SUMER CORPORATION, MUMBAI V. DCIT CEN CIR 5(3), MUMBAI

ITA 6801/MUM/2017

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 8917 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2011-2012
• Appeal Filed On: 30-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAFIQUE DADAVIPUL JOSHI
• Keywords: Reopening of assessment; Bogus purchase; Business income; Revision of order; Transfer pricing; Rectification of order; Search and seizure; Document seized; Period of limitation; Retrospective amendment; Additional evidence; Question of law; Reasonable cause; Difference of opinion; Competent authority
• Section: 143(3); 142(1); 153A; 80IB; 263; 132; 154; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM)& SHRI PAWAN SINGH ( JM) I.T.A. NO. 6801/MUM/2017 (ASSESSMENT YEAR 2011-12) M/S. SUMER CORPORATION 203, A WING, PENINSULA CORPORATE PARK, GANPATRAO KADAM MARG LOWER PAREL MUMBAI-400 013. PAN : AACFS4279F VS . DCIT CC - 5(3) ROOM NO. 1906 19 TH FLOOR AIR INDIA BUILDING NARIMAN POINT MUMBAI-400 021. ( APPELLANT ) ( RESPONDENT ) C.O. NO. 162/MUM/2018 (ASSESSMENT YEAR 2011-12) DCIT CC - 5(3) ROOM NO. 1906 19 TH FLOOR AIR INDIA BUILDING NARIMAN POINT MUMBAI-400 021. VS . M/S. SUMER CORPORATION 203, A WING, PENINSULA CORPORATE PARK, GANPATRAO KADAM MARG LOWER PAREL MUMBAI-400 013. PAN : AACFS4279F ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY S /SHRI RAFIQUE DADA,VIPUL JOSHI & NISHIT GANDHI DEPARTMENT BY S /S HRI R. MANJUNATHA SWAMY, RAJESHWAR YADAV, ASHOK KUMAR JHA & RAJESH DAMOR DATE OF HEARING 27 . 11 . 201 8 DATE OF PRONOUNCEMENT 26 . 1 2 . 201 8 O R D E R PER B.R. BASKARAN (AM) :- THE ASSESSEE HAS FILED APPEAL CHALLENGING THE ORDE R DATED 14-09-2017 PASSED BY LD CIT(A)-53, MUMBAI FOR ASSESSMENT YEAR 2011-12 CONFIRMING THE RECTIFICATION ORDER PASSED BY THE ASSESSING OFFICER U/S 154 OF THE ACT. THE REVENUE HAS FILED CROSS OBJECTION RAISING CERTAIN L EGAL CONTENTIONS. 2 2. WE SHALL FIRST DEAL WITH THE APPEAL FILED BY THE ASSESSEE. THE ASSESSEE HEREIN BELONGS TO SUMER GROUP AND IS ENGAGED IN THE BUSINESS OF DEVELOPMENT AND CONSTRUCTION OF BUILDINGS. THE REVENUE CARRIED OUT SEARCH AND SEIZURE OPERATIONS IN SUMER GROUP ON 23.12.2010. THE YEAR UNDER CONSIDERATION, BEING THE YEAR OF SEARCH, THE AO COMPLETED THE ASSE SSMENT U/S 143(3) R.W.S. 153A OF THE ACT ON 28-03-2013. 3. IN THE ASSESSMENT ORDER, THE AO HAS OBSERVED THAT THE ASSESSEE HAS E- FILED ITS RETURN OF INCOME ON 30-09-2011 DECLARING INCOME OF RS.5.78 CRORES. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE H AS COMPLETED ITS ON-GOING PROJECT NAMED CHANDIVALI PROJECT, WHICH WAS A SRA P ROJECT (SLUM REHABILITATION SCHEME PROJECT). THE ASSESSEE CLAIM ED DEDUCTION U/S 80IB(10) OF THE ACT ON THE INCOME DERIVED FROM THE ABOVE SAI D PROJECT TO THE TUNE OF RS.447.92 CRORES IN THE RETURN OF INCOME FILED BY I T. THE ASSESSEE ALSO DECLARED INTEREST INCOME, INCOME FROM GENERATION OF ELECTRIC ITY FROM ITS WIND MILL PROJECT. 4. AS PER THE SRA SCHEME, THE ASSESSEE HAS BORNE CONSTRUCTION COST OF 12500 UNITS ALONG WITH SHOPS, BALWADIS, SCHOOL INFR ASTRUCTURE ETC., WITH INNER ROADS. THE ASSESSEE HAS ALSO RECEIVED TDR (TRANSFE RRABLE DEVELOPMENT RIGHTS) UNDER THIS PROJECT. THE ASSESSEE HAS FOLLOWED PROJ ECT COMPLETION METHOD FOR OFFERING INCOME FROM THIS PROJECT. SINCE THE PROJEC T WAS COMPLETED DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE DECLARED INC OME FROM THIS PROJECT DURING THE INSTANT YEAR AND HAS ALSO CLAIMED DEDUCT ION U/S 80IB(10) OF THE ACT. THE INCOME SO DECLARED BY THE ASSESSEE INCLUD ED THE SALE PROCEEDS OF TDR. THE AO FOUND THE CLAIM OF THE ASSESSEE TO BE IN ACCORDANCE WITH THE CBDTS NOTIFICATION NO.67/2010 DATED 30-08-2010 AND NO.2/2010 DATED 05- 01-2011, AS PER WHICH THE SCHEMES FALLING UNDER REG ULATION 33(10) OF DEVELOPMENT CONTROL REGULATION FOR GREATER MUMBAI A RE ELIGIBLE FOR DEDUCTION U/S 80IB(10) OF THE ACT. 3 5. DURING THE COURSE OF SEARCH PROCEEDINGS, THE A SSESSEE HAD ADMITTED ADDITIONAL INCOME OF RS.60.91 CRORES AS ITS INCOME. THE ASSESSEE DISCLOSED THE SAME IN ITS RETURN OF INCOME AS ITS BUSINESS INCOME AND ACCORDINGLY CLAIMED DEDUCTION U/S 80IB(10) THEREON. THE AO, HOWEVER, T REATED THE SAME AS INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES. ACCORDIN GLY HE REDUCED THE DEDUCTION U/S 80IB(10), INTER ALIA, BY THE AMOUNT O F RS.60.91 CRORES REFERRED ABOVE. ACCORDINGLY, IN THE ASSESSMENT PROCEEDINGS, THE AO RESTRICTED THE DEDUCTION IS U/S 80IB(10) OF THE ACT TO RS.384.71 C RORES. 6. IT IS PERTINENT TO NOTE THAT THE ABOVE SAID ASSESSMENT ORDER WAS REVISED BY THE LD PR. CIT U/S 263 OF THE ACT ON 30-03-2015 DIRECTING THE AO TO VERIFY THE ELIGIBILITY OF THE ASSESSEE TO CLAIM DEDUCTION U/S 80IB(10) OF THE ACT. THE AO AGAIN PASSED AN ASSESSMENT ORDER U/S 143(3) R.W. S. 263 OF THE ACT ON 31.3.2016, WHEREIN HE ALLOWED DEDUCTION OF SAME AMO UNT OF RS.384.71 CRORES U/S 80IB(10) OF THE ACT. 7. THE DETAILS RELATING TO THE ABOVE SAID AMOUNT OF RS.60.91 CRORES ARE DISCUSSED IN BRIEF, AS THEY ARE RELEVANT TO THE APP EAL UNDER CONSIDERATION. THIS AMOUNT CONSISTED OF THREE ITEMS, WHICH WERE FOUND F ROM THE INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. THE DET AILS THEREOF ARE DISCUSSED BELOW:- (A) PAGE NO.3 OF ANNEXURE A-5:- THIS DOCUMENT REVE ALED THAT THE ASSESSEE HAS RECEIVED A SUM OF RS.33.99 CRORES BY W AY OF CASH ON SALE OF TDR. THE DOCUMENT ITSELF WAS TITLED AS CASH RECEI PTS ON SALE OF TDRS FROM 01.04.2010. THE RELEVANT TABLE IS EXTRACTED B ELOW:- (B) PAGE NO.4 OF ANNEXURE A-5:- THIS DOCUMENT CONTAINED CERTAIN CASH TRANSACTIONS UNDERTAKEN IN THE NAME OF CERTAIN PARTIES. THE RELEVANT TABLE IS EXTRACTED BELOW:- 4 THE TRANSACTIONS APPEARING IN THE NAME OF SATARA PR OPERTIES (INDIA) LTD AND KHYATI REALTORS WAS OWNED UP BY THE ASSESSEE AN D CLAIMED THAT THEY REPRESENT CASH RECEIPTS AGAINST SALE OF TDRS. THE AGGREGATE AMOUNT RECEIVED FROM BOTH THE PARTIES WAS RS.25.79 CRORES. (C) CASH RECEIPTS OF RS.1.12 CRORES ON SALE OF SC RAP. ALL THESE TRANSACTIONS WERE CONFRONTED TO SHRI RAME SH S SHAH, PARTNER OF ASSESSEE FIRM, DURING THE COURSE OF SEARCH AND HE, IN THE STATEMENT RECORDED FROM HIM U/S 132(4) OF THE ACT, ADMITTED THAT THESE RECEIPTS WERE NOT RECORDED IN THE BOOKS OF ACCOUNTS AND ALSO AGREED TO DISCLOS E THE SAME IN THE RETURN OF INCOME. WITH REGARD TO THE RECEIPTS MENTIONED IN I TEM (A) ABOVE, IN REPLY TO QUESTION NO.20 POSED TO HIM, HE STATED THAT THE CAS H RECEIPTS AS RECEIPTS ON SALE OF TDRS. WITH REGARD TO RECEIPTS MENTIONED IN ITEM (B) ABOVE, THE TRANSACTIONS MENTIONED UNDER THE NAME OF M/S SATARA PROPERTIES (INDIA) P LTD AND M/S KHYATI REALTORS WERE IDENTIFIED AS BELONGIN G TO THE ASSESSEE HEREIN. HE REPLIED THAT THEY REPRESENT CASH RECEIVED FOR VA RIOUS MISCELLANEOUS TRANSACTIONS DONE BY THE ASSESSEE (M/S SUMER CORPOR ATION) WITH M/S SATARA PROPERTIES (INDIA) P LTD & M/S KHYATI REALTORS. TH E TRANSACTION MENTIONED IN ITEM (C) ABOVE WAS STATED TO BE THE UNACCOUNTED AMO UNT REALISED ON SALE OF SCRAP GENERATED FROM THE CHANDIVILI PROJECT. THE A GGREGATE AMOUNT OF ALL THE THREE ITEMS WAS RS.60.91 CRORES. BESIDES THE ABOVE , THE ASSESSEE ALSO 5 ACCEPTED THAT PURCHASES TO THE EXTENT OF RS.29.92 L AKHS WAS BOGUS IN NATURE, OUT OF WHICH RS.9,75,612/- WAS RELATING TO THE YEAR UNDER CONSIDERATION. 8. AS STATED EARLIER, THE ASSESSEE DISCLOSED TH E ABOVE SAID AMOUNT OF RS.60.91 CRORES IN THE RETURN OF INCOME FILED FOR T HE YEAR UNDER CONSIDERATION AS ITS BUSINESS INCOME AND ALSO CLAIMED DEDUCTION U /S 80IB(10) OF THE ACT. HOWEVER, THE ASSESSING OFFICER ASSESSED THE SAME AS INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES FOR THE REASONS MENTIONED IN THE ASSESSMENT ORDER. HENCE THE DEDUCTION U/S 80IB(10) OF THE ACT WAS RED UCED TO THE EXTENT OF RS.60.91 CRORES. THE AO FURTHER REDUCED THE BOGUS PURCHASES AMOUNT OF RS.29.92 LAKHS AND ALSO THE SUM OF RS.2.00 CRORES, BEING THE SCRAP SALES PERTAINING TO AY 2009-10, FROM THE AMOUNT OF DEDUC TION CLAIMED U/S 80IB(10) OF THE ACT. ACCORDINGLY, THE AO ALLOWED DEDUCTION U/S 80IB(10) OF THE ACT TO THE TUNE OF RS.384.71 CRORES. 9. THE ASSESSEE HAD ALSO INCREASED THE COST OF C ONSTRUCTION OF THE SRA PROJECT BY RS.9.00 CRORES MENTIONING IT AS CHANDIV ALI PROJECT ADDITIONAL WIP COST. ACCORDING TO THE ASSESSEE, IT HAS USED THE U NDISCLOSED INCOME IN INCURRING ADDITIONAL COSTS AND THE SAME HAS BEEN AC COUNTED FOR AS APPLICATION OF INCOME. SINCE THE ASSESSEE COULD NOT FURNISH SU PPORTING EVIDENCES FOR THE CLAIM, THE AO DISALLOWED THE SAID CLAIM. THE AO PA SSED THE ASSESSMENT ORDER ON 28-03-2013, BUT THE ASSESSEE DID NOT PREFER APPE AL CHALLENGING THE ABOVE SAID DECISION OF THE ASSESSING OFFICER. 10. SUBSEQUENTLY, THE ASSESSEE FILED A RECTIFICAT ION PETITION U/S 154 OF THE ACT ON 13.04.2016 SEEKING RECTIFICATION OF THE ASSESSME NT ORDER PASSED U/S 143(3) R.W.S 153A OF THE ACT, ON THE ISSUE OF DEDUCTION CL AIMED U/S 80IB OF THE ACT ON THE ABOVE SAID DISALLOWANCES, VIZ., (A) ASSESSMENT OF CASH RECEIPTS AGGREGATING TO RS. 60.91 CRORES AS INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES INS TEAD OF ASSESSING THE SAME AS BUSINESS INCOME, THEREBY DENY ING DEDUCTION U/S 80IB(10) OF THE ACT ON THE ABOVE SAID AMOUNT. 6 (B) REJECTION OF DEDUCTION U/S 80IB(10) OF THE ACT ON THE DISALLOWANCE TOWARDS BOGUS PURCHASES OF RS.29.92 LAKHS AND ADDIT ION OF RS.9.00 CRORES RELATING TO APPLICATION OF INCOME BY WAY OF INCREASE IN WIP, I.E., BOTH THE ADDITIONS WOULD INCREASE BUS INESS INCOME ONLY. (C) THE REDUCTION OF RS.2.00 CRORES RELATING TO SCRAP SALES OF AY 2009- 10 HAS RESULTED IN DOUBLE TAXATION OF SAME INCOME. 11. THE AO, HOWEVER, TOOK THE VIEW THAT THE ABOVE SAID CLAIMS OF THE ASSESSEE CANNOT BE CONSIDERED AS MISTAKES APPARENT FROM RECORD WITHIN THE SCOPE OF SEC.154 OF THE ACT. THE AO HAS ALSO DISCU SSED THE PRINCIPLES RELATING TO RECTIFICATION OF MISTAKES APPARENT FROM RECORD B Y PLACING RELIANCE ON CERTAIN CASE LAWS. THE AO OBSERVED THAT HE HAS GIVEN PROPER REASONS FOR ASSESSING THE AMOUNT OF RS.60.91 CRORES AS INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES. HE FURTHER OBSERVED THAT THE ASSESSEE HAS ACCEPTED THE SAID FINDINGS GIVEN IN THE ASSESSMENT ORDER BY NOT FILING APPEAL AND HENCE IT HAS ATTAINED FINALITY. HE ALSO OBSERVED THAT THE ASSESSEE HAS N OT GIVEN VALID REASONS FOR NOT ACCOUNTING THESE CASH RECEIPTS IN THE REGULAR BOOKS OF ACCOUNTS. ACCORDINGLY, HE REJECTED THE RECTIFICATION PETITION FILED BY THE ASSESSEE. THE ASSESSEE CHALLENGED THE SAME BY FILING APPEAL BEFORE LD CIT( A). 12. IN THE APPELLATE PROCEEDINGS, THE LD CIT(A) UPHELD THE VIEW TAKEN BY THE AO. IN THIS REGARD, THE LD CIT(A) HAS ALSO REFERRED TO CERTAIN DECISIONS WHICH EXPLAINED THE MEANING OF MISTAKES APPARENT FROM RE CORD. THE LD CIT(A) HELD THAT THE AO HAS TAKEN A PLAUSIBLE VIEW IN ASSESSING THE AMOUNT OF RS.60.91 CRORES AS INCOME UNDER THE HEAD INCOME FROM OTHER S OURCES. WITH REGARD TO THE ADDITION OF RS.9.00 CRORES CLAIMED BY THE ASSES SEE AS APPLICATION OF INCOME, THE LD CIT(A) TOOK THE VIEW THAT THE CLAIM OF THE ASSESSEE SHALL HAVE EFFECT ON CLOSING STOCK WITHOUT AFFECTING PROFIT AN D HENCE THE SAME WILL FALL OUTSIDE THE SCOPE OF SEC.154 OF THE ACT. THE LD CI T(A) ALSO EXPRESSED THE VIEW THAT THE ASSESSEE IS HAVING PROJECTS OTHER THAN CHA NDIVALI PROJECT AND HENCE THE CONTENTIONS OF THE ASSESSEE CANNOT BE READILY V ERIFIED FROM THE FACTS AVAILABLE ON RECORDS. THE LD CIT(A), HOWEVER, ACCE PTED THE CONTENTION OF THE ASSESSEE ON DOUBLE TAXATION OF THE AMOUNT OF RS.2.0 0 CRORES RELATING TO SALE OF 7 SCRAP ASSESSED IN AY 2009-10 AND ACCORDINGLY DIRECT ED THE AO NOT TO ASSESS THE AMOUNT OF RS.2.00 CRORES IN THIS YEAR. AGGRIEV ED BY THE ORDER PASSED BY LD CIT(A), THE ASSESSEE HAS FILED THIS APPEAL. 13. WE HEARD THE PARTIES AND PERUSED THE RECORD . THE PROVISIONS OF SEC.154 AUTHORISE AN INCOME TAX AUTHORITY TO AMEND ANY ORDE R PASSED BY IT WITH A VIEW TO RECTIFY THE MISTAKE APPARENT FROM THE RECOR D. UNDER SEC.154(7) OF THE ACT, NO AMENDMENT SHALL BE MADE AFTER EXPIRY OF FOU R YEARS FROM THE END OF FINANCIAL YEAR IN WHICH THE ORDER SOUGHT TO BE AMEN DED WAS PASSED (EXCEPT CASES COVERED BY SEC.155 AND SEC.186(4)). IN THE I NSTANT CASE, THE ORIGINAL ASSESSMENT ORDER WAS PASSED ON 28-03-2013. THE ASS ESSEE HAS MOVED THE RECTIFICATION PETITION ON 13.04.2016 AND THE AO HAS PASSED THE ORDER U/S 154 OF THE ACT ON 28-09-2016, I.E., WITHIN FOUR YEARS P ERIOD AS MENTIONED IN SEC.154(7) OF THE ACT. 14. THE AO AS WELL AS THE LD CIT(A) HAS, INTER ALIA, OBSERVED THAT THE ASSESSEE HAS NOT CHALLENGED THE ASSESSMENT ORDER AN D HENCE THE ISSUES DECIDED THEREIN HAS ATTAINED FINALITY. IN THIS REG ARD, THE LD A.R PLACED RELIANCE ON THE DECISION RENDERED BY HONBLE SUPREME COURT I N THE CASE OF J.M.BHATIA VS. J.M.SHAH (1985)(156 ITR 474). THE LD A.R SUBMIT TED THAT THE HONBLE SUPREME COURT HAS HELD THAT THE ORDER, WHICH IS NOT APPEALED AGAINST, DOES NOT ATTAIN FINALITY IN THE LITERAL SENSE, SINCE IT IS ALWAYS LIABLE TO BE MODIFIED U/S 35 OF THE ACT (SIMILAR TO SEC. 154 OF THE 1961 ACT). WE HAVE GONE THROUGH THE DECISION RENDERED BY HONBLE SUPREME COURT IN T HE ABOVE SAID CASE. FOR THE SAKE OF CONVENIENCE, WE EXTRACT BELOW THE RELEV ANT OBSERVATIONS MADE BY HONBLE SUPREME COURT:- 5. IT IS CLEAR THAT THE GROUND WHICH WAS URGED BEFORE THE HIGH COURT AND WHICH SEEMED TO FIND FAVOUR WITH IT WAS THAT THE QU ESTION WHETHER THE AMENDING ACT APPLIED TO ASSESSMENTS WHICH WERE ALRE ADY COMPLETED WAS A HIGHLY DEBATABLE QUESTION AND, THEREFORE, IT WAS NO T A CASE OF AN ERROR APPARENT ON THE FACE OF THE RECORD WHICH ENTITLED T HE AAC TO RECTIFY HIS PREDECESSOR'S ORDER BUT THE QUESTION, THUS RAISED WOULD, IN OUR VIEW, ARISE ONLY IF IT IS REALLY A CASE OF COMPLETED ASSE SSMENT IN THE LITERAL SENSE OF THE WORD, IT MAY BE POINTED OUT THAT THIS VERY ASPECT OF THE MATTER WAS PRESSED IN SERVICE IN THE BOMBAY DYEING & MFG. CO. LTD.'S CASE 8 (SUPRA)(34 ITR 143) AND THIS COURT WHILE NEGATIVING THE CONTENTION HAS TAKEN THE VIEW THAT THE ASSESSMENT ORDER THAT HAD BEEN INITIALLY PASSED IN THAT CASE (WHICH WAS UNDER SECTION 18A(5) OF THE IN DIAN INCOME-TAX ACT, 1922 ('THE 1922 ACT') COULD NOT BE SAID TO HAVE BECOME FINAL IN THE LITERAL SENSE OF THE WORD AND IN THAT BEHALF THIS COURT POINTED OUT THAT IRRESPECTIVE OF THE QUESTION WHETHER ANY APPEAL HAD BEEN PREFERRED OR NOT AGAINST IT THAT ORIGINAL ORDER WAS LIABLE TO BE MODIFIED OR RECTIFIED UNDER SECTION 35 OF THE 1957 ACT AND, THE REFORE, COULD NOT BE SAID TO HAVE BECOME FINAL OR COMPLETE AND AS SUCH THE CONTENTION RAISED WOULD NOT BE OF MUCH ASSISTANCE TO THE ASSES SEE. AFTER REFERRING TO THE DECISION OF THE PRIVY COUNCIL IN DELHI CLOTH & GENERAL MILLS CO. LTD. V. ITC AIR 1927 PC 242 AS ALSO TO THE BOARD'S DECISION IN COLONIAL SUGAR REFINING CO. V. IRVING [1905] AC 369 THIS COU RT' WITH REFERENCE TO THE PRECISE ARGUMENT OBSERVED THUS : '... THE SAME ARGUMENT IS PUT IN ANOTHER FORM BY CO NTENDING THAT THE FINALITY OF THE ORDER PASSED BY THE INCOME-TAX OFFI CER CANNOT BE IMPAIRED BY THE RETROSPECTIVE OPERATION OF THE RELEVANT PROV ISION. IN OUR OPINION, THIS ARGUMENT DOES NOT REALLY HELP THE RESPONDENT'S CASE BECAUSE THE ORDER PASSED BY THE INCOME-TAX OFFICER UNDER SECTION 18A( 5) CANNOT BE SAID TO BE FINAL IN THE LITERAL SENSE OF THE WORD. THIS ORD ER WAS AND CONTINUED TO BE LIABLE TO BE MODIFIED UNDER SECTION 35 OF THE AC T. WHAT THE INCOME-TAX OFFICER HAS PURPORTED TO DO IN THE PRESENT CASE IS NOT TO REVISE HIS ORDER IN THE LIGHT OF THE RETROSPECTIVE AMENDMENT MADE BY SE CTION 13 OF THE AMENDMENT ACT ALONE, BUT TO EXERCISE HIS POWER UNDE R SECTION 35 OF THE ACT ; AND SO THE QUESTION WHICH FAILS TO BE CONSIDE RED IN THE PRESENT APPEAL CENTRES ROUND THE CONSTRUCTION OF THE EXPRES SION 'MISTAKE APPARENT FROM THE RECORD' USED IN SECTION 35. THAT IS WHY WE THINK THAT THE PRINCIPLE OF THE FINALITY OF THE ORDERS OR THE SANCTITY OF TH E EXISTING RIGHTS CANNOT BE EFFECTIVELY INVOKED BY THE RESPONDENT IN THE PRESEN T CASE.' [EMPHASIS SUPPLIED] (P. 147) 6. WE FEEL THE AFORESAID OBSERVATIONS APPLY WITH EQUA L FORCE TO THE FACTS OF THE PRESENT CASE. THE AAC'S ORIGINAL ORDER WHEREBY THE JEWELLERY AND ORNAMENTS HAD BEEN EXCLUDED FROM THE COMPUTATION OF THE TOTAL WEALTH OF THE ASSESSEE HAD BEEN PASSED ON 26-5-1970. AFTER TH E AMENDMENT HAD COME INTO FORCE WITH RETROSPECTIVE EFFECT FROM 1-4- 1963, PROCEEDINGS FOR RECTIFICATION WERE UNDERTAKEN BY THE AAC IN JANUARY 1972. IT WAS WELL WITHIN FOUR YEARS OF PERIOD OF LIMITATION AVAILABLE TO HIM UNDER SECTION 35. THIS IS NOT A CASE WHERE THE RESORT TO THE RECTIFIC ATION POWER WAS REQUIRED TO BE MADE BY REFERENCE TO ANY PROVISION IN THE AME NDING ACT BUT DE HORSE THE AMENDING ACT POWER WAS SOUGHT TO BE EXERC ISED UNDER THE ORIGINAL SECTION, NAMELY, 35(7). IF THAT BE SO, FOL LOWING THE OBSERVATIONS QUOTED ABOVE, IT MUST BE HELD THAT THE AAC'S ORDER DATED 26-5-1970 HAD NOT BECOME FINAL IN THE LITERAL SENSE OF THE WORD N OTWITHSTANDING THE FACT THAT NO APPEAL HAD BEEN PREFERRED AGAINST THAT ORDE R OR THAT THE REQUISITE PERIOD FOR APPEAL WAS ALLOWED TO EXPIRE. THE SAID O RDER WAS AND 9 CONTINUED TO BE LIABLE TO BE MODIFIED UNDER SECTION 35(7) AND IN THIS VIEW OF THE MATTER THE ASSESSEE HEREIN ALSO WOULD NOT BE IN A POSITION TO INVOKE THE PRINCIPLE OF FINALITY OF ORDERS OR THE SANCTITY OF THE EXISTING RIGHTS WHICH ARE SAID TO HAVE BEEN ACQUIRED BY HER UNDER THE INI TIAL ORDER. IN VIEW OF THE ABOVE SAID DECISION OF HONBLE SUPRE ME COURT, WE AGREE WITH THE CONTENTIONS OF THE ASSESSEE THAT THERE IS NO BAR IN MOVING RECTIFICATION PETITION AGAINST AN ASSESSMENT ORDER WITHIN THE PERIOD PRESC RIBED UNDER THE RELEVANT PROVISIONS, WHICH HAS NOT BEEN APPEALED AGAINST. I N THE INSTANT CASE, THERE IS NO DISPUTE THAT THE ASSESSEE HAS MOVED THE RECTIFIC ATION PETITION WITHIN THE PERIOD PRESCRIBED U/S 154 OF THE ACT. 15. THE LD A.R SUBMITTED THAT THE ASSESSEE HAS B EEN EXECUTING ONLY ONE PROJECT, VIZ., CHANDIVALI HOUSING PROJECT AND HAS C LAIMED DEDUCTION U/S 80IB(10) OF THE ACT IN RESPECT OF THAT PROJECT ONLY . ACCORDINGLY HE SUBMITTED THAT ALL THE RECEIPTS ARE RELATED TO THE ABOVE SAID PROJECT ONLY. HE SUBMITTED THAT THE LD CIT(A) WAS NOT CORRECT IN OBSERVING THA T THE ASSESSEE HAS BEEN EXECUTING OTHER PROJECTS ALSO AND THE SAID OBSERVAT ION HAS BEEN MADE WITHOUT ANY SUPPORTING MATERIAL. THERE APPEARS TO BE MERIT IN THE ABOVE SAID SUBMISSIONS ALSO. WE NOTICE THAT IT IS NOT THE CAS E OF THE AO THAT THE ASSESSEE HAS BEEN EXECUTING OTHER PROJECTS ALSO. HENCE THER E IS MERIT IN THE CONTENTIONS OF LD A.R THAT THE LD CIT(A) HAS MADE THE ABOVE SAI D OBSERVATION WITHOUT CORROBORATING THE SAME. 16. BE THAT AS IT MAY, THE QUESTION THAT REQUIR ES CONSIDERATION IS WHETHER THE MISTAKES POINTED OUT BY THE ASSESSEE WOULD FALL UNDER THE CATEGORY OF MISTAKES APPARENT FROM RECORD WARRANTING THE RECT IFICATION OF THE ASSESSMENT ORDER PASSED BY THE AO. WE SHALL EXTRACT BELOW THE CONTENTS OF RECTIFICATION PETITION FILED BY THE ASSESSEE:- 4.1. CASH RECEIPTS OF RS. 33,99,27.120/- ON P AGE NO. 3 OF A-5 I. CASH RECEIPTS OF RS. 33,99,27,120/- ON SAL E OF TDR AS MENTIONED ON PAGE NO. 3 OF ANNEXURE A-5 PERTAINS TO SALE OF TDR AS VARIOUS SEIZED PAGES FOUND AND SEIZED DURING THE COURSE OF SEARCH ENVISAGES THAT THOSE CASH RECEIPTS REFER TO SALE OF TDR. DETAILS OF SEIZ ED PAGES SUBMITTED BY THE ASSESSEE IS AS FOLLOWS: 10 II. FURTHER, WHILE RECORDING STATEMENT U/S. 132 (4) OF THE ACT OF SHRI RAMESH S. SHAH, PARTNER OF THE ASSESSES, OFFICER WH O CONDUCTED SEARCH AND ADIT WHILE ANALYZING ANNEXURE - A -5 HAV E ALSO ACCEPTED THAT THE ABOVE MENTIONED CASH RECEIPTS OF RS. 33,99,27,120/- PERTAINS TO SALE OF TDR. III. THUS, THE SAME SHOULD BE TAXED UNDER THE HEAD 'PROFIT AND GAINS OF BUSINESS OR PROFESSION' INSTEAD OF THE RESIDUARY HE AR BEING 'INCOME FROM OTHER SOURCES'. 4.2. CASH RECEIPTS OF RS. 11,79,49,616/- AND RS. 14.00,00,0OO/- FROM M/S. SATRA PROPERTIES (INDIA) LIMITED AND M/S. KHYATI REALTORS: I. CASH RECEIPTS OF RS. 11,79,49,616/- AND RS. 14,00,0 0,000/- FROM M/S. SATRA PROPERTIES (INDIA) LIMITED AND M/S. KHYA TI REALTORS RESPECTIVELY AS MENTIONED ON PAGE NO. 4 OF ANNEXURE A-5 ALSO, PERTAINS TO SALE OF TDR AS VARIOUS SEIZED PAGES FOU ND AND SEIZED DURING THE COURSE OF SEARCH ENVISAGES THAT THOSE CA SH RECEIPTS REFER TO SALE OF TDR. DETAILS OF SEIZED PAGES SUBMITTED B Y THE ASSESSES IS AS FOLLOWS: PG. NO. REMARKS 11 II. THUS THE SAME SHOULD BE TAXED UNDER THE HEAD 'PROFIT AND GAINS OF BUSINESS OR PROFESSION' INSTEAD OF THE RESIDUARY HE AR BEING 'INCOME FROM OTHER SOURCES'. . 4.3. CASH RECEIPTS OFRS. 1,12,79,442/- FROM SAL E OF SCRAP I. CASH RECEIPTS OF RS. 1,12,79,442/- FROM SALE OF SCRAP AS MENTIONED ON PAGE NO. 1 OF ANNEXURE A-5 PERTAINS TO RECEIPTS FROM SALE OF SCRAP AS ON THE SEIZED PAGE NO. 1 AGAINST S. NO 3 TO 6, A GGREGATING TO RS. 1,12,79,442/- 'RAHIM BHAI CHANDAIVALI - SCORP' IS M ENTIONED. II. THUS, THE SAME SHOULD BE TAXED UNDER THE HEAD 'PROF IT AND GAINS OF BUSINESS OR PROFESSION' INSTEAD OF THE RESIDUARY HE AR BEING 'INCOME FROM OTHER SOURCES'. 4.4. APPLICATION OF INCOME OF RS. 9,00,00,000/- TOW ARDS CHANDIVALI HOUSING PROJECT: I. APPLICATION OF INCOME OF RS. 9,00,00,0007- TO WARDS CHANDIVALI HOUSING PROJECT WHICH IS DISALLOWED BY THE ASSESSIN G OFFICER VIDE ORDER U/S. 143(3) OF THE ACT ' DATED 28.03.2013. TH US THE DEDUCTION U/S. 80-18(10) SHOULD BE INCREASED BY THE SAME AMOU NT. 4.5. BOGUS PURCHASE OF RS. 29,92,087/-: I. BOGUS PURCHASE OF RS. 29,92,0877- DECLARED IN THE HANDS OF THE ASSESSEE SHOULD ADDED BACK TO THE PROFIT OF THE CHA NDIVALI PROJECT. THUS, THE DEDUCTION U/S. 80-18(10) INCREASES BY T HE SAME AMOUNT. 4.6. DOUBLE TAXATION OF RS. 2,00,00,000/- ON ACC OUNT OF SALE OF SCRAP: I. DURING THE COURSE OF SEARCH THE ASSESSEE DEC LARED SALE OF SCRAP OF RS. 2,00,00,0007- GENERATED FROM CHANDIVALI PROJECT PER TAINING TO AY 2009-10, WHICH ASSESSEE RECORDED AS REVENUE IN THE BOOKS OF ACCOUNT IN AY 2011-12. THE SAME HAS BEEN BROUGHT TO TAXATION IN AY 2009-10 AND REDUCED DEDUCTION U/S. 80-18(10) OF THE ACT BY RS. 2,00,00,0007- IN AY 2011-12. II. HOWEVER, THE SAME HAS NOT BEEN REDUCED FROM AY 2011-12, LEADING TO DOUBLE TAXATION. 17. IN THE WRITTEN SUBMISSIONS, THE ASSESSEE HA S SUBMITTED VARIOUS LEGAL PROPOSITIONS RELATING TO RECTIFICATION OF MISTAKES APPARENT FROM RECORD. WE SUMMARISE THE SAME BELOW:- 12 (I) THE TERM RECORD MEANS RECORD OF ALL PROCEEDI NGS LEADING TO FRAMING OF ASSESSMENT ORDER. THE FOLLOWING CASE LAWS EXPLA IN THIS PROPOSITION:- (A) MAHARANA MILLS (P) LTD VS. ITO (1959)(36 ITR 3 50)(SC) (B) GAMMON INDIA VS. CIT (1995)(214 ITR 50)(BOM) (C) UPASANA HOSPITAL AND NURSING HOME VS. CIT (2 53 ITR 507)(KERALA) (II) IF THE AO DOES NOT LOOK AT ENTIRE RECORD OR A N IMPORTANT MATERIAL OR FACT, WHICH WAS BROUGHT TO HIS NOTICE, THEN THE SAM E CAN BE RECTIFIED AND ORDER CAN BE ALTERED:- (A) ITO VS. ITAT (1964)(58 ITR 634)(ALL) (B) CIT VS. MITHALAL ASHOK KUMAR (1984)(158 ITR 755) (C) LAXMI ELECTRONIC CORPORATION VS. CIT (1990)( 188 ITR 398)(ALL) (III) WHEN THE ASSESSEE HAS GOT ONLY ONE BUSINESS/PROJECT , ALL INCOME UNEARTHED DURING THE SEARCH HAVE TO BE TREATED AS B EING EARNED FROM THE SAID BUSINESS:- (A) CIT VS. MHASKAR GENERAL HOSPITAL (TAX APPEAL NO .1474 OF 2009) (B) CIT VS. SUMAN PAPER AND BOARDS LTD (2009)(31 4 ITR 119)(GUJ) (C) LAKHMICHAND BAIJNATH VS. CIT (1959)(35 ITR 416 )(SC) (IV) THE UNDISCLOSED INCOME UNEARTHED DURING THE C OURSE OF SEARCH IN THE FORM OF ON-MONEY/CASH RECEIVED IS ELIGIBLE FOR DEDUCTION U/S 80IB(10) OF THE ACT IRRESPECTIVE OF WHETHER IT IS R ECORDED IN THE BOOKS OF ACCOUNTS OR NOT. CIT VS. SHETH DEVELOPERS P LTD (2012)(254 CTR 12 7)(BOM) (V) NON-CONSIDERATION OF THE DECISION OF HONBLE SUPREME COURT OR HONBLE JURISDICTIONAL HIGH COURT IS AN ERROR APPAR ENT FROM RECORD AND MUST BE RECTIFIED. ACIT VS. SAURASHTRA KUTCH STOCK EXCHANGE LTD (2008)(305 ITR 227)(SC). (VI) UNDER THE SCHEME OF ACT, THE INCOME IS ASSESS ED TO TAX UNDER VARIOUS HEADS. ALL THE HEADS OF INCOME MUST BE EXH AUSTED/EXCLUDED BEFORE TAXING AN INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES:- (A) S.G. MERCANTILE CORPORATION P LTD VS. CIT (83 ITR 700)(SC) (B) CIT VS. T.P. SIDHWA (1982)(133 ITR 840)(BOM) 13 (C) BIHAR STATE CO-OP BANK LTD VS. CIT (39 ITR 115)(SC ). NON-CONSIDERATION OF ABOVE SAID DECISIONS IS AN ERR OR APPARENT FROM RECORD. (VII) THE DEDUCTIONS UNDER CHAPTER VIA SHOULD BE R ESTRICTED TO THE AMOUNT OF GROSS TOTAL INCOME, IF GROSS TOTAL INCOME WORKS OUT TO LESS THAN THE ELIGIBLE AMOUNT OF DEDUCTION. (A) CIT VS. J.B.BODA & CO. P LTD (ITA NO.3224 OF 2009)( BOM) (B) CIT VS. TRIDOSS LABORATORIES LTD (2010)(328 ITR 44 8)(BOM) (C) CIT VS. ESKAY KNIT (INDIA) LTD (ITA NO.184 OF 200 7)(BOM) THE AO HAS NOT FOLLOWED THE ABOVE CITED BINDING DEC ISIONS. (VIII) IF AN ORDER HAS BEEN PASSED ON MISTAKEN ASS UMPTION AND WITHOUT CONSIDERING THE MATERIALS AVAILABLE ON RECORD, THEN IT DESERVES TO BE RECTIFIED. (A) NEETA SHAH AND ORS VS. CIT (191 ITR 77)(KAR) (B) KESORAM INDUSTRIES LTD VS. CIT (271 ITR 501)(CAL) (IX) A RECTIFICATION IS MAINTAINABLE IN ORDER TO C ORRECTLY DECIDE AN ISSUE AS PER LAW. IF IT IS APPARENT FROM RECORD THAT THE ASSESSEE IS ENTITLED TO A PARTICULAR RELIEF, THEN THE SAME IS ALLOWABLE BY WA Y OF RECTIFICATION U/S 154 OF THE ACT. (A) CIT VS. BALLABH PRASAD AGARWALLA (233 ITR 354)(CAL ) (B) CIT VS. K.N. OIL INDUSTRIES (142 ITR 13)(MP) 18. THE QUESTION THAT NEEDS TO BE ADDRESSED HER E IS WHETHER THE CLAIM MADE BY THE ASSESSEE IN ITS RECTIFICATION PETITION WOULD FALL UNDER THE CATEGORY OF MISTAKES APPARENT FROM RECORD WITHIN THE MEANING OF SEC.154 OF THE ACT WARRANTING RECTIFICATION OF ASSESSMENT ORDER OR NOT ?. 19. WE SHALL DEAL WITH EACH OF THE ISSUES SEPARAT ELY. THE FIRST ITEM OF RECEIPTS PERTAINS TO CASH RECEIPTS ON SALE OF FOUR TDRS AMOU NTING TO RS.33.99 CRORES. THE AO HAS DENIED DEDUCTION U/S 80IB(10) OF THE ACT IN RESPECT OF THIS RECEIPT, 14 SINCE HE ASSESSED THE SAME AS INCOME FROM OTHER SOU RCES AND NOT BUSINESS INCOME. WE HAVE NOTICED EARLIER, THE DETAILS PERTA INING TO THE ABOVE RECEIPTS WERE UNEARTHED DURING THE COURSE OF SEARCH PROCEEDI NGS AND THE DOCUMENT ITSELF WAS TITLED AS CASH RECEIPTS ON SALE OF TDRS FROM 01-04-2010. THIS DOCUMENT WAS CONFRONTED WITH THE PARTNER OF THE ASS ESSEE FIRM DURING THE COURSE OF SEARCH PROCEEDING AND THE PARTNER HAS ACC EPTED THE SAME AS UNACCOUNTED RECEIPTS AND AGREED TO OFFER THE SAME A S INCOME. ACCORDINGLY, THE ASSESSEE HAS OFFERED THE SAME AS ITS INCOME IN THE RETURN OF FILED BY IT THEREAFTER AS ITS BUSINESS INCOME. THE AO HAS ALSO ACCEPTED THE SAME. BUT THE AO HAS DENIED THE DEDUCTION U/S 80IB(10) OF THE ACT WITH THE OBSERVATION THAT THE ASSESSEE HAS FAILED TO PROVE THAT THE ABOV E SAID RECEIPT PERTAINS TO SALE PROCEEDS OF TDRS. THE VARIOUS REASONS MENTIONE D BY THE AO ARE GIVEN BELOW:- (A) THE SEIZED DOCUMENT CONTAINED THE NAME OF SOME BROK ERS, WHOSE IDENTITY AND ADDRESS DETAILS WERE NOT GIVEN BY THE ASSESSEE AND HENCE IT IS DIFFICULT TO INFER THAT THE AMOUNTS MENTIONED ON THESE PAPERS ARE ACTUALLY RECEIPTS ON SALE OF TDR. (B) FURTHER THE TDRS HAVE BEEN SOLD TO VARIOUS PARTIES IN SMALL BITS AND PIECES AND THE ASSESSEE COULD NOT FURNISH THE DETAI LS OF CASH RECEIVED FROM EACH OF THE PARTIES. (C) CASH RECEIVED MAY BE IN THE FORM OF DEPOSITS WHICH THE BROKERS MIGHT HAVE GIVEN IN RESPECT OF MANY SUNDRY TRANSACTIONS M ADE BETWEEN THEM AND THE ASSESSEE. 20. IT IS THE CONTENTION OF LEARNED AR THAT THE A SSESSEE HAS EXECUTED ONLY ONE PROJECT, VIZ., CHANDIVALI PROJECT AND RECEIVED TDR IN RESPECT OF THAT PROJECT ONLY. THE SAID PROJECT IS ELIGIBLE FOR DEDUCTION U /S 80IB(10) OF THE ACT. HENCE THE ON MONEY RECEIVED BY THE ASSESSEE IN THE COURSE OF SALE OF TDRS RELATED THE ABOVE SAID PROJECT ONLY. EVEN THE DOCUMENT SEIZED DURING COURSE OF SEARCH ALSO CLEARLY STATES THAT CASH RECEIPTS PERTAIN TO S ALE OF TDRS. WE ALSO NOTICE THAT THE SEIZED DOCUMENT ALSO CONTAINS TDR NUMBER, AREA AND AMOUNT 15 RECEIVED ALONGWITH COMPUTATION. ACCORDINGLY, THE LE ARNED AR SUBMITTED THAT THERE CANNOT BE TWO VIEWS IN THIS RESPECT. HE SUBMI TTED THAT THE SAID DOCUMENT WAS PUT TO MR. RAMESH S. SHAH, PARTNER OF THE ASSESSEE AND HE HAS ADMITTED THE SAID RECEIPTS AS UNDISCLOSED INCOME OF THE ASSESSEE-FIRM. ACCORDINGLY, THE LD A.R SUBMITTED THAT THE VIEW TAK EN BY THE ASSESSING OFFICER IS NOT IN ACCORDANCE WITH EVIDENCE AVAILABLE ON REC ORD AND HENCE THERE IS NO SCOPE FOR ASSESSING THE SAME AS INCOME FROM OTHER S OURCES. THE LD A.R FURTHER SUBMITTED THAT THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF SHETH DEVELOPERS (SUPRA) HAS HELD THAT ON MONEY RECEIPTS ARE ALSO ELIGIBLE FOR DEDUCTION U/S. 80IB(10) OF THE ACT. ACCORDINGLY, LE ARNED AR SUBMITTED THAT THE VIEW SO TAKEN BY THE ASSESSING OFFICER IS A MISTAKE APPARENT FROM RECORD AND HENCE IT SHOULD BE RECTIFIED. 21. LEARNED DR, ON THE CONTRARY, RELIED UPON THE OR DER PASSED BY LD CIT(A). HE ALSO RAISED A LEGAL ISSUE WITH REGARD TO ELIGIBI LITY OF THE ASSESSEE TO CLAIM DEDUCTION U/S 80IB(10) OF THE ACT. HE SUBMITTED TH AT THE ASSESSEE HAS FILED ITS RETURN OF INCOME BELATEDLY BEYOND THE DUE DATE PRES CRIBED U/S. 139(1) OF THE ACT AND HENCE THE ASSESSEE IS NOT ENTITLED FOR DEDU CTION U/S. 80IB(10) OF THE ACT BY VIRTUE OF PROVISIONS OF SECTION 80AC OF THE ACT. HE SUBMITTED THAT THE ASSESSEE HAS MISREPRESENTED BEFORE THE AO THAT IT H AS FILED ITS RETURN OF INCOME BY THE DUE DATE AND ALSO FILED A COPY OF ACK NOWLEDGEMENT FOR FILING RETURN OF INCOME. THE ENQUIRIES MADE BY THE AO WIT H THE CENTRAL PROCESSING CENTRE HAS PROVED THAT THERE IS NO SUCH RETURN OF I NCOME FILED, AS CLAIMED BY THE ASSESSEE. THE LD D.R SUBMITTED THAT THE ASSESS EE HAS FILED RETURN OF INCOME ONLY IN RESPONSE TO THE NOTICE U/S 142(1) OF THE ACT, ISSUED BY THE AO. HE SUBMITTED THAT THE AO ISSUED NOTICE ON 09-02-201 2 AND THE ASSESSEE HAS FURNISHED RETURN OF INCOME FOR THE FIRST TIME FOR T HE YEAR UNDER CONSIDERATION ONLY ON 29-02-2012, I.E., BEYOND THE DUE DATE PRESC RIBED U/S 139(1) OF THE ACT. THE LD D.R SUBMITTED THAT THE PROVISIONS OF SEC.80A C OF THE ACT DEBARS ALLOWING DEDUCTION U/S 80IB(10) OF THE ACT, IF THE RETURN OF INCOME IS NOT FURNISHED WITHIN THE DUE DATE PRESCRIBED U/S 139(1) OF THE ACT. HE FURTHER SUBMITTED THAT THE DECISION RENDERED IN THE CASE OF SETH DEVELOPERS (SUPRA) BY 16 HONBLE BOMBAY HIGH COURT DID NOT CONSIDER PROVISIO NS OF SECTION 80AC. HE ALSO SUBMITTED THAT THE TRIBUNAL, BEING THE LAST FA CTS FINDING AUTHORITY, IS OBLIGED TO CONDUCT PROPER INQUIRY ON FACTS, IF THER E IS LACUNAE OR DEFECT IN THE ORDER PASSED BY THE AO. IN THIS REGARD HE PLACED RE LIANCE ON THE DECISION RENDERED BY HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. JANSAMPERK ADVERTISING AND MARKETING PVT. LTD. (2015) 375 ITR 373. THE LD D.R ALSO PLACED HIS RELIANCE ON VARIOUS CASE LAWS, WHERE IT HAS BEEN HELD THAT THE DEDUCTION U/S 80IB & OTHER SIMILAR PROVISIONS COULD BE DENIED IN TERMS OF SEC.80AC OF THE ACT, IF THE RETURN OF INCOME IS NOT FILED WITHIN THE DUE DATE PRESCRIBED U/S 139(1) OF THE ACT. SOME OF THE DECIS IONS RELIED UPON BY THE LD D.R ARE GIVEN BELOW:- (A) CIT VS. SHELCON PROPERTIES (P) LTD (2014)(44 T AXMANN.COM) 170)(CAL) (B) SUOLIFICIO LINEA ITALIA (INDIA) P LTD VS. JCIT (CAL) (C) SAFFIRE GARMENTS VS. ITO (2012)(28 TAXMANN.COM 27)(SB) (D) SHRI DWARKADAS G PANCHMATIA VS. ACIT (ITA NO.4 727/MUM/2012) (E) ITO VS. YASHASHVI DEVELOPERS (ITA NO.3645/MUM /2012) 22. WE NOTICED THAT THE PRESENT APPEAL IS EMANATING FROM THE ORDER PASSED BY THE ASSESSING OFFICER U/S. 154 OF THE ACT. THE S COPE OF PROVISIONS OF SECTION 154 OF THE ACT IS ONLY TO FIND OUT AS TO WHETHER TH ERE ARE MISTAKES APPARENT FROM RECORD IN THE ASSESSMENT ORDER PASSED BY THE A SSESSING OFFICER OR NOT. THE QUESTION AS TO WHAT CONSTITUTES MISTAKES APPAR ENT FROM RECORD IS WELL SETTLED AND THE VARIOUS PROPOSITIONS SUBMITTED BY T HE ASSESSEE HAS BEEN DISCUSSED SUPRA. BEFORE US, THE LD D.R HAS RAISED A LEGAL CONTENTION, AS DISCUSSED IN THE PRECEDING PARAGRAPH. SUBSEQUENTLY , THE REVENUE HAS ALSO FILED CROSS OBJECTION RAISING VERY SAME LEGAL CONTE NTIONS. HOWEVER, WE PREFER TO DEAL THE CONTENTIONS OF REVENUE WITH REGARD TO THE LEGAL ISSUE URGED BY THEM SEPARATELY. 23. WE SHALL DEAL WITH THE GROUNDS URGED IN THE APPEAL FILED BY THE ASSESSEE. WITH REGARD TO RECEIPT OF RS 33.99 CRORES, THERE IS NO DISPUTE THAT THE SAID ADDITION HAS BEEN MADE ON THE BASIS OF DOCUMENT BEA RING PAGE NO. 3 OF 17 ANNEXURE-5 SEIZED FROM THE ASSESSEE-FIRM. THE SAID DOCUMENT, WHICH IS EXTRACTED IN EARLIER PARAGRAPH, IS TITLED AS CASH RECEIPTS ON SALE OF TDRS FROM 1.4.2010. AS SUBMITTED BY LEARNED AR, THE SAID DOC UMENT GIVES DETAILS OF TDR NUMBER, AREA SOLD, AMOUNT RECEIVED AND CALCULATIONS THEREOF. THIS DOCUMENT ALSO MENTIONS NAME OF BROKER THROUGH WHOM SALE WAS EXECUTED. THE ASSESSING OFFICER HAS REFUSED TO ACKNOWLEDGE THIS RECEIPT AS BUSINESS INCOME OF THE ASSESSEE, ONLY FOR THE REASONS THAT ASSESSEE HAS NO T FURNISHED DETAILS OF BROKER AND ALSO DETAILS OF PURCHASER OF TDRS. BUT THE QUES TION HERE IS WHETHER AMOUNT OF RS 33.99 CRORES REPRESENT BUSINESS INCOME OF THE ASSESSEE OR NOT. IN ANY CASE, WE NOTICE THAT THE ASSESSEE, VIDE ITS LETTER DATED 26-06-2012 (PAGES 258 TO 261 OF PAPER BOOK), HAS FURNISHED THE DETAILS OF TDR, THE PARTIES TO WHOM IT WAS SOLD ETC. ADMITTEDLY, THESE DETAILS WERE NOT CONSIDERED BY THE AO AND THE SAME RESULTS IN MISTAKE APPARENT FROM RE CORD. WHEN THE ASSESSEE ITSELF IS OFFERING THE RECEIPTS FOUND IN THE DOCUME NT AS ITS INCOME, THE DETAILS OF BROKERS WOULD LOOSE ITS RELEVANCE. IN ANY CASE, TH E ABOVE SAID RECEIPT HAS ALREADY BEEN IDENTIFIED AS UNACCOUNTED RECEIPTS TOW ARDS SALE OF TDR. THE SEIZED DOCUMENT CLEARLY STATES THAT THE IMPUGNED AM OUNT WAS RECEIVED BY WAY OF CASH ON SALE OF TDRS AND THE PARTNER OF THE ASSE SSEE HAS ALSO CONFIRMED THE SAME AS UNDISCLOSED RECEIPTS. FURTHER, THE ASSESSE E HAS COMPLETED ONLY ONE PROJECT, VIZ., CHANDIVALI PROJECT, DURING THE YEAR UNDER CONSIDERATION AND THE TDR WAS RECEIVED AGAINST THE SAID PROJECT ONLY. ALL THESE FACTS CUMULATIVELY SHOW THAT THERE IS NO SCOPE FOR TREATING THIS RECEI PT AS NOT RELATED TO BUSINESS ACTIVITY CARRIED ON BY THE ASSESSEE, PARTICULARLY W HEN THE AMOUNT ACCOUNTED BY THE ASSESSEE IN RESPECT OF SALE OF TDR HAS BEEN ACC EPTED AS BUSINESS INCOME OF THE ASSESSEE. THE HON'BLE SUPREME COURT IN THE CASE OF LAKHMICHAND BAIJNATH (SUPRA) AND HON'BLE GUJARAT HIGH COURT IN THE CASE OF SUMAN PAPERS AND BOARDS LTD. (SUPRA) HAVE TAKEN THE VIEW THAT WHEN T HE ASSESSEE HAS GOT ONLY ONE BUSINESS/PROJECT, THE INCOME UNEARTHED DURING THE SEARCH HAVE TO BE TREATED AS BEING EARNED FROM THE SAID BUSINESS. THE DECISION RENDERED BY HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF SH ETH DEVELOPERS (SUPRA) ALSO SUPPORT THIS VIEW. 18 24. WE NOTICED THAT THE ASSESSING OFFICER HAS ALLOW ED DEDUCTION U/S. 80IB(10) OF THE ACT IN RESPECT OF INCOME FROM BUILD ING PROJECT ALREADY DISCLOSED BY THE ASSESSEE. IT APPEARS THAT THE ASSESSING OFFI CER HAS PROPOSED TO ASSESS THE ABOVE SAID RECEIPT UNDER THE HEAD INCOME FROM OTHER SOURCES ONLY FOR THE PURPOSE OF REJECTING CLAIM OF DEDUCTION U/S. 80IB(1 0) OF THE ACT ON THE ABOVE SAID INCOME. THE FOREGOING DISCUSSIONS WOULD SHOW T HAT THE DECISION SO TAKEN BY THE ASSESSING OFFICER IS CONTRARY TO THE DECISIO N RENDERED BY HON'BLE SUPREME COURT IN THE CASE OF LAKHMICHAND BAIJNATH ( SUPRA). THE FACT THAT THE ASSESSEE HAS COMPLETED ONLY ONE PROJECT, VIZ., CHAN DIVALI PROJECT AND FURTHER THE TDR WAS RECEIVED IN CONNECTION WITH THAT PROJEC T IS NOT DENIED, IN WHICH CASE, THE IMPUGNED RECEIPTS HAVE TO CONSIDERED AS B USINESS INCOME ONLY AS PER THE DECISION RENDERED BY HONBLE SUPREME COURT IN T HE ABOVE SAID CASE. HENCE NON-CONSIDERATION OF DECISION RENDERED BY HON BLE SUPREME COURT RESULTS IN MISTAKE APPARENT FROM RECORD. THE CLAIM OF THE ASSESSEE ALSO GETS SUPPORT FROM THE DECISION RENDERED BY HONBLE JURIS DICTIONAL HIGH COURT IN THE CASE OF SHETH DEVELOPERS (SUPRA). NON-CONSIDERATIO N OF DECISION RENDERED BY JURISDICTIONAL HIGH COURT ALSO CONSTITUTES MISTAKE APPARENT FROM RECORD. FURTHER, WE NOTICE THAT THE EVIDENCES FOUND DURING THE COURSE OF SEARCH CLEARLY INDICATE THAT THE IMPUGNED INCOME IS RELATED TO THE BUILDING PROJECT EXECUTED BY THE ASSESSEE. HENCE THE DECISION TAKEN BY THE A O TO ASSESS THE INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES IS AGAINST THE FACTS AVAILABLE ON RECORD AND HENCE CLEARLY A MISTAKE APPARENT FROM RE CORD. ONCE IT IS ASSESSED AS BUSINESS INCOME OF THE ASSESSEE, THEN AS PER THE DECISION RENDERED BY HON'BLE BOMBAY HIGH COURT IN THE CASE OF SHETH DEVE LOPERS (SUPRA), THE ASSESSEE WOULD BE ELIGIBLE FOR DEDUCTION U/S 80IB(1 0) OF THE ACT ON THE ABOVE SAID INCOME ALSO. ACCORDINGLY, WE ARE OF THE VIEW T HAT THERE IS MERIT IN THE CONTENTIONS OF THE ASSESSEE. ACCORDINGLY, WE SET A SIDE THE ORDER PASSED BY THE LEARNED CIT(A) ON THIS ISSUE AND DIRECT THE ASSESSI NG OFFICER TO ASSESS THIS INCOME UNDER THE HEAD INCOME FROM BUSINESS AND CO NSEQUENTLY ALLOW DEDUCTION U/S. 80IB(10) OF THE ACT. 19 25. THE NEXT TWO RECEIPTS ARE RS.11.79 CRORES REC EIVED FROM SATARA PROPERTIES INDIA LTD AND RS.14.00 CRORES RECEIVED FROM KHYATI REALTORS. THE ASSESSEE CLAIMED THE ABOVE AMOUNTS AS UNACCOUNTED RECEIPTS R ELATING TO SALE OF TDR TO THE ABOVE SAID TWO PARTIES. THE AO DID NOT ACCEPT THE ABOVE SAID CLAIM OF THE ASSESSEE FOR THE REASON THAT (A) THE PARTNER OF THE ASSESSEE HAS STATED THE ABOV E SAID AMOUNTS WERE RECEIVED ON ACCOUNT OF VARIOUS MISCELLANEOUS TRANS ACTIONS ENTERED WITH THE ABOVE SAID PARTIES. (B) M/S SATARA PROPERTIES INDIA LTD IS UNDERTAKING CIVIL CONSTRUCTION WORKS FROM THE ASSESSEE AND HENCE THE AMOUNT RECEIV ED FROM IT MAY BE ON ACCOUNT OF ADJUSTMENT OF VARIOUS OTHER BUSINESS TRANSACTIONS. (C) IN THE IMPUGNED DOCUMENT (PAGE NO.4 OF ANNEXUR E A-5), THE AMOUNTS MENTIONED AGAINST THE NAME OF M/S VIGNAHATA PROPERT IES WAS EXPLAINED AS AMOUNT RECEIVED BY M/S VIGNAHATA. HOWEVER, TH E AMOUNTS MENTIONED AGAINST THE NAME OF M/S SATARA PROPERTIES AND M/S KHYATI ASSOCIATES WERE CLAIMED AS AMOUNT RECEIVED FROM T HEM. (D) THE NAME OF THE ASSESSEE IS NOT MENTIONED IN P AGE NO.4 OF ANNEXURE A-5. 26. THE SUBMISSION OF THE ASSESSEE IS THAT THE AB OVE SAID OBSERVATIONS MADE BY THE AO TO REJECT THE RECEIPTS AS RELATED TO BUSI NESS OF THE ASSESSEE IS AGAINST THE FACTS AVAILABLE ON RECORD. FIRST OF ALL, THE L D A.R SUBMITTED THAT IF THE IMPUGNED AMOUNTS ARE CONSIDERED TO BE AMOUNTS RECEI VED BY M/S SATARA PROPERTIES AND M/S KHYATI ASSOCIATES, THEN THERE IS NO NECESSITY FOR THE ASSESSEE TO OFFER THE SAME AS ITS INCOME. SINCE TH E ASSESSING OFFIER HAS ALREADY ACCEPTED THE INCOME OF RS.11.79 CRORES AND RS.14.00 CRORES AGGREGATING TO RS.25.79 CRORES OFFERED BY THE ASSESSEE, THE AO WAS NOT JUSTIFIED IN TAKING THE VIEW THAT THE ASSESSEE MIGHT NOT HAVE RECEIVED THE AMOUNTS. SECONDLY, THE LD A.R SUBMITTED THAT THE FOLLOWING MATERIALS AVAILABL E ON RECORD HAS BEEN COMPLETELY IGNORED BY THE ASSESSING OFFICER:- (A) TRANSACTIONS WITH M/S SATARA PROPERTIES INDIA LTD:- 20 (A) MOU/AGREEMENT ENTERED BETWEEN THE ASSESSEE AND THE ABOVE SAID PARTY FOR SALE OF TDR (PAGES 89, 97 TO 110, 11 1 AND 157 TO 162 OF PAPER BOOK) SEIZED FROM THE ASSESSEE. (B) SEIZED LEDGER A/C OF SATARA PROPERTIES INDIA L TD SHOWING RECEIPTS FROM SALE OF TDR (PG 111 AND 163 TO 166 OF PAPER BOOK) (C) LETTER DATED 26-06-2012 FILED BEFORE THE AO ( PAGES 251 TO 253 OF PAPER BOOK) (B) TRANSACTIONS WITH M/S KHYATI REALTORS (A) SEIZED LEDGER ACCOUNT SHOWING AMOUNTS RECEIVED ON SALE OF TDR TO M/S KHYATI REALTORS (PAGES 180 AND 181 OF PA PER BOOK) (B) SEIZED AGREEMENTS ON SALE OF TDR BETWEEN ASSES SEE AND KHYATI REALTORS (PAGES 182 TO 186 OF PAPER BOOK) THE ABOVE DOCUMENTS WOULD SHOW THAT THE TRANSACTION S ENTERED BETWEEN THE ASSESSEE AND M/S SATARA PROPERTIES INDIA LTD AND M/ S KHYATI ASSOCIATES WERE IN CONNECTION WITH SALE OF TDR BY THE ASSESSEE TO T HEM. THE SALE PROCEEDS OF TDR ACCOUNTED BY THE ASSESSEE HAS ALREADY BEEN ACCE PTED AS BUSINESS INCOME OF THE ASSESSEE. IT IS THE CONTENTION OF THE ASSES SEE THAT THE ABOVE SAID AMOUNT OF RS.25.79 CRORES RECEIVED FROM THEM WAS AL SO RELATED TO TDR TRANSACTIONS AND HENCE CONSTITUTE BUSINESS INCOME O F THE ASSESSEE. THE AO NOTICED THAT THE ASSESSEE HAS GIVEN CONTRACT WORKS TO M/S SATARA PROPERTIES AND ACCORDINGLY HE HAS TAKEN THE VIEW THAT THE AMOU NT RECEIVED FROM M/S SATAR PROPERTIES INDIA LTD MAY PERTAIN TO CIVIL CON STRUCTION WORKS. THE LD A.R SUBMITTED THAT THE CIVIL CONSTRUCTION WORKS WAS UND ERTAKEN BY ANOTHER CONCERN NAMED M/S SATARA PROPERTY DEVELOPOMENT CO P LTD AND NOT BY M/S SATARA PROPERTIES INDIA LTD. THE LD A.R SUBMITTED THAT THE LEDGER ACCOUNT COPY OF M/S SATARA PROPERTY DEVELOPMENT CO P LTD IS AVAILABLE AT PAGE NO.163 TO 166 OF PAPER BOOK AND THE SAME CLARIFIES THE ABO VE SAID POSITION. ACCORDINGLY THE LD A.R SUBMITTED THAT NON-CONSIDERA TION OF MATERIALS AVAILABLE ON RECORD IS MISTAKE APPARENT FROM RECORD. 27. WE NOTICE THAT THE MATERIALS ALREADY AVAILA BLE ON RECORD, WHICH WERE LISTED OUT IN THE PRECEDING PARAGRAPH, WOULD SHOW T HAT THE ASSESSEE HAS 21 ENTERED BUSINESS TRANSACTIONS WITH THE ABOVE SAID T WO PARTIES IN CONNECTION WITH SALE OF TDR ONLY. THE REASONING GIVEN BY THE AO TO REJECT THE CLAIM OF THE ASSESSEE DOES NOT EMANATE FROM THE FACTS ALREADY AV AILABLE ON RECORD. ACCORDINGLY NON-CONSIDERATION OF MATERIALS ALREADY AVAILABLE ON RECORD RESULTS IN MISTAKE APPARENT FROM RECORD. FURTHER, THE DECI SION RENDERED BY HONBLE SUPREME COURT IN THE CASE OF LAKHMICHAND BAIJNATH ( SUPRA) ALSO SUPPORT THE CASE OF THE ASSESSEE, WHICH HAS NOT BEEN CONSIDERED BY THE AO. HENCE, THE REASONING MENTIONED BY US IN THE EARLIER PARAGRAPHS , WHILE CONSIDERING THE CASH RECEIPT OF RS.33.99 CRORES RELATING TO SALE OF TDR, SHALL EQUALLY APPLY TO THE FACTS OF THE PRESENT CASE. FOLLOWING THE SAME, WE SET ASIDE THE ORDER PASSED BY LD CIT(A) ON THIS ISSUE AND DIRECT THE AO TO ASS ESS THE AMOUNT OF RS.25.79 CRORES AS BUSINESS INCOME OF THE ASSESSEE AND CONSE QUENTLY ALLOW THE DEDUCTION U/S 80IB(10) OF THE ACT ON THE ABOVE SAID INCOME. 28. THE NEXT ITEM OF RECEIPT IS CASH OF RS.1.12 C RORES RECEIVED ON SALE OF SCRAP. THE AO ASSESSED THE SAME AS INCOME UNDER TH E HEAD INCOME FROM OTHER SOURCES, ONLY FOR THE REASON THAT THE ASSESSE E DID NOT FURNISH THE YEAR- WISE BREAKUP OF GENERATION OF SCRAP AND THE DETAILS OF PARTIES TO WHOM SCRAP WAS SOLD. FURTHER THE AO HAS ALSO OBSERVED THAT TH ERE IS A POSSIBILITY THAT SCRAP MIGHT HAVE BEEN GENERATED FROM WINDMILL FARM ALSO. 29. IT IS THE SUBMISSION OF THE ASSESSEE THAT T HE ASSESSEE HAS GENERATED SCRAP FROM ITS CONSTRUCTION ACTIVITIES ONLY AND THI S FACT HAS BEEN ACCEPTED BY THE AO IN AY 2009-10. FURTHER THE RECEIPTS ON SALE OF SCRAP WAS ASSESSED AS BUSINESS INCOME IN AY 2009-10. THE LD A.R FURTHER SUBMITTED THAT THERE IS NO MATERIAL AVAILABLE ON RECORD TO SHOW THAT THE ASSES SEE COULD HAVE GENERATED SCRAP FROM ANY OTHER SOURCE, SINCE THE ASSESSEE WAS EXECUTING ONLY ONE PROJECT, VIZ., CHANDIVALI PROJECT. THERE IS ALSO N O MATERIAL TO SHOW THAT THESE SCRAPS WERE GENERATED FROM WIND MILL OPERATIONS. T HE LD A.R ACCORDINGLY SUBMITTED THAT THE VIEW SO TAKEN BY THE AO WAS NOT ON THE BASIS OF ANY MATERIAL AVAILABLE ON RECORD AND, IN FACT, IT IS CO NTRARY TO THE FACTS AVAILABLE ON 22 RECORD AS WELL AS THE DECISION TAKEN BY THE AO HIMS ELF IN AY 2009-10. ACCORDINGLY HE SUBMITTED THAT THE AO HAS COMMITTED A MISTAKE APPARENT FROM RECORD IN ASSESSING THE CASH RECEIPTS ON SALE OF SC RAP AS INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES, THEREBY DENYING DED UCTION U/S 80IB(10) OF THE ACT. 30. ON THE CONTRARY, THE LD D.R SUPPORTED THE O RDER PASSED BY LD CIT(A). 31. WE HEARD THE PARTIES ON THIS ISSUE AND PERU SED THE RECORD. AS NOTICED EARLIER, THE ASSESSEE HAS EXECUTED ONLY ONE PROJECT DURING THE YEAR UNDER CONSIDERATION AND ACCORDINGLY, IT HAS BEEN CLAIMED THAT THE SCRAP HAS BEEN GENERATED FROM THAT PROJECT ONLY. IT WAS FURTHER S UBMITTED THAT THE AO HAS ACCEPTED THIS FACT IN AY 2009-10. FURTHER, THE ASSE SSEE HAS OFFERED THE IMPUGNED AMOUNT ON THE BASIS OF SEIZED MATERIAL FOU ND DURING THE COURSE OF SEARCH, SINCE IT WAS NOT ACCOUNTED FOR IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. WE NOTICE THAT THE ASSESSEE HAS OFFERED ENTIRE AMOU NT AS ITS INCOME AND FURTHER, THE SOURCE OF RECEIPT IS ACCEPTED AS SALE OF SCRAP. ACCORDINGLY, THE REASONING GIVEN BY THE AO TO REJECT THE CLAIM OF TH E ASSESSEE DOES NOT EMANATE FROM THE FACTS ALREADY AVAILABLE ON RECORD AND ALSO CONTRARY TO THE VIEW TAKEN BY HIM IN AY 2009-10. ACCORDINGLY, REJECTION OF CL AIM OF THE ASSESSEE WITHOUT ANY BASIS AND WITHOUT CONSIDERING THE MATERIALS AVA ILABLE ON RECORD RESULTS IN MISTAKE APPARENT FROM RECORD. FURTHER, THE DECISIO N RENDERED BY HONBLE SUPREME COURT IN THE CASE OF LAKHMICHAND BAIJNATH ( SUPRA) ALSO SUPPORT THE CASE OF THE ASSESSEE, WHICH HAS NOT BEEN CONSIDERED BY THE AO. HENCE, THE REASONING MENTIONED BY US IN THE EARLIER PARAGRAPHS , WHILE CONSIDERING THE CASH RECEIPT OF RS.33.99 CRORES ON SALE OF TDR, SHA LL EQUALLY APPLY TO THE FACTS OF THE PRESENT CASE. FOLLOWING THE SAME, WE SET AS IDE THE ORDER PASSED BY LD CIT(A) ON THIS ISSUE AND DIRECT THE AO TO ASSESS TH E AMOUNT OF RS.1.12 CRORES AS BUSINESS INCOME OF THE ASSESSEE AND CONSEQUENTLY ALLOW THE DEDUCTION U/S 80IB(10) OF THE ACT ON THE ABOVE SAID INCOME. 23 32. THE LAST ITEM RELATES TO THE DISALLOWANCE O F RS.9.00 CRORES. SINCE THE ASSESSEE OFFERED ADDITIONAL INCOME, IT INCREASED IT S WORK IN PROGRESS BY RS.9.00 CRORES BY CLAIMING THE SAME AS APPLICATION OF INCOM E. SINCE THE SAID EXPENDITURE IS NOT SUPPORTED BY ANY EVIDENCE, THE A O DISALLOWED THE SAME. THE LD CIT(A) HELD THAT THE CLAIM OF THE ASSESSEE M AY HAVE BEARING ON THE CLOSING STOCK WITHOUT AFFECTING THE PROFIT AND LOSS ACCOUNT. HOWEVER, HE EXPRESSED THE VIEW THAT THIS AMOUNT WOULD FALL OUTS IDE THE SCOPE OF SEC.154 OF THE ACT. 33. WE HEARD THE PARTIES ON THIS ISSUE. THE ASS ESSEE HAS OFFERED INCOME TO THE TUNE OF RS.60.91 CRORES AND HENCE IT HAS INCREA SED ITS WORK IN PROGRESS BY RS.9.00 CRORES AS APPLICATION OF INCOME OUT OF RS.6 0.91 CRORES. SINCE THE INCOME HAS ALREADY BEEN TAXED, IT IS THE CONTENTION OF THE ASSESSEE, THAT THE SAME WOULD RESULT IN DOUBLE TAXATION, IF THE CLAIM OF APPLICATION IS REJECTED. EVEN THOUGH THE LD CIT(A) HAS EXPRESSED THE VIEW TH AT THIS ISSUE MAY FALL OUTSIDE THE SCOPE OF SEC.154 OF THE ACT, HE HAS NOT GIVEN ANY SPECIFIC DIRECTION TO THE AO. THE ASSESSEE, IN THE ALTERNATIVE CONTEN DED THAT WHERE AN EXPENDITURE IS DISALLOWED, IT WILL GO TO INCREASE T HE PROFITS ELIGIBLE FOR DEDUCTION U/S 80IB(10) OF THE ACT. IN THIS REGARD, THE ASSESS EE PLACED ITS RELIANCE ON THE DECISION RENDERED BY HONBLE JURISDICTIONAL BOMBAY HIGH COURT IN THE CASE OF CIT VS. SUNIL VISHAMBHARNATH TIWARI (2016)(388 ITR 630). WE NOTICE THAT THE AO HAS NOT CONSIDERED THE BINDING DECISION OF THE J URISDICITONAL HIGH COURT AND THE SAME CONSTITUTES MISTAKE APPARENT FROM RECO RD. ACCORDINGLY WE DIRECT THE AO TO ALLOW DEDUCTION U/S 80IB(10) OF THE ACT O N THE DISALLOWANCE OF RS.9.00 CRORES MADE BY HIM. 34. WE SHALL NOW TAKE UP THE CROSS OBJECTION FI LED BY THE REVENUE. THE REVISED OR REFRAMED GROUNDS OF OBJECTIONS URGED BY THE REVENUE READ AS UNDER:- GROUNDS OF CROSS OBJECTION 1) 'WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE DEDUCTION U/S 24 80IB(10) OF THE I.T. ACT AMOUNTING TO RS. 447,92,81 ,226/- CLAIMED BY THE ASSESSEE BASED ON A FRAUDULENT RETURN FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS, BEARING ACKNOWLEDGEMENT NO. 34552817130092011 DATED 30.09.2011 IS ALLOWABLE ? ' 2) 'WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE DEDUCTION U/S 80IB(10) OF ACT AMOUNTING TO RS. 447,92,81,226/- FR AUDULENTLY CLAIMED BY THE ASSESSEE, IN CONTRAVENTION TO THE MANDATORY CON DITIONS PRESCRIBED UNDER SECTION 80AC OF THE I.T. ACT, WHICH REQUIRES FILING OF THE RETURN OF INCOME ON OR BEFORE THE DUE DATE SPECIFIED U/S 139( 1) OF THE IT ACT IS ALLOWABLE?' 3) 'WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE DEDUCTION U/S 80IB(10) OF THE ACT AMOUNTING TO RS. 447,92,81,226/ - FRAUDULENTLY CLAIMED BY THE ASSESSEE IN CONTRAVENTION TO THE JUD GMENT OF THE HON'BLE SC IN THE CASE OF UNITED INDIA INSURANCE VS. RAJEND RA SINGH(2000) 3 SCC 581 BE ALLOWED ? 4) 'WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE DEDUCTION U/S 80IB(10) OF THE ACT AMOUNTING TO RS. 447,92,81,226/ - CLAIMED BY THE ASSESSEE IN THE RETURN OF INCOME FILED U/S 139(4) O F THE IT ACT BE ALLOWED, IGNORING THE VITAL FACT THAT THE ASSESSEE HAS MADE A FRAUDULENT CLAIM OF RETURN FILED U/S 139(1) OF THE ACT ? ' 5) 'WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE DEDUCTION U/S 80IB(10) OF ACT AMOUNTING TO RS. 447,92,81,226/- FR AUDULENTLY CLAIMED BY THE ASSESSEE, BEING A MISTAKE APPARENT FROM RECORD AS PER THE PROVISIONS OF SECTION 154 OF THE ACT BE ALLOWED? ' 6) 'WHETHER IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE, SHOULD NOT THE HON'BLE TRIBUNAL, USING ITS EXISTING WIDE POWER S BUTTRESSED BY JUDGMENT OF THE HON'BLE SC IN THE CASE OF UNITED IN DIA INSURANCE VS. RAJENDRA SINGH(2000) 3 SCC 581 IN CASES OF FRAUD, S ET-ASIDE THE ASSESSMENT, TO THE FILE OF THE A.O. FOR FRESH ASSES SMENT, DIRECTING THE ASSESSING OFFICER, TO ONLY CONSIDER THE RETURN FILE D ON 29.02.2012, ON THE BASIS OF FACT THAT THE ENTIRE EDIFICE ON WHICH THE EARLIER ASSESSMENT ORDER DATED 28.03.2013 WAS MADE I.E THE RETURN PURPORTEDL Y FILED ON 30.09.2011 AND NOW PROVED FORGED, HAS NOW COLLAPSED ?' 35. THE CROSS OBJECTION FILED BY THE ASSESSEE IS BARRED BY LIMITATION. THE REGISTRY INITIALLY INTIMATED THE REVENUE THAT THE C ROSS OBJECTION FILED BY IT IS BARRED BY LIMITATION BY 4 DAYS. IN RESPONSE THERET O, THE AO HAS FILED A PETITION REQUESTING THE BENCH TO CONDONE THE DELAY. THE SAI D PETITION READS AS UNDER:- 25 1. I, MANOJ TRIPATHI, DY CIT CENTRAL CIRCLE 5(3), MUMBAI HAVING MY OFFICE AT PR CIT CENTRAL 3,MUMBAI DO HEREBY SOLEMNL Y AFFIRMED AND STATE AS UNDER : 2. THE ASSESSE HAD FILED THE COPY OF RETURN OF INCO ME VIDE ACK NO 34552817130092011 DATED 30.09.2011. SUBSEQUENTLY TH E ASSESSEE HAD FILED ANOTHER ACK OF RETURN OF INCOME 3455281712902 12 DATED 29.02.2012. 3. THE AO ACCEPTED THE RETURN OF INCOME FILED BY TH E ACK. NO 34552817130092011 DATED 30.09.2011 UNDER THE BONAFI DE BELIEF THAT THE HARD COPY OF ACK OF RETURN OF INCOME E-FILED BY THE ASSESSEE WAS GENUINE AND ACCORDINGLY THE 80 IB (10) CLAIM OF THE ASSESSE E WAS ALLOWED. 4. HOWEVER, DURING THE APPELLATE PROCEEDING THIS FA CT WAS VERIFIED FROM THE CPC, BANGALORE AND THE CPC, BANGALORE VIDE THEIR CO MMUNICATION DATED 31.05.2018 HAS CONFIRMED THAT NO 'E- RETURN' OF INC OME WAS FILED THROUGH E FILING PORTAL WITH ACK NO 34552817130092011 DATED 30.09.2011. 5. THE RETURN OF INCOME FILED BY THE ASSESSEE VIDE ACK NO 345528171290212 DATED 29.02.2012 IS A BELATED 'ORIG INAL' RETURN AND THERE CANNOT EXIST ANY OTHER ORIGINAL RETURN PURPOR TEDLY FILED BY THE ASSESSEE ON 30.09.2011 AND THEREFORE, THE RETURN ON THE BASIS OF WHICH CLAIM IS MADE IS PROVED TO BE FAKE. 6. THE ASSESSEE HAS FAILED TO SATISFY THE PRIMARY C ONDITION OF SECTION 80AC WHICH MANDATES THE FILING OF RETURN OF INCOME ON OR BEFORE THE DUE DATE SPECIFIED U/S SUB SECTION (1) OF 139 OF THE IT ACT 1961, AND AS SUCH IS INELIGIBLE FOR CLAIM OF ENTIRE 80IB (10) DEDUCTION. 6. AS THE ABOVE FACTS UNEARTHED ONLY RECENTLY, THE CROSS OBJECTION IS BEING FILED TODAY ACCORDINGLY. THEREFORE THE UNDERSIGNED WAS PREVENTED BY REASONABLE CAUSE TO FILE CROSS OBJECTION EARLIER. A S THE REVENUE IMPLICATION OF THIS NEW FACT ARE HIGH AND MAY INVOLVE CRIMINAL CULPABILITY, THE CROSS OBJECTION MAY KINDLY BE ADMITTED AND HEARD BY THE H ONBLE BENCH. THERE IS A BONAFIDE DELAY OF 04 DAYS IN FILING THE CROSS OBJECTIONS WHICH IS NOT DELIBERATE AND INTENTIONAL AND HENCE, DESERVES TO B E CONDONED IN THE INTEREST OF JUSTICE. 7. I SAY THAT WHATEVER STATED HEREIN ABOVE PARAGRAP H IS TRUE TO THE BEST OF MY OWN KNOWLEDGE AND I BELIEVE THE SAME TO BE TRUE. THEREAFTER, THE REGISTRY RECOMPUTED THE PERIOD OF D EALY AS 124 DAYS AND HENCE, THE AO FILED ANOTHER PETITION CITING THE VER Y SAME REASONS FOR DELAY IN FILING CROSS OBJECTION. 26 36. IT IS PERTINENT TO NOTE THAT THE REVENUE HAD URGED FOLLOWING GROUNDS ONLY INITIALLY IN THE CROSS OBJECTION FILED BY IT. FURT HER THE APPROVAL OF THE LD PR. CIT HAS BEEN OBTAINED FOR THE FOLLOWING GROUNDS ONL Y: 1) THE RESPONDENTS PRAYS THAT THE ASSESSEE HAS CLAIMED DEDUCTION U/S 80IB(10) WITHOUT FILING A RETURN OF INCOME ON OR BE FORE THE DUE DATE AND THEREFORE IS NOT ELIGIBLE TO CLAIM DEDUCTION U/ S 80IB(10). 2) THE RESPONDENTS PRAYS THAT THE ROI FILED BY THE ASS ESSEE VIDE ACK NO.34552817130092011 DATED 30-09-2011 IS NOT GENUIN E AND THE SAME HAS BEEN CONFIRMED BY THE CENTRAL PROCESSING C ENTRE, THE AUTHORITY FOR E FILING OF RETURNS. 3) THE RESPONDENTS PRAYS THAT THE ASSESSEE HAS FAILED TO SATISFY THE PRIMARY CONDITION OF SECTION 80AC WHICH MANDATES TH E FILING OF RETURN OF INCOME ON OR BEFORE THE DUE DATE SPECIFIE D U/S SUB. SECTION (1) OF 139 OF THE I T ACT, 1961 AND AS SUCH IS INEL IGIBLE FOR CLAIM OF ENTIRE 80IB(10) DEDUCTION OF RS.445,62,89,140/- (RS .388,00,68,095/- + RS.60,91,56,178/-.) 37. THE REVENUE HAS NOT FILED COPY OF APPROVAL, I F ANY, GRANTED BY LD PR. CIT TO THE REFRAMED GROUNDS OF CROSS OBJECTION FILED BY THE AO. 38. BE THAT AS IT MAY, THE ONLY ISSUE URGED BY THE REVENUE IS THAT THE RETURN OF INCOME CLAIMED TO HAVE BEEN FILED BY THE ASSESS EE ON 30-09-2011 IS FORGED ONE AND THE ASSESSEE HAS ACTUALLY FILED ITS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION ONLY ON 29-02-2012, I.E., BEYOND THE DUE DATE PRESCRIBED U/S 139(1) OF THE ACT. HENCE THE ASSESSEES CLAIM FOR DEDUCTION U/S 80IB(10) OF THE ACT IS LIABLE TO REJECTED IN TOTO IN VIEW OF THE PR OVISIONS OF SEC. 80AC OF THE ACT. 39. BEFORE CONSIDERING THE PETITION FILED BY THE RE VENUE REQUESTING THE BENCH TO CONDONE THE DELAY, WE PREFER TO EXTRACT THE PROV ISIONS OF SEC.253(4) AND SEC. 253(5) OF THE ACT AS AVAILABLE DURING THE YEAR UNDE R CONSIDERATION, WHICH DEALS WITH FILING OF CROSS OBJECTION:- 27 (4) THE ASSESSING OFFICER OR THE ASSESSEE, AS THE CASE MAY BE, ON RECEIPT OF NOTICE THAT AN APPEAL AGAINST THE ORDER OF THE DEPUTY COMMISSIO NER (APPEALS) OR, AS THE CASE MAY BE, THE COMMISSIONER (APPEALS) OR THE ASSESSING OFF ICER IN PURSUANCE OF THE DIRECTIONS OF THE DISPUTE RESOLUTION PANEL HAS BEEN PREFERRED UNDER SUB-SECTION (1) OR SUB-SECTION (2) OR SUB-SECTION (2A) BY THE OTHER PARTY, MAY, NO TWITHSTANDING THAT HE MAY NOT HAVE APPEALED AGAINST SUCH ORDER OR ANY PART THEREOF, WI THIN THIRTY DAYS OF THE RECEIPT OF THE NOTICE, FILE A MEMORANDUM OF CROSS-OBJECTIONS, VERI FIED IN THE PRESCRIBED MANNER, AGAINST ANY PART OF THE ORDER OF THE ASSESSING OFFI CER (IN PURSUANCE OF THE DIRECTIONS OF THE DISPUTE RESOLUTION PANEL) OR DEPUTY COMMISSIONE R (APPEALS), OR AS THE CASE MAY BE, THE COMMISSIONER (APPEALS), AND SUCH MEMORANDUM SHALL BE DISPOSED OF BY THE APPELLATE TRIBUNAL AS IF IT WERE AN APPEAL PRESENTE D WITHIN THE TIME SPECIFIED IN SUB- SECTION (3) OR SUB-SECTION (3A). (5) THE APPELLATE TRIBUNAL MAY ADMIT AN APPEAL OR P ERMIT THE FILING OF A MEMORANDUM OF CROSS-OBJECTIONS AFTER THE EXPIRY OF THE RELEVAN T PERIOD REFERRED TO IN SUB-SECTION (3) OR SUB-SECTION (4), IF IT IS SATISFIED THAT THERE WAS SUFFICIENT CAUSE 54 FOR NOT PRESENTING IT WITHIN THAT PERIOD. SECTION 253(4) WAS AMENDED IN 01-06-2016 AND ACCORD INGLY, IT READS AS UNDER PRESENTLY:- (4) THE ASSESSING OFFICER OR THE ASSESSEE, AS THE CASE MAY BE, ON RECEIPT OF NOTICE THAT AN APPEAL AGAINST THE ORDER OF THE C OMMISSIONER (APPEALS), HAS BEEN PREFERRED UNDER SUB-SECTION (1) OR SUB-SEC TION (2) BY THE OTHER PARTY, MAY, NOTWITHSTANDING THAT HE MAY NOT HAVE AP PEALED AGAINST SUCH ORDER OR ANY PART THEREOF, WITHIN THIRTY DAYS OF THE RECEIPT OF THE NOTICE, FILE A MEMORANDUM OF CROSS-OBJECTIONS, VERI FIED IN THE PRESCRIBED MANNER, AGAINST ANY PART OF THE ORDER OF THE COMMIS SIONER (APPEALS), AND SUCH MEMORANDUM SHALL BE DISPOSED OF BY THE APP ELLATE TRIBUNAL AS IF IT WERE AN APPEAL PRESENTED WITHIN THE TIME S PECIFIED IN SUB-SECTION (3). A PERUSAL OF THE ABOVE SAID PROVISIONS WOULD SHOW T HAT THE POWER TO FILE CROSS OBJECTIONS IS GIVEN TO BOTH THE ASSESSEE AS WELL AS THE REVENUE AGAINST ANY PART OF THE ORDER PASSED BY COMMISSIONER (APPEALS), NOTW ITHSTANDING THE FACT THAT EITHER OF THE PARTIES HAVE NOT PREFERRED APPEAL. T HROUGH CROSS OBJECTIONS, THE PARTIES CAN CHALLENGE ANY PART OF THE ORDER PASSED BY COMMISSIONER (APPEALS). AN EXCEPTION HAS BEEN PROVIDED TO THE ABOVE SAID CO NDITIONS BY HONBLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CORPORATION LTD CS. CIT (1998)(229 ITR 382), WHEREIN IT WAS HELD THAT THE L EGAL ISSUES GOING TO THE ROOT 28 OF THE MATTER CAN BE AGITATED AT ANY STAGE, PROVIDE D ALL THE FACTS RELATING THERETO ARE ALREADY AVAILABLE ON RECORD. 40. WITH THE SUPPORT OF THESE LEGAL PROPOSITIONS, W E SHALL NOW EXAMINE THE CROSS OBJECTION FILED BY THE REVENUE. FOR THIS PUR POSE, IT IS NECESSARY TO DWELL UPON THE FACTS OF THE CASE, WHILE LED THE REVENUE T O FILE THIS CROSS OBJECTION. AS PER THE FACTS AVAILABLE ON RECORD, (A) THE ASSESSEE HAS CLAIMED TO HAVE FILED ITS RETURN O F INCOME FOR THE YEAR UNDER CONSIDERATION ON 30-09-2011 VIDE E-ACKNO WLEDGEMENT NUMBER 34552817130092011. (B) THE ASSESSEE FURNISHED A LETTER DATED 30-09-2011 T O THE AO FURNISHING A COPY OF MANUAL RETURN, COMPUTATION OF INCOME, FINANCIAL STATEMENTS, TAX AUDIT REPORT U/S 44AB OF THE ACT, R EPORT IN FORM NO.10CCB. (THE CONTENTION OF THE REVENUE IS THAT T HE LETTER OF ASSESSEE DOES NOT BEAR OFFICER SEAL, ACKNOWLEDGEMEN T NUMBER AND SIGNATURE OF THE RECIPIENT.) (C) THE AO ISSUED A NOTICE U/S 142(1) OF THE ACT TO TH E ASSESSEE ON 09- 02-2012 WHICH READS AS UNDER:- THE RETURN OF INCOME FOR ASSESSMENT YEAR 2011-12 H AS NOT BEEN FILED U/S 139(1) OF THE I T ACT, 1961. YOU ARE HER EBY REQUIRED TO FURNISH THE RETURN OF INCOME FOR ASSESSMENT YEAR 20 11-12 WITHIN 7 DAYS OF RECEIPT OF THIS NOTICE. 2. FAILURE TO FURNISH THE RETURN OF INCOME WITHIN THE SPECIFIED TIME WOULD RESULT IN INITIATION OF PENALTY PROCEEDI NGS U/S 271F OF THE I.T ACT, 1961. (D) THE AO ALSO ISSUED A COMMON QUESTIONNAIRE DA TED 17-02-2012 US 142(1) FOR AYS 2005-06 TO 2011-12. (E) THE ASSESSEE FILED RETURN RETURN OF INCOME IN RESPONSE TO THE NOTICE ISSUED U/S 142(1) OF THE ACT ON 29-02-2012. (F) IN BOTH THE RETURNS OF INCOME, THE ASSESSEE CL AIMED DEDUCTION U/S 80IB(10) OF THE ACT TO THE TUNE OF RS.447.92 CRORES . 29 (G) THE ASSESSEE FURNISHED A LETTER DATED 30-03-2 012 TO THE AO ENCLOSING THEREWITH COPY OF E-ACKNOWLEDGEMENT COPY OF RETURN OF INCOME FILED ON 29-02-2012 (G) THE AO COMPLETES THE ASSESSMENT U/S 143(3) R.W .S. 153A OF THE ACT ON 28-03-2013 AFTER OBTAINING MANDATORY APPROVAL OF THE JURISDICTIONAL ADDITIONAL COMMISSIONER OF INCOME TAX U/S 153D OF T HE ACT. (IT IS PERTINENT TO NOTE THAT THE ASSESSEE WAS SUBJECTED T O SEARCH OPERATIONS U/S 132 OF THE ACT ON 23.12.2010 AND HENCE THE ASSE SSMENT WAS COMPLETED U/S 143(3) R.W.S. 153A OF THE ACT). THE AO ALLOWED DEDUCTION ONLY TO THE EXTENT OF RS.384.71 CRORES. DURING THE COURSE OF SEARCH OPERATIONS, THE ASSESSEE HAD OFFERED INCOME ON ACCO UNT OF ON-MONEY RECEIPTS AND SCRAP SALES TO THE TUNE OF RS.60.91 CR ORES. THE ASSESSEE CLAIMED DEDUCTION U/S 80IB(10) IN RESPECT OF THOSE ADDITIONAL INCOME ALSO, BUT THE AO REJECTED THE SAID CLAIM. (H) THE LD PR. CIT PASSED AN ORDER U/S 263 OF THE ACT ON 30-03-2015, WHEREIN HE DIRECTED THE AO TO EXAMINE THE ELIGIBILI TY OF THE ASSESSEE TO CLAIM DEDUCTION U/S 80IB(10) OF THE ACT. (I) THE AO PASSED ORDER U/S 143(3) R.W.S 263 OF TH E ACT ON 31.3.2016, WHEREIN HE DETERMINED THE VERY SAME TOTAL INCOME AS WAS ASSESSED IN THE ORIGINAL ASSESSMENT ORDER PASSED ON 28.03.2013. (J) THE ASSESSEE FILED A RECTIFICATION PETITION U /S 154 OF THE ACT ON 13.04.2016 BEFORE THE AO, WHEREIN IT WAS PRAYED THA T THE DEDUCTION U/S 80IB(10) SHOULD BE ALLOWED ON INCOME RELATING TO ON -MONEY RECEIPTS OFFERED BY THE ASSESSEE. THE ASSESSEE, IN THIS REG ARD, PLACED ITS RELIANCE ON THE DECISION RENDERED BY HONBLE BOMBAY HIGH COU RT IN THE CASE OF CIT VS. SHETH DEVELOPERS P LTD (2012)(254 CTR 127). 41. AS NOTICED EARLIER, THE AO REJECTED THE RECTIFI CATION PETITION AND THE SAME WAS ALSO PARTIALLY CONFIRMED BY LD CIT(A) AND HENCE THE ASSESSEE FILED APPEAL BEFORE THE ITAT CHALLENGING THE DECISION TAKEN BY L D CIT(A) AGAINST THE ASSESSEE, WHICH WAS ADJUDICATED IN THE EARLIER PARA GRAPHS. WHILE THE TRIBUNAL WAS HEARING THE APPEAL OF THE ASSESSEE, THE LD D.R BROUGHT A NEW FACT THAT THE 30 ASSESSEES CLAIM OF FILING ITS RETURN OF INCOME WIT HIN THE DUE DATE IS FOUND TO BE WRONG AND THE ASSESSEE HAS, FOR THE FIRST TIME, HAS FILED ITS RETURN OF INCOME ON 29-02-2012 IN RESPONSE TO THE NOTICE ISSUED BY THE AO U/S 142(1) OF THE ACT. SINCE THE RETURN OF INCOME WAS FILED BEYOND THE DUE DATE PRESCRIBED U/S 139(1) OF THE ACT, THE LD D.R SUBMITTED THAT THE AS SESSEE IS NOT ELIGIBLE FOR DEDUCTION U/S 80IB(10) OF THE ACT AS PER THE PROVIS IONS OF SEC.80AC OF THE ACT. AFTER CONCLUSION OF HEARING OF THE APPEAL FILED BY THE ASSESSEE, THE REVENUE HAS FILED THIS CROSS OBJECTION, WHEREIN ALSO THE REVENU E HAS QUESTIONED AS TO WHETHER THE CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT IS ALLOWABLE IN THE HANDS OF THE ASSESSEE?. IN THE GROUNDS, IT IS SUBM ITTED THAT ASSESSEE HAS CLAIMED TO HAVE FILED ITS RETURN OF INCOME WITHIN T HE DUE DATE PRESCRIBED U/S 139(1) OF THE ACT AND FRADULENTLY PREPARED AN E-ACK NOWLEDGEMENT ALSO. IT IS SUBMITTED THAT THE ASSESSEE IS NOT ELIGIBLE FOR DED UCTION IN VIEW OF THE PROVISIONS OF SEC.80AC OF THE ACT. 42. THE CROSS OBJECTION FILED BY THE REVENUE WA S POSTED FOR HEARING. FOR THE SAKE OF CONVENIENCE, THE APPEAL OF THE ASSESSEE WAS ALSO POSTED FOR HEARING, EVEN THOUGH FULL HEARING HAD ALREADY BEEN COMPLETED , SINCE THE REVENUE HAS URGED A LEGAL ISSUE IN ITS CROSS OBJECTION. 43. AT THE TIME OF HEARING OF CROSS OBJECTION, THE LD A.R VEHEMENTLY CONTENDED THAT THE REVENUE IS NOT ENTITLED TO FILE CROSS OBJECTION AFTER CONCLUSION OF HEARING OF THE APPEAL FILED BY THE AS SESSEE. BY PLACING RELIANCE ON THE DECISION RENDERED BY HONBLE SUPREME COURT I N THE CASE OF ARJUN SINGH VS. MOHINDRA KUMAR & ORS (1964 AIR 993 SC/ 1964 SCR (5) 946), THE LD A.R SUBMITTED THAT THE TRIBUNAL SHOULD PASS ORDER AFTER CONCLUSION OF HEARING AND NO FURTHER SUBMISSIONS BY PARTIES CAN BE PERMITTED TO BE MADE. 44. HE FURTHER CONTENDED THAT THE REVENUE HAS NOT CITED PROPER REASONS FOR CONDONING THE DELAY. HE SUBMITTED THAT THE REVENUE HAS TO CITE COGENT REASONS FOR THE DELAY AND SHOULD SHOW THAT THERE WAS SUFFIC IENT CAUSE FOR THE DELAY. 31 45. HE SUBMITTED THAT IF AN ASSESSEE HAS TAKEN A C ONSCIOUS DECISION NOT TO FILE APPEAL, THEN HE IS NOT ENTITLED TO FILE APPEAL LATE R ON. HE SUBMITTED THAT THIS WAS SO HELD IN THE CASE OF SOMERSET PLACE CO-OPERAT IVE HOUSING SOCIETY LTD VS. ITO (374 ITR 307)(BOM) BY HONBLE BOMBAY HIGH COURT . THE LD A.R SUBMITTED THAT THE REVENUE TOOK A CONSCIOUS DECISION NOT TO F ILE CO INITIALLY. SUBSEQUENTLY IT HAS TAKEN DECISION TO FILE C.O AND HENCE IT WAS AN AFTER THOUGHT ONLY. ACCORDINGLY HE CONTENDED THAT THE CO SHOULD NOT BE ADMITTED. HE FURTHER SUBMITTED THAT THE GROUNDS URGED IN CROS S OBJECTION SHOULD BE RESTRICTED TO THE ISSUES ADJUDICATED IN THE ORDER A PPEALED AGAINST. HE SUBMITTED THAT THE GROUNDS URGED IN THE CROSS OBJEC TION DO NO ARISE OUT OF THE ORDER PASSED BY LD CIT(A). 46. ON THE CONTRARY, THE LD D.R SUBMITTED THAT T HE HONBLE SUPREME COURT HAS ACCEPTED THE PLEA OF THE COUNSEL TO MAKE FURTHE R SUBMISSIONS AFTER CONCLUSION OF HEARING IN THE CASE OF BIMAL GURUNG V S. UNION OF INDIA & ORS (W.P (CRIMINAL) NO.182/2017 DATED 23-02-2018). ACC ORDINGLY, THE LD D.R SUBMITTED THAT THERE IS NO BAR IN FILING CROSS OBJE CTION AFTER CONCLUSION OF HEARING. HE FURTHER SUBMITTED THAT THE FACTS RELAT ING TO NON-FILING OF RETURN OF INCOME WITHIN THE DUE DATE PRESCRIBED U/S 139(1) OF THE ACT WAS NOTICED ONLY DURING THE COURSE OF HEARING OF APPEAL FILED BY THE ASSESSEE BEFORE THE TRIBUNAL AND FURTHER IT CAME TO LIGHT THAT THE E-ACKNOWLEDGE MENT FILED BY THE ASSESSEE TO SUPPORT OF ITS CLAIM OF FILING OF RETURN OF INCO ME WITHIN THE DUE DATE WAS FOUND TO BE FRAUDULENT ONE AFTER RECEIPT OF REPORT FROM CENTRAL PROCESSING CENTRE (CPC). BY PLACING RELIANCE ON THE DECISION RENDERED BY HONBLE GAUHATI HIGH COURT IN THE CASE OF CIT VS. PURBANCHAL PRIBA HAN GOSTHI (1998)(234 ITR 663), THE LD D.R SUBMITTED THAT THE CROSS OBJECTION S FILED BY THE ASSESSEE NEED NOT BE CONFINED TO THE POINTS TAKEN BY THE OPPOSITE PARTY IN THE MAIN APPEAL. THE LD D.R FURTHER SUBMITTED THAT THE CROSS OBJECTI ON IS ALSO AN APPEAL. HE SUBMITTED THAT SO LONG AS THE ISSUE CONTESTED IN TH E CROSS OBJECTION IS RELEVANT TO THE ISSUE DECIDED BY THE LD CIT(A), THE SAME CAN BE CONSIDERED AND DECIDED. 32 HE FURTHER SUBMITTED THAT THE ISSUE CONTESTED BY TH E REVENUE IN CROSS OBJECTION IS A LEGAL ISSUE AND IT GOES TO THE ROOT OF THE MATTER AND HENCE THE SAME SHOULD BE ADMITTED AS HELD BY HONBLE SUPREME COURT IN THE CASE OF NTPC VS. CIT (1998)(229 ITR 382). 47. WITH REGARD TO THE DELAY, THE LD D.R SUBMIT TED THAT THE REVENUE HAS CITED PROPER REASONS FOR THE DELAY. HE SUBMITTED T HAT THE DETAILS OF FRAUD COMMITTED BY THE ASSESSEE CAME TO BE PROVED ONLY AF TER RECEIPT OF CONFIRMATION BY THE REVENUE FROM CPC, BANGALORE, I.E., IT CAME T O LIGHT THAT THE ASSESSEE HAS NOT FILED ITS RETURN OF INCOME WITHIN THE DUE DATE PRESCRIBED U/S 139(1) OF THE ACT. IMMEDIATELY THEREAFTER, THE REVENUE HAS FILED THE CROSS OBJECTION, SINCE THE MISTAKES CANNOT BE ALLOWED TO BE PERPETUATED. BY PLACING RELIANCE ON THE DECISION RENDERED IN THE CASE OF COLLECTOR, LAND AC QUISITION VS. MST. KATIJI AND OTHERS (1987)(2 SCC 107) AND ALSO THE DECISION REND ERED IN THE CASE OF VEDABAI ALIAS VAIJANATABAI BABURAO PATIL VS. SHANTARAM BABU RAO PATIL (2002)(122 TAXMAN 114)(SC) AND ALSO SOME OTHER DECISIONS, THE LD D.R SUBMITTED THAT WHILE CONSTRUING THE EXPRESSION SUFFICIENT CAUSE, THE PRINCIPLE OF ADVANCING SUBSTANTIAL JUSTICE IS OF PRIME IMPORTANCE. ACCORD INGLY, THE LD D.R CONTENDED THAT THE DELAY IN FILING CROSS OBJECTION SHOULD BE CONDONED. 48. THE LD D.R FURTHER SUBMITTED THAT THE TRIBUN AL SHOULD ALLOW FILING OF ADDITIONAL EVIDENCES AND ADDITIONAL GROUNDS UNDER R ULE 29 OF ITAT RULES. BY PLACING RELIANCE ON THE DECISION RENDERED BY HONBL E SUPREME COURT IN THE CASE OF KAPURCHAND SHRIMAL VS. CIT (1981)(131 ITR 4 51), THE LD D.R SUBMITTED THAT THE APPELLATE AUTHORITY HAS THE JURI SDICTION AS WELL AS THE DUTY TO CORRECT ALL ERRORS IN THE PROCEEDINGS UNDER APPE AL AND TO ISSUE, IF NECESSARY, APPROPRIATE DIRECTIONS TO THE AUTHORITY AGAINST WHO SE DECISION THE APPEAL IS PREFERRED TO DISPOSE OF THE WHOLE OR ANY PART OF TH E MATTER AFRESH, UNLESS FORBIDDEN FROM DOING SO BY STATUTE. 33 49. THE LD D.R ALSO MADE EXTENSIVE ARGUMENTS ON THE JURISPRUDENCE ON THE CASES OF FRAUD. HE SUBMITTED THAT THE JUDGEMENT/DE CREE OBTAINED ON FRAUD HAS TO BE TREATED AS A NULLITY BY EVERY COURT AND F URTHER, IT CAN BE CHALLENGED IN THE COLLATERAL PROCEEDINGS ALSO. IN SUPPORT OF THIS PROPOSITION, THE LD D.R PLACED HIS RELIANCE ON THE DECISION RENDERED BY HON BLE SUPREME COURT IN THE CASE OF UNITED INDIA INSURANCE CO. LTD VS. RAJENDRA SINGH (2000)(3 SCC 581), CIT VS. ELECTRONIC RESEARCH LTD (2003)(130 TAXMAN 2 16)(KAR) AND ALSO MANY OTHER DECISIONS. THE LD D.R ALSO PLACED HIS RELIA NCE ON THE DECISION RENDERED BY HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT V S. SHELCON PROPERTIES (2014)(44 TAXMANN.COM 170) TO CONTEND THAT THE ASSE SSEE IS NOT ELIGIBLE FOR DEDUCTION U/S 80IB(10) IF THE RETURN OF INCOME IS N OT FILED IN TIME. HE FURTHER SUBMITTED, BY PLACING RELIANCE ON THE DECISION REND ERED BY HONBLE SUPREME COURT IN THE CASE OF DILIP KUMAR AND COMPANY (CIVIL APPEAL NO.3327 OF 2007), THAT THE TAX EXEMPTION CLAUSE/NOTIFICATION SHOULD B E READ STRICTLY AND IF THERE IS AMBIGUITY, IT MUST BE INTERPRETED IN FAVOUR OF R EVENUE. 50. THE LD A.R, ON THE CONTRARY, SUBMITTED THA T THE REVENUE IS ONLY ALLEGING THAT THE ASSESSEE HAS COMMITTED A FRAUD BY CLAIMING THAT IT HAS FILED ITS RETURN OF INCOME BEFORE THE DUE DATE PRESCRIBED U/S 139(1) OF THE ACT BY FURNISHING A COPY OF E-ACKNOWLEDGEMENT OF RETURN OF INCOME, WHIC H WAS NOT FOUND IN THE RECORDS OF CPC, BANGALORE. FURTHER, THE CPC, BANGA LORE HAS FOUND FAULT WITH THE E-ACKNOWLEDGEMENT NUMBER ALSO. HE SUBMITTED TH AT THE ALLEGATION OF FRAUD, HOWSOEVER STRONG IT MAY BE, CANNOT TAKE PLAC E OF ESTABLISHED FRAUD. HE SUBMITTED THAT THE VARIOUS CASE LAWS RELIED UPON BY THE REVENUE ARE NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE, SINCE IN THOSE CASE, THE FRAUD WAS EITHER ADMITTED OR ESTABLISHED. IN SUPPORT OF THIS PROPOSITION, THE LD A.R PLACED HIS RELIANCE ON THE DECISION RENDERED BY HON BLE SUPREME COURT IN THE CASE OF BISHUNDEO NARAIN & ANOTHER VS. SEOGENI RAI & OTHERS (AIR (38) 1951 SUPREME COURT 280). THE LD A.R ALSO PLACED HIS REL IANCE ON THE FOLLOWING OBSERVATIONS MADE BY HONBLE SUPREME COURT IN THE C ASE OF SMT. SHRISHT DHAWAN VS. M/S SHAW BROTHERS (AIR 1992 SUPREME COUR T 1555):- 34 10. FRAUD IS ESSENTIALLY A QUESTION OF FACT, THE B URDEN TO PROVE WHICH IS UPON HIM WHO ALLEGES IT. HE WHO ALLEGES FRAUD MUST DO SO PROMPTLY. THERE IS PRESUMPTION OF LEGALITY IN FAVOUR OF A STA TUTORY ORDER. THE CONTROLLERS ORDER UNDER S.21 IS PRESUMED TO BE VAL ID UNTIL PROVED TO BE VITIATED BY FRAUD OR MALA FIDE. IF HIS ORDER WAS OBTAINED BY THE FRAUD OF THE PARTY SEEKING IT OR IF HE MADE A MINDLESS ORDER IN THE SENSE OF ACTING MALA FIDE BY ILLGETIMATE EXERCISE OF POWER OWING TO NON-APPLICATION OF HIS MIND TO THE STRICT REQUIREMENTS OF THE SECTION, THE N THE SPECIAL MECHANISM OF THE SECTION WOULD NOT OPERATE. (SEE S. B.NORONAH V. PREM KUMARI KHANNA (1980) 1SCC 52 : (AIR 1980 SC 193). HE SUBMITTED THE REVENUE IS ONLY ALLEGING FRAUD UPO N THE ASSESSEE BEFORE THE TRIBUNAL AND PURSUADING THE TRIBUNAL TO TAKE COGNIZ ANCE OF THE SAME. HE SUBMITTED THAT THE ITAT CANNOT TAKE CONGNIZANCE OF THE SAME, UNLESS THE FRAUD IS ESTABLISHED BY THE COMPETENT AUTHORITY. ACCORDI NGLY HE SUBMITTED THAT THE TRIBUNAL CANNOT DEAL WITH THE QUESTION OF FRAUD, IF ANY, COMMITTED BY THE ASSESSEE. ACCORDINGLY HE SUBMITTED THAT THE ALLEGA TION OF FRAUD SHOULD NOT BE TAKEN CONGNIZANCE OF BY THE TRIBUNAL. 51. THE LD A.R SUBMITTED THAT THE REVENUE, TAKING SUPPORT FROM SECTION 80AC OF THE ACT, IS CONTENDING THAT THE ASSESSEE SHOULD BE DENIED DEDUCTION U/S 80IB(10) OF THE ACT, SINCE THE ASSESSEE HAS FILED I TS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION BEYOND THE DUE DATE PRESCR IBED UNDER THE ACT. THEIR CLAIM OF FILING OF RETURN OF INCOME BEFORE THE DUE DATE WAS A FRAUD COMMITTED BY THE ASSESSEE AND HENCE THE SAID RETURN SHOULD BE IGNORED BY THE TRIBUNAL. THERE IS NO DISPUTE THAT THE ASSESSEE HAS FILED RET URN OF INCOME IN RESPONSE TO THE NOTICE ISSUED U/S 142(1) OF THE ACT ALSO. THE MANUAL RETURN OF INCOME FILED BY THE ASSESSEE WITHIN THE DUE DATE IS ALSO AVAILAB LE ON RECORD. UNDER THESE SET OF FACTS, THE LD A.R SUBMITTED THAT, IF AT ALL THE CONTENTION OF THE REVENUE THAT THE ASSESSEE HAS COMMITTED A FRAUD IS ACCEPTED , THEN IT WOULD ONLY GIVE RISE TO A LEGAL ISSUE AS TO WHETHER THE ASSESSEE WO ULD BE ENTITLED FOR DEDUCTION U/S 80IB(10) OR NOT. HE SUBMITTED THAT THE REVENUE IS PLACING RELIANCE ON THE 35 PROVISIONS OF SEC.80AC OF THE ACT TO CONTEND THAT T HE ASSESSEE WOULD NOT BE ELIGIBLE FOR DEDUCTION U/S 80IB(10) OF THE ACT, IF THE RETURN IS FILED BEYOND THE DUE DATE PRESCRIBED UNDER THE ACT. HOWEVER, THERE ARE NUMBER OF DECISIONS RENDERED BY HIGH COURTS AND TRIBUNAL, WHEREIN IT HA S BEEN HELD THAT THE CONDITION PRESCRIBED IN SEC.80AC OF THE ACT IS ONLY DIRECTORY. THE LD A.R SUBMITTED THAT THE PAPER BOOK FILED BY THE REVENUE WOULD SHOW THAT THE ASSESSEE HAS ALSO FILED RETURN OF INCOME MANUALLY W ITH THE ASSESSING OFFICER BEFORE THE DUE DATE PRESCRIBED U/S 139(1) OF THE AC T FOR FILING RETURN OF INCOME. HENCE THE ASSESSEE SHOULD BE ELIGIBLE FOR DEDUCTION U/S 80IB(10) OF THE ACT ON THE STRENGTH OF MANUAL RETURN OF INCOME ALSO. ACCO RDINGLY HE SUBMITTED THAT THE CONTENTIONS URGED BY THE REVENUE, AT THE MOST, WOULD GIVE RISE TO A LEGAL ISSUE. ACCORDINGLY, HE SUBMITTED THAT THE CROSS OB JECTION FILED BY THE REVENUE IS LIABLE TO BE REJECTED ON THIS REASON ALONE. 52. THE LD A.R SUBMITTED THAT THE ASSESSING OFF ICER HAS ALLOWED THE CLAIM FOR DEDUCTION U/S 80IB(10) OF THE ACT IN THE ORIGIN AL ASSESSMENT PROCEEDINGS AS WELL AS IN THE REASSESSMENT ORDER PASSED U/S 143(3) R.W.S 263 OF THE ACT. HE SUBMITTED THAT THE ASSESSING OFFICER HAS EXAMINED T HE MATTER TWICE, THE LD PR. CIT HAS EXAMINED THE MATTER ONCE WHILE FINALISING R EVISION PROCEEDING U/S 263 OF THE ACT AND THE LD CIT(A) ALSO EXAMINED THE MATT ER IN THE PRESENT PROCEEDINGS. HE SUBMITTED THAT ALL THE AUTHORITIES DID NOT FIND FAULT WITH THE CLAIM MADE BY THE ASSESSEE. HE SUBMITTED THAT IT I S THE D.R, WHO HAS RAISED THIS ISSUE FOR THE FIRST TIME BEFORE THE TRIBUNAL. HE SUBMITTED THAT THE D.R IS ATTEMPTING TO IMPROVE THE CASE OF THE AO, WHICH HE IS NOT ENTITLED TO. 53. THE LD A.R SUBMITTED THAT, UNDER THE SCHEME OF THE ACT, THE ASSESSING OFFICER IS NOT ENTITLED TO CHALLENGE HIS OWN ORDER BY FILING APPEAL BEFORE THE APPELLATE AUTHORITIES. HE SUBMITTED THAT THE AO, B Y FILING THE PRESENT CROSS OBJECTION, IS ATTEMPTING TO CHALLENGE HIS OWN DECIS ION IN ALLOWING DEDUCTION U/S 80IB(10) OF THE ACT, WHICH IS NOT PERMITTED UND ER THE ACT. HE SUBMITTED THAT IT IS MANDATORY FOR THE AO TO FOLLOW THE SCHEM E OF THE ACT AND HENCE, IF 36 ANY WRONG COMMITTED BY THE ASSESSEE IS FOUND, HE IS REQUIRED TO DEAL WITH THE SAME IN ACCORDANCE WITH THE LAW BY FOLLOWING PRESCR IBED METHODOLOGIES. ACCORDINGLY HE SUBMITTED THAT THE PRESENT CROSS OBJ ECTION FILED BY THE ASSESSING OFFICER IS NOT IN ACCORDANCE WITH THE SCH EME OF THE ACT AND HENCE THE SAME IS LIABLE TO BE DISMISSED. 54. THE LD A.R FURTHER SUBMITTED THAT THE ASSESS EE HAS FILED RETURN OF INCOME FOR THE SUCCEEDING YEAR, I.E. A Y 2012-13 AL SO BELATEDLY, I.E., BEYOND THE DUE DATE PRESCRIBED U/S 139(1) OF THE ACT AND THE A SSESSING OFFICER HIMSELF HAS ALLOWED DEDUCTION U/S 80IB(10) OF THE ACT CLAIMED B Y THE ASSESSEE. HE SUBMITTED THAT THE ORDER PASSED BY THE AO FOR AY 20 12-13, WHEN READ WITH THE ORDER PASSED FOR AY 2011-12, WOULD SHOW THAT THE AS SESSING OFFICER HAS TAKEN THE VIEW THAT THE PROVISIONS OF SEC.80AC, WHICH IS PRESSED INTO SERVICE BY REVENUE, ARE DIRECTORY IN NATURE. HE SUBMITTED THA T THE VIEW SO TAKEN BY THE AO ALSO GETS SUPPORT FROM MANY DECISIONS RENDERED B Y THE TRIBUNAL AND HIGH COURTS. 55. THE LD A.R FURTHER SUBMITTED THAT THE TRIBU NAL IS CONFINED WITH THE MATTER/PROCEEDING BEFORE IT. HENCE THE TRIBUNAL CA NNOT TRAVEL BEYOND THOSE ISSUES. HE FURTHER SUBMITTED THAT THE PRESENT APPE AL FILED BY THE ASSESSEE IS AGAINST THE RECTIFICATION PROCEEDINGS COMPLETED U/S 154 OF THE ACT AGAINST THE ORIGINAL ASSESSMENT ORDER PASSED U/S 143(3) R.W.S 1 53A OF THE ACT. HENCE THE POWER OF THE TRIBUNAL IS CONFINED TO THE SAID RECTI FICATION ORDER ONLY. HE FURTHER SUBMITTED THAT THE LEGAL ISSUES PERMITTED T O BE RAISED BY HONBLE SUPREME COURT SHOULD PERTAIN TO SAME PROCEEDINGS. H OWEVER, IN THE INSTANT CASE, THE REVENUE IS ATTEMPTING TO RAISE A LEGAL IS SUE RELATING TO ORIGINAL ASSESSMENT PROCEEDINGS AND THE SAME IS NOT RELATED TO THE RECTIFICATION ORDER PASSED U/S 154 OF THE ACT, REJECTING THE RECTIFICAT ION PETITION FILED BY THE ASSESSEE. HENCE THE THEORY OF MERGER ALSO WOULD NO T APPLY IN THE INSTANT CASE. 37 56. HE FURTHER SUBMITTED THAT THE HONBLE SUPREME COURT HAS ONLY ALLOWED MAKING OF ADDITIONAL SUBMISSIONS ON THE ALREADY EXI STING ISSUE IN THE CASE OF BIMAL GURUNG (SUPRA), RELIED UPON BY THE REVENUE, W HERE AS IN THE INSTANT CASE, THE REVENUE IS ATTEMPTING TO RAISE ALTOGETHER NEW ISSUE, DIVORCED FROM THE ISSUES URGED BY THE ASSESSEE IN THE APPEAL FILED BY IT. 57. THE LD A.R SUBMITTED THAT THE ORIGINAL ASSE SSMENT ORDER PASSED BY THE AO WOULD RETAIN ITS SANCTITY AND THE SAME CAN BE UP SET ONLY AS PER THE LEGAL PROCESS KNOWN TO LAW. HE FURTHER SUBMITTED THAT THE PERIOD OF LIMITATION SHALL APPLY EVEN TO A VOID ORDER. IN SUPPORT OF THESE PR OPOSITIONS, THE LD A.R PLACED HIS RELIANCE ON PARAGRAPH 18 OF THE DECISION RENDER ED BY HONBLE BOMBAY HIGH COURT IN THE CASE OF BPCL VS. ITAT (W.P NO.1740 OF 2013), WHEREIN THE HONBLE BOMBAY HIGH COURT HAD PLACED ITS RELIANCE ON THE FO LLOWING OBSERVATIONS MADE BY HONBLE SUPREME COURT IN THE CASE OF SULTAN SADI K VS. SANJAY RAJ SUBBA REPORTED IN 2004 (2) SCC 277. FOR THE SAKE OF CONV ENIENCE, WE EXTRACT BELOW RELEVANT OBSERVATIONS MADE BY HONBLE BOMBAY HIGH C OURT:- 18) BEFORE CONCLUDING, WE WOULD LIKE TO MAKE IT CLE AR THAT AN ORDER PASSED IN BREACH OF RULE 24 OF THE TRIBUNAL RULES, IS AN IRRE GULAR ORDER AND NOT A VOID ORDER. HOWEVER, EVEN IF IT IS ASSUMED THAT THE ORDE R IN BREACH OF RULE 24 OF THE TRIBUNAL RULES IS AN VOID ORDER, YET THE SAME WOULD CONTINUE TO BE BINDING TILL IT IS SET ASIDE BY A COMPETENT TRIBUNAL. IN FACT, T HE APEX COURT IN THE SULTAN SADIK V/S. SANJAY RAJ SUBBA REPORTED IN 2004(2) SCC 277 HAS OBSERVED AS UNDER:- ' PATENT AND LATENT INVALIDITY IN A WELL-KNOWN PASSAGE LORD RADCLIFFE SAID : ' AN ORDER, EVEN IF NOT MADE IN GOOD FAITH, IS STIL L AN ACT CAPABLE OF LEGAL CONSEQUENCES. IT BEARS NO BRAND OF INVALIDITY UPON ITS FOREHEAD. UNLESS THE NECESSARY PROCEEDINGS ARE TAKEN AT LAW TO ESTABLISH THE CAUSE OF INVALIDITY AND TO GET IT QUASHED OR OTHERWISE UPSET, IT WILL REMAI N AS EFFECTIVE FOR ITS OSTENSIBLE PURPOSE AS THE MOST IMPECCABLE OF ORDERS.' THIS MUST BE EQUALLY TRUE EVEN WHERE THE BRAND OF I NVALIDITY IS PLAINLY VISIBLE, FOR THERE ALSO THE ORDER CAN EFFECTIVELY B E RESISTED IN LAW ONLY BY OBTAINING A DECISION OF COURT.' 38 FURTHER THE SUPREME COURT IN SNEH GUPTA V/S. DEV SA RUP (2009) 6 SCC 194 HAS OBSERVED ' WE ARE CONCERNED HEREIN WITH THE QUESTION OF LIMI TATION. THE COMPROMISE DECREE, AS INDICATED HEREIN BEFORE, EVEN IF VOID WAS REQUIRED TO BE SET ASIDE. A CONSENT DECREE AS IS WELL KNOWN, IS AS GOOD AS A CONTESTED DECREE. SUCH A DECREE MUST BE SET ASIDE I F IT HAS BEEN PASSED IN VIOLATION OF LAW. FOR THE SAID PURPOSE, THE PROV ISIONS CONTAINED IN LIMITATION ACT 1963 WOULD BE APPLICABLE. IT IS NOT THE LAW THAT W HERE THE DECREE IS VOID, NO PERIOD OF LIMITATION SHALL B E ATTRACTED AT ALL.' THEREFORE, IN THIS CASE ALSO THE PERIOD OF FOUR YEA RS FROM THE DATE OF ORDER SOUGHT TO BE RECTIFIED/RECALLED WILL APPLY AS PROVI DED IN SECTION 254(2) OF THE ACT. THIS IS SO EVEN IF IT IS ASSUMED THAT THE ORDE R DATED 6 DECEMBER 2006 IS A VOID ORDER. 58. THE LD A.R FURTHER SUBMITTED THAT THE EXEMPT ION PROVISION IS TO BE CONSTRUED LIBERALLY, WHILE THE PROSECUTION PROVISIO NS SHOULD BE CONSTRUED STRICTLY. HE SAID THAT IT IS SO HELD BY HONBLE RA JASTHAN HIGH COURT IN THE CASE OF PR. CIT VS. SHANKAR LAL SAINI (2018)(89 TAXMANN. COM 235). HE FURTHER SUBMITTED THAT THE HONBLE SUPREME COURT HAS HELD I N THE CASE OF UOI VS. WOOD PAPERS LTD (1990)(4 SCC 256) THAT TRULY SPEAKING LIBERAL AND STRICT CONSTRUCTION OF AN EXEMPTION PROVISION ARE TO BE INVOKED AT DIFFERENT STAGES OF INTERPRETI NG IT. WHEN THE QUESTION IS WHETHER A SUBJECT FALLS IN THE NOTIFICA TION OR IN THE EXEMPTION CLAUSE, THEN IT BEING IN NATURE OF EXCEPTION IS TO BE CONSTRUED STRICTLY AND AGAINST THE SUBJECT, BUT ONCE AMBIGUITY OR DOUB T ABOUT APPLICABILITY IS LIFTED AND THE SUBJECT FALLS IN THE NOTIFICATION THEN FULLY PLAY SHOULD BE GIVEN TO IT AND IT CALLS FOR A WIDER AND LIBERAL CO NSTRUCTION THE LD A.R SUBMITTED THAT THE ABOVE SAID DECISION W AS FOLLOWED BY HONBLE SUPREME COURT IN THE CASE OF DILIPKUMAR & CO (SUPRA ) IN CIVIL APPEAL NO.3327 OF 2007. THE LD A.R SUBMITTED THAT, IN THE INSTANT CASE, THERE IS NO DIFFERENCE OF OPINION THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCT ION U/S 80IB(10) OF THE ACT AND THE REVENUE IS PLEADING FOR ITS WITHDRAWAL ONLY FOR THE REASON THAT THE RETURN HAS BEEN ALLEGED TO HAVE BEEN FILED BELATEDL Y BY PLACING RELIANCE U/S 39 80AC OF THE ACT, WHICH HAS BEEN HELD TO BE PROCEDUR AL IN NATURE BY SOME HIGH COURTS AND TRIBUNAL. 59. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORD. BEFORE GOING INTO THE TWO PRELIMINARY ISSUES, VIZ., (A) MAINTAIN ABILITY OF CROSS OBJECTION FILED BY THE REVENUE AFTER CONCLUSION OF HEARING OF APPEA L OF THE ASSESSEE AND (B) THE DELAY IN FILING THE CO AND THE MATTER OF CONDON ING THE DELAY, WE SHALL BRIEFLY DWELL UPON THE GROUNDS URGED BY THE REVENUE IN ITS C.O AND ITS VALIDITY UNDER THE PROVISIONS OF THE ACT. 60. THERE SHOULD NOT BE ANY DOUBT THAT THE RES PONDENT IN THE APPEAL FILED BY THE ASSESSEE IS THE ASSESSING OFFICER AND IT I S THE ASSESSING OFFICER, WHO IS APPLICANT IN THE CROSS OBJECTION FILED BY THE REVEN UE. IT IS WELL SETTLED PROPOSITION OF LAW THAT THE INCOME TAX ACT DOES NOT AUTHORISE AN ASSESSING OFFICER TO FILE APPEAL AGAINST HIS OWN ORDER. THIS STATUTORY POSITION HAS BEEN CLARIFIED BY HONBLE SUPREME COURT IN THE CASE OF C OMMISSIONER OF INCOME TAX VS. AMRITLAL BHOGILAL & CO. (1958)(34 ITR 130)(SC), WHEREIN IT WAS HELD BY HONBLE SUPREME COURT THAT IT IS PATENT THAT THE SC HEME OF THE ACT IN RESPECT OF APPEALS TO THE AAC (APPELLATE ASSISTANT COMMISSI ONER) IS THAT IT IS ONLY THE ASSESSEE WHO IS GIVEN A RIGHT TO MAKE APPEAL AND NO T THE DEPARTMENT. IT WAS FURTHER HELD THAT IF SECTION 30(1)*(* UNDER 1922 AC T) DOES NOT PROVIDE FOR AN APPEAL AGAINST A PARTICULAR ORDER, LEGISLATURE OBVI OUSLY INTENDS THAT THE CORRECTNESS OF THE SAID ORDER CANNOT BE IMPEACHED B EFORE THE APPELLATE AUTHORITY. THE JURISDICTION AND POWERS OF THE APPE LLATE AUTHORITY MUST INEVITABLY BE DETERMINED BY THE SPECIFIC AND RELEVA NT PROVISIONS OF THE ACT. 61. THE HONBLE JURISDICTIONAL BOMBAY HIGH COU RT ALSO HAD AN OCCASION TO EXAMINE THE POWER OF THE REVENUE TO CHALLENGE THE O RDER PASSED BY THE AO. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS . MAERSK GLOBAL SERVICE CENTRE (I) PVT LTD (ITA NO.692 AND 693 OF 2012 DATE D 22-08-2014) HELD THAT THE 40 REVENUE CANNOT RAISE GROUNDS BEFORE THE TRIBUNAL TO GET OVER THE DEFECTS AND LACUNAS SO ALSO ANY DISCREPANCIES IN THE ORDER OF T HE TRANSFER PRICING OFFICER. 62. WE HAVE EARLIER NOTICED THAT THE ASSESSING OFFICER (REVENUE) HAS RAISED GROUNDS IN THE CROSS OBJECTION FILED BY HIM QUESTIO NING HIS OWN DECISION IN GRANTING DEDUCTION U/S 80IB(10) OF THE ACT IN THE O RIGINAL ASSESSMENT PROCEEDINGS. WE HAVE EARLIER NOTICED THAT THE (A) AO HIMSELF ALLOWED THE DEDUCTION IN THE ORIGINA L ASSESSMENT ORDER PASSED ON 28-03-2013 U/S 143(3) R.W.S 153A OF THE A CT. (B) SUBSEQUENTLY THE SAID ORDER WAS REVISED BY LD PR. CIT U/S 263 OF THE ACT, VIDE HIS REVISION ORDER DATED 30.03.2015, DIRE CTING THE AO TO EXAMINE THE ELIGIBILITY OF THE ASSESSEE TO CLAIM DE DUCTION U/S 80IB(10) OF THE ACT. (C) THE ASSESSING OFFICER PASSED REASSESSMENT ORD ER ON 31.3.2016 TO GIVEN EFFECT TO THE REVISION ORDER PASSED U/S 263 O F THE ACT, WHEREIN ALSO, THE ASSESSING OFFICER ALLOWED DEDUCTION U/S 80IB(10 ) OF THE ACT. (D) THEREAFTER, THE ASSESSEE FILED A RECTIFICATIO N PETITION BEFORE THE AO U/S 154 OF THE ACT SEEKING RECTIFICATION OF ORDER P ASSED ON 28-03-2013. (E) THE LD CIT(A) PASSED ORDER ON 14.09.2017 AGAI NST THE APPEAL FILED BY THE ASSESSEE CHALLENGING THE RECTIFICATION ORDER PASSED BY THE AO U/S 154 OF THE ACT. (F) THE PRESENT APPEAL BEFORE US HAS BEEN FILED BY THE ASSESSEE CHALLENGING THE ORDER PASSED BY LD CIT(A) AGAINST T HE ORDER PASSED BY THE AO U/S 154 OF THE ACT. (G) IN THE PRESENT PROCEEDINGS, THE AO HAS FILED T HE CROSS OBJECTION PRAYING THAT THE DEDUCTION GRANTED BY HIM U/S 80IB( 10) OF THE ACT MAY BE WITHDRAWN. 63. A PERUSAL OF THE SEQUENCE OF EVENTS DISCUSS ED ABOVE WOULD SHOW THAT THE ASSESSING OFFICER HIMSELF HAS EXAMINED THE CLAI M OF THE ASSESSEE FOR DEDUCTION U/S 80IB(10) OF THE ACT TWICE. THE LD PR .CIT AND LD CIT(A) HAVE 41 EXAMINED THE CLAIM OF THE ASSESSEE ONCE. BY FILING THIS CROSS OBJECTION, THE ASSESSING OFFICER IS CHALLENGING HIS OWN DECISION I N ALLOWING THE DEDUCTION U/S 80IB(10) OF THE ACT IN THE ORIGINAL ASSESSMENT PROC EEDINGS. THE DECISION RENDERED BY HONBLE SUPREME COURT IN THE CASE OF AM RITLAL BHOGILAL (SUPRA) GOES AGAINST THE SAID ACTION OF THE ASSESSING OFFIC ER, MEANING THEREBY, THE GROUNDS URGED IN THE CROSS OBJECTION FILED BY THE R EVENUE IS CONTRARY TO THE DECISION RENDERED BY HONBLE SUPREME COURT IN THE A BOVE SAID CASE. 64. THE LD A.R CONTENDED THAT THE REVENUE IS FREE TO TAKE RECOURSE AS AVAILABLE IN LAW AGAINST THE ASSESSEE, IF THE ASSES SING OFFICER WAS SATISFIED THAT THE INCOME HAS ESCAPED THE ASSESSMENT OR IF IT IS C ONSIDERED THAT THE ASSESSEE HAS AVAILED THE BENEFIT OF DEDUCTION BY MISREPRESEN TING THE FACTS. WE ARE OF THE VIEW THAT THERE IS MERIT IN THE SAID SUBMISSION S OF THE LD A.R. AS SUBMITTED BY LD A.R, THE AO COULD PURSUE OTHER PROC EDURES KNOWN TO LAW IN ORDER TO WITHDRAW THE DEDUCTION, IF HE IS OF THE VI EW THAT THE SAME HAS BEEN WRONGLY GRANTED. CERTAINLY, THE ACTION OF THE AO I N CHALLENGING HIS OWN DECISION BY FILING AN APPEAL (IN THE FORM OF CO) IS NOT A PROCESS KNOWN OR PERMITTED BY LAW. AT THIS JUNCTURE, IT IS APT TO EX TRACT THE FOLLOWING OBSERVATIONS MADE BY HONBLE MADRAS HIGH COURT IN T HE CASE OF SESHASAYEE PAPER & BOARDS LTD VS. IAC (1986)(157 ITR 342)(MAD) :- EVEN A WRONG ORDER HAS A FINALITY AND UNLESS THAT FINALITY IS DISTURBED BY A PROCESS KNOWN TO LAW OR BY A PROCESS AUTHORIZE D BY LAW, THE RIGHTS OF THE ASSESSEE AND THE REVENUE WILL CONTINUE TO BE GOVERNED BY THE ORDER. IT IS ALSO WELL SETTLED PROPOSITION OF LAW THAT WHA T IS NOT PERMITTED TO BE DONE DIRECTLY CANNOT ALSO BE DONE INDIRECTLY AS HELD IN THE CASE OF CIT VS. KELVINATOR OF INDIA LTD (2001)(256 ITR 1)(DELHI). WHEN IT WAS QUESTION AS TO WHY THE AO COULD PROCEED AGAINST THE ASSESSEE UNDER OTHER PROV ISIONS OF THE ACT, THE LD D.R SUBMITTED THAT THE TIME LIMIT FOR REOPENING OF ASSESSMENT HAS ALREADY EXPIRED. HENCE THERE IS MERIT IN THE CONTENTIONS OF THE ASSESSEE THAT THE 42 REVENUE IS TRYING TO ACHIEVE SOMETHING INDIRECTLY W HICH IT IS NOT ENTITLED TO ACHIEVE DIRECTLY, WHICH IS NOT PERMISSIBLE. 65. WE HAVE NOTICED THAT THE ORDER APPEALED BEF ORE THE TRIBUNAL IS THE ORDER PASSED BY LD CIT(A) AGAINST THE RECTIFICATION ORDER . THE SCOPE OF RECTIFICATION PROCEEDINGS IS ONLY TO RECTIFY MISTAKE APPARENT FRO M RECORD. WE HAVE NOTICED THAT THE REVENUE HAS URGED ALTOGETHER NEW GROUND CH ALLENGING THE DECISION TAKEN BY THE AO IN THE ORIGINAL ASSESSMENT ORDER, I .E., THE GRIEVANCE OF THE REVENUE URGED IN THE CO RELATES TO THE DEDUCTION GR ANTED BY THE AO IN THE ORIGINAL ASSESSMENT ORDER AND NOT IN THE RECTIFICAT ION ORDER, WHICH IS CHALLENGED BEFORE US NOW. UNDER THESE FACTS, THE Q UESTION THAT ARISES IS WHETHER THE REVENUE IS ENTITLED TO URGE THE IMPUGNE D GROUNDS IN THE APPEAL FILED BY THE ASSESSEE AGAINST RECTIFICATION ORDERS? . THE REVENUE HAS SOUGHT TO SUPPORT ITS DECISION BY CONTENDING THAT (A) AS PER THE DECISION RENDERED BY HONBLE SUPREM E COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD VS. CIT (229 ITR 383 ), THE LEGAL ISSUES CAN BE URGED AFRESH IN ANY OF THE APPEAL PROCEEDING S. (B) THE ASSESSEE HAS OBTAINED DEDUCTION BY COMMITT ING A FRAUD AND HENCE THE ORDER SO OBTAINED BY FRAUD IS NULLITY IN THE EYES OF LAW. 66. THE LD A.R OPPOSED BOTH THE REASONS CITED BY THE REVENUE. WITH REGARD TO THE FIRST CONTENTION OF THE REVENUE, THE LD A.R SUBMITTED THAT THE DECISION RENDERED BY HONBLE SUPREME COURT DOES NOT TAKE AWA Y THE DISCRETION OF THE TRIBUNAL, I.E., IT IS THE TRIBUNAL WHICH HAS TO TAK E A FINAL CALL AS TO WHETHER TO ADMIT THE LEGAL GROUND OR NOT. THE LD A.R FURTHER SUBMITTED THAT THE LEGAL GROUND SHOULD RELATE TO THE VERY SAME PROCEEDING, W HICH IS BEING ADJUDICATED BY THE TRIBUNAL. HE SUBMITTED THAT, IN THE INSTANT CASE, THE REVENUE IS TRYING TO RAKE UP A LEGAL ISSUE PERTAINING TO ORIGINAL ASS ESSMENT PROCEEDINGS, WHEREAS THE PRESENT PROCEEDINGS RELATE TO RECTIFICATION PRO CEEDINGS U/S 154 OF THE ACT. BEFORE ADDRESSING THE OBJECTIONS OF LD A.R, WE PREF ER TO EXTRACT FOLLOWING OBSERVATIONS MADE BY HONBLE SUPREME COURT IN THE C ASE OF NATIONAL THERMAL 43 POWER CO. LTD (SUPRA) WITH REGARD TO ADMISSION OF L EGAL ISSUE BY WAY OF ADDITIONAL GROUNDS:- 5. UNDER SECTION 254 OF THE INCOME-TAX ACT, THE APPELLATE TRIBUNAL MAY, AFTER GIVING BOTH THE PARTIES TO THE APPEAL AN OPPORTUNIT Y OF BEING HEARD, PASS SUCH ORDERS THEREON AS IT THINKS FIT. THE POWER OF THE T RIBUNAL IN DEALING WITH APPEALS IS THUS EXPRESSED IN THE WIDEST POSSIBLE TE RMS. THE PURPOSE OF THE ASSESSMENT PROCEEDINGS BEFORE THE TAXING AUTHORITIE S IS TO ASSESS CORRECTLY THE TAX LIABILITY OF AN ASSESSEE IN ACCORDANCE WITH LAW . IF, FOR EXAMPLE, AS A RESULT OF A JUDICIAL DECISION GIVEN WHILE THE APPEAL IS PENDI NG BEFORE THE TRIBUNAL, IT IS FOUND THAT A NON-TAXABLE ITEM IS TAXED OR A PERMISS IBLE DEDUCTION IS DENIED, WE DO NOT SEE ANY REASON WHY THE ASSESSEE SHOULD BE PR EVENTED FROM RAISING THAT QUESTION BEFORE THE TRIBUNAL FOR THE FIRST TIME, SO LONG AS THE RELEVANT FACTS ARE ON RECORD IN RESPECT OF THAT ITEM. WE DO NOT SEE AN Y REASON TO RESTRICT THE POWER OF THE TRIBUNAL UNDER SECTION 254 ONLY TO DECIDE THE GROUNDS WHICH ARISE FROM THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEAL S). BOTH THE ASSESSEE AS WELL AS THE DEPARTMENT HAVE A RIGHT TO FILE AN APPE AL/CROSS-OBJECTIONS BEFORE THE TRIBUNAL. WE FAIL TO SEE WHY THE TRIBUNAL SHOUL D BE PREVENTED FROM CONSIDERING QUESTIONS OF LAW ARISING IN ASSESSMENT PROCEEDINGS ALTHOUGH NOT RAISED EARLIER. 6. IN THE CASE OF JUTE CORPORATION OF INDIA LTD. V. C.I.T . . THIS COURT, WHILE DEALING WITH THE POWERS OF THE APPELLATE ASSISTANT COMMISSIONER OBSERVED THAT AN APPELLATE AUTHORITY HAS ALL THE POWERS WHICH THE ORIGINAL AUTHORITY MAY HAVE IN DECIDING THE QUESTION BEFORE IT SUBJECT TO THE R ESTRICTIONS OR LIMITATIONS, IF ANY, PRESCRIBED BY THE STATUTORY PROVISIONS. IN THE ABSENCE OF ANY STATUTORY PROVISION, THE APPELLATE AUTHORITY IS VESTED WITH A LL THE PLENARY POWERS WHICH THE SUBORDINATE AUTHORITY MAY HAVE IN THE MATTER. T HERE IS NO GOOD REASON TO JUSTIFY CURTAILMENT OF THE POWER OF THE APPELLATE A SSISTANT COMMISSIONER IN ENTERTAINING AN ADDITIONAL GROUND RAISED BY THE ASS ESSEE IN SEEKING MODIFICATION OF THE ORDER OF ASSESSMENT PASSED BY T HE INCOME-TAX OFFICER. THIS COURT FURTHER OBSERVED THAT THERE MAY BE SEVERAL FA CTORS JUSTIFYING THE RAISING OF A NEW PLEA IN AN APPEAL AND EACH CASE HAS TO BE CONSIDERED ON ITS OWN FACTS. THE APPELLATE ASSISTANT COMMISSIONER MUST BE SATISF IED THAT THE GROUND RAISED WAS BONA FIDE AND THAT THE SAME COULD NOT HAVE BEEN RAISED EARLIER FOR GOOD REASONS. THE APPELLATE ASSISTANT COMMISSIONER SHOUL D EXERCISE HIS DISCRETION IN PERMITTING OR NOT PERMITTING THE ASSESSEE TO RAI SE AN ADDITIONAL GROUND IN ACCORDANCE WITH LAW AND REASON. THE SAME OBSERVATIO NS WOULD APPLY TO APPEALS BEFORE THE TRIBUNAL ALSO. 7. THE VIEW THAT THE TRIBUNAL IS CONFINED ONLY TO I SSUES ARISING OUT OF THE APPEAL BEFORE THE COMMISSIONER OF INCOME-TAX (APPEA LS) TAKES TOO NARROW A VIEW OF THE POWERS OF THE APPELLATE TRIBUNAL [VIDE, E.G., C.I.T, V. ANAND PRASAD (DELHI), C.I.T . V. KARAMCHANDPREMCHAND P. LTD. AND C.I.T. V. CELLULOSE PRODUCTS OF INDIA LTD . . UNDOUBTEDLY, THE TRIBUNAL WILL HAVE THE DISCRET ION TO ALLOW OR NOT ALLOW A NEW GROUND TO BE RAISED. BUT WHERE THE TRIB UNAL IS ONLY REQUIRED TO CONSIDER A QUESTION OF LAW ARISING FROM THE FACTS W HICH ARE ON RECORD IN THE ASSESSMENT PROCEEDINGS WE FAIL TO SEE WHY SUCH A QU ESTION SHOULD NOT BE 44 ALLOWED TO BE RAISED WHEN IT IS NECESSARY TO CONSID ER THAT QUESTION IN ORDER TO CORRECTLY ASSESS THE TAX LIABILITY OF AN ASSESSEE. A PERUSAL OF THE ABOVE DECISION RENDERED BY HONBLE SUPREME COURT MAKES IT CLEAR THAT THE TRIBUNAL WILL HAVE THE DISCRETION TO ALLOW OR NOT ALLOW A NEW GROUND TO BE RAISED. BUT WHERE THE TRIBUNAL IS ONLY REQUIRED TO CONSIDER A QUESTION OF LAW ARISING FROM THE FACTS WHICH ARE ON RECORD IN THE ASSESSMEN T PROCEEDINGS , THEN THE SAME SHALL BE CONSIDERED BY THE TRIBUNAL IN ORDER TO COR RECTLY ASSESS THE TAX LIABILITY OF AN ASSESSEE. WE NOTICE THAT THE CONDITION PRESCRIBED BY HONBLE SUPREME COURT FOR ADMITTING A LEGAL GROUND IS THAT THE FACTS RELATING TO THE SAME SHOULD BE AVAILABLE ON RECORD IN THE ASSESSMENT PROCEEDINGS. IN THE INSTA NT CASE, WE NOTICE THAT THE REVENUE IS ALLEGING FRAUD AND ACCORDINGLY SEEKING WITHDRAWA L OF DEDUCTION BY CITING THE PROVISIONS OF SEC.80AC OF THE ACT. HOWEVER, THERE IS NO DISPUTE THAT THE FRAUD, IF ANY, IS IN ALLEGATION STAGE ONLY AND FURTHER THE SAID CO NTENTIONS ARE BEING RAKED UP ON THE BASIS OF INFORMATION OBTAINED FROM CPC ONLY RECENTL Y, MEANING THEREBY, THE DETAILS RELATING TO ALLEGED FRAUD WERE NOT AVAILABLE ON REC ORD IN THE ASSESSMENT PROCEEDINGS. HENCE, THE PRINCIPLE LAID DOWN BY HONBLE SUPREME C OURT IN THE ABOVE SAID CASE FOR ADMISSION OF A LEGAL ISSUE, DOES NOT APPLY TO THE F ACTS OF THE PRESENT CASE. IN ANY CASE, THE ABOVE SAID DECISION OF HONBLE SUPREME CO URT DOES NOT OVERRIDE THE FIRST PRINCIPLE THAT THE ASSESSING OFFICER IS NOT ENTITLE D TO QUESTION HIS OWN ORDER IN APPEAL. 67. WE HAVE NOTICED THAT THE LEGAL ISSUE URGED BY THE REVENUE IN THE CO RELATES TO THE ORIGINAL ASSESSMENT PROCEEDING, WHERE AS THE PR ESENT APPEAL RELATES TO THE RECTIFICATION ORDER PASSED U/S 154 OF THE ACT CHALL ENGING THE REJECTION OF THE RECTIFICATION PETITION FILED BY THE ASSESSEE. SINC E THE RECTIFICATION PETITION HAS BEEN REJECTED, THE DOCTRINE OF MERGER ALSO DOES NOT APPL Y TO THE INSTANT CASE. THE LD D.R CONTENDED THAT THE QUESTION OF FRAUD COULD BE RAISE D IN COLLATERAL PROEEDINGS ALSO. HOWEVER, THERE IS ONLY ALLEGATION OF FRAUD AT THIS STAGE AND THE SAME HAS NOT BEEN ESTABLISHED IN THE PROPER FORUM. ACCORDINGLY, WE FI ND MERIT IN THE CONTENTIONS OF THE LD A.R THAT THE REVENUE COULD NOT RAISE THIS LEGAL ISSUE IN THE APPEAL PREFERRED BY THE ASSESSEE AGAINST RECTIFICATION PROCEEDINGS. HENCE, IN OUR VIEW, THE REVENUE CANNOT TAKE SUPPORT OF THIS DECISION OF HONBLE SUPREME CO URT, REFERRED SUPRA. 68. THE NEXT REASONING GIVEN BY THE REVENUE IS T HAT THE ASSESSEE HAS COMMITTED A FRAUD BY FURNISHING A COPY OF E-ACKNOWLEDGEMENT, WH ICH HAS BEEN FOUND TO BE BOGUS. 45 FIRST OF ALL, AS SUBMITTED BY LD A.R, THERE IS ONLY ALLEGATION OF FRAUD, IF ANY, COMMITTED BY THE ASSESSEE. SECONDLY, THE INCOME TAX APPELLATE TRIBUNAL IS NOT THE AUTHORITY EMPOWERED TO DECIDE ABOUT THE ALLEGATION OF FRAUD. THIRDLY, AS SUBMITTED BY LD A.R, THE ALLEGED FRAUD, EVEN IF IT IS PROVED TO BE TRUE, WOULD GIVE RISE TO ONLY A LEGAL ISSUE AS TO WHETHER THE ASSESSEE WOULD BE ENTITLED FOR DEDUC TION U/S 80IB(10) OF THE ACT FOR NON-FILING OF RETURN OF INCOME WITHIN THE DUE DATE OR NOT. BEFORE US, THE LD A.R PLACED HIS RELIANCE ON HOST OF DECISIONS AND SUBMITTED THA T IT HAS BEEN HELD BY VARIOUS COURTS AND TRIBUNAL THAT THE EXEMPTION PROVISION SH ALL BE CONSTRUED LIBERALLY, ONCE IT IS FOUND THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTIO N. IN SOME OF THE CASES, THE DEDUCTION CLAIMED BY THE ASSESSEE WAS ALLOWED, EVEN IF THE RETURN OF INCOME WAS FILED BELATEDLY BY HOLDING THAT THE CONDITION PRESCRIBED IN SEC.80AC/OTHER PROVISIONS IS DIRECTORY IN NATURE. SOME OF THE DECISIONS RELIED UPON BY THE ASSESSEE ARE GIVEN BELOW:- (A) TRUSTEES OF TULSIDAS GOPALJI CHARITABLE & CHE LESHWAR TEMPLE VS. CIT (1994)(207 ITR 368)(BOM) (B) FIBERFILL ENGINEERS VS. DCIT (2017) (299 CTR 173)(DELHI) (C) CHIRAKKAL SERVICE CO-OPERATIVE BANK LTD VS. C IT (2016)(384 ITR 490)(KER) (D) CIT VS. S.VENKATIAH (ITA NO.114 OF 2013)(AP) (E) PRINCIPAL CIT VS. SHANKARLAL SAINI (2018)(253 TAXMAN 308)(RAJ) (F) ITO VS. M/S YASH DEVELOPERS (ITA NO.809/MUM/2 011) THE LD A.R FURTHER SUBMITTED THAT THE ASSESSEE HAS ALSO FILED RETURN OF INCOME MANUALLY WITHIN THE DUE DATE BEFORE THE AO AND HENC E THE REVENUE CANNOT DISCARD THE MANUAL RETURN IN ORDER TO DENY DEDUCTION CLAIMED U/ S 80IB(10) OF THE ACT. 69. WE HAVE EARLIER NOTICED THAT THE REVENUE HAS PLACED RELIANCE ON THE DECISION RENDERED BY HONBLE CALCUTTA HIGH COURT, W HEREIN IT WAS HELD THAT THE DEDUCTION U/S 80IB(10) WOULD BE DENIED, IF THE RETU RN OF INCOME IS FILED BEYOND THE DUE DATE PRESCRIBED U/S 139(1) OF THE ACT. THE ABOVE DISCUSSIONS WOULD SHOW THAT THERE ARE TWO VIEWS ON THE ISSUE. HENCE THE LD A.R SUBMITTED THAT, IF THE ASSESSEE IS CONSIDERED TO HAVE FILED THE RET URN OF INCOME BELATEDLY BEYOND THE DUE DATE PRESCRIBED U/S 139(1) OF THE AC T, THEN THE VIEW IN FAVOUR OF THE ASSESSEE SHOULD BE TAKEN AS PER THE DECISION RENDERED BY HONBLE SUPREME COURT IN THE CASE OF VEGETABLE PRODUCTS OF INDIA LTD (1973)(88 ITR 46 182)(SC). WE FIND MERIT IN THE SUBMISSIONS MADE B Y LD A.R. THE REVENUE IS ONLY ALLEGING FRAUD ON THE PART OF THE ASSESSEE AND THE TRIBUNAL IS NOT THE COMPETENT AUTHORITY TO DECIDE ON THE SAME. AS SUBM ITTED BY LD A.R, THE ISSUE RAKED UP BY THE REVENUE WOULD GIVE RISE TO ONLY A L EGAL ISSUE AND ON THE SAME, TWO VIEWS ARE EXISTING AS ON TODAY. 70. WE HAVE NOTICED THAT THE LIMITATION WOULD A PPLY FOR ALL ORDERS, EVEN IF IT IS A WRONG ORDER. WE HAVE ALSO NOTICED THAT, WHAT CANNOT BE ACHIEVED DIRECTLY CANNOT BE ACHIEVED INDIRECTLY. IN THE INSTANT CASE , THE REVENUE HAS FAIRLY ADMITTED THAT THE TIME LIMIT FOR REOPENING OF ASSES SMENT HAS ALREADY EXPIRED, MEANING THEREBY, THE AO COULD NOT DISTURB THE ASSES SMENT ORDER ALREADY PASSED BY HIM, EVEN IF ANY WRONG IS FOUND THEREIN. BY FILING THIS CO BEFORE THE TRIBUNAL, THAT TOO IN AN APPEAL PROCEEDING CHALLENG ING THE RECTIFICATION ORDER PASSED U/S 154 OF THE ACT, THE REVENUE IS TRYING TO ACHIEVE ITS OBJECTIVES, WHICH COULD NOT BE ACHIEVED BY IT DIRECTLY. THE SAID OBJ ECTIVES ARE SOUGHT TO BE ACHIEVED INDIRECTLY ON THE BASIS OF ALLEGATION OF F RAUD, SINCE THE AO COULD NOT TAKE DIRECT ACTION DUE TO EXPIRY OF LIMITATION PERI OD. 71. THE LD A.R ALSO SUBMITTED THAT THE ASSESSEE HAS FILED ITS RETURN OF INCOME FOR AY 2012-13 ALSO BEYOND THE DUE DATE PRES CRIBED U/S 139(1) OF THE ACT CLAIMING DEDUCTION U/S 80IB(10) OF THE ACT. IT WAS SUBMITTED THAT THE AO HAS ALLOWED THE SAID DEDUCTION IN AY 2012-13. ACCO RDINGLY, IT WAS SUBMITTED BY LD A.R THAT THERE IS NO MERIT IN THE ALLEGATION OF FRAUD, IF ANY, COMMITTED BY THE ASSESSEE, AS THE AO HIMSELF HAS ALLOWED DEDUCTI ON IN THE SUCCEEDING YEAR ON THE BASIS OF BELATED RETURN OF INCOME. 72. IN VIEW OF THE FOREGOING DISCUSSIONS, WE ARE CONVINCED THAT THE THE CO FILED BY THE REVENUE IS NOT MAINTAINABLE. ACCORDIN GLY WE REJECT THE SAME. 73. WE HAVE EARLIER NOTICED THAT THE REVENUE HAS FURNISHED SANCTION OF LD CIT ONLY IN RESPECT OF ORIGINAL GROUNDS OF APPEAL FILED BY IT. THE APPROVAL IN RESPECT 47 OF REVISED GROUNDS OF APPEAL WAS NOT PLACED BEFORE US. THE PROVISIONS OF SEC.253(2) MANDATES THAT THE AO SHOULD FILE APPEAL ON THE DIRECTION OF THE PRINCIPAL COMMISSIONER OR COMMISSIONER, AS THE CASE MAY BE. WE NOTICE THAT THE PRACTICE FOLLOWED BY THE REVENUE IS TO FURNISH A COPY OF APPROVAL GRANTED BY LD PR. CIT OR CIT TO THE GROUNDS URGED BY THE ASSES SING OFFICER. ACCORDINGLY, IN THE ABSENCE OF APPROVAL OF PRINCIPAL COMMISSIONE R OR COMMISSIONER, THE REFRAMED GROUNDS OF THE REVENUE ARE LIABLE TO BE RE JECTED ON THIS GROUND ALSO. 74. THE ASSESSEE ARGUED AT LENGTH THAT THE CO F ILED BY THE REVENUE SHOULD NOT BE ADMITTED, SINCE THE CO HAS BEEN FILED BY THE REVENUE AFTER CONCLUSION OF HEARING OF THE APPEAL FILED BY THE ASSESSEE. IT WA S ALSO ARGUED THAT THE DELAY OF 124 DAYS IN FILING THE CO SHOULD NOT BE CONDONED. WE NOTICE THAT THE POWER TO FILE CO IS GIVEN TO THE PARTIES U/S 253(4) OF THE A CT AND THE SAME HAS TO BE FILED WITHIN 30 DAYS FROM THE DATE OF RECEIPT OF NOTICE O F APPEAL FILED BY THE OTHER PARTY. IN THE NORMAL PRACTICE, THE APPEAL AND CO A RE HEARD AND DISPOSED OF TOGETHER. HENCE THERE MAY BE MERIT IN THE CONTENTI ONS OF THE ASSESSEE THAT THE CO SHOULD NOT BE ADMITTED, IF IT IS FILED AFTER CON CLUSION OF HEARING OF THE APPEAL. HOWEVER, WE NOTICE THAT THE BENCH HAS PUT UP THE APPEAL OF THE ASSESSEE FOR HEARING THE SAME ALONG WITH THE CROSS OBJECTION BY REFIXING IT. UNDER THESE SET OF FACTS, THE OBJECTION OF THE ASSE SSEE MAY NOT SURVIVE. WE HAVE EARLIER NOTICED THAT THE LD D.R, DURING THE CO URSE OF HEARING OF APPEAL OF THE ASSESSEE, SUBMITTED ABOUT THE ALLEGED FRAUD AND ALSO CONTENDED THAT THE DEDUCTION CLAIMED U/S 80IB(10) SHOULD BE WITHDRAWN IN VIEW OF PROVISIONS OF SEC.80AC OF THE ACT. SINCE IT IS A WELL ESTABLISHE D PROPOSITION THAT THE LD D.R CANNOT IMPROVE THE CASE OF THE AO, THE REVENUE, IN ITS WISDOM, HAS THOUGHT IT FIT TO FILE CROSS OBJECTION BELATEDLY. THE REASON CITED FOR THE DELAY WAS THE DELAY OCCURRED IN OBTAINING THE DETAILS FROM CPC. IN OUR VIEW, THE REASONING GIVEN BY THE REVENUE MAY CONSTITUTE SUFFICIENT CAUS E IN FILING THE CO BELATEDLY. HOWEVER, IN THE PRECEDING PARAGRAPHS, WE HAVE HELD THAT THE CO AS WELL AS THE GROUNDS URGED BY THE REVENUE IN THE CO IS NOT MAINT AINABLE. HENCE WE ARE OF 48 THE VIEW THAT THE OBJECTIONS RAISED BY THE ASSESSEE ON PRELIMINARY ISSUES LOSE THEIR SIGNIFICANCE. 75. IN THE RESULT, THE APPEAL FILED BY THE ASSE SSEE IS ALLOWED AND THE CROSS OBJECTION OF THE REVENUE IS DISMISSED. ORDER HAS BEEN PRONOUNCED IN THE COURT ON 26.12.2 018. SD/- SD/- (PAWAN SINGH) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED : 26/12/2018 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// SENIOR PRIVATE SECRETARY KISHORE, SPS ITAT, MUMBAI