Bipinkumar Bhaktiram Nimavat, GONDAL V. The Income Tax Officer, Ward-3(3), RAJKOT-GUJARAT

MA 09/RJT/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 2414 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 6 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 28-11-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 22-11-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUHAS MISTRY
• Keywords: Business income; Salary income
• Section: 254(2); 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT [ CONDUCTED THROUGH E-COURT AT AHMEDABAD ] BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER & MS. MADHUMITA ROY, JUDICIAL MEMBER MA NO.09/RJT/2017 ( IN I.T.A. NO.237/RJT/2013) [ASSESSMENT YEAR : 2008-09] BIPINKUMAR BHAKTIRAM NIMAVAT VIMAL BERING CO. 24/3 BHOJPARA, GONDAL VS. THE ITO WARD-3(3) RAJKOT [PAN NO.ADGPN 0828 C] ( APPLICANT ) .. ( RESPONDENT ) APPELLANT BY : WRITTEN SUBMISSION RESPONDENT BY : SHRI SUHAS MISTRY, SR.DR DATE OF HEARING 18/10/2019 DATE OF PRONOUNCEMENT 27/11/2019 O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: BY THIS MISCELLANEOUS APPLICATION, THE ASSESSEE P RAYS TO RECTIFY THE MISTAKE APPARENT FROM THE RECORD IN THE ORDER PASSED BY THE ITAT IN ITA NO. 237/RJT/2013 FOR ASSESSMENT YEAR 2008-09 VIDE ORDER DATED 29.11.2013. 2. THE ASSESSEE IN HIS MISCELLANEOUS APPLICATION PO INTED OUT THAT THE ITAT HAS PASSED THE ORDER WITHOUT CONSIDERING THE JUDGMENTS CITED BY THE ASSESSEE AT THE TIME OF HEARING. THE RELEVANT EXTRACT OF THE MISCEL LANEOUS APPLICATION READS AS UNDER: 4. A PERUSAL OF THE ORDER PASSED BY THE HON. BENCH AT PARA 3 SHOWS THAT RELIANCE PLACE BY THE ASSESSEE ON THE VARIOUS DECISIONS OF THE HON. HIGH COURTS AS REPRODUCED AT PARA 2 PAGE MO. 3 OF - 2 - MA NO.9/RJT/2017 (IN ITA NO.237/RJT/2013) BIPINKUMAR B. NIMAVAT VS.ITO ASST.YEAR 2008-09 THE ORDER OF THE HON. ITAT IS ALSO THE DECISIONS GI VEN BY THE HON. ITAT, RAJKOT IN ITA NO. 1317 / RJT / 2010 DATED 11-1-2013 IN THE CASE OF NAVNEET M ULJIBHAI WHERE IN THE HON. ITAT HAS BEEN PLEASED TO HOLD THAT NO PENALTY IS LEVIABLE WHEN IN COME IS ASSESSED ON ESTIMATED BASIS. THUS IT IS EVIDENCE FROM THE ORDER PASSED BY THE HON. ITAT, TH AT THERE IS NO REFERENCE OF DECISIONS RELIED ON BY THE ASSESSEE OF THE HON. HIGH COURT AS WELL AS O F THE HON. ITAT, RAJKOT, AS TO HOW THESE DECISIONS ARE NOT APPLICABLE TO THE FACTS OF THE CA SE. THE HON. SUPREME COURT AND HON. GUJARAT HIGH COURT HAS DESIRED THAT IN JUDICIAL ORDER MUST BE* SPEAKING, REASONED AND DETAILED. 5. THE ORDER PASSED BY THE HON. ITAT DOES NOT MENTI ONED ANY REASON AS TO HOW THE JUDICIAL DECISIONS RELIED ON BY THE ASSESSEE ARE NOT APPLICA BLE. BESIDES ABOVE GROUNDS NO. 4 RELATING TO INADEQUATE OPPORTUNITY BY THE LD. CIT(A) AND GROUND S NO. 6 REGARDING PENALTY ORDER BEING BAD IN LAW NEEDS CANCELLATION HAVE ALSO NOT BEEN DECIDE D BY THE HON. ITAT. THUS THE GROUNDS AND PLEA TAKEN BY THE ASSESSEE ARE REMAIN TO BE CONSIDE RED. 6. IN VIEW OF THE ABOVE, THE APPELLANT BAG TO PRAY THAT THE APPEAL MAY KINDLY BE RECALLED AND MAY BE REHEARD TO PASS A FRESH ORDER AFTER HEARING BOTH J THE PARTIES TO MEET THE END OF THE JUSTICE. 3. IN VIEW OF THE ABOVE, THE LD. AR FURTHER SUB MITTED THAT NON-CONSIDERATION OF THE ORDER OF THE OTHER HONBLE TRIBUNALS/ COURTS IS A MISTAKE APPARENT FROM THE RECORD WHICH REQUIRES TO BE RECTIFIED U/S 254(2) OF THE ACT. 4. ON THE OTHER HAND, LD. DR VEHEMENTLY SUPPOR TED THE ORDER OF HONBLE ITAT. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE MATERIALS AVAILABLE ON RECORD. ON PERUSAL OF THE ITAT ORDER, WE NOTE THAT THE ITAT HAS DULY RECORDED THE ORDER/ JUDGMENTS REFERRED BY THE ASSESSEE AT THE TI ME HEARING WHICH WERE ALSO CONSIDERED BY IT. AT THIS JUNCTURE, WE ARE INCLINED TO REPRODUCE THE RELEVANT EXTRACT OF THE ITAT ORDER WHICH READS AS UNDER: IN SUPPORT OF THIS, THE LD.AR OF THE ASSESSEE RELI ED UPON THE FOLLOWING DECISIONS:- 1. 106 ITR 672 (ALL) - CIT V/S.MUSDILAL SING 2. 150 ITR 714 (P&H) - CIT V/S METAL PRODUCTS OF IND IA 3. 258 ITR 285 (P&H) - HARIGOPAL V/S. CIT - 3 - MA NO.9/RJT/2017 (IN ITA NO.237/RJT/2013) BIPINKUMAR B. NIMAVAT VS.ITO ASST.YEAR 2008-09 4. 140 ITR 943 (BOM) CIT V/S. DEVENDAS PERUMAL & CO. 5. 120 ITR 752 (GUJ) CIT V/S. VINAYCHAND HARILAL 6. 213 ITR 69 (GUJ) CIT V/S. NAVNITLAL POCHALAL 7. 261 ITR 675 (GUJ) CIT V/S. MILEX CABLE IND. XXXXXXXXXXXX FINALLY, THE LD.AR OF THE ASSESSEE RELIED UPON THE DECISION OF THE ITAT, RAJKOT BENCH IN ITA NO.1317/RJT/2010 DATED 11.01.2- 013 IN THE CASE OF VARIA NAVNEET MULJIBHAI V. ITO FOR THE ASSESSMENT Y EAR 2002-03, WHEREIN THE TRIBUNAL HELD THAT NO PENALTY IS LEVIABLE WHEN INCOME IS ON ESTIMATED BASIS. 3. HAVING HEARD BOTH SIDES, I HAVE CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT IN THIS CASE THE ASSES SEE HAS NOT DISCLOSED THE SOURCE OF INCOME. IN THE RETURN OF INCOME FURNISHED BY HIM, HE HAS SHOWN ONL Y SALARY INCOME AND NOT BUSINESS INCOME THOUGH HE WAS DOING THE BUSINESS WHICH HE ADMITTED WHEN CONFRONTED ON THE BASIS OF THE INFORMATION OBTAINED FROM THE BANK U/S.133(6) OF TH E INCOME-TAX ACT, 1961. KEEPING IN VIEW OF THESE CONSPICUOUS FACTS OF THE CASE, I AM OF THE VI EW THAT THIS IS THE FIT CASE FOR LEVYING PENALTY U/S.271(1)(C) OF THE INCOME-TAX ACT. IN THE IMPUGN ED ORDER, THE LD. CIT(A) CONFIRMED THE PENALTY ONLY TO THE EXTENT OF 100% OF TAX SOUGHT TO BE EVAD ED WHICH IN MY VIEW IS FAIR AND REASONABLE. NEEDS TO INTERFERENCE. I, THEREFORE, DECLINE TO IN TERFERE. ON THE PERUSAL OF THE ABOVE ORDER, WE NOTE THAT THE ITAT WHILE DECIDING THE ISSUE HAS DULY CONSIDERED THE ORDERS OF THE TRIBUNAL AS D ISCUSSED ABOVE AND AFTER THAT, THE ORDER WAS PASSED BY THE ITAT. THEREFORE, THE AR GUMENT OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE HONBLE ITAT HAD NOT CONSIDER ED THESE ORDERS IS NOT CORRECT. 6. THERE CAN BE AN ERROR OF JUDGMENT IN THE ORDER OF ITAT, BUT THE TRIBUNAL CANNOT RECTIFY THE SAME. OTHERWISE, IT WILL AMOUNT TO REVIEW ITS OWN ORDER. IN HOLDING SO, WE FIND SUPPORT & GUIDANCE FROM THE JUD GMENT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT(EXEMPTION) VS. GUJARA T INSTITUTE OF HOUSING ESTATE DEVELOPERS REPORTED IN 84 TAXMANN.COM 148 WHEREIN I T WAS HELD AS UNDER: - 4 - MA NO.9/RJT/2017 (IN ITA NO.237/RJT/2013) BIPINKUMAR B. NIMAVAT VS.ITO ASST.YEAR 2008-09 4. IN THE PRESENT CASE, AS NOTED THE TRIBUNAL HAD GIVE N DETAILED REASONS FOR COMING TO THE CONCLUSION THAT THE PRINCIPLE OF MUTUALITY WOULD NO T APPLY. WHILE ACCEPTING THE ASSESSEE'S RECTIFICATION APPLICATIONS, THE TRIBUNAL UNDERTOOK EQUALLY PAINSTAKING AND ELABORATE CONSIDERATION OF THE VERY SAME ISSUES AND VERY SAME FACTS TO COME TO A CONTRARY CONCLUSION. IT IS NOT NECESSARY NOR POSSIBLE FOR US TO HOLD WHETHER T HE TRIBUNAL'S FIRST VIEW WAS CORRECT OR THE SUBSEQUENT ONE. IT IS ENOUGH TO HOLD THAT THE TRIBU NAL COULD NOT HAVE UNDERTAKEN SUCH INCISIVE AND DETAILED EXAMINATION OF FACTS AND LAW TO COME T O THE CONCLUSION WHICH ARE COMPLETELY CONTRARY TO ITS OWN CONCLUSION ARRIVED AT AFTER DET AILED CONSIDERATIONS. SUCH POWERS SIMPLY DO NOT FLOW FROM THE POWER OF RECTIFICATION UNDER SUB- SECTION (2) OF SECTION 254 OF THE ACT. 5. UNDER THE CIRCUMSTANCES, IN OUR OPINION THE TRIBUNA L COMMITTED A SERIOUS ERROR IN ALLOWING THE ASSESSEE'S RECTIFICATION APPLICATIONS AND RECAL LING ITS EARLIER ORDER OF REJECTION OF APPEALS. THE IMPUGNED ORDER DATED 29.07.2016 IS THEREFORE SE T ASIDE. CONSEQUENTLY, THE ORDER PASSED BY THE TRIBUNAL OF ALLOWING ALL THE TAX APPEALS OF THE ASSESSEE BY ORDER DATED 25.11.2016 WOULD THEREFORE AUTOMATICALLY BE RENDERED NON-EST. RESULT ANTLY, THE TRIBUNAL'S ORIGINAL ORDER DATED 29.09.2015 WOULD BE RESTORED. NEEDLESS TO STATE THA T THE ASSESSEE FEELING AGGRIEVED BY THE SAID ORDER, IT WILL ALWAYS BE OPEN FOR THE ASSESSEE TO F ILE TAX APPEALS. THE INTERVENING FACTS AND CIRCUMSTANCES WOULD CERTAINLY BE RELEVANT IN THE CO NTEXT OF TECHNICAL DELAY IF ANY THAT MAY ARISE IN THE PROCESS OF FILING SUCH TAX APPEALS. IN THIS REGARD, WE ALSO PLACE OUR RELIANCE ON THE J UDGMENT OF BOMBAY HIGH COURT IN THE CASE OF RAMESH ELECTRIC & TRADING COMPANY RE PORTED IN 77 TAXMAN 43 WHEREIN IT WAS HELD AS UNDER: THE APPELLATE TRIBUNAL DOES NOT HAVE ANY POWER TO REVIEW ITS OWN ORDERS UNDER THE PROVISIONS OF THE INCOME-TAX ACT, 1961. THE ONLY POWER WHICH T HE TRIBUNAL POSSESSES IS TO RECTIFY ANY MISTAKE IN ITS OWN ORDER WHICH IS APPARENT FROM THE RECORD. THIS IS MERELY A POWER OF AMENDING ITS ORDER. IN THE INSTANT CASE, IN THE FIRST ORDER OF THE TRIBUNAL DATED 9-6-1975, THERE WAS NO MISTAKE WHICH WAS APPARENT FROM THE RECORD AT ALL. THE TRIBUNAL WAS REQUIRED TO DECIDE WHETHER THE COMMISSION PAYMENT OF RS. 54,000 WAS DEDUCTIBLE UNDER SECTION 37 AFTER EXAMINING THE CIRCUMSTANCES, THE TRIBUNAL CAME TO THE CONCLUSION THAT IT WAS NOT SO DEDUCTIBLE. THE TRIBUNAL CANNOT, IN EXERCISE OF ITS POWER OF RECTIFICATION, LOOK INTO SOME OTHER CIRCUMSTANCES WHICH WOULD SUPPORT OR NOT SUPPORT ITS CONCLUSION SO ARRIVED AT . THE MISTAKE WHICH THE TRIBUNAL IS ENTITLED TO CORRECT IS NOT AN ERROR OF JUDGMENT BUT A MISTAKE W HICH IS APPARENT FROM THE RECORD ITSELF. NO SUCH MISTAKE WAS APPARENT FROM THE RECORD. IN FACT, THIS WAS DOUBTFUL, IF THIS SORT OF AN EXERCISE COULD HAVE BEEN DONE BY THE TRIBUNAL EVEN IF IT HAD THE P OWER OF REVIEW. THE TRIBUNAL HAD, PATENTLY, FAR EXCEEDED ITS JURISDICTION UNDER SECTION 254(2) IN R EDECIDING THE ENTIRE DISPUTE WHICH WAS BEFORE IT IN THIS FASHION, AND THE TRIBUNAL HAD COMMITTED A G ROSS AND INEXPLICABLE ERROR FOR REASONS WHICH COULD NOT BE UNDERSTOOD. THE POWER OF RECTIFICATION UNDER SECTION 254(2) CAN BE EXERCISED ONLY WHERE THE MISTAKE IS APPARENT FROM THE RECORD, AND NOT A MISTAKE WHICH I S REQUIRED TO BE ESTABLISHED BY ARGUMENTS AND - 5 - MA NO.9/RJT/2017 (IN ITA NO.237/RJT/2013) BIPINKUMAR B. NIMAVAT VS.ITO ASST.YEAR 2008-09 A LONG-DRAWN PROCESS OF REASONING ON POINTS ON WHIC H THERE MIGHT CONCEIVABLY BE TWO OPINIONS. FAILURE BY THE TRIBUNAL TO CONSIDER AN ARGUMENT ADV ANCED BY EITHER PARTY FOR ARRIVING AT A CONCLUSION IS NOT AN ERROR APPARENT ON THE RECORD, ALTHOUGH IT MAY HAVE BEEN AN ERROR OF JUDGMENT. IN THE INSTANT CASE, THE ALLEGED FAILURE, AT LEAST ON ONE COUNT, WAS ATTRIBUTED BY THE ASSESSEE TO THE ITO AND NOT THE TRIBUNAL THEREFORE, THE TRIBUNAL HAD NO JURISDICTION UNDER SECTION 254(2) TO PASS THE SECOND ORDER. THE PROVISIONS OF SECTION 254(2) OF THE ACT CAN BE INVOKED FOR THE MISTAKES WHICH ARE GLARING IN NATURE AND CAN BE POINTED FROM THE F ACE OF THE ORDER. THE MISTAKES WHICH REQUIRE THE APPLICATION OF MIND AND LONG DRAW N PROCESS TO CONCLUDE CANNOT AMOUNT TO APPARENT MISTAKE. IF THESE TYPES OF MISTA KES ARE CONSIDERED AS APPARENT FROM THE RECORD, THEN IT WOULD LEAD TO A REVIEW OF THE ORDER. IN THIS REGARD, WE FIND SUPPORT & GUIDANCE FROM THE JUDGMENT OF HONBLE DEL HI HIGH COURT IN THE CASE SMT. BALJEET JOLLY VS. CIT REPORTED IN 113 TAXMAN 3 8 WHEREIN IT WAS HELD AS UNDER: A BARE LOOK AT SECTION 254(2) MAKES IT CLEAR THAT A 'MISTAKE APPARENT FROM THE RECORD' IS RECTIFIABLE. IN ORDER TO ATTRACT THE APPLICATION OF SECTION 254(2), THE MISTAKE MUST EXIST AND THE SAME MUST BE APPARENT FROM THE RECORD. THE POWER TO RECTIFY THE MISTAKE, HOWEVER, DOES NOT COVER CASES WHERE A REVISION OR REVIEW OF THE ORDER IS IN TENDED. 'MISTAKE' MEANS TO TAKE OR UNDERSTAND WRONGLY OR INACCURATELY; TO MAKE AN ERROR IN INTERP RETING; IT IS AN ERROR; A FAULT, A MISUNDERSTANDING, A MISCONCEPTION. 'APPARENT' MEANS VISIBLE; CAPABLE OF BEING SEEN; EASILY SEEN; OBVIOUS; PLAIN. A MISTAKE WHICH CAN BE RECTIFIED UN DER SECTION 254(2) IS ONE WHICH IS PATENT, WHICH IS OBVIOUS AND WHOSE DISCOVERY IS NOT DEPENDE NT ON ARGUMENT OR ELABORATION. THE LANGUAGE USED IN SECTION 254(2) MAKES IT CLEAR THAT ONLY AME NDMENT TO THE ORDER PASSED UNDER SECTION 254(1) IS PERMISSIBLE WHERE IT IS BROUGHT TO THE NO TICE OF THE TRIBUNAL THAT THERE IS ANY MISTAKE APPARENT FROM THE RECORD. AMENDMENT OF AN ORDER DOE S NOT MEAN OBLITERATION OF THE ORDER ORIGINALLY PASSED AND ITS SUBSTITUTION BY A NEW ORD ER. WHAT THE ASSESSEE INTENDED, TO DO IN THE INSTANT CASE WAS PRECISELY THE SUBSTITUTION OF THE ORDER, WHICH WAS NOT PERMISSIBLE UNDER THE PROVISIONS OF SECTION 254(2) AND, THEREFORE, THE TR IBUNAL WAS JUSTIFIED IN HOLDING THAT THERE WAS NO MISTAKE APPARENT ON THE FACE OF THE RECORD. WHER E AN ERROR IS FAR FROM SELF-EVIDENT, IT CEASES TO BE AN APPARENT ERROR. IT IS NO DOUBT TRUE THAT A MI STAKE CAPABLE OF BEING RECTIFIED UNDER SECTION 254(2) IS NOT CONFINED TO CLERICAL OR ARITHMETICAL MISTAKE. ON THE OTHER HAND, IT DOES NOT COVER ANY MISTAKE WHICH MAY BE DISCOVERED BY A COMPLICATED PR OCESS OF INVESTIGATION, ARGUMENT OR PROOF. AS OBSERVED BY THE APEX COURT IN MASTER CONSTRUCTION CO. (P.) LTD. V. STATE OF ORISS A [1966] 17 STC 360, AN ERROR WHICH IS APPARENT ON THE FACE OF THE RECORD SHOULD BE ONE WHICH IS NOT AN ERROR WHICH DEPENDS FOR ITS DISCOVERY ON ELABORATE ARGUME NTS ON QUESTIONS OF FACT OR LAW. - 6 - MA NO.9/RJT/2017 (IN ITA NO.237/RJT/2013) BIPINKUMAR B. NIMAVAT VS.ITO ASST.YEAR 2008-09 7. IN VIEW OF THE ABOVE, WE HOLD THAT THERE IS NO MISTAKE IN THE ORDER OF LD. ITAT ON THE GROUND THAT THE ORDERS/ JUDGMENTS CITED BY THE LD. COUNSEL FOR THE ASSESSEE HAD NOT BEEN CONSIDERED. THEREFORE WE DO N OT FIND ANY MERIT IN THE ARGUMENT OF LD. COUNSEL FOR THE ASSESSEE. HENCE THE FIRST GROUND RAISED BY THE ASSESSEE IN ITS MA IS DISMISSED. 8. IN THE RESULT, MA FILED BY THE ASSESSEE IS D ISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 27 / 11 /2019 SD/- SD/- (MS. MADHUMITA ROY) ( W ASEEM AHMED ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 27/ 11 /2019 .., . ../ T.C. NAIR, SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPLICANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A)-III, RAJKOT 5. '#$ , % , /DR,ITAT, RAJKOT 6. $23 45 / GUARD FILE. / BY ORDER, ' //TRUE COPY// / ( DY./ASSTT.REGISTRAR) !, / ITAT, RAJKOT