Sh. Kedar Nath Jegaria, Agra V. I.T.O., Ward - 4(2), Agra

ITA 413/AGR/2011

• Counselvise Citation: 41320314 RSA 2011
• Duration Of Justice: 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 02-05-2012
• Assessment Year: 1997-1998
• Appeal Filed On: 03-11-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SOHAIL AKHTAR
• Keywords: Maximum Marginal Rate
• Section: 143(3); 154; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 413, 414 & 415/AGRA/2011 ASSTT. YEAR : 1997-98, 1998-99 & 1999-2000 SHRI KEDAR NATH JEGARIA, VS. INCOME-TAX OFFICE R, CHARITABLE SOCIETY, WARD 4(2), AGRA. C-2/58, KAMLA NAGAR, AGRA. (PAN : AAAAK 9814 H) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJENDRA SHARMA, ADVOCATE RESPONDENT BY : SHRI SOHAIL AKHTAR, JR. D.R. DATE OF HEARING : 02.05.2012 DATE OF PRONOUNCEMENT OF ORDER : 04.05.2012 ORDER PER BHAVNESH SAINI, J.M.: ALL THE APPEALS OF THE SAME ASSESSEE ARE DIRECTED AGAINST THE COMMON ORDER OF LD. CIT(A)-II, AGRA DATED 25.08.2011 FOR T HE ASSESSMENT YEARS 1997- 98, 1998-99 AND 1999-2000 ON THE FOLLOWING IDENTICA L GROUNDS OF APPEALS : 1. THAT THE LEARNED CIT (APPEALS) HAS ERRED ON FAC TS AS WELL AS IN LAW WHILE DISMISSING THE APPEAL OF THE A PPELLANT, IGNORING THE GROUNDS TAKEN BY THE APPELLANT AND WIT HOUT APPRECIATING OF THE FACTS AS WELL AS ISSUE INVOLVED THEREIN. THE ORDER OF THE CIT (APPEALS) IS NOT CORRECT ON THE FA CTS AS WELL AS IN LAW, SAME IS LIABLE TO BE SET ASIDE. APPLICATION MO VED BY THE APPELLANT U/S 154 OF THE ACT IS LIABLE TO BE ALLOWE D. ITA NO. 413, 414 & 415/AGRA/2011 2 2. THAT IN THE MEMORANDUM OF APPEAL, APPELLANT HAS CHALLENGED THE CALCULATION OF I.TAX CHARGED BY THE AO AND NOT THE STATUS, WHILE THE CIT (APPEALS) IGNORING THE GROUND S, HAS GIVEN THE DECISION ON SOME OTHER ISSUE I.E. ON STATUS OF APPE LLANT WHICH WAS NOT THE ISSUE BEFORE CIT (APPEALS) AND ALSO HAS NOT BEEN CHALLENGED BY THE APPELLANT, THE ORDER OF THE CIT ( APPEALS) SUFFERED WITH JURISDICTION WHICH HE HAS, THE APPELL ATE ORDER PASSED DATED 25.8.2011 IS BAD IN LAW, LIABLE TO BE SET ASI DE. 3. THAT THE AO HAS ERRED ON FACTS AND IN LAW WHILE REJECTING THE ASSESSEE'S APPLICATION MOVED U/S 154 OF INCOME TAX ACT POINTING THEREIN THE MISTAKE APPARENT FROM RECORD IN RESPECT OF CALCULATION OF THE TAX PAYABLE BY TRUST (REGD. WITH REGISTRAR O F SOCIETY) ON WHICH TAX IS TO BE CHARGED AS CHARGEABLE IN THE CAS E OF INDIVIDUAL AND NOT AS IN THE CASE OF AOP (UNSPECIFIED) AS MAXI MUM MARGINAL RATES AS CHARGED BY THE AO IN THE CASE OF APPELLANT U/S 167 B OF THE INCOME TAX ACT. THE NOTICE OF DEMAND DATED 28.3 .2002 CHARGING OF THE TAX U/S 167 B OF INCOME TAX ACT AS MAXIMUM MARGINAL RATES IS LIABLE TO BE AMENDED AND IS TO BE CHARGED AS CHARGEABLE IN THE CASE OF INDIVIDUAL, WHICH IS ALSO NOT APPRECIATED AND CONSIDERED BY THE AO AS WELL AS BY THE CIT (APP EALS) IN THEIR APPELLATE ORDER UNDER APPEAL. 4 THAT THE ASSESSEE IS SOCIETY REGISTERED WITH REGI STRAR OF SOCIETY, IF THE ASSESSMENT IS COMPLETED IN THE STATUS OF AOP, T HE TAX IS TO BE CHARGED AS CHARGEABLE IN THE CASE OF INDIVIDUAL AND NOT ON MAXIMUM MARGINAL RATE AS CHARGED BY THE AO U/S 167 B OF INCOME TAX ACT IN THE CASE OF APPELLANT. 5 THAT THE ORDER PASSED BY THE AO DATED 2.12.2009 U/S 154 AND APPELLATE ORDER OF THE COMMISSIONER OF INCO ME TAX (APPEALS) DATED 26.8.2011 ARE BAD IN LAW. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSMENTS FOR THE ASSESSMENT YEARS 1997-98, 1998-99 AND 1999-2000 WERE COMPLETED BY THE AO U/S. 143(3) VIDE SEPARATE ORDERS AND THE STATUS OF THE ASSESSEE WAS ADOPTED IN THE ASSESSMENT ORDERS AS UNSPECIFIED AOP. THE ASSESSEE PREFERRED THE APPEALS ITA NO. 413, 414 & 415/AGRA/2011 3 AGAINST THE ASSESSMENT ORDERS BEFORE THE LD. CIT(A) WHO HAS DISMISSED ALL THE APPEALS OF THE ASSESSEE VIDE ORDER DATED 31.01.2003 (PB-7). THE AO NOTED IN THE IMPUGNED ORDER U/S. 154 OF THE IT ACT THAT PENA LTY U/S. 271(1)(C) WAS ALSO SEPARATELY INITIATED. THE ASSESSEE NEVER PREFERRED ANY APPEAL AGAINST ITS STATUS TAKEN BY THE AO AS UNSPECIFIED AOP, WHICH HAS MERGE D WITH THE APPELLATE ORDER. THEREFORE, THE ASSESSEES REQUEST FOR RECTIF ICATION U/S. 154 OF THE IT ACT WITH REGARD TO THE STATUS TAKEN AS UNSPECIFIED AOP WAS REJECTED BY HOLDING THAT THE PROVISIONS OF SECTION 154 ARE NOT APPLICABLE IN SUCH CIRCUMSTANCES. THE LD. CIT(A) ALSO DISMISSED ALL THE APPEALS OF THE ASSESS EE FILED AGAINST THE ORDER PASSED U/S. 154 OF THE IT ACT HOLDING THAT THE ASSE SSMENT ORDERS HAVE MERGED IN THE APPELLATE ORDER AND NOTHING IS POINTED OUT AS T O HOW THERE IS A MISTAKE APPARENT ON RECORD IN TAKING STATUS OF THE ASSESSEE AS UNSPECIFIED AOP. ALL THE APPEALS OF THE ASSESSEE WERE, ACCORDINGLY, DISMISSE D. 3. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD. CIT(A) SHOULD NOT REJECT THE APPEALS OF THE ASSESSEE FILED AGAINST TH E ORDER U/S. 154 OF THE IT ACT BECAUSE THE ASSESSEE IS REGISTERED WITH THE REGISTR AR OF SOCIETIES, ON WHICH TAX IS TO BE CHARGED AS CHARGEABLE IN THE CASE OF INDIV IDUAL AND NOT AS A CASE OF AOP (UNSPECIFIED). ON THE OTHER HAND, THE LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE AO IN THE ASSESSMENT ORDERS ITA NO. 413, 414 & 415/AGRA/2011 4 SPECIFICALLY FOUND THE STATUS OF THE ASSESSEE TO BE AOP (UNSPECIFIED) AND THE ASSESSMENT ORDERS HAVE MERGED WITH THE APPELLATE OR DER. THEREFORE, THERE IS NO MISTAKE APPARENT ON RECORD AND THE APPEALS OF THE A SSESSEE MAY BE DISMISSED. THE LD. COUNSEL FOR THE ASSESSEE ON FURTHER QUERY S UBMITTED THAT THE ASSESSEE HAS NOT PREFERRED ANY APPEAL AGAINST THE COMMON ORDER O F LD. CIT(A)-II DATED 31.01.2003 DISMISSING THE APPEALS OF THE ASSESSEE F OR THE ASSESSMENT YEARS UNDER APPEALS ON MERIT. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE FINDINGS OF THE AUTHORITIES BELOW. HONBLE SUPREME COURT IN THE CAS E OF T.S. BALRAM, INCOME- TAX OFFICER VS. VOLKART BROTHERS & OTHERS, 82 ITR 5 0 (SC) HELD A MISTAKE APPARENT ON THE RECORD MUST BE AN OBVIOU S AND PATENT MISTAKE AND NOT SOMETHING WHICH CAN BE ESTAB LISHED BY A LONG DRAWN PROCESS OF REASONING ON POINTS ON WHICH THERE MAY BE CONCEIVABLY TWO OPINIONS. A DECISION ON A DEBATABLE POINT OF LAW IS NOT A MISTAKE APPARENT FROM THE RECORD. 4.1 HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. CO MPUTER GRAPHICS LTD., 285 ITR 84 (MAD.) HELD THAT THE THREE ADDITIONS, SUCH AS DISALLOWANCES UN DER SECTION 32AB AND 80I AND FOREIGN EXCHANGE FLUCTUATI ON LOSS WERE HIGHLY DEBATABLE ISSUES AND THERE WERE TWO OPINIONS POSSIBLE, AND IN SUCH SITUATION, IT WAS NOT POSSIBLE TO RECTIFY B Y INVOKING SECTION 154. ITA NO. 413, 414 & 415/AGRA/2011 5 4.2 HONBLE CALCUTTA HIGH COURT IN THE CASE OF HINDUSTA N LEVER LTD. VS. JCIT AND OTHERS, 284 ITR 42 (CAL.) HELD AS UNDER : HELD, THAT ORIGINALLY THE ASSESSING OFFICER HAD APPLIED SECTION 32, SUB-SECTION (1), THIRD PROVISO. WHETHER THIS PROVISION HAD BEEN CORRECTLY APPLIED OR NOT WAS A DEBATABLE I SSUE. THE NOTICE WAS ULTRA VIRES THE PROVISION OF SECTION 154 AND THE ORDER PASSED PURSUANT TO THE NOTICE WAS NOT SUSTAINABLE I N LAW. 4.3 THE FACTS NOTED ABOVE ARE NOT IN DISPUTE. THE L D. COUNSEL FOR THE ASSESSEE IN THE PAPER BOOK FILED COPIES OF ASSESSMENT ORDERS FOR ALL THE ASSESSMENT YEARS UNDER APPEALS PASSED U/S. 143(3) OF THE IT ACT IN W HICH THE AO WHILE COMPUTING THE INCOME OF THE ASSESSEE HELD THAT SINC E THE SHARES OF THE ASSESSEE HAVE NOT BEEN SPECIFIED, THE STATUS IS TAKEN AS UNS PECIFIED AOP AND THE INCOME TAX WILL BE CHARGED ON MAXIMUM MARGINAL RATE. THE A SSESSEE THOUGH PREFERRED APPEALS AGAINST THE ASSESSMENT ORDERS BEFORE THE LD . CIT(A), BUT ALL THE APPEALS WERE DISMISSED VIDE ORDER DATED 31.03.2003 (PB-7) A ND THE LD. CIT(A) NOTED AT THE END OF THE ORDER THAT THE AO WAS ALSO JUSTIFIED IN TAKING STATUS OF THE ASSESSEE AS UNSPECIFIED AOP. ACCORDING TO THE LD. C OUNSEL FOR THE ASSESSEE, THE ABOVE ORDER OF LD. CIT(A) DATED 31.01.2003 HAS NOT BEEN CHALLENGED BEFORE THE TRIBUNAL. THEREFORE, IT REACHED THE FINALITY AND ST ATUS OF THE ASSESSEE REMAINED CONFIRMED AS UNSPECIFIED AOP AND ACCORDING TO THE A O TAX HAS TO BE CHARGED ITA NO. 413, 414 & 415/AGRA/2011 6 ON MAXIMUM MARGINAL RATE. SECTION 154 OF THE IT ACT PROVIDES THE CIRCUMSTANCES, UNDER WHICH RECTIFICATION CAN BE MAD E. A MISTAKE MUST BE APPARENT FROM THE RECORDS, MEANING THEREBY, NO EXTE RNAL HELP EITHER OF FACT OR LAW IS REQUIRED TO DETECT SUCH MISTAKE. THE MISTAKE MUST BE SO OBVIOUS THAT IT CAN BE CORRECTED EASILY LIKE ARITHMETICAL MISTAKE, WRONG QUOTING OF SECTION ETC. THE QUESTION WHETHER INTERPRETATION OF A PROVISION OF LAW IS RIGHT OR WRONG IS PER SE A DEBATABLE ISSUE. SUCH ISSUE CANNOT BE RESOLVED B Y INVOKING JURISDICTION U/S. 154 OF THE IT ACT, AS IT COULD NOT BE TERMED T O BE APPARENT FROM RECORD. WE ARE FORTIFIED IN OUR VIEW BY THE JUDGMENT OF HONBL E CALCUTTA HIGH COURT IN THE CASE OF HINDUSTAN LEVER LTD. VS. JCIT AND OTHERS (S UPRA). THEREFORE, THERE IS NO MISTAKE APPARENT ON RECORD IN THE PRESENT CASE TO T AKE A DIFFERENT STATUS OF THE ASSESSEE OR TO CHARGE LESSER TAX ON THE ASSESSED IN COME. FURTHER, THE ASSESSMENT ORDER HAS BEEN MERGED WITH THE APPELLATE ORDER CONF IRMING THE STATUS OF THE ASSESSEE AS AOP (UNSPECIFIED), WHICH IS NOT CHALLEN GED FURTHER IN APPEAL BEFORE THE TRIBUNAL. THEREFORE, THE SAME CANNOT BE SUBJECT MATTER OF PROCEEDINGS U/S. 154 OF THE IT ACT. AS IS PROHIBITED BY SECTION 154( 1A) OF THE IT ACT, THE AO RIGHTLY DID NOT EXERCISE JURISDICTION U/S. 154 OF T HE IT ACT ON THE MATTER ON WHICH THE LD. CIT(A) HAS ALREADY EXERCISED JURISDIC TION. THERE IS, THUS, NO MISTAKE APPARENT FROM RECORD. THE CONTENTION OF THE ASSESSEE CANNOT BE CONSIDERED BY INVOKING THE PROVISIONS OF SECTION 15 4 OF THE IT ACT. THEREFORE, ITA NO. 413, 414 & 415/AGRA/2011 7 ON LONG-DRAWN REASONING, THE ISSUE, WHICH HAS REACH ED FINALITY, CANNOT BE SUBJECT MATTER IN PROCEEDINGS U/S. 154 OF THE IT AC T. WE, THEREFORE, DO NOT FIND MERIT IN ALL THE APPEALS OF THE ASSESSEE. THE SAME ARE, ACCORDINGLY, DISMISSED. 5. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE A RE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY