THE SEKSARIA BISWAN SUGAR FACTORY LTD, MUMBAI V. DCIT 2(3), MUMBAI

ITA 4040/MUM/2010

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88581 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 12-02-2015
• Assessment Year: 2000-2001
• Appeal Filed On: 18-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PAVAN KUMAR BEER LA
• Assessee Lawyers: Y P TRIVEDI SHRI RUPAL VORA
• Keywords: Rectification of order; Period of limitation; Capital receipt; Time period of passing order
• Section: 143(3); 263; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G, MUMBAI , !''''# !''''# !''''# !''''#$ $$ $ % % % % BEFORE SHRI B R BASKARAN, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER . : . : . : . : 4040 4040 4040 4040/ // / / // / 2010, 2000-01 ITA NO. : 4040/MUM/2010 , (ASSESSMENT YEAR 2000-01) THE SEKSARIA BISWAN SUGAR FACTORY LTD. SEKSARIA CHAMBERS, 5 TH FLOOR, 139, NAGINDAS MASTER ROAD, FORT, MUMBAI - 400 001 PAN: AAACT 1343 C VS COMMISSIONER OF INCOME TAX -2, ROOM NO. 344, 3 RD FLOOR, AAYAKAR BHAVAN, M K ROAD, MUMBAI - 400 020 (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI Y P TRIVEDI SHRI RUPAL VORA RESPONDENT BY : SHRI PAVAN KUMAR BEERLA /DATE OF HEARING : 12-02-2015 / DATE OF PRONOUNCEMENT : 04-03-2015 ! ! ! ! ORDER , , , , PER VIVEK VARMA, J.M. : THE APPEAL IS FIELD BY THE ASSESSEE AGAINST THE ORD ERS OF CIT 2, MUMBAI, DATED 23.03.2010 U/S 263 OF THE INCOME TAX ACT. 2. THE FACTS ARE THAT ON THE ISSUE OF ADDITIONAL QU OTA, THE CASE OF THE ASSESSEE REACHED THE ITAT. IN ITA NO. 7692/MUM/ 2003, THE COORDINATE BENCH OF THE ITAT, RELYING ON THE DECISI ONS ON THE ISSUE FOR ASSESSMENT YEAR 1991-92, 1992-93, 1993-94, 1995-96, 1996-97, 1997-98 AND 1998-99 HELD THE RECEIPTS FROM SALE OF ADDITIONAL QUOTA WAS CAPITAL RECEIPT AND THEREFORE, NOT EXIGIBLE TO TAX. THE SEKSARIA BISWAN SUGAR FACTORY LTD ITA 4040/MUM/2010 2 3. IN THE APPEAL GIVING EFFECT ORDER DATED 26.11.20 07, THE AO ONCE AGAIN ADDED BACK RS. 4,42,65,747/-, WHICH THE ITAT HAD HELD TO BE NOT TAXABLE. 4. THE ASSESSEE FILED AN APPLICATION U/S 154 FOR RE CTIFICATION OF MISTAKE, AS THE AO HAD NOT GIVEN DIRECT AND PROPER EFFECT TO THE DIRECTIONS OF THE ITAT. 5. THE AO VIDE ORDER DATED 07.02.2008 PASSED THE RE CTIFICATION ORDER, FINALLY, GIVING EFFECT TO THE ORDER OF THE I TAT. 6. AGAINST THIS ORDER RECTIFICATION U/S 154 DATED 0 7.02.2008, THE CIT HAS INITIATED REVISION PROCEEDINGS U/S 263, BEC AUSE ACCORDING TO HIM THE AO FAILED TO COMPUTE INCOME U/S 115JA. 7. THE AR, BEFORE US SUBMITTED THAT IF AT ALL THERE WAS ANY MISTAKE IN THE ORDER OF THE AO, IT WAS IN THE ORIGINAL REGU LAR ASSESSMENT FRAMED U/S 143(3). BUT THIS IS A CASE OF ORDER GIVI NG EFFECT TO THE ORDER OF THE ITAT. SINCE THERE WAS AN APPARENT MISTAKE IN THIS ORDER, OF ORDER GIVING EFFECT, THE ASSESSEE SOUGHT RECTIFICAT ION, WHICH WAS RECTIFIED. 8. IN ANY CASE, THE AR SUBMITTED THAT THE INITIATIO N OF PROCEEDINGS U/S 263 IS WELL BEYOND THE TWO YEARS LIMITATION PER IOD. 9. ACCORDING TO THE AR, THE ORDER WAS ORDER GIVING EFFECT TO THE ITAT ORDER DATED 26.11.2007. RECTIFICATION PROCEEDING WA S ONLY TO RECTIFY THE MISTAKE, WHICH WAS ON THE FACE OF THE ORDER, AN D WHICH LEGALLY, GOT MERGED WITH THE MAIN ORDER, WHICH IN THE INSTANT CA SE WAS DATED 26.11.2007. 10. IN SUCH A CIRCUMSTANCES, IF AT ALL THE CIT HAD PROPOSED TO REVISE THE ORDER, IT COULD HAVE BEEN THE ORDER DATED 26.11 .2007. THE SEKSARIA BISWAN SUGAR FACTORY LTD ITA 4040/MUM/2010 3 11. THE AR, THEREFORE, SUBMITTED THAT ON THE BOTH T HE CIRCUMSTANCES, THE REVISION PROCEEDINGS WERE ILLEGA L. 12. THE DR SUPPORTED THE ORDER OF THE CIT. 13. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE PU RSUED THE VARIOUS ORDERS. IF AT ALL THERE WAS AN INFIRMITY, I T WAS IN THE ORDER GIVING EFFECT TO THE ORDER OF THE CIT(A) DATED 06.1 1.2003. THE ISSUE OF 115JA BECAME FINAL AS IT WAS NEVER RAISED BY EITHER PARTY, POST THE ORDER DATED 06.11.2003, AS REFERRED ABOVE. IN ANY C ASE ON OTHER ISSUES THE CASE TRAVELLED TO THE ITAT AND WAS DECIDED BY I T. 14. AT THIS STAGE, THE ASSESSMENT WAS FRAMED ON THE ISSUES WHICH WERE ENTRUSTED TO THE AO TO GIVE EFFECT TO. 15. THE ISSUE OF 115JA WAS NEITHER THE ISSUE BEFORE THE ITAT NOR IN THE APPEAL EFFECT, AS IT WAS ALREADY FINAL. 16. IN SUCH A CASE, WE CANNOT HOLD THAT THE ORDER O F THE CIT U/S 263 IS CORRECT, BECAUSE THE CIT HAS THE POWER TO REVISE ANY ORDER, WITHIN A PRESCRIBED TIME LIMIT. IN THE CURRENT PROCEEDINGS, THE ORDER DATED 06.11.2003 COULD ONLY BE REVERSED BY CIT U/S 263 ON OR BEFORE 31.03.2006. IF WHAT THE CIT WAS SEEKING TO REVISE, I.E. ORDER U/S 154, IS ALLOWED, THEN IT WILL GIVE UN BRIDLED AND UNSTOP PABLE POWER TO THE CIT. 17. REVERTING OUR ATTENTION, AS TO WHICH ORDER COUL D HAVE BEEN REVISED BY THE CIT. WE FIND THAT THE CIT SOUGHT TO REVISE THE ORDER U/S 154 DATED 02.01.2008 IN RESPECT OF A MATTER WHICH G OT CONCLUDED ON 06.11.2003. THIS CANNOT BE ALLOWED BECAUSE THE SURV IVING ORDER WAS ORDER U/S 143(3) READ WITH SECTION 154, DATED 06.11 .2003. THE SEKSARIA BISWAN SUGAR FACTORY LTD ITA 4040/MUM/2010 4 18. WE, THEREFORE, CANCEL THE INITIATION OF PROCEED INGS U/S 263 AND THE CONSEQUENTIAL ORDER DATED 23.3.2010 AND RESTORE THE ORDER U/S 154 DATED 07.02.2008. 19. ON THE ISSUE OF LIMITATION AS WELL, WE FIND THA T THE ORDER SOUGHT TO BE REVISED IN RECTIFICATION ORDER DATED 07.02.20 08, WHEREAS IF AT ALL ANY ORDER COULD BE REVISED WAS ORDER U/S 143(3)/254 DATED 26.11.2007. SINCE THE ORDER U/S 263 IS DATED 23.03. 2010, IT IS WELL BEYOND THE TWO YEARS LIMITATION PERIOD FROM ORDER D ATED 06.11.2003. 20. UNDER THESE CIRCUMSTANCES, WE CANCEL THE ORDER U/S 263 AS ILLEGAL, BEING BEYOND THE LIMITATION. 21. IN THE RESULT, THE APPEAL AS FILED BY THE ASSES SEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 04/03/2015. SD/- SD/- ( (( ( ) ) ) ) ( (( ( ) )) ) (B R BASKARAN) (VIVEK VARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE 04/03/2015 '/ COPY TO:- 1) / THE APPELLANT. 2) / THE RESPONDENT. 3) THE CIT -2, MUMBAI. 4) THE ADDL CIT-RG. 2(3)/CIT- CONCERNED ____, MUMBAI. 5) #$%' , &' THE D.R. G BENCH, MUMBAI. 6) %()' THE SEKSARIA BISWAN SUGAR FACTORY LTD ITA 4040/MUM/2010 5 COPY TO GUARD FILE. ! / BY ORDER / / TRUE COPY / / */+ , , &' DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI *./+ .. * CHAVAN, SR. PS