HARISH CHOPRA, MUMBAI V. ACIT 11(2), MUMBAI

ITA 5440/MUM/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5744 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 09-12-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 29-08-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M RAJAN
• Assessee Lawyers: DR K SHIVARAM; RAHUL R SARDA
• Keywords: Bonafide belief; Period of limitation; Additional evidence; Time period of passing order; Condonation of delay
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH H , MUMBAI BEFORE SHRI D. KARUNAKARA RAO , ACCOUNTANT MEMBER AND SHRI SANJAY GARG , JUDICIAL MEMBER ITA NO. 5440/M/2012 ASSESSMENT YEAR: 2008 - 09 SHRI HARISH CHOPRA, 3, GOLDEN PALACE, 191 - 192, TURNER ROAD , BANDRA (W), MUMBAI 400 050 PAN: AABPC 3440M VS. ACIT 11(2), R.NO.479, 4 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 (APPELLANT) (RESPONDENT) ASSESSEE BY : DR. K. SHIVARAM & SHRI RAHUL R. SARDA REVENUE BY : SHRI M. RAJAN, D.R. DATE OF HEARING : 09.12 .201 3 DATE OF PRONOUNCEMENT : 31.01.2014 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER INCOME TAX (APPEALS) (HEREIN FURTHER REFERRED TO AS CIT(A) ) UPHOLDING THE ORDER OF THE A SSESSING OFFICER (HEREIN FURTHER REFERRED TO AS AO) REJECTING THE APPLICATION OF THE ASSESSEE MOVED UNDER SECTION 154 OF THE INCOME TAX ACT. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE , AN INDIVIDUAL , FILED HIS RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 2,94,10,440/ - INCLUDING PROFESSIONAL RECEIPTS OF RS.3,14,48,258/ - . DURING ASSESSMENT PROCEEDINGS THE AO , ON THE BASIS OF AIR INFORMATION RECEIVED BY HIM, OBSERV ED THAT THE PROFESSIONAL RECEIPTS OF THE ASSESSEE WERE RS.4,87,78,506/ - . THE ASSESSEE FILED A RECONCILIATION STATEMENT OF THE PROFESSIONAL RECEIPTS OUT OF WHICH HE COULD NOT RECONCILE RECEIPTS OF RS.4,15,093/ - . ASSESSEE SUBMITTED BANK STATEMENTS ITA NO .5440/M/2012 SHRI HARISH CHOPRA 2 ETC. TO ESTABLISH THAT THE SAID AMOUNT OF RS.4,15,093/ - WAS IN FACT NOT RECEIVED BY THE ASSESSEE. HOWEVER, THE AO DID NOT AGREE WITH THE DETAILS SUBMITTED BY THE ASSESSEE AND HELD THAT RS.4,15,093/ - HAD REMAINED UNRECONCILED THUS ADDED THE SAME TO THE INCOME OF T HE ASSESSEE VIDE ASSESSMENT ORDER DATED 20.09.10. THE ASSESSEE THEREAFTER OBTAINED A CERTIFICATE DATED 20.10.10 FROM HSBC BANK, ( COPY OF WHICH HAS BEEN PLACED AT PAGE 125 OF THE PAPER BOOK BEFORE US ) CONFIRMING THAT NO PAYMENT OF RS.3,44,021/ - WAS MADE TO THE ASSESSEE DURING THE FINAN CIAL YEAR UNDER CONSIDERATION. THE ASSESSEE THEREAFTER FILED A RECTIFICATION APPLICATION DATED 30.10.10 UNDER SECTION 154 OF THE ACT TO THE AO PLEADING THAT THERE WAS A MISTAKE APPARENT ON THE RECORD OF THE ORDER IN THE LIGHT OF CERTIFICATE ISSUED BY HSBC BANK REQUESTING THAT THE ADDITION MADE BY THE AO ON ACCOUNT OF RECONCILIATION OF THE PROFESSIONAL RECEIPTS BE DELETED/RECTIFIED. HOWEVER, THE AO OBSERVED THAT THE CERTIFICATE ISSUED BY HSBC BANK WAS THE NEW EVIDENCE WHICH WA S NOT BROUGHT BY THE ASSESSEE AT THE TIME OF ASSESSMENT PROCEEDINGS. HE FURTHER HELD THAT THE ASSESSEE HA D ALSO NOT FURNISHED ANY EVIDENCE REGARDING NON RECEIPT OF THE REMAINING AMOUNT OF RS.7 1,0 72/ - OUT OF THE TOTAL UNRECONCILED AMOUNT OF RS.4,15,093/ - D URING THE ASSESSMENT PROCEEDINGS. HENCE, THERE WAS NO MISTAKE APPARENT ON RECORD OF THE ORDER. HE THEREFORE REJECTED THE APPLICATION MOVED BY THE ASSESSEE UNDER SECTION 154 OF THE INCOME TAX ACT. THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A). THE LD. CIT(A) ALSO OBSERVED THAT THE EVIDENCE IN THE FORM OF BANK CERTIFICATE AND THE CHARTERED ACCOUNTANT CERTIFICATE , PRODUCED BY THE ASSESSEE ALONG WITH RECTIFICATION APPLICATION, WERE NEW EVIDENCES IN RELATION TO ASSESSMENT MADE BY THE AO. SUCH EVIDENCE REQU IRED IN DEPTH INVESTIGATION AND AMOUNTS TO ADDITIONAL EVIDENCE AS THE SAME WERE NOT FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. HE FURTHER OBSERVED THAT THE MISTAKE APPARENT FROM THE RECORD MEANS THE MISTAKE ON FACE OF RECORD WHICH IS VISIBLE FROM RECORD. SINCE BOTH THE CERTIFICATES FROM BANK AS WELL AS FROM CHARTERED ACCOUNTANT WERE OBTAINED AFTER ASSESSMENT, HENCE THE SAME COULD NOT BE RELIED ITA NO .5440/M/2012 SHRI HARISH CHOPRA 3 UPON TO HOLD THAT THERE WAS A MISTAKE IN THE ASSESSMENT ORDER WHICH CAN BE SAID TO BE APPARENT FROM RECOR D. HE THEREFORE UPHELD THE ACTION OF THE AO IN REJECTING THE APPLICATION OF THE ASSESSEE MOVED UNDER SECTION 154 OF THE INCOME TAX ACT. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 3. BEFORE US , THE LD. A.R. HAS RELIED UPON TWO AUTHORITIES OF THE BAN GALORE B ENCH OF THE TRIBUNAL I.E. DCIT VS. SHREE G. SELVA KUMAR IN ITA NO. 868/BANG/2009 DECIDED ON 22.10.10 AND ANOTHER IN THE CASE OF MRS. ARATI RAMAN VS. DCIT IN ITA NO.245/BANG/12 DECIDED ON 05.10.12 WHEREIN IT HAS BEEN HELD THAT THE ASSESSMENT ORDE R BASED ONLY ON THE AIR INFORMATION WOULD NOT STAND IN THE EYES OF LAW. IF THE ASSESSEE DENIES THAT HE IS IN RECEIPT OF INCOME FROM A PARTICULAR SOURCE , IT IS FOR THE AO TO PROVE THAT THE ASSESSEE HAS RECEIVED INCOME AS THE ASSESSEE CANNOT PROVE THE NEGAT IVE. THE LD. A.R. HAS VEHEMENTLY ARGUED THAT IN THE LIGHT OF ABOVE STATED CASE LAWS , THE ACTION OF THE AO IN RELYING MERELY UPON ON THE AIR INFORMATION WAS WRONG AND ILLEGAL AND AS SUCH THE ADDITION MADE BY HIM ON THIS ACCOUNT IS LIABLE TO BE SET ASIDE. ON THE OTHER HAND THE LD. D.R. HAS RELIED UPON THE AUTHORITIES BELOW. 4. WE HAVE HEARD THE LD. REPRESENTATIVES OF BOTH THE PARTIES AND ALSO HAVE GONE THROUGH THE RECORDS. IN OUR VIEW THOUGH THE ASSESSEE SEEMS TO HAVE A GOOD CASE ON MERITS, HOWEVER, IT IS NOT A CASE OF ANY MISTAKE APPARENT ON THE RECORD. THE AO PASSED THE ASSESSMENT ORDER ON THE BASIS OF MATERIAL AVAILABLE BEFORE HIM. THOUGH HIS ACTION IN MERELY RELYING UPON THE AIR INFORMATION , IN THE LIGHT OF THE JUDGMENTS GIVEN BY THE CO - ORDINATE B ENCHES OF THE TRIBUNAL , MAY BE FOUND WRONG OR FALSE , IF AGITATED BY THE ASSESSEE IN HIS APPEAL ON MERITS , YET, BY RELYING UPON THE CERTIFICATE ISSUED BY HSBC BANK AFTER THE ASSESSMENT ORDER , IT CANNOT BE SAID TO BE ANY ERROR APPARENT ON THE RECORD OF THE O RDER. IT HAS BEEN TIME AND AGAIN HELD BY THE HIGHER COURTS THAT A MISTAKE IS APPARENT ON THE FACE OF RECORD WHEN IT IS PATENT, GLARING, OBVIOUS OR SELF ITA NO .5440/M/2012 SHRI HARISH CHOPRA 4 EVIDENT. A MISTAKE IS APPARENT ON THE RECORD IF NO EXTERNAL HELP EITHER ON FACT OR IN LAW IS REQUIRED TO DETECT SUCH MISTAKE. IF THE ALLEGED MISTAKES REQUIRE INVESTIGATION INTO FACTS OR DETERMINATION OF LAW OR DISCUSSION OF DEBATABLE POINTS ARE INVOLVED OR TWO OPINIONS ARE POSSIBLE ON THE ISSUE THEN SUCH POINTED MISTAKES CANNOT BE SAID TO BE MISTAKES APPA RENT ON RECORD WHICH CAN BE RECTIFIED UNDER SECTION 154 OF THE INCOME TAX ACT. THE ASSESSEE IN THE PRESENT CASE HAS AGITATED THE FINDING OF THE AO IN RELYING UPON MERELY ON THE AIR INFORMATION IN THE ABSENCE OF ANY OTHER MATERIAL EVIDENCE ON RECORD RELATI NG TO THE ALLEGED PROFESSIONAL RECEIPTS. THE GRIEVANCE OF THE ASSESSEE IS RELATING TO THE FINDINGS ON MERITS BY THE AO AND NOT RELATING TO ANY MISTAKE WHICH CAN BE SAID TO BE APPARENT ON RECORD. HENCE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LOW ER AUTHORITIES IN DISMISSING THE APPLICATION OF THE ASSESSEE MOVED UNDER SECTION 154 OF THE INCOME TAX ACT. 5. HOWEVER, WE MAY OBSERVE THAT THE ASSESSEE WAS UNDER THE BONAFIDE BELIEF THAT THE SAID FINDING OF THE AO COULD BE CORRECTED/RECTIFIED UNDER SEC TION 154 OF THE INCOME TAX ACT IN THE LIGHT OF THE CERTIFICATE ISSUED BY HSBC BANK AS WELL AS BY HIS CHARTERED ACCOUNTANT . HE WAS PURSUING HIS REMEDY UNDER SECTION 154 OF THE INCOME TAX ACT UNDER THIS BELIEF. IT IS ALSO AGAIN A SETTLED POSITION OF THE LAW THAT IF A LITIGANT IS FOUND PURSUING A REMEDY UNDER THE WRONG PROVISION OF THE ACT OR THE LAW UNDER BONAFIDE BELIEF, WHICH THE COURTS ULTIMATELY FOUND TO BE NOT MAINTAINABLE UNDER THAT PROVISION OR LAW AND THAT THE ASSESSEE SHOULD HAVE PURSUED HIS REMEDY UNDER ANOTHER PROVISION OF THE LAW , THEN THE PERIOD CONSUMED IN PURSUING SUCH LITIGATION UNDER BONAFIDE BELIEF SHOULD BE EXCLUDED FOR THE PURPOSE OF CALCULATION OF LIMITATION PERIOD , IF THE LITIGATION CHOOSES TO PURSUE THE REMEDY UNDER THE CORRECT PROVISI ON OF THE LAW. ACCORDINGLY, IN THIS CASE ALSO , IF THE ASSESSEE CHOOSES TO FILE AN APPEAL BEFORE THE NEXT APPELLATE AUTHORITY I.E. CIT(A) AGAINST THE ASSESSMENT ORDER IN QUESTION , THEN THE PERIOD CONSUMED IN PURSUING THE PRESENT LITIGATION I.E. FROM ITA NO .5440/M/2012 SHRI HARISH CHOPRA 5 THE DA TE OF FILING OF APPLICATION UNDER SECTION 154 OF THE INCOME TAX ACT BEFORE THE AO TILL THE RECEIPT OF THIS ORDER WILL BE EXCLUDED FOR THE PURPOSE OF CALCULATION OF LIMITATION PERIOD IN PREFERRING SUCH APPEAL BEFORE THE CIT(A). THE ASSESSEE WILL ALSO BE AT LIBERTY TO MOVE AN APPLICATION FOR CONDONATION OF DELAY EXPLAINING THE RELEVANT CIRCUMSTANCES , IF ANY, EVEN AFTER EXCLUSION OF THE PERIOD CONSUMED IN THIS LITIGATION THERE MAY BE FOUND ANY DELAY IN PREFERRING THE APPEAL BEFORE THE CIT(A). IF THE ASSESSEE CHOOSES TO FILE AN APPEAL AS OBSERVED ABOVE, THE LD. CIT(A) WILL DECIDE THE SAME IN ACCORDANCE WITH LAW. 6. SUBJECT TO ABOVE OBSERVATIONS, THE APPEAL OF THE ASSESSEE IS HEREBY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31.01. 2 01 4 . SD/ - SD/ - ( D. KARUNAKARA RAO ) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 31.01. 201 4 . * KISHORE COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT ( A) CONCERNED, MUMBAI THE DR C BENCH //TRUE COPY// [ BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.