M/s. Kapadia Corporation, Ahmedabad V. The Income tax Officer,Ward-9(2), Ahmedabad

MA 1/AHD/2013

• Counselvise Citation: [2013] 124 COUNSELVISE.COM (IT) 0141 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 7 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 09-05-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 1998-1999
• Appeal Filed On: 01-01-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: Y P VERMA
• Assessee Lawyers: A C SHAH
• Keywords: Rectification of order; Difference of opinion; Change of opinion
• Section: 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMADABAD BEFORE SHRI MUKUL KR. SHRAWAT , JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT MEMBER M.A. NO. 1/AHD/2013 (ARISING OUT OF ITA NO.2474/AHD/2009) ASSESSMENT YEAR :1998-99 M/S. KAPADIA CORPORATION, AKAR COMPLEX, CELLAR, NR. DARPAN SIX ROAD, NAVRANGPURA, AHMADABAD - 380013 V/S . THE I.T.O., WARD-9(2), AHMEDABAD PAN NO. A A FF B 2690G (APPELLANT) .. (RESPONDENT) BY APPELLANT SHRI A. C. SHAH, A.R. /BY RESPONDENT SHRI Y. P. VERMA, SR. D.R. /DATE OF HEARING 15.03.2013 /DATE OF PRONOUNCEMENT 09.05.2013 O R D E R PER : T.R.MEENA, ACCOUNTANT MEMBER THIS M.A. IS FILED BY THE ASSESSEE AGAINST THE ORDE R DATED 07.12.2012 IN RESPECT OF ASSESSEES OWN APPEAL IN ITA NO.2474/AHD /2009 FOR A.Y. 1998-99. THIS APPEAL HAS BEEN PARTLY ALLOWED BY THE CO-ORDIN ATE B BENCH, AHMADABAD. NOW THE ASSESSEE MOVED THIS M.A. NO. 1/ AHD/ 2013 ON 01.01.2013, WHICH IS REPRODUCED AS UNDER: 1. WE ARE IN RECEIPT OF THE APPELLATE ORDER DATED 07-12-2012 ON 21-12-2012. THERE ARE CERTAIN APPARENT MISTAKES IN THE SAID ORDER: 2. THE HON'BLE TRIBUNAL HELD IN PARANO.9 ON PAGE NO .11 AS UNDER: M.A. NO. 104/AHD/12 A.Y. 96-97 PAGE 2 '9. THE LEARNED AO HAS ESTABLISHED CONCEALMENT OF I NCOME AS THE ASSESSEE HAS OBTAINED BOGUS BILLS AND INFLATED THE EXPENDITURE. THE DETAILED INVESTIGATION HAD BEEN MA DE BY THE AO AT THE TIME OF ASSESSMENT AND AGAIN THE ASSESSEE WAS ALLOWED OPPORTUNITY AT THE TIME OF PENALTY PROCEEDI NGS UNDER SECTION 271(1)(C) OF THE ACT TO ESTABLISH ITS CASE. BUT THE ASSESSEE HAS NOT REBUTTED THE FACT OF THE CASE BY P RODUCING ANY EVIDENCES. THE STATEMENT OF SHRI PRASHANT PATEL THAT AMOUNTS PAID TO HIM BY WAY OF CROSS CHEQUES IN SUBS EQUENT YEARS WERE WITHDRAWN FROM BANK IN CASH AND RETURNED TO THE ASSESSEE HAS NOT BEEN REFUTED OR DENIED BY THE ASSE SSEE NOR ANY CONVINCING EXPLANATION PLACED BEFORE US TO TAKE DIFFERENT VIEW. THEREFORE, WE FIND THAT THIS IS A FIT CASE FO R IMPOSITION OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. ' 3. WHEREAS THE HON'BLE TRIBUNAL FAILED TO APPRECIAT E THE FACTS. THE HON'BLE TRIBUNAL RECORDED THE SUBMISSION MADE B Y THE AR IN PARA NO. 6 ON PAGE NO. 7 OF THE ORDER. THE CO NTENTIONS HAVE BEEN DULY RECORDED. HOWEVER, THE SAID CONTENT IONS HAVE NOT BEEN DEALT WITH AT ALL. IT WAS CONTENDED THAT PRASHANT PATEL STATEMENT SHOULD BE READ AS A WHOLE AND THAT PRASHANT PATEL CATEGORICALLY REPLIED IN Q.NO.19 THAT HE WAS PAID CASH EARLIER AND THEREAFTER THE CHEQUE WAS PAID. MEANIN G BY THE EXPENDITURE INCURRED IS GENUINE BUT THE SOURCE OF E XPENDITURE INCURRED BY THE ASSESSEE IS NOT KNOWN. FURTHER, IT WAS ALSO CONTENDED THAT THE SATISFACTION REACHED FOR INITIAT ION OF PENALTY PROCEEDINGS ON THE GROUND THAT THE EXPENDITURE INCU RRED JS NOT GENUINE. HOWEVER, THE SOURCE OF EXPENDITURE INCUR RED IS NOT KNOWN AS PER REPLY TO Q.NO. 19 OF PRASHANT PATEL ST ATEMENT. THE HON'BLE TRIBUNAL PLACED RELIANCE ON Q.NO. 19 OF PRASHANT PATEL STATEMENT THOUGH IT IS RECORDED THAT THE STAT EMENT AS A WHOLE SHOULD BE READ AND THE PRASHANT PATEL STATEME NT IS NOT M.A. NO. 104/AHD/12 A.Y. 96-97 PAGE 3 CONSIDERED AT ALL. THEREFORE IT WAS CONTENDED THAT THE PENALTY LEVIED WAS BAD IN LAW. THE AR ALSO PLACED RELIANCE ON THE GUJARAT HIGH COURT JUDGMENT IN THE CASE OF PANNABEN P. DESAI 79 ITD 30 (AHD) SMC & CIT V/S. LAKHDHIR LALJI 85 1TR 77 (GUJ)]. 4. AND WHEREAS THE AR ALSO CONTENDED THAT THE PENAL TY UNDER SECTION 271(1)(C) CANNOT BE LEVIED FOR A.Y. 1998-19 99 SINCE THE PENALTY IS NOT LEVIED FOR A.Y. 1997-1998 AND TH E RELIANCE WAS PLACED IN THE CASE OF CIT V/S. SOOD HARVESTERS 304 ITR 279 (P&H) AND K.M. BHATIA(QUARRY) V/S. CIT 193 ITR 379 (GUJ). 5. AND WHEREAS THE AR ALSO CONTENDED THAT THE PENAL TY LEVIED IS BAD IN LAW ON ACCOUNT OF TECHNICAL GROUNDS STATED I N THE CHART DATED 10-10-2012 SUBMITTED IN THE COURSE OF HEARING . ONE OF THE TECHNICAL GROUND WAS THAT THE PENALTY IS LEVIED ON THE BASIS OF THE FINDINGS IN THE ASSESSMENT ORDER AND T HAT NO COGENT MATERIAL IS BROUGHT ON RECORD AND THE RELIAN CE WAS PLACED ON THE SC DECISIONS MENTIONED IN THE CHART U NDER THE HEAD TECHNICAL. 6. NON-CONSIDERATION OF THE JUDGMENT OF THE JURISDI CTIONAL HIGH COURT AND OTHER HIGH COURTS DECISIONS AND NON CONSI DERATION OF THE MATERIAL ON RECORD IS A MISTAKE APPARENT FRO M RECORD [CIT V/S. MITHALAL 158 ITR 755 (MP) AND ACIT V/S. S AURASHTRA KUTCH STOCK EXCHANGE LTD. 262 ITR 146 (GUJ) AFFIRME D BY SC 305 ITR 227]. 7. AND WHEREAS THE HON'BLE TRIBUNAL HELD THE ASSESS EE HAS NOT DISCHARGED THE ONUS WITHOUT GIVING ANY REASONS AND THEREBY REVERSED THE CIT(A) ORDER. THE KIND ATTENTION IS DR AWN TO THE GUJARAT HIGH COURT DECISION IN THE CASE OF RAMESHCH ANDRA M. LUTHRA V/S. ACIT 257 ITR 460 (GUJ). THE CATCH-NOTE IS AS UNDER: M.A. NO. 104/AHD/12 A.Y. 96-97 PAGE 4 'APPEAL TO APPELLATE TRIBUNAL - DUTY OF TRIBUNAL TO CONSIDER ALL FACTS AND GIVE REASONS FOR ITS DECISION TRIBUNAL GIVING FINDING CONTRARY TO DECISION OF CLT(A) WITHOUT GIVING REASO NS - MATTER REMANDED - I.T. ACT - SECTION 254'. THE KIND ATTENTION IS ALSO DRAWN TO THE GUJARAT HIG H COURT DECISION IN THE CASE OF S.J. & S.P. FAMILY TRUST V/ S. DCIT 277 ITR 557 (GUJ). THE GUJARAT HIGH COURT HAS OBSERVED AS UNDER: 'THE PROCEDURE REQUIRED TO BE ADOPTED BY THE TRIBUN AL SO AS TO ENSURE THAT THE ORDER IS AN APPELABLE ORDER, MUS T BE ONE WHICH REFLECTS, NOT_ONLY_ITS_CONCLUSION, BUT THE DECISION MAKING PROCESS ALSO. REASONS, HOWEVER, BRIEF ARE TH E SOUL AND BACKBONE OF AN ORDER. IN THE ABSENCE OF SUCH REASONS, WHICH MUST BE REFLECTED ON A READING OF THE ORDER, IT IS NOT POSSIBLE TO STATE AS TO WHETHER THE TRIBUNAL WAS A WARE AS TO WHAT THE CONTROVERSY WAS BEFORE IT AND WHAT WERE TH E FACTORS PRO AND CON IN RELATION TO THE SAID ISSUE AND THE REASONS WHICH ULTIMATELY _WEIGHED WITH THE TRIBUNAL FOR AR RIVING AT A DECISION .' IF THERE IS A FACTUAL MISTAKE, THE ORDER CAN BE REC TIFIED [CHAMPALAL CHOPRA V/S. STATE OF RAJASTHAN 257 ITR 7 4 (RAJ)]. 8. WHEN PREJUDICE RESULT FROM AN ORDER ATTRIBUTABLE TO TRIBUNAL'S MISTAKE, ERROR OR OMISSION, THEN IT IS DUTY OF TRI BUNAL TO SET IT RIGHT [HONDA SIEL POWER PRODUCTS LTD. V/S. CIT 295 ITR 466 SC]. 9. MISAPPRECIATION OF FACTS AND LAW IS A MISTAKE AP PARENT FROM RECORD. 9.1 NOT CONSIDERING THE CASE LAW CITED AT THE TIME OF HEARING AS PER CHART DATED 10-10-2012 IS A MISTAKE APPARENT FR OM RECORD. M.A. NO. 104/AHD/12 A.Y. 96-97 PAGE 5 9.2 THE FUNDAMENTAL PRINCIPLE BEING, THAT POWER OF RECTIFICATION IS FOR JUSTICE AND FAIR PLAY [ACIT V/S. SAURASHTRA KUT CH STOCK EXCHANGE LTD. 262 ITR 146 -162 (GUJ)]. 9.3 THE CONCLUSION REACHED BY THE TRIBUNAL SHOULD N OT BE COLORED BY ANY IRRELEVANT CONSIDERATIONS OR MATTERS OF PREJ UDICE AND IF THERE ARE ANY CIRCUMSTANCES WHICH REQUIRED TO BE EX PLAINED BY THE ASSESSEE, THE ASSESSEE SHOULD BE GIVEN AN OP PORTUNITY OF DOING SO. ON NO ACCOUNT WHATEVER SHOULD THE TRIB UNAL BASE ITS FINDINGS ON SUSPICIOUS, CONJUNCTURES OR SURMISE S NOR SHOULD IT ACT ON NO EVIDENCE AT ALL OR IMPROPER REJECTIONS OF MATERIAL AND RELEVANT EVIDENCE OR PARTLY ON EVIDENCE AND PAR TLY ON SUSPICIOUS, CONJUNCTURES OR SURMISES- OMAR SALAY MO HAMED SAIT V/S. CIT 37 ITR 151-170 (SC). 9.4 EVERY JUDICIAL / QUASI-JUDICIAL BODY / AUTHORIT Y MUST PASS A REASONED ORDER WHICH SHOULD REFLECT THE APPLICATION OF MIND OF THE CONCERNED AUTHORITY TO THE ISSUES / POINTS RAISED B EFORE IT. THE REQUIREMENT OF RECORDING REASONS IN AN IMPORTANT SA FEGUARD TO ENSURE OBSERVANCE OF THE RULE OF LAW. IT INTRODUCE S CLARITY, CHECKS THE INTRODUCTION OF EXTRANEOUS OR IRRELEVANT CONSID ERATIONS AND MINIMIZES ARBITRARINESS IN THE DECISION MAKING PROC ESS - CIT V/S. PALWAL CO.OP. SUGAR MILLS LTD. 284 ITR 153 (P&H). 10. YOUR HONOURS ARE THEREFORE PRAYED TO MODIFY / R ECALL THE ORDER. 2. LD. COUNSEL FOR THE APPELLANT CONTENDED THAT THE STATEMENT OF SHRI PRASHANT PATEL HAD CONSIDERED PARTIALLY BUT NOT FUL LY. HE RELIED UPON VARIOUS DECISIONS IN M.A. ITSELF AND ARGUED THAT PENALTY IS PARTIALLY CONFIRMED BY THE HONBLE BENCH, IS BAD IN LAW. FROM THE SIDE OF THE REVENUE, IT HAS BEEN CONTENDED THAT THE HONBLE BENCH HAS ALREADY DECIDE D THE CASE AND THERE IS M.A. NO. 104/AHD/12 A.Y. 96-97 PAGE 6 NO MISTAKE APPARENT ON RECORD, WHICH CAN BE RECTIFI ED IN M.A. IF THE ORDER IS RECTIFIED IS TANTAMOUNT TO CHANGE OF OPINION WHICH IS NOT ALLOWED BY THE LAW. 3. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE M.A. AND ALL THE CASE LAWS. IN CASE OF PANNABEN P. DESAI , JEWELLERY WAS SEIZED AND TAXED PROTECTIVE BASIS WHEREAS IN CASE OF LAKHDHIR LALJI , THE ISSUE WAS UNDER VALUATION OF STOCK, ADVANCE TAX PAID BY THE ASSESSE E ON DISCLOSURE, IN CASE OF MITHALAL , THE ISSUE WAS RELATED TO RECTIFICATION OF MISTAKE ON THE BASIS OF EVIDENCE, IN CASE OF SAURASHTRA KUTCH STOCK EXCHANGE LTD. , THE MISTAKE WAS IN ORDER OF THE TRIBUNAL, IN CASE OF CHAMPALAL CHOPRA , THERE WAS A FACTUAL MISTAKE, IN CASE OF HONDA SIEL POWER PRODUCTS LTD. , THERE WAS A MISTAKE OF TRIBUNAL, IN CASE OF OMAR SALAY MOHAMED SAIT , THE ISSUE WAS THAT OPPORTUNITY SHOULD BE GIVEN TO THE ASSESSEE. THE ASSESSEES AR GUMENT DOESNT HAVE ANY BASIS THAT IN A.Y. 1997-98, NO PENALTY U/S. 271(1)( C) WAS IMPOSED AND IN YEAR UNDER CONSIDERATION, PENALTY COULD NOT BE IMPOSED. AS PER QUANTUM APPEAL ORDER, IN PARAGRAPH NO.10, IT HAS CLEARLY HELD BY T HE CO-ORDINATE BENCH THAT DURING THE YEAR FACTUM OF MAKING OF PAYMENT OF CROS S CHEQUE IN SUBSEQUENT YEAR WAS NOT RELEVANT IN VIEW OF THE STATEMENT OF S HRI PRASHANT PATEL WHO HAD SPECIFICALLY STATED THAT AMOUNT PAID TO BY WAY OF C ROSS CHEQUE IN SUBSEQUENT YEARS, WERE WITHDRAWN FROM BANK IN CASH AND RETURNE D BACK TO THE ASSESSEE. IF THE ASSESSEE HAD NOT MADE THE PAYMENT IN CASH DU RING THE F.Y. 96-97 AND HAD NOT RECEIVED BY CASH AGAINST CROSS CHEQUE IN SU BSEQUENT FINANCIAL YEAR 1997-98, THE ONUS WAS ON THE ASSESSEE TO ESTABLISH HIS CLAIM BY COGENT MATERIAL AS WELL AS TO REFUTE THE STATEMENT OF SAID SHRI PRASHANT PATEL, WHICH M.A. NO. 104/AHD/12 A.Y. 96-97 PAGE 7 WAS RECORDED TWICE AND THAT TO U/S. 131 OF THE IT A CT. THEREFORE, THIS CASE IS NOT RECTIFIABLE U/S.254(3) OF THE IT ACT. IF WE AL LOW THE M.A., IT IS TANTAMOUNT TO CHANGE OF OPINION WHICH IS NOT PERMITTED UNDER THE LAW. THUS, WE DISMISS THE M.A. 4. IN THE RESULT, THE ASSESSES M.A. IS DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 09.05.2013 SD/- SD/- ( MUKUL KR. SHRAWAT ) (T.R. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER TRUE COPY S.K.SINHA ! ! ! ! '! '! '! '! / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. '(' ) * / CONCERNED CIT 4. *- / CIT (A) 5. !./ ), ) , 12( / DR, ITAT, AHMEDABAD 6. /45 67 / GUARD FILE. BY ORDER/ , 8/ 1 ': ) , 12( ;