M/s Orthonova Hospital, Jalandhar V. The Dy Commissioner of Income Tax, Jalandhar

ITA 125/ASR/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4541 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 01-03-2018
• Assessment Year: 2007-2008
• Appeal Filed On: 08-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K SHARMA
• Keywords: Rectification of order; Competent authority; Onus to prove
• Section: 143(3); 153A; 54; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER AND SH. N. K. CHOUDHRY, JUDICIAL MEMBER I.T.A. NO. 125/(ASR)/2017 AS SESSMENT YEAR: 2007-08 [PAN: AAAFO 7491B] M/S. ORTHONOVA HOSPITAL NEAR NARI NIKETAN NAKODAR ROAD, JALANDHAR (PB) VS. DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-II, JALANDHAR (PB). (APPELLANT) (RESPONDENT) APPELLANT BY : SH. SURINDER MAHAJAN ( C.A.) RESPONDENT BY: SH. P. K. SHARMA (D.R.) DATE OF HEARING: 01.03.2018 DATE OF PRONOUNCEMENT: 09.05.2018 ORDER PER SANJAY ARORA, AM: THIS IS AN APPEAL BY THE ASSESSEE AGITATING THE ORD ER BY THE COMMISSIONER OF INCOME TAX (APPEALS), BATHINDA ('CIT(A)' FOR SHO RT) DATED 23.01.2017, CONFIRMING THE RECTIFICATION ORDER U/S. 154 OF THE INCOME TAX ACT, 1961 ('THE ACT' HEREINAFTER) DATED 08.07.2009 FOR THE ASSESSMENT YE AR (AY) 2007-08. 2. THE ONLY ISSUE ARISING IN THE INSTANT APPEAL IS THE SUSTAINABILITY OF THE IMPUGNED ORDER IN LAW AND IN THE FACT AND CIRCUMSTA NCES OF THE CASE. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E WAS SUBJECT TO SEARCH U/S. 132. ASSESSMENT U/S. 153A READ WITH SECTION 143(3) WAS ACCORDINGLY FRAMED ON 29.12.2008, EFFECTING, INTER ALIA , AN ADDITION (TO THE RETURN OF INCOME U/S. 153A) F OR ITA NO.125 (ASR)/2017(AY 2007-08) ORTHONOVA HOSPITAL V. DY. CIT 2 A SUM OF RS. 29.29 LACS. THE CASH WAS, IN TERMS OF THE CASH BOOK SEIZED, FOUND DEFICIT (I.E., IN THE NEGATIVE) ON DIFFERENT DATES DURING THE RELEVANT YEAR, IN THE AGGREGATE OF THE SAID SUM. THE ASSESSING OFFICER (A O) ACCORDINGLY MADE AN ADJUSTMENT FOR THIS SUM IN-AS-MUCH AS CASH, AN ASSE T, CAN, AT THE MINIMUM, BE NIL, BUT NOT NEGATIVE, SO THAT THE SOURCE OF CASH, AT LE AST TO THE EXTENT NEGATIVE, REMAINED UNEXPLAINED. THE ASSESSEE PREFERRED A PETI TION U/S. 264 BEFORE THE COMMISSIONER OF INCOME TAX, CENTRAL, LUDHIANA (CIT /COMPETENT AUTHORITY, HEREINAFTER) ON 19.02.2009, CLAIMING THAT IT HAD RE WORKED THE CASH SHORTFALL ON DIFFERENT DATES, AND ALREADY INCLUDED A SUM OF RS. 15 LACS PER ITS RETURN OF INCOME U/S. 153A. NO FURTHER ADJUSTMENT WAS ACCORDINGLY CA LLED FOR. PENDING THE ADJUDICATION U/S. 264, THE ASSESSEE FIELD AN APPLIC ATION U/S. 154 (ON 02.03.2009), I.E., TOWARD RECTIFYING THE SAID MISTAKE, CLAIMED TO IMBUE ITS ASSESSMENT DATED 29.12.2008. THE PETITION U/S. 264 WAS DISPOSED BY T HE COMPETENT AUTHORITY ON 31.03.2010 (COPY OF THE ORDER ON RECORD), HOLDING A S UNDER: 4. THE CONTENTIONS OF THE ASSESSEE HAVE BEEN CONSI DERED AND IT IS OBSERVED AS FOLLOWS: (I) AS FAR AS ADDITION OF RS. 29,29,000/- IS CONCE RNED, IN THE BODY OF THE ASSESSMENT ORDER, IT IS HAS BEEN ELABORATELY DISCUSSED ON THE BASIS OF THE SEIZED MATERIAL HOW THE ASSESSEE HAD SUPPRESSED PROFESSIONAL RECEIPTS. TALKING SPECI FICALLY ABOUT THE FIGURE RS. 29,29,000/- , ADDITION MADE WAS KEPT RESTRICTED TO THIS AMOUNT BY GIVING BENEFIT OF DOUBT TO THE ASSESSEE THROUGH WARDING OFF EVERY IOTA OF ESTIMATION, CONJE CTURE OF SURMISE, EVEN THOUGH POSSIBLE GROUND FOR MAKING FURTHER ADDITION UNDER THIS HEAD WAS THERE. THE ASSESSEE IN HIS OWN SUBMISSION HAS HIMSELF SUBMITTED THAT THERE WAS DIS CREPANCY IN AS MUCH AS PROFESSIONAL RECEIPTS WERE NOT FULLY DISCLOSED IN THE CASH BOOK FOR WHICH HE HAS SOUGHT TO EXPLAIN BEING PURELY A PROBLEM OF AN INEFFICIENT ACCOUNTANT. WHET HER RIGHT OR WRONG, FACT REMAINS THAT TOTAL PROFESSIONAL RECEIPTS WERE NOT-DISCLOSED IN HIS BOO KS OF ACCOUNTS. FURTHER, IT HAS BEEN FOUND THAT THE ASSESSEE, IN COURSE OF ASSESSMENT PROCEEDI NGS, HIMSELF ADMITTED OF NON-RECORDING OF PROFESSIONAL RECEIPTS TO THE TUNE OF RS. 44,10,620/ - WHICH WERE INTENDED TO GET PARTLY OFFSET THROUGH MATCHING ENTRIES IN HIS BOOKS OF ACCOUNTS A ND FOR WHICH HE DISCLOSED RS. 15,00,000/- AS MISC. INCOME . THUS, THE BALANCE AMOUNT TO BE THUS OFF-SET BY HI M, IN HIS OWN ADMISSION COMES TO RS. 29,10,626, WHICH IS PRETTY CLOSE TO TH E ADDITION MADE BY THE A.O. ON THIS ACCOUNT. THUS, ADDITION GETS JUSTIFIED THROUGH THE SUBMISSIO N OF THE ASSESSEE HIMSELF . THEREFORE, THE ADDITION ON THIS GROUND IS VERY MUCH REASONABLE AND DOES NOT CALL FOR ANY FURTHER INTERVENTION. MOREOVER, IT IS SEEN THAT THE ASSESSEE HAS GIVEN DETAILED EXPLANATION AT ITA NO.125 (ASR)/2017(AY 2007-08) ORTHONOVA HOSPITAL V. DY. CIT 3 THE TIME OF ASSESSMENT AND THE SAME HAS BEEN CLOSEL Y EXAMINED LAY THE A.O., HENCE AT THIS STAGE, (NO) FURTHER INTERFERENCE ON THIS ISSUE IS C ALLED FOR. [EMPHASIS, OURS] THE ASSESSEES APPLICATION WAS, IN VIEW THEREOF, RE GARDED AS NOT MAINTAINABLE BY THE REVENUE AUTHORITIES, SO THAT, AGGRIEVED, THE AS SESSEE IS IN SECOND APPEAL. 5. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. 5.1 THE LD. CIT HAVING CONSIDERED THE MATTER IN DET AIL, ISSUING DEFINITE FINDINGS OF FACT, IMPACTING THE ASSESSMENT, IT WAS ALSO CONS IDERED PROPER BY US TO VISIT THE ASSESSMENT ORDER, WHICH IS ALLEGED TO CONTAIN THE S AID MISTAKE. PARA 4 OF THE ASSESSMENT ORDER IS, INTER ALIA , RELEVANT IN THIS REGARD, WHICH CONTAINS THE FINDI NGS ON EXAMINATION OF THE ASSESSEES RECORD, AS SEIZED, AS WELL AS THE RECONCILIATION FURNISHED BY IT DURING ASSESSMENT PROCEEDINGS. 5.2 OUR FIRST OBSERVATION IN THE MATTER IS THAT THE ASSESSEE HAS NOT BROUGHT ANY MATERIAL ON RECORD WHEREBY THE CLAIM BEING NOW MADE BEFORE US, I.E., THAT IT HAD REWORKED THE CASH SHORTFALL ON DIFFERENT DATES AND, FURTHER, INCLUDED A SUM OF RS. 15 LACS TOWARD THE SAME PER ITS RETURN OF INCOME FU RNISHED IN RESPONSE TO NOTICE U/S. 153A, STANDS MADE DURING THE ASSESSMENT PROCEE DINGS. THE SAME IN FACT OUGHT TO FIND MENTION IN THE RETURN OF INCOME ITSELF. RAT HER, EVEN WHERE SO, IT WOULD REQUIRE VERIFICATION AS TO ITS VERACITY, I.E., WITH REFERENCE TO THE ASSESSEES BOOKS OF ACCOUNT, COMPARING THE SAME WITH THE CASH-BOOK SEIZ ED, WHICH EXERCISE COULD BE CARRIED OUT ONLY IN THE ASSESSMENT PROCEEDINGS, WHE REAT THIS ASPECT OF THE MATTER, EVEN AS APPARENT FROM THE ASSESSMENT ORDER, AND NOT ICED BY THE LD. CIT, STANDS DISCUSSED ON MERITS IN CONSIDERABLE DETAIL. THE ASS ESSEES PLEA THEREFORE CANNOT BE APPARENTLY ADMITTED IN THE INSTANT PROCEEDINGS, THE SCOPE OF WHICH IS SEVERELY LIMITED, I.E., TOWARD RECTIFYING MISTAKE/S APPARENT FROM RECORD. AT THE SAME TIME THOUGH, IF THE ASSESSEE HAS INDEE D INCLUDED RS. 15 LACS AS INCOME TOWARD CASH SHORTFALL, I.E., AS AGAINST THE SHORTFALL OF RS. 29.29 LACS FOR ITA NO.125 (ASR)/2017(AY 2007-08) ORTHONOVA HOSPITAL V. DY. CIT 4 WHICH ADDITION HAS BEEN SUBSEQUENTLY MADE IN ASSESS MENT, THERE IS APPARENTLY AN EXCESS ADDITION (ON ACCOUNT OF CASH SHORTFALL) TO T HE EXTENT OF RS. 15 LACS, WHICH COULD BE RECTIFIED U/S. 154. WE MAY THOUGH CLARIFY THAT WE ASSUME A CASH SHORTFALL OF RS. 29.29 LACS AS PER CASH-BOOK SEIZED ON THE BA SIS OF THE STATEMENT MADE BEFORE US AS WELL AS THE PLAIN READING OF THE ASSESSMENT O RDER, WHICH RECORDS THE RELEVANT ISSUE, EVEN AS, AS AFORENOTED, THE RAISING OF THE R ELEVANT CLAIM PER THE RETURN OF INCOME OR DURING THE ASSESSMENT PROCEEDINGS, HAS NO T BEEN EXHIBITED. UPON THIS BEING OBSERVED BY THE BENCH DURING HEARING, THE LD. AUTHORIZED REPRESENTATIVE (AR), THE ASSESSEES COUNSEL, SH. SURINDER MAHAJAN, CA, WOULD AGREE TO THE MATTER BEING RESTORED TO THE FILE OF THE AO TO SATISFY HIM , ON THE BASIS OF THE MATERIAL ON RECORD, THAT THERE HAS BEEN AN EXCESS ADDITION BY R S. 15 LACS. HE WOULD THOUGH SUBSEQUENTLY CONTEND THAT THE MATTER BE RESTORED TO THE FILE OF THE FIRST APPELLATE AUTHORITY IN-AS-MUCH AS THE SAID AUTHORITY HAD OMIT TED TO ADJUDICATE THE ASSESSEES CASE ON MERITS, STATING THAT THE APPLICATION U/S. 1 54 IS NOT MAINTAINABLE IN VIEW OF THE PETITION U/S. 264, AND WHICH IS CLEARLY NOT THE CORRECT POSITION IN LAW IN VIEW OF THE DECISIONS BY HONBLE HIGH COURTS AND THE TRIBUN AL, SOME OF WHICH STAND CITED. OUR PURVIEW THEREFORE GETS LIMITED TO EXAMINING WHE THER WE COULD REMAND BACK THE MATTER IN THE INSTANT PROCEEDINGS, I.E., I N VIEW OF THE CLEAR FINDINGS IN THE ASSESSMENT ORDER, AS WELL AS BY THE COMPETENT AUTHO RITY U/S. 264, REPRODUCED ABOVE, AND THE ABSENCE OF ANY MATERIAL INDICATING T HE STATED MISTAKE. 5.3 IT IS PATENTLY CLEAR THAT THE SUBJECT ISSUE HAS BEEN SUBJECT TO ELABORATE CONSIDERATION, BOTH AT ASSESSMENT STAGE AS WELL AS IN THE PROCEEDINGS UNDER SECTION 264. AS AFORENOTED, NO MATERIAL OR EVIDENCE OF THE MISTAKE UNDER REFERENCE IN EITHER - THE FINDINGS PER THE TWO ORDERS AFORE-SAID BEING SUBJECT TO THE DOCTRINE OF MERGER, STANDS BROUGHT TO OUR NOTICE. BE THAT AS IT MAY, IT IS ALSO, AT THE SAME TIME, ABUNDANTLY CLEAR THAT IF THERE HAS BEEN, AS CLAIMED , DOUBLE ADDITION, OR THE ASSESSEE ITA NO.125 (ASR)/2017(AY 2007-08) ORTHONOVA HOSPITAL V. DY. CIT 5 HAS BEEN OMITTED TO BE ALLOWED CREDIT IN RESPECT OF AN ADDITION MADE SUO MOTU PER ITS RETURN OF INCOME IN ASSESSMENT, IT OUGHT TO BE, IF NOT ALREADY TAKEN INTO ACCOUNT OR CONSIDERED, I.E., WHILE COMPUTING THE TAXABLE IN COME, SO DONE, SO THAT TO THAT EXTENT THERE COULD BE A SCOPE FOR A MISTAKE, AS BEI NG CLAIMED. BOTH THE AO AND THE LD. CIT(A) HAVE, HOWEVER, NOT DECIDED THE ASSESSEE S PETITION UNDER SECTION 154 ON MERITS, STATING IT TO BE NOT MAINTAINABLE IN VIEW O F THE PETITION U/S.264, SINCE DISPOSED AND, AS HEREINABOVE OBSERVED, ISSUING FIND INGS OF FACT AND, FURTHER, IN RESPECT OF THE SAME MATTER QUA WHICH THE ASSESSEE CLAIMS A MISTAKE. CONSIDERATION OF A MATTER IN DETAIL, HOWEVER, WOULD NOT PER SE PRECLUDE A MISTAKE, THE BURDEN TO PROVE WHICH (MISTAKE) THOUGH IS SQUARELY ON THE PER SON WHO SO CLAIMS, I.E., THE EXISTENCE OF A MISTAKE/S LIABLE FOR RECTIFICATION. THE LIMITED ISSUE BEFORE US IS THE MAINTAINABILITY OF THE ASSESSEES APPLICATION U/S. 154. NO DOUBT, THE SCOPE OR MARGIN FOR SUCH AN OBVIOUS ERROR, AS BEING CLAIMED, GIVEN THAT THE RELEVANT ASPECT HAS BEEN THE SUBJECT MATTER OF DELIBERATION ON MORE THAN ONE OCCASION, AND BY MORE THAN ONE AUTHORITY, STANDS GREATLY REDUCED. THE SAM E, HOWEVER, CANNOT BE ELIMINATED THOUGH. THERE IS, THUS, LITTLE MERIT IN NOT DECIDING/DISPOSING THE ASSESSEES APPLICATION U/S. 154 ON MERITS. THAT IS, IN SPITE OF THE LD. CIT HAVING CONSIDERED THE ASPECT OF SUO MOTU DISCLOSURE OF RS.15 LACS BY THE ASSESSEE. WHY, A MISTAKE WHICH IS APPARENT FROM RECORD, COULD OCCU R AT ANY STAGE. ALL THAT THE ASSESSING AUTHORITY HAD TO DO WAS TO ISSUE A FINDIN G/S, ONE WAY OR THE OTHER, PER A SPEAKING ORDER. [ 5.4 IN VIEW OF THE FORE-GOING, WE SEE NO REASON FOR REGARDING THE ASSESSEES APPLICATION U/S. 154 AS NOT MAINTAINABLE, AS HELD B Y THE REVENUE AUTHORITIES. WE, ACCORDINGLY, VACATING THEIR FINDING AS TO NON-MAINT AINABILITY, RESTORE THE MATTER BACK TO THE FILE OF THE AO (I.E., WHOSE ORDER IS CL AIMED TO BEAR THE MISTAKE) FOR THE CONSIDERATION OF THE ASSESSEES APPLICATION U/S . 154 ON MERITS. FURTHER, WE ITA NO.125 (ASR)/2017(AY 2007-08) ORTHONOVA HOSPITAL V. DY. CIT 6 CONSIDER IT PROPER TO CLARIFY THAT WE MAY NOT CONST RUED AS HAVING ISSUED ANY DIRECTION OR FINDING IMPACTING THE SAID CONSIDERATI ON. THE BURDEN TO PROVE THE MISTAKE, APPARENT FROM RECORD, SO THAT IT IS LIABLE FOR RECTIFICATION U/S. 154, WOULD BE CLEARLY ON THE ASSESSEE. WE DECIDE ACCORDINGLY. 6. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED ON THE AFORESAID TERMS. ORDER PRONOUNCED IN THE OPEN COURT ON MAY 09, 2018 SD/- SD/- (N. K. CHOUDHRY) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 09.05.2018 /GP/SR. PS. COPY OF THE ORDER FORWARDED TO: (1) THE APPELLANT: ORTHONOVA HOSPITAL NAKODAR R OAD, JALANDHAR (PB) (2) THE RESPONDENT: DY. C. I. T. CENTRAL CIRCLE -II JALANDHAR (PB). (3) THE CIT(A), BATHINDA. (4) THE CIT CONCERNED. (5) THE SR. DR, I.T.A.T. TRUE COPY BY ORDER