 154 OF THE ACT, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE ORDER DT.15.03.2017 (IN APPEAL NO.A BD/CIT(A)- 2/76/2016-17) DISMISSED THE APPEAL OF THE ASSESSEE. AGGR IEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US AN D HAS RAISED THE FOLLOWING GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) ERRED THE CONFIRMING THE RECTIFICATION ORDER PASSED UNDER SECTION 154 BY THE A.O, FOR THE REASONS THAT: - (A) EVEN THOUGH THERE IS NO APPARENT MISTAKE FROM THE F ACE OF RECORD, WHICH COULD BE RECTIFIED U / S.154 OF THE IT ACT, FROM THE SAID ASSESSMENT ORDER; (B) EVEN THOUGH ISSUE INVOLVED BEING DEBATABLE CANNOT B E CORRECTED UNDER SECTION 154 OF THE IT ACT, AS IT CA NNOT BE CONSIDERED AS . MISTAKE WITHIN THE MEANING OF SECTION 154 OF THE I T ACT; (C) EVEN THOUGH THERE IS NO MISTAKE ' WITHIN THE MEANING OF SECTION 154 OF THE IT ACT, AS THE SAID ORIGINAL ASS ESSMENT ORDER ASSESSMENT ORDER WAS PASSED U/S.143(3) DT . 6-11-2012, AFTER DUE VERIFICATION OF EARLIER RECORDS, WHEREIN SUCH DEDUCTION WAS ALLOWED; (D) EVEN IF INCOME OF THE APPELLANT IS CONSIDERED N OT ELIGIBLE FOR DEDUCTION U/S. 80 P(2)(B) OF THE IT ACT, THEN ALSO IT IS NOT LIABLE TO TAX AS INCOME IS DERIVES ON MUTUALITY CON CEPT WITH THE MEMBERS, AS PER RULES AND REGULATION AND BY-LAW S OF THE APPELLANT. 3 3. THE CASE FILE REVEALS THAT ON LAST OCCASION, NONE ATT ENDED ON BEHALF OF THE ASSESSEE THOUGH NOTICE WAS SERVED ON ASSESSEE. ON THE DATE OF PRESENT HEARING ALSO NONE APPEARED ON BEHALF OF THE ASSE SSEE NOR WAS ANY ADJOURNMENT APPLICATION FILED. CONSIDERING THE FACT THAT T HE ISSUE IN THE PRESENT CASE IS COVERED BY VARIOUS JUDICIAL PRONOUNCEMEN TS, WE PROCEED TO DECIDE THE APPEAL EX-PARTE QUA THE ASSESSEE ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND AFTER HEARING THE LD. D.R. 4. THE PERUSAL OF THE GROUNDS REVEAL THAT SOLE GRIEVANCE OF THE ASSESSEE IS ITS CHALLENGE ABOUT THE RECTIFICATION ORDER PASSED BY TH E AO U/S 154 OF THE ACT WHEREIN THE CLAIM OF ASSESSEE OF DEDUCTION U/S 8 0P OF THE ACT HAS BEEN WITHDRAWN WHICH WAS ORIGINALLY ALLOWED IN THE ASSESSME NT PROCEEDINGS U/S 143(3) OF THE ACT. 5. BEFORE US, LD. D.R. TOOK US THROUGH THE ORDER OF AO PA SSED U/S 154 OF THE ACT AND SUBMITTED THAT ASSESSEE WAS NOT ELIGIBLE FO R DEDUCTION U/S 80P OF THE ACT AND WAS WRONGLY ALLOWED BY AO IN THE ORD ER FRAMED U/S 143(3) OF THE ACT. AO THEREAFTER PASSED RECTIFICATION ORDER U/S 154 OF THE ACT WHEREIN HE WITHDREW THE CLAIM OF DEDUCTION U/S 80P O F THE ACT. HE SUBMITTED THAT THERE IS NO ERROR IN THE ORDER OF AO AND HE THUS SUPPORTED THE ORDER OF AO. 6. WE HAVE HEARD THE LD. D.R. AND PERUSED THE MATERIAL A VAILABLE ON RECORD. THE ISSUE IN THE PRESENT GROUND IS WITH RESPECT TO THE D ISALLOWANCE OF RS.50,74,224/- ON ACCOUNT OF DEDUCTION U/S 80P(2)(B) OF THE ACT MADE BY THE AO IN THE ORDER PASSED U/S 154 OF THE ACT. IN THE PRESENT CASE, IT IS AN UNDISPUTED FACT AS REVEALED FROM THE STATEMENTS OF FAC TS THAT ASSESSEE SOCIETY HAD FILED THE RETURN OF INCOME WHEREIN IT HAD CLAIMED DEDUCTION OF 4 RS.50,74,224/- U/S 80P OF THE ACT. WE FIND THAT WHILE FRAMIN G THE ASSESSMENT U/S 143(3) OF THE ACT, AO VIDE ORDER DT.06.11.20 12 HAD ALLOWED THE CLAIM OF DEDUCTION U/S 80P OF THE ACT. THEREAFTER V IDE ORDER DT.30.09.2015 PASSED U/S 154 OF THE ACT AO HELD THAT ASS ESSEE IS NOT ELIGIBLE FOR CLAIM OF DEDUCTION U/S 80P(2)(B) OF THE ACT AND ACC ORDINGLY WITHDREW THE CLAIM OF DEDUCTION. 7. SECTION 154 OF THE ACT PROVIDES FOR RECTIFICATION OF ANY MISTAKE WHICH ARE APPARENT FROM RECORD IN THE ORDERS SPECIFIED THEREIN. A MISTAKE WHICH CAN BE RECTIFIED U/S 154 OF THE ACT IS ONE WHICH IS PATIENT AND OBVIOUS AND WHOSE DISCOVERING IS NOT DEPENDENT ON ARGUMENT OR ELAB ORATION. ON THE ISSUE OF THE MISTAKES THAT CAN BE RECTIFIED U/S 154 OF TH E ACT, WE FIND THAT THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. M.M. T.C. LTD., REPORTED IN [2000] 246 ITR 725 (DEL) HAS OBSERVED AS UNDER : A BARE LOOK AT SECTION 154 OF THE ACT MAKES IT CLE AR THAT A MISTAKE APPARENT FROM THE RECORD' IS RECTIFIABLE. IN ORDER TO ATTRACT THE APPLICATION OF SECTION 154, THE MISTAKE MUST EXIST AND THE SAME MU ST BE APPARENT FROM THE RECORD. THE POWE R T O RECTIFY THE M I STAKE, H OWEVER, DO E S NOT COVER CASES WHERE A REVISION O R R E V I EW OF THE ORDER IS IN T END E D. ' M I S T AKE' MEANS TO TAKE OR UNDE R STAND WRONG L Y O R INACCURA T ELY ; TO MAKE AN ERR OR I N I NTERPRETING I T IS AN E R ROR A FAULT, A MISUNDERSTAND I NG, A M I SCONCEPTION. ' APPARENT ' MEANS VIS I B L E ; CAPABLE OF BEING SEEN, OBVIOUS ; PLAIN. IT MEANS 'OPEN TO VIEW, VISIBLE, EV I DENT , APPEARS , APPEAR I NG AS REAL A ND T RUE, CONSPICUOUS, MANIFEST, OBVIOUS, SEEMING.' A MISTAKE WHICH CAN BE RECTIFIED UNDER SECTION 154 IS ONE WHICH IS PATENT, WHICH IS OBVIOUS A ND WHOSE DISCOVERY I S NOT DEPENDENT ON ARGUMENT OR ELABORATION. IN OU R VIEW THE AMENDMENT OF AN ORDER DOES NOT MEAN OBLITERATION OF THE O R DER ORIGINALLY PASSED AND ITS SUBSTITUTION BY A NEW ORDER. WHAT THE REV EN U E INTENDS TO DO IN THE PRESENT CASE IS PRECISELY THE SUBSTITUTION OF THE O RDER WHICH ACCORDING TO US IS NOT PERMISSIBLE UNDER THE P R OVISIONS OF SECTION 154 AND, THEREFORE, TH E T R IB U NAL WAS J US TIFI ED I N HOLDING T HA T THERE WAS NO MISTAKE APPARENT ON T H E F AC E O F T H E RE CO R D . IN ORDER TO B RIN G AN APPLICATION UNDER SECTION 15 4 , THE MISTAKE MUS T BE 'APPA R ENT ' FR O M T HE RECORD . SECTION 1 54 DOES NOT E NABL E AN ORDER T O B E REV E RSED BY R E V I S I ON OR BY REVIEW, BUT PERMITS ONLY SO ME ERROR W H IC H IS APPA RE NT O N TH E FA CE OF THE RECO R D TO BE CORRECTED . WH E R E AN ERR OR I S F A R FR OM S E L F- EV I DEN T, IT CEASES T O BE AN APPARENT ERROR. IT I S , N O DO U BT, TRUE THAT A M I S T AK E CAPAB L E O F BEING RECTIFIED UNDER SEC TI ON 1 54 I S NO T CON FINE D T O CLERICAL OR ARITHMETICAL MISTAKES. ON THE OTHER H AND, I T DO E S NOT CO V ER ANY MI STAKE W HI CH MAY BE DISCOVERED BY A COMPLICA TE D PR OC E SS O F IN V ESTIG A TI ON, ARGUM E N T O R P R OOF . AS OBSERVED BY THE APEX CO URT I N MASTER CONS TRU C TI ON CO . (P.) L TD . V . STATE OF O R ISSA [ 1966] 17 STC 360, A N E RROR WHICH I S APPARENT FROM THE RECORD SHOULD BE ONE WHICH IS N O T A N ER RO R W H ICH D E PENDS FOR ITS D I SCOVERY ON ELABORATE ARGUMENTS ON Q UE S TI ON S O F F AC T O R L AW . A SIM IL AR V I EW WAS ALSO EXPRESSED I N SATYANARAYA N L AXM I NA RA YAN HEG DE V . MALL I KA RJ U N BHAVANAPPA 5 TIRUMALE [1960] AIR 1 960 SC 1 37. IT IS TO B E NO T ED THAT T HE LANGUAGE USED IN ORDER 47, RU L E 1 O F TH E COD E O F C I V IL PROC E DUR E, 1 908 (IN SHORT 'THE CPC'), IS D I FFERENT FR O M THE L ANG UAG E USED IN S E C T ION 1 5 4 O F THE AC T . T HE POWER IS G I VEN TO VA RI OU S A U THORITIE S T O RE C T I F Y ANY M I S T AK E 'APPARENT FROM RECORD' UNDER SECTION 1 5 4 OF THE AC T. I N T HE CIVIL PROCEDU R E CODE, THE WORDS ARE 'AN ERROR APP A R E N T ON TH E F AC E O F THE R ECORD'. T HE TWO PROVISIONS DO NOT MEAN THE SAM E THIN G. T H E POW ER OF T HE TR IBUNA L I N SECTION 154 TO RECTIFY 'ANY MISTAKE APPA R E NT FR OM TH E R ECORD' I S U N DOUBTEDLY NOT MORE THAN THAT OF TH E HI GH COU RT T O E N TERTA IN A WR IT PET I TION ON THE BASIS OF 'AN ERROR APPARENT ON T H E FAC E O F TH E R EC O R D ' (S EE T . S . BA L A R AM, I TO V. VOLKART BROTHERS [ 197 1] 82 ITR 5 0 (SC )) . 'MI S T AK E' I S AN O R DINARY WO R D BUT IN TAXATION LAWS, IT HAS A SP E C I A L S I G NIFI CANCE . IT I S N OT AN ARITHME TI CA L E R ROR WH I CH, AFTER A J U D I C I OU S PR OB E I NT O THE RE CORD FR OM WH I C H I T I S SUPPOSED TO EMANATE OR D I SC ER NED. T H E WORD 'MI S T AKE' IS INHER E NTLY INDEFINITE IN SCOPE, AS WHAT MAY BE A MISTAKE FOR ON E MAY NOT BE ONE F OR ANOTHER. IT IS MOSTLY SUBJECT I VE AND T H E DIV I DING LIN E I N BO R DE R AREAS IS TH I N AND INDISCERNIBLE. IT I S SOMETHI N G WH I CH A DULY AND JUD I CIOUSLY I NST R UCTED MIND CAN F I ND OUT FROM THE R E CO RD . I N OR D E R T O ATTR AC T T H E POWE R TO RECTIFY UNDER SECT I ON 154, IT IS NOT SUFFI C I ENT IF T HER E IS MERE LY A M I STAK E IN THE ORDERS SOUGHT TO BE RECTIFIED . T H E MI S TAKE T O BE R ECTIFIE D MUS T B E ON E APPARENT FROM THE RECORD . A D E C I S I O N O N A D E BA TABLE PO I N T O F LAW O R A D I SPUTED QUESTION OF FACT IS NOT A MIS T AK E APPA RE NT FR OM THE R ECORD. T HE PLAIN MEAN I NG OF THE WORD 'APPARENT' IS THA T I T MUS T B E SOMETHING WHICH APPEARS TO BE SO EX FACIE AND I S I NCAP A B LE OF A R GU ME NT OR DEBATE . IT , THEREFORE, FOL L OWS THAT A DECISION O N A DEB ATAB L E PO INT O F L AW O R F AC T O R F A I L U RE TO APP L Y THE LAW TO A SET OF FACT S WH I C H REMA IN S TO BE IN V E S T IGAT ED CAN N OT BE CORRECTED BY WAY OF RECTIFICATIO N. ON THE FACT S O F THE P RE S E NT CASE, W E FI ND THAT THERE WAS NO M I STAKE A P PA RENT F R O M THE RECOR D WH I CH COU L D B E R ECTIFIED UNDER SECTION 154 OF T HE A CT . T HE QU E S TI O N S PR OPOS E D DEAL WIT H CONC L USIONS ON THE FACTS GIVING RISE TO NO QU EST ION O F L AW. 8. IN THE PRESENT CASE, WITH THE PASSING OF RECTIFICATION O RDER U/S 154 OF THE ACT, ORIGINAL ORDER PASSED U/S 143(3) OF THE ACT WILL BE SUBSTITUTED BY THE NEW ORDER WITH DENIAL OF CLAIM OF DEDUCTION U/S 80P(2)(B) OF THE ACT. THIS IN OUR VIEW IS NOT PERMISSIBLE MORE SO IN VIEW OF THE AFO RESAID DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. M.M.T.C . LTD., (SUPRA) WHEREIN THE HON'BLE HIGH COURT HAS OBSERVED THAT POWE R TO RECTIFY THE MISTAKE H OWEVER, DO E S NOT COVER CASES WHERE A REVISION O R R E V I EW OF THE ORDER IS IN T END E D. 9. FURTHER, WE FIND THAT HONBLE SUPREME COURT IN THE CA SE OF T.S. BALRAM, ITO VS. M/S. VOLKART BROTHERS REPORTED IN (1971) 82 ITR 50 HAS HELD THAT A MISTAKE APPARENT ON THE RECORD MUST BE A N OBVIOUS AND PATENT MISTAKE AND NOT SOMETHING WHICH CAN BE ESTABLISHED BY A LONG DRAWN PROCESS OF REASONING ON POINTS ON WHICH THERE MAY CONC EIVABLY BE TWO OPINIONS. WE FURTHER FIND THAT BEFORE LD.CIT(A), IT WAS ASS ESSEES 6 CONTENTION THAT THE DEDUCTION U/S 80P HAS BEEN ALLOWED TO THE ASSESSEE IN EARLIER YEARS. 10. CONSIDERING THE FACT THAT ASSESSEE HAD BEEN ALLOWED D EDUCTION U/S 80P OF THE ACT IN EARLIER ASSESSMENT YEARS, THEREFORE, ALSO IT CANNOT BE SAID THAT THE ISSUE OF DEDUCTION WAS A DEBATABLE ISSUE WHICH C OULD BE RECTIFIED U/S 154 OF THE ACT. WE THEREFORE CONSIDERING THE DECISIO NS CITED HEREINABOVE ARE OF THE VIEW THAT IN THE PRESENT CASE AO COULD NOT HAVE PROCEEDED TO WITHDREW THE DEDUCTION U/S 80P IN THE OR DER U/S 154 OF THE ACT. WE THEREFORE SET ASIDE THE ORDER OF AO PASSED U/ S 154 OF THE ACT AND THUS, THE GROUNDS OF ASSESSEE ARE ALLOWED. 11. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 1 ST DAY OF AUGUST, 2019. SD/- S D/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) ! / JUDICIAL MEMBER '! / ACCOUNTANT MEMBER PUNE; DATED : 1 ST AUGUST, 2019. YAMINI #$%&'('% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. CIT(A) 2, AURANGABAD. PR. CIT-2, AURANGABAD. '#$ %%&',) &', / DR, ITAT, B PUNE; $*+,/ GUARD FILE. / BY ORDER // TRUE COPY // -./%0&1 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE.