M/s. Hardik Gas Agency, Gandhinagar V. The Income tax Officer, Ward-2, Gandhinagar

ITA 2965/AHD/2009

• Counselvise Citation: [2010] 137 COUNSELVISE.COM (IT) 0020 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2001-2002
• Appeal Filed On: 03-11-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: C K MISHRA
• Assessee Lawyers: KALPESH J SHAH
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD - AHMEDABAD A BENCH (BEFORE DR.O.K. NARAYANAN, VICE-PRESIDENT AND SHRI MAHAVIR SINGH, JUDICIAL MEMBER) ITA NO.2965/AHD/2009 [ASSTT.YEAR : 2001-2002] HARDIK GAS AGENCY G-23, MEGH MALHAR SECTOR 11, GANDHINAGAR. VS. ITO, WARD-2 GANDHINAGAR. ASSESSEE BY : SHRI KALPESH J. SHAH REVENUE BY : SHRI C.K.MISHRA DATE OF ORDER RESERVED : 04-01-2010 O R D E R PER DR. O.K. NARAYANAN, VICE-PRESIDENT : THIS APPEAL IS FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2001- 2002. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE CIT(A), GANDHINAG AR, AHMEDABAD DATED 11-8-2009. THE APPEAL ARISES OUT OF THE ORDER PASS ED BY THE ASSESSING OFFICER UNDER SECTION 154 OF THE INCOME TAX ACT, 19 61. 2. THE ASSESSEE IS CARRYING ON THE BUSINESS OF DIST RIBUTION OF LPG CYLINDERS ON CONTRACT WITH INDIAN OIL CORPORATION L TD. IN EXECUTING THE ABOVE CONTRACT, THE ASSESSEE DEPLOYED ITS OWN TRUCK FOR WHICH CHARGES WERE REIMBURSED BY THE IOC LTD. 3. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO TOOK A VIEW THAT THE ASSESSEE IS CARRYING ON THE BUSINESS OF OPERATI ON OF TRUCK INDEPENDENTLY AND THEREFORE COVERED BY SECTION 44AE OF THE ACT. ON THE BASIS OF THE ABOVE OBSERVATION, THE AO WORKED OUT R S.24,000/- PER MONTH AS INCOME AND DISALLOWED ALL OTHER EXPENSES RELATIN G TO RUNNING OF TRUCK. PAGE - 2 ITA NO.2965/AHD/2009 -2- 4. THE FIRST APPEAL FILED BY THE ASSESSEE AGAINST T HE ABOVE TREATMENT METED OUT BY THE AO WAS DISMISSED BY THE CIT(A) ON THE GROUND THAT THE APPEAL WAS FILED BEYOND THE TIME PERMITTED BY LAW. THE DELAY CAUSED IN FILING THE APPEAL WAS NOT CONDONED BY THE CIT(A). THE MATTER WAS TAKEN BEFORE THE APPELLATE TRIBUNAL IN SECOND APPEAL. TH E TRIBUNAL UPHELD THE ORDER OF THE CIT(A) AND CONFIRMED THE DISMISSAL OF THE APPEAL ON THE GROUND OF LIMITATION. ONE COURSE OF ACTION CONTEMP LATED BY THE ASSESSEE THUS CAME TO AN END. THE MATTER WAS NOT FURTHER PU RSUED BY THE ASSESSEE. 5. MEANWHILE, THE SAME ISSUE WAS AGITATED BEFORE TH E CIT(A) FOR THE ASSESSMENT YEARS 2000-2001, 2002-2003, 2003-2004 AN D 2004-2005. THE ASSESSEE ARGUED THAT THE ACTIVITY OF OPERATING TRUC K BY THE ASSESSEE WAS PART AND PARCEL OF ITS OVERALL BUSINESS AND CANNOT BE TREATED AS AN INDEPENDENT BUSINESS SO AS TO ATTRACT THE SUMMARY P ROVISIONS OF ASSESSMENT PROVIDED UNDER SECTION 44AE. THE CIT(A) FURTHER HELD THAT THE ASSESSEE HAS MAINTAINED BOOKS OF ACCOUNTS AND T HOSE ACCOUNTS HAVE BEEN AUDITED AND IN SUCH CIRCUMSTANCES, THE ASSESSE E HAS EVERY RIGHT TO DEMAND AN ASSESSMENT IN THE REGULAR COURSE AND THER E IS NO JUSTIFICATION FOR IMPOSING SECTION 44AE ON THE ASSESSEE. THE C ONTENTION OF THE ASSESSEE WAS ACCEPTED FOR THE ABOVE ASSESSMENT YEAR S. IN THE LIGHT OF THE ABOVE DEVELOPMENT, THE ASSESSEE AGAIN REVIVED THE I SSUE FOR THE IMPUGNED ASSESSMENT YEAR 2001-2002 BEFORE THE AO THROUGH A P ETITION FILED UNDER SECTION 154. IT WAS THE CONTENTION OF THE ASSESS EE THAT THE ORDER OF THE ASSESSING AUTHORITY FOR IMPUGNED ASSESSMENT YEAR 20 01-2002 INVOKING SECTION 44AE IS A MISTAKE APPARENT FROM THE RECORD BOTH ON FACTS AS WELL AS IN LAW. BUT THE RECTIFICATION PETITION WAS DISM ISSED BY THE AO STATING THAT THE ISSUE IS NOT IN THE NATURE OF A MISTAKE AP PARENT FROM THE RECORDS. PAGE - 3 ITA NO.2965/AHD/2009 -3- CIT(A) ALSO AGREED WITH THE AO THAT THIS IS NOT A M ATTER TO BE ADDRESSED IN THE LIGHT OF THE LAW CONTAINED IN SECTION 154. THE FIRST APPEAL WAS DISMISSED. THE ASSESSEE IS AGGRIEVED AND THEREFORE THE SECOND APPEAL BEFORE US. AS A MATTER OF FACT, THE ASSESSEE HAD A LSO APPROACHED THE ADMINISTRATIVE COMMISSIONER UNDER SECTION 264 OF TH E IT ACT AND WAS NOT SUCCESSFUL. 6. WE HEARD SHRI KALPESH J. SHAH, THE LD. CHARTERED ACCOUNTANT APPEARING FOR THE ASSESSEE AND SHRI C.K.MISHRA, THE LEARNED ADDL. COMMISSIONER OF INCOME TAX APPEARING FOR THE REVENU E. WE HAD DETAILED HEARING ON THE MATTER. IT IS A FACT DISCE RNIBLE FROM THE RECORDS THAT THE ASSESSEE HAD MAINTAINED REGULAR BOOKS OF A CCOUNTS AND THOSE ACCOUNTS WERE AUDITED AND AUDITED STATEMENTS AND AU DITORS REPORTS WERE FILED BEFORE THE ASSESSING AUTHORITY. IT IS ALSO T RUE THAT THE ASSESSEE IS OPERATING TRUCK AS PART AND PARCEL OF HIS BUSINESS AS A WHOLE AND THEREFORE THERE WAS NO SANCTITY IN DE-LINKING TRUCK OPERATION FROM THE REMAINING BUSINESS OF THE ASSESSEE. OBVIOUSLY, IN SUCH CIRCU MSTANCES, THERE IS NO APPLICATION OF SECTION 44AE. AND FURTHER THE ASSES SEE HAS NOT SOUGHT FOR THE BENEFIT OF SECTION 44AE BEFORE THE ASSESSING AU THORITY. IT IS, IN LIGHT OF THE ABOVE SCENARIO THAT THE CIT(A) HAS SET ASIDE THE ACTION OF THE AO FOR THE PRECEDING AND SUCCEEDING ASSESSMENT YEARS. IT IS ALSO RELEVANT TO NOTE THAT THE ORDERS OF THE CIT(A) FOR THOSE ASSESS MENT YEARS HAVE NOT BEEN CHALLENGED BY THE DEPARTMENT BEFORE THE APPELL ATE TRIBUNAL. THEREFORE, ON THE MERIT OF THE CASE, THERE IS NO DO UBT THAT THE GRIEVANCE OF THE ASSESSEE RAISED FOR THE IMPUGNED ASSESSMENT YEA R 2001-2002 IS GENUINE. 7. BUT AT THE SAME TIME, WE HAVE TO SEE THAT THE QU ANTUM APPEAL FILED BY THE ASSESSEE WAS DISMISSED BY THE TRIBUNAL ON TH E GROUND OF LIMITATION PAGE - 4 ITA NO.2965/AHD/2009 -4- AND THE ASSESSEE HAS NOT PURSUED THE MATTER FURTHER . THEREFORE, THE TRIBUNAL HAS NO LOCUS STANDI TO EXAMINE THE ISSUE ON ITS MERITS. THE LIMITED QUESTION NOW ARISING FOR OUR CONSIDERATION IS WHETHER THE ASSESSEE IS JUSTIFIED IN ARGUING THAT THE ORDER FOR THE IMPU GNED ASSESSMENT YEAR 2001-2002 HAS TO BE RECTIFIED IN THE LIGHT OF THE S UBSEQUENT ORDERS PASSED BY THE CIT(A) FOR EARLIER AND SUBSEQUENT ASSESSMENT YEARS ON THE VERY SAME SUBJECT. THERE SHOULD NOT BE ANY DISPUTE REGA RDING THE LIMITED ROLE OF SECTION 154 IN PROCEEDING WITH RECTIFICATION. T HE MATTER TO BE RECTIFIED MUST BE MISTAKE APPARENT FROM THE RECORDS. IN THE PRESENT CASE, THE ASSESSEE MIGHT HAVE BEEN INFLICTED WITH INJUSTICE F OR THE IMPROPER DECISION OF THE ASSESSING AUTHORITY FOR THE IMPUGNE D ASSESSMENT YEAR 2001-2002. BUT THAT DOES NOT MEAN THAT THE FINDING OF THE AO FOR THE ASSESSMENT YEAR 2001-2002 IS A MISTAKE APPARENT FRO M RECORDS. IT IS A CASE OF WRONG APPRECIATION OF FACTS, IMPROPER APPLI CATION OF LAW AND AN ERROR OF JUDGMENT. BUT THESE ARE NOT DERIVATIVES O F RECTIFIABLE MISTAKES. 8. THEREFORE, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE CONSTRAINED TO DISMISS THE APPEAL FILED BY THE ASSE SSEE INVOLVING THE LIMITED QUESTION OF INVOKING SECTION 154 TO UNDO AN APPARENT INJUSTICE METED OUT TO THE ASSESSEE FOR THE ASSESSMENT YEAR 2 001-2002. 9. IN RESULT THE APPEAL FILED BY THE ASSESSEE IS DI SMISSED. ORDER PRONOUNCED ON WEDNESDAY THIS SIXTH DAY OF JAN UARY, 2010. SD/- SD/- (MAHAVIR SINGH) JUDICIAL MEMBER (DR.O.K. NARAYANAN) VICE-PRESIDENT PAGE - 5 ITA NO.2965/AHD/2009 -5- PLACE : AHMEDABAD DATE : 06-01-2010 COPY OF THE ORDER FORWARDED TO: 1) : ASSESSEE 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR, ITAT, AHMEDABAD