KAILASH GAHLOT,NEW DELHI V. DCIT, CENTRAL CIRCLE-4, NEW DELHI

MA 280/DEL/2024

AI Insights

The case involves Shri Kailash Gahlot, the applicant, contesting an order from the DCIT, Central Circle-4, New Delhi, regarding the assessment year 2015-16. The applicant filed a miscellaneous application under Section 254(1) of the Income-Tax Act, 1961, seeking rectification of an earlier order due to alleged mistakes of fact and law. The Tribunal acknowledged that some submissions and grounds of appeal were not considered in the original order, which led to the rectification of the order and the restoration of the appeal for re-examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 705599 (ITAT-DELHI)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 30-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2015-2016
• Other Referred Cases: Shobha Lakshman [2023] 155 taxmann.com 344 (SC), Prajatantra Prachar Samity [2022] 138 taxmann.com 58 (SC), Kanwar Singh Saini vs High Court of Delhi (2012) 4 SCC 307, Mehta Parikh & Co vs CIT (1956) 30 ITR 181 (SC), Rajhesh Manhar Bhansali Vs. Addl. CIT [2025] 173 taxmann.com 230 (Mumbai \\u2013 Trib.)
• Laws Referred To: Income-Tax Act, 1961, The Appellate Tribunal Rules, 1963
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AKHILESH KUMAR YADAV
• Keywords: Set aside; Rectification of order

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘C’ NEW DELHI BEFORE SHRI M BALAGANESH, ACCOUNTANT MEMBER AND SHRI VIMAL KUMAR, JUDICIAL MEMBER Miscellaneous Application No. 280/Del/2024 Arising out of ITA No. 3431/Del/2023 Assessment Year: 2015-16 Shri Kailash Gahlot, 6/6172, Vasant Vihar, New Delhi. PIN: 1100 70 Vs. DCIT, Central Circle-4, New Delhi PAN :AAJPG2849N (Applicant) (Respondent) ORDER PER VIMAL KUMAR, JUDICIAL MEMBER: The miscellaneous application under Section 254(1) of the Income-Tax Act, 1961 (hereinafter referred as “the Act”) and under Rule34A of The Appellate Tribunal Rules, 1963 is for rectification of order dated 02.07.2024 in ITA No.3431/Del/2023 for assessment year 2015-16. 2. Learned Authorized Representative for the applicant/assessee submitted that order dated 02.07.2024 for mistakes of facts and law apparent on record requires rectification. Para 10 of order mentions “Learned authorized Applicant by Shri V.K. Bindal, CA & Shri Arvind Dua, Adv. Respondent by Shri Akhilesh Kumar Yadav, Sr. DR Date of hearing 06.06.2025 Date of pronouncement 30.06.2025 2 MA No.280/Del./2024 representative for appellant/assessee submitted that impugned orders are bad in law as having been based on mechanical approval under section 153D of the Act without due application of mind”. Para 11 of order states \"Learned authorized representative for appellant/assessee submitted that Learned AO erred in law and on facts in charging tax under section 115BBE of the Act whereas the additional tax liability was applicable w.e.f. assessment year 2017-18. As such addition otherwise does not attract the said section.\" However, the arguments of para 10 & 11 based on grounds of appeal inadvertently escaped adjudication and it was, due to inadvertent mistake, stated vide para 15 that \"15. No other point was argued\". Non-adjudication is a mistake apparent on record liable for rectification as deemed fit. 3. Learned authorized representative for applicant submitted that in ground of appeal no. 3 it was stated that impugned amount of Rs. 42,98,086/- has been arrived after aggregating duplicate/ triplicate entries. However, inadvertently, no finding of fact has been rendered, which is a mistake apparent from record. The Tribunal under Section 254 of the Act has to consider all appeals on their merits, and dismissal of an appeal for non-prosecution without considering merits was not legally sustainable, non-arguing by the Ld. AR is equally of no consequence and the Tribunal is statutorily obliged to decide all grounds as has been held in Shobha Lakshman [2023] 155 taxmann.com 344 (SC) and Prajatantra Prachar Samity [2022] 138 taxmann.com 58 (SC). 3 MA No.280/Del./2024 4. Learned authorized representative for applicant/assessee submitted that when the documents on record have undisputedly shown that the impugned assessment order, demand notice and the requisite approval under Section 153D of the Act referred in para 9 of the impugned assessment order were without quoting any computer generated DIN, not declaring these orders/notice non-est at its own is mistake apparent from record, especially, considering the order of the Hon'ble Jurisdictional Delhi High Court in Brandix Mauritius and considering trite law that judicial forum must first consider at its own, matters which goes to the root/ validity of the matter as has been held by the Hon'ble Apex Court in Kanwar Singh Saini vs High Court of Delhi (2012) 4 SCC 307. 5. Learned authorised representative for the applicant/assessee when the claim regarding diary by Mr. Rohit Sharma was rejected on the ground of absence of specific details and supporting documents, then accepting the very same contents against the appellant, non-author, in absence of specific details and supporting documents is self-contradiction and is a mistake apparent. Though, it has been admitted that the diary containing entries, which is the sole basis of the impugned addition, was undisputedly written by one Mr Rohit Sharma and not at all by the assessee. Mr. Rohit Sharma not only filed an affidavit but also presented himself before the Ld. AO for his cross examination and necessary verification of the facts by the Ld. AO but the Ld. AO deliberately did not undertake the said exercise. Thus, in view of the judgment 4 MA No.280/Del./2024 of the Hon'ble Supreme Court in the case of Mehta Parikh & Co vs CIT (1956) 30 ITR 181 (SC), if the affidavit was not cross examined by the Ld. Assessing Officer, the same has to be accepted as correct. This was mentioned on page no. 30. Further, in the said affidavit Mr. Rohit Sharma not only categorically explained each and every entry including the duplicate entries forming part of the impugned addition made through a detailed chart filed on PB page nos. 39-42 and 43-47 but also worked out the actual expenditure incurred as per the said diary out of Rs 42,98,086/-besides he also gave the names of the persons who undertook the job as mentioned in the diary. On PB Page nos. 43- 47 a detailed working as to how the entries were duplicate and how the amounts were paid was given. This fact was neither examined by the authorities below and also escaped attention of the Hon'ble Tribunal being a final fact-finding authority. The assessee had discharged his onus u/s 132(4) of the Act by not only producing the author of the diary whose name as the owner/author of the same is specifically mentioned in the diary copied by the Ld. CIT(A) in his appellate order, and filing his affidavit with a detailed explanation on the contents of the diary and the sources/nature/ purpose of the expenditure mentioned therein which categorically nowhere identifies or points to the assessee. Thus, this fact also escaped the attention of the Hon'ble Tribunal. The assessee also relied on the judgment of the Hon'ble Supreme Court and the jurisdictional Delhi High Court submitted before the Ld. CIT(A) in written submissions, particularly page no. 27 para 1.18, 1.19 etc. of the Ld. CIT(A) 5 MA No.280/Del./2024 order, which have also escaped attention of the Hon'ble Tribunal while holding that the affidavit of Mr. Rohit Sharma was rightly rejected by the Ld. AO though, admittedly, the Ld. AO did not make any attempt at all before concluding to reject the affidavit. Whatever evidence was desired by the Ld. AO to support the affidavit, it could only be submitted by Mr. Rohit Sharma and not by the assessee as the assessee never authored the said diary and was also never aware of the same much its contents. 6. Learned authorized representative for the applicant/assessee submitted that ITAT, Mumbai Bench in the case of Rajhesh Manhar Bhansali Vs. Addl. CIT reported in [2025] 173 taxmann.com 230 (Mumbai – Trib.) has held as under: \"6 We find that, though the order dated 13th February 2015 does render a finding that no positive material was brought on record, there is no discussion whatsoever of the various case laws detailed in the submissions which according to the petitioner clinches the issues in support of its case that the shareholding investment by the five Companies was genuine. In the above view, the Tribunal ought to have allowed the petitioner's Rectification Application and considered the petitioner's appeal before it on merits, inter-alia, taking into account the material and case laws which has been already filed by the petitioner's during the hearing leading to the order dated 13th February, 2015. 7. In view of the peculiar facts of the present case, we are not only setting aside the impugned order dated 4th May 2018 but also the order dated 13th February, 2018 to the extent it dismissed the petitioner's Appeal before it. This for the reason that, we find the order dated 13th February, 2015 in the context of material available on record to be a nonspeaking order as it gives no reasons to reject the appeal in the context of the decisions admittedly relied upon at the hearing by the petitioners.\" 6 MA No.280/Del./2024 7. We notice both the above cited decision of Hon'ble jurisdictional High Court support the plea of the assessees made in the miscellaneous petitions. Since the Co-ordinate Bench did not consider the detailed written submissions furnished by it along with the evidences in support of the impugned additions made in their hands by the AO, it has led to the reversal of relief granted by Ld CIT(A). As held in the above said cases, non-consideration of the detailed written submissions furnished by the assessees along with relevant evidences would result in a mistake apparent from the record in the orders passed by the Tribunal in the hands of both the assessees with regard to the impugned issue. 8. Accordingly, following the above said decisions of the Hon'ble jurisdictional High Courts, we recall the orders dated 02-11-2021 passed in ITA No.5/Mum/2021 in the case of Shri Rashesh M Bhansali and ITA No.4/Mum/2021 in the case of Smt Ami R Bhansali in respect of the issue relating to addition of USS 32,13,307.60 made in their hands respectively. Accordingly, we direct the registry to post both the above said appeals in the normal course before the regular bench for limited purpose of disposing the above said issue raised in the respective appeals filed by the revenue, referred supra.” 7. Learned authorized representative for Revenue submitted that impugned order does not have mistake apparent on record. 8. From examination of record in light of aforesaid rival contentions, it is crystal clear that para no.10 of impugned order mentions submissions regarding impugned orders being passed on mechanical approval under Section 153D of the Act without due application of mind. Para no. 11 of the order mentions that charging tax under Section 115BBC of the Act whereas the additional tax liability was applicable w.e.f. assessment year 2017-18 was not attracted. The above-said arguments inadvertently escaped adjudication. Ground of appeal no.3 regarding aggregate amount of Rs.42,98,086/- is being aggregated duplicate/triplicate entries has not been adjudicated. The addition is based on 7 MA No.280/Del./2024 entries in diaries by Rohit Sharma was rejected on the ground of absence of specific details and supporting documents and then accepting the same that contents against appellant. In absence of specific diaries which were contradictory. Accepting of contents of a third-party diary without independent corroboration was against law as laid down by the Hon'ble Supreme Court in Common Case [2017] 77 taxmann.com 245 (SC) and CBI Vs. V.C. Shukla [1998] 3 SCC 410 and thus apparent from record. 9. As per ratio of judgment in Shri Rashesh Manhar Bhansali vs. Addl. Commissioner of Income Tax, supra, it is well settled principles of law that non- consideration of detailed submissions would result in a mistake apparent from record in the order. 10. In view of above material facts and well settled principles of law, impugned order dated 02.07.2024 being unsustainable in law is set aside. The appeal is restored to its original number. The Registry is directed to fix the appeal for hearing on out of turn basis on 21.07.2025. 11. In the result, the miscellaneous application is allowed. Order pronounced in the open court on 30 June, 2025. Sd/- Sd/- (M BALAGANESH) ACCOUNTANT MEMBER (VIMAL KUMAR) JUDICIAL MEMBER Dated: 30 June, 2025. Mohan Lal 8 MA No.280/Del./2024 Copy forwarded to: 1. Applicant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi "