M/s Ess Jay Steels (P) Ltd., Agra V. A.C.I.T., Circle-4(1), Agra

ITA 376/AGR/2013

• Counselvise Citation: 37620314 RSA 2013
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 27-02-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 26-12-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ANURADHA
• Assessee Lawyers: P N AGARWAL
• Keywords: Rectification of order
• Section: 54; 154; 15; 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER ITA NO.376/AGRA/2013 ASSESSMENT YEAR: 2008-09 M/S ESS JAY STEELS (P) LTD., VS. ASSTT. COMMISSION ER OF INCOME TAX, 63, NUNHAI ROAD, CIRCLE 4(1), AGRA. SAHADARA, AGRA. (PAN AAACE 6481 A). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI P.N. AGARWAL, ADVOCATE RESPONDENT BY : SMT. ANURADHA, JR. D.R. DATE OF HEARING : 27.02.2014 DATE OF PRONOUNCEMENT : 28.02.2014 ORDER PER PRAMOD KUMAR, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 30.10.2013 PASSED BY THE LD. CIT(A)-II, AGRA IN THE MATER OF R ECTIFICATION PETITION UNDER SECTION 154 OF THE INCOME TAX ACT, 1961 FILED BEFOR E THE LD. CIT(A) FOR THE A.Y. 2008-09. 2. THE GRIEVANCES RAISED BY THE ASSESSEE ARE AS FOL LOWS :- 1. BECAUSE THE LEARNED CIT(A) HAS ERRED ON FACTS A ND IN LAW IN DISMISSING THE APPLICATION U/S 154 OF THE I.T. ACT WITHOUT APPRECIATING THE CORRECT FACTS THAT THE OUTSTANDING OPENING BALA NCE OF M/S SHYAM AGRO INDUSTRIES REPRESENTS OLD PURCHASES AND REMAIN PAYABLE AT THE ITA NO.376/AGRA/2013 A.Y. 2008-09 2 END OF THE YEAR AND THEREBY THE PROVISIONS OF SECTI ON 41(1) ARE WRONGLY INVOKED AND APPLIED. 2. BECAUSE THE LEARNED CIT(A) HAS ERRED ON FATS AND IN LAW IN NOT APPRECIATING THE ASSESSEES CONTENTION BASED ON APP ARENT FACTS ON RECORD AND SETTLED LAW. 3. BECAUSE THE MISTAKE OF FACTS AS WELL AS LAW, BEI NG APPARENT FROM RECORDS, NEEDS RECTIFICATION AND CONSEQUENTIAL RELIEF. 3. TO ADJUDICATE THIS APPEAL, ONLY A FEW MATERIAL F ACTS NEED TO BE TAKEN NOTE OF. THE ASSESSEE BEFORE US IS A MANUFACTURER OF AUTOMOB ILE PARTS. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE A.O. MADE AN ADDITION O F RS.2,08,400/- BY INTER ALIA OBSERVING AS FOLLOWS:- AS REGARDS THE OPENING BALANCE OF RS.2,08,400/- AP PEARING IN THE CASE OF M/S SHYAM AGRO INDUSTRIES, ONCE MORE OP PORTUNITY WAS GIVEN TO THE ASSESSEE TO FILE THE EVIDENCES LIKE TR ANSPORTATION BILLS, CHALLANS, ETC. TO PROVE THE GENUINENESS OF PURCHASE S MADE BY IT FROM M/S SHYAM AGRO INDUSTRIES. SHAMLI AND THE ASESEE WA S AKED TO WHY THE SAME MAY NOT BEE ADDED WITHIN THE PROVISIONS OF SECTION 41(1) OF THE I.T. ACT. ASSESSEE, VIDE ITS REPLY DATED 01.12. 2010 STATED AS UNDER:- IN THIS ACCOUNT THERE WAS OB OF RS.2,08,400/- THIS IS THE REMAINING AMOUNT OF GOODS PURCHASED FROM PARTY IN T HE EARLIER YEAR AND DULY ENTERED IN THE EARLIER YEAR. AGAINST THE SAID OB OF RS.2,08,400/- ON AMOUNT OF RS.48,900/- REPAID TO HIM TOWARDS THE GOODS PURCHASED IN EARLIER YEAR AND DO NOT RELATE TO THE BUSINESS ACTIVITIES DONE IN THIS YEAR I.E. N O BUSINESS ACTIVITIES IS DONE IN CURRENT YEAR. I HAVE CONSIDERED THE REPLY OF THE ASSESSEE AND TH E ASSESSEE HAS NOT SPECIFICALLY PINPOINTED THAT WHY THE ADDITION B E NOT MADE UNDER THE IMPUGNED SECTION. SINCE THE ASSESSEE FAILED TO ESTABLISH THE TRADING LIABILITY, THE OPENING BALANCE OF RS.2,08,4 00/- IS BEING ADDED TO THE INCOME OF THE ASSESSEE. ( ADDITION OF RS.2,08,400/-) ITA NO.376/AGRA/2013 A.Y. 2008-09 3 4. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN AP PEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) DISMISSED THE ASSESSEES GRIEVANCE O N THIS ISSUE AND WHILE DOING SO HE OBSERVED THAT I HAVE GONE THROUGH THE ASSESSMEN T ORDER AS WELL AS THE SUBMISSIONS MADE BY THE LD. A.R. IN THIS REGARD AND IN MY OPINION, AS THE ASSESSEE HAS FAILED TO BRING ANY MATERIAL ON RECORD THAT THE LIABILITY STILL SUBSISTS, THE A.O. HAS RIGHTLY INVOKED THE PROVISIONS OF SECTION 41(1) OF THE ACT. THE ASSESSEE THEN MOVED RECTIFICATION PETITION BEFORE THE LD. CIT(A) ON THE GROUND THAT IT IS A MISTAKE APPARENT FROM RECORD TO HOLD THAT THE ASSESSEE FAIL ED TO BRING ANY MATERIAL ON RECORD THAT THE LIABILITY STILL SUBSISTS. IT WAS P OINTED OUT THAT OUT OF RS.2,08,400/- REPRESENTING THE SAID OPENING BALANCE, THE LD. CIT( A) HAS ALREADY GIVEN RELIEF OF RS.48,900/- WHICH WAS PAID DURING THE YEAR AND BAL ANCE REMAINS PAYABLE AS ALSO VERIFIABLE FROM SHEET-3 TO THE BALANCE SHEET I.E. S URCHARGE SHOWN PAYABLE TO SHYAM AGRO INDUSTRIES. LD. CIT(A) HOWEVER, DID NOT ACCE PT THIS CONTENTION. HE REJECTED THE RECTIFICATION PETITION AND OBSERVED AS FOLLOWS: - 2. IN RESPONSE TO THE NOTICE ISSUED BY THIS OFFICE , SRI P.N. AGARWAL, ADVOCATE ATTENDED ON BEHALF OF THE APPELLANT AS HIS AUTHORIZED REPRESENTATIVE (HEREINAFTER REFERRED TO AS THE LD. AR) AND MADE ORAL ARGUMENTS BY RELYING ON THE DISCUSSION ALREADY MADE IN THE RECTIFICATION APPLICATION AND HE ALSO REFERRED TO V ARIOUS CASE LAWS RELATING TO THE RECTIFICATION OF THE APPELLATE ORD ER IN WHICH, THERE ARE GLARING AND OBVIOUS MISTAKE OF LAW AS WELL AS FACT AND CASE LAWS RELATING TO THE INTERPRETATION OF THE PROVISIONS OF SECTION 41(1). AFTER CONSIDERING THE WRITTEN SUBMISSION AS WELL AS ORAL ARGUMENTS OF THE LD. AR AND CONSIDERING THE CASE LAWS REFERRED BY HI M, I HAVE FOUND THAT MY PREDECESSOR LD. CIT(A)-II, AGRA HAS CLEARLY HELD THAT PROVISIONS OF SECTION 41(1) CAN BE INVOKED IN CASE OF THE ASSESSEE (APPELLANT) AND CONFIRMED THE ADDITION TO THE EXTEN T OF RS.1,59,500/- ITA NO.376/AGRA/2013 A.Y. 2008-09 4 OUT OF THE TOTAL AMOUNT OF ADDITION OF RS,2,08,400/ - MADE IN THE ASSESSMENT ORDER. IN MY CONSIDERED OPINION, SUCH DE CISION IN THE APPELLATE ORDER TAKEN BY THE CIT(A) AFTER CONSIDERI NG THE FACTS OF THE CASE AND TAKING INTO ACCOUNT A PARTICULAR PROVISION OF LAW RELATING TO INCOME TAX ACT, CANNOT BE SAID TO BE MISTAKE APPARE NT FROM THE RECORD. SINCE DECISION TAKEN BY MY PREDECESSOR IN T HIS PARTICULAR MATTER IS BASED ON EXAMINATION OF THE FACTS OF THE CASE BY HIM AND HIS INTERPRETATION OF PROVISIONS OF LAW RELATING TO THE SECTION 41(1) OF INCOME TAX ACT WHICH IS NOW BEING DISPUTED BY THE L D. AR ON THE BASIS OF CERTAIN DECISIONS CITED BY HIM, SUCH DECIS ION OF MY PREDECESSOR CANNOT BE SAID TO BE MISTAKE APPARENT F ROM THE RECORD. THEREFORE, AFTER CONSIDERING THE ARGUMENT OF THE LD . AR, I AM OF THE OPINION THAT IF IT IS FELT BY THE APPELLANT THAT TH ERE IS ANY MISTAKE IN TAKING DECISION BY MY PREDECESSOR LD. CIT(A)-II, AG RA IN HIS APPELLATE ORDER DATED 01.03.2012 CONTRARY TO JUDICI AL DECISIONS AS RELIED UPON BY THE LD. AR, AN APPEAL CAN BE FILED T O HONBLE ITAT, AGRA AGAINST THE APPELLATE ORDER DATED 01.03.2012 B UT SUCH MISTAKE CANNOT BE RECTIFIED UNDER THE PROVISIONS OF SECTION 154 BECAUSE SUCH MISTAKE CANNOT BE HELD TO BE MISTAKE APPARENT FROM THE RECORD AND HENCE, THE APPLICATION FILED BY THE APPELLANT U/S 1 54 IS REJECTED. 5. THE ASSESSEE AGGRIEVED AND IS IN APPEAL BEFORE U S. 6. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AND DULY CONSIDERED THE FACTUAL MATRIX OF THE CASE AS ALSO T HE APPLICABLE LEGAL POSITION. THE LAW IS WELL SETTLED THAT SO FAR AS RECTIFICATION OF MISTAKE UNDER SECTION 154 IS CONCERNED, IT IS CONFINED ONLY TO SUCH MISTAKES WHI CH ARE GLARING, OBVIOUS AND INCAPABLE OF TWO VIEW BEING TAKEN IN RESPECT OF THE SAME. THE MISTAKES, EVEN IF ANY, WHICH REQUIRE LONG DRAWN PROCESS OF REASONING ON SUBJECTIVE ISSUES ARE INHERENT OUTSIDE THE NARROW SCOPE OF MISTAKES WHICH CAN BE RECTIFIED UNDER SECTION 154 OF THE ACT. THE AUTHORITY FOR THIS PROPOSITION IS CONTAINED IN HONBLE SUPREME COURTS LANDMARK JUDGEMENT IN THE CASE OF ITO VS. V OLKAT BROTHERS, 82 ITR 50 ITA NO.376/AGRA/2013 A.Y. 2008-09 5 WHEREIN THEIR LORDSHIPS HAVE OBSERVED THAT A DECIS ION ON DEBATABLE POINT OF LAW IS NOT A MISTAKE APPARENT FROM RECORD AND THAT A MISTAKE APPARENT ON RECORD MUST BE OBVIOUS AND PATENT MISTAKE AND NOT SOMETHING WHI CH CAN BE ESTABLISHED BY A LONG DRAWN PROCESS OF REASONING ON POINTS ON WHICH THERE MAY CONCEIVABLY BE TWO OPINION. IN THE LIGHT OF THE LEGAL POSITION, WHEN WE EXAMINE THE FACTS OF THE PRESENT CASE, WE FIND THAT IN THE ORIGINAL ORDER TH E LD. CIT(A) HAS TAKEN NOTE OF THE FACT THAT NOTICE UNDER SECTION 133(6) OF THE ACT CO ULD NOT BE SERVED TO SHYAM AGRO INDUSTRIES AND THE LD. CIT(A) WAS OF THE VIEW THAT THE ASSESSEE COULD NOT SUBSTANTIATE EXISTENCE OF THE SAID PARTY. WE ARE N OT CONCERNED WITH THE CORRECTNESS OF THIS APPROACH NOR ARE WE DEALING WITH THE QUESTI ON WHETHER SECTION 41(1) CAN BE APPLIED IN SUCH A SITUATION, BUT SUFFICE TO NOTE TH AT, RIGHTLY OR WRONGLY, THE CIT(A) WAS OF THE OPINION THAT THE ASSESSEE HAS FAILED TO ESTABLISH EXISTENCE OF THE LIABILITY. SUCH A CONCLUSION WAS INHERENTLY A SUBJECTIVE EXERC ISE. IN OUR CONSIDERED VIEW, THEREFORE, WHETHER LD. CIT(A) REACHED THIS CONCLUSI ON RIGHTLY OR WRONGLY AND WHETHER BALANCE SHEET ENTRY ITSELF WAS SUFFICIENT T O DISLODGE THIS CONCLUSION IS BEYOND THE INHERENTLY LIMITED SCOPE OF MISTAKES WHI CH CAN BE RECTIFIED UNDER SECTION 154 OF THE ACT. AT THE COST OF REPETITION, WE MAY POINT OUT THAT WE ARE NOT SITTING IN JUDGEMENT WHETHER THE LD. CIT(A) WAS RIG HT OR WRONG IN DOING SO BUT OUR LIMITED CONCERN IS WHETHER SUCH AN ERROR OF JUDGEME NT, EVEN IF ANY, CAN BE RECTIFIED UNDER SECTION 154 OF THE ACT. THE ANSWER IN OUR HU MBLE UNDERSTANDING IS EMPHATICALLY IN NEGATIVE. THE SCHEME OF SECTION 15 4 OF THE ACT DOES NOT PERMIT ITA NO.376/AGRA/2013 A.Y. 2008-09 6 CORRECTION OF SUCH ERRORS, EVEN IF THERE IS ANY ERR OR. IN THIS VIEW OF THE MATTER AND BEARING IN MIND THE FACT THAT THE ASSESSEE IS NOT I N APPEAL BEFORE US AGAINST LD. CIT(A)S ORDER ON MERIT, IN OUR CONSIDERED VIEW, TH E LD. CIT(A)S SUCCESSOR VIDE IMPUGNED ORDER WAS PERFECTLY JUSTIFIED. WE APPROVE HIS WELL REASONED ACTION AND DECLINE TO INTERFERE IN THE MATTER. ACCORDINGLY, T HE APPEAL FILED BY THE ASSESSEE AGAINST REJECTION OF RECTIFICATION PETITION IS DISM ISSED. 7. IN THE RESULT, APPEAL IS DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH FEBRUARY, 2014) SD/- SD/- (BHAVNESH SAINI) (PRAMOD KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 28 TH FEBRUARY, 2014 PBN/* COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, AGRA BENCH, AGRA 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL, AGRA TRUE COPY