The Income Tax Office, Muktsar V. Narayangarh Hotel & Gardens, Muktsar

MA 1/ASR/2018

AI Insights

The case involves a Miscellaneous Application (MA) filed by the revenue against the order of the ITAT, Amritsar Bench, which had previously allowed the appeal of the assessee, M/s Narayangarh Hotel Garden. The revenue contended that the ITAT erred in treating an amount of Rs. 20 lakh, surrendered by the assessee during a survey, as business income rather than deemed income, despite the assessee's failure to establish the source of this income. The ITAT dismissed the MA, citing the Supreme Court's decision which restricts the scope of section 254(2) to rectifying mistakes apparent from the record.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 115165 (ITAT-AMRITSAR)
• Duration Of Justice: 5 year(s) 9 month(s) 28 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 12-09-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 27-08-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 15-11-2017
• Other Referred Cases: Faqir Mohmed Haji Hasan vs CIT, Pr. CIT Vs M/s Khushi Ram & Sons Foods (P) Ltd., CIT(IT- M.A. 4) Mumbai vs Reliance Telecom Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Set aside
• Section: 133A; 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER ANDSH. ANIKESH BANERJEE, JUDICIAL MEMBER M.A. No. 1/Asr/2018 (In I.T.A.No. 406/Asr/2015) Assessment Year: 2011-12 ITO- Ward -II(2), Muktsar. (Appellant) Vs. M/s Narayangarh Hotel Garden Malout Road, Muktsar. [PAN: AAHFN8249F] (Respondent) Appellant by Smt. Ratinder Kaur, Sr. DR. Respondent by None Date of Hearing 28.08.2023 Date of Pronouncement 13.09.2023 ORDER Per Anikesh Banerjee, JM: This instant Miscellaneous Application (in brevity the MA) was filed by the revenue against the order of ITAT, Amritsar Bench in ITA No.406/Asr/2015, order pronounced on 18.09.2017for A.Y. 2011-12. 2. When the Miscellaneous Application was called for hearing, none was present on behalf of the assessee nor any adjournment petition was filed. So, the appeal was taken on ex parte qua for the assessee and dispose the matter after hearing the ld. DR. M.A. No. 1/Asr/2018 (In I.T.A.No. 406/Asr/2015) 2 3. The ld. DR vehemently argued and relied on the submission of the revenue authorities. The relevant para of the revenue is extracted as below: “3. The Hon'ble ITAT has erred in allowing the appeal of the assessee by following the decision of Amritsar Bench of the Tribunal in the case of J.B. Resorts, Fazilka in view of the following facts (i) The assessee surrendered the amount of Rs. 20 lakh as additional income during the course of survey u/s 133 A of the Act on account of certain discrepancies. However, the assessee failed to disclose the source of the amount of Rs. 20 lakh offered as additional income and as such, the AO rightly assessed the amount of Rs. 20 lakh as deemed income by relying upon the judgment Hon'ble Gujrat High Court in the case of Faqir Mohmed Haji Hasan vs CIT, 247 ITR 290. (ii) In the case of Pr. CIT Vs M/s Khushi Ram & Sons Foods (P) Ltd., ITA No., 126 of 2015 dated 21.07.2016, the Hon'ble Punjab & Haryana Court has held as under "It is not necessary that the surrendered amount is from business income. It could be on account of any other transaction legal or otherwise. Merely because an assessee carries on certain business, it does not necessarily follow that the amounts surrendered by him are on account of its business transactions. There is no presumption that absent anything else, M.A. No. 1/Asr/2018 (In I.T.A.No. 406/Asr/2015) 3 an amount surrendered by an assessee is his business income. It is for the assessee to establish the source of such surrendered amount." (iii) In view of the judgment of the Hon'ble High Court, the ITAT has erred in holding that the amount of Rs. 20 lakh offered by the assessee as additional income during the course of survey proceedings u/s 133A was to be considered as assessee's as business income and not as deemed income even though the assessee failed to established the source of such surrendered income. 4. In view of the observations of the Hon'ble High Court in its order in ITA No. 126 of 2015 dated 21.07.2016 as noted above, a mistake of law apparent from record within the meaning of section 254(2) of the Income Tax Act, 1961 has crept in the order of the ITAT in ITA No. 406(Asr)/2015 dated 18.09.2017. Accordingly, it is submitted that the order of Hon'ble IT AT in ITANo.406(Asr)/2015 dated 18.09.2017 may kindly be rectified. The authorization to file Miscellaneous Application before the Hon'ble ITAT, Amritsar Bench, Amrisar's in ITA No. 406(Asr)/2015 dated 18.09.2017 for the A.Y. 2011-12 is submitted herewith. The copies of assessment order and order of Ld. CIT(A) dated 11.06.2015 are also submitted herewith.” 4. We heard the submission of the ld. DR and relied on the documents available in the record. We respectfully relied on the order of Apex Court, CIT(IT- M.A. No. 1/Asr/2018 (In I.T.A.No. 406/Asr/2015) 4 4) Mumbai vs Reliance Telecom Ltd. 133 taxmann.com 41 (SC). The observation is extracted as below: - “4. In the present case, a detailed order was passed by the ITAT when it passed an order on 6-9-2013, by which the ITAT held in favour of the Revenue. Therefore, the said order could not have been recalled by the Appellate Tribunal in exercise of powers under section 254(2) of the Act. If the Assessee was of the opinion that the order passed by the ITAT was erroneous, either on facts or in law, in that case, the only remedy available to the Assessee was to prefer the appeal before the High Court, which as such was already filed by the Assessee before the High Court, which the Assessee withdrew after the order passed by the ITAT dated 18- 11-2016 recalling its earlier order dated 6-9-2013. Therefore, as such, the order passed by the ITAT recalling its earlier order dated 6-9-2013 which has been passed in exercise of powers under section 254(2) of the Act is beyond the scope and ambit of the powers of the Appellate Tribunal conferred under section 254(2) of the Act. Therefore, the order passed by the ITAT dated 18-11-2016 recalling its earlier order dated 6-9-2013 is unsustainable, which ought to have been set aside by the High Court. 5. From the impugned judgment and order passed by the High Court, it appears that the High Court has dismissed the writ petitions by observing that (i) the Revenue itself had in detail gone into merits of the case before the ITAT and the parties filed detailed submissions based on which the ITAT passed its order recalling its earlier order; (ii) the Revenue had not contended that the ITAT had become functus officio after delivering its original order and that if it had to relook/revisit the order, it must be for limited purpose as permitted by section 254(2) of the Act; and (iii) that the merits might have been decided erroneously but ITAT had the jurisdiction and within its powers it may pass an erroneous order and that such objections had not been raised before ITAT. 6. None of the aforesaid grounds are tenable in law. Merely because the Revenue might have in detail gone into the merits of the case before the ITAT and merely because the parties might have filed detailed submissions, it does not confer jurisdiction upon the ITAT to pass the order de hors section 254(2) of the Act. As observed hereinabove, the powers under section 254(2) of the Act are only to correct and/or rectify the mistake apparent from the record and not beyond that. Even the observations that the merits might have been decided erroneously and the ITAT had jurisdiction and within its powers it may pass an order recalling its earlier order which is an erroneous order, cannot be accepted. As observed hereinabove, if the order passed by the ITAT was erroneous on merits, in that case, the remedy available to the Assessee was to prefer an appeal before the High Court, which in fact was M.A. No. 1/Asr/2018 (In I.T.A.No. 406/Asr/2015) 5 filed by the Assessee before the High Court, but later on the Assessee withdrew the same in the instant case.” The order of ITAT-Amritsar Bench is a speaking order. The Bench has explained the issue properlyin the order. The ld. DR was unable to indicate any error apparent from the record in the said order of the ITAT-Amritsar bench. We respectfully relied on the order of Reliance Telecom Ltd, (supra) and the MA filed by the revenue is dismissed. 5. In the result, the Miscellaneous Application of the revenue bearing M.A. No. 01/Asr/2018 is dismissed. Order pronounced in the open court on 13.09.2023 Sd/- Sd/- (Dr. M. L. Meena) (ANIKESH BANERJEE ) Accountant Member Judicial Member Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By Order