VGP Video Vision of India, CHENNAI V. ACIT, CHENNAI

MA 102/CHNY/2017

• Counselvise Citation: [2017] 124 COUNSELVISE.COM (IT) 5670 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s) 21 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 19-06-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 28-04-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R CLEMENT RAMESH KUMAR
• Assessee Lawyers: S SRIDHAR
• Keywords: Revision of order; Rectification of order; Reasonable cause
• Section: 153A; 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI , ! ' ! # . $% , &'( BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU R.L. REDDY, JUDICIAL MEMBER M.P.NOS.102, 103, 104, 105, 106 & 107/MDS/2017 ( ./I.T.A. NOS.463 TO 468/MDS/2016 ) & ) *) / ASSESSMENT YEARS : 2003-04 TO 2008-09. M/S. VGP VIDEO VISION OF INDIA, NO.6, DHARMARAJAKOIL STREET, SAIDAPET, CHENNAI 600 015. [PAN AAAFV 4302J] VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE III(4) CHENNAI. (PETITIONER) (RESPONDENT) +, - . /APPELLANT BY : SHRI. S. SRIDHAR. ADVOCATE /0+,-. /RESPONDENT BY : SHRI.R.CLEMENT RAMESH KUMAR, JC IT. ! -1 /DATE OF HEARING : 09.06.2017 23* -1 /DATE OF PRONOUNCEMENT : 19.06.2017 / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER : BY THESE MISCELLANEOUS PETITION ASSESSEE SEEKS RECT IFICATION/ RECALL THE ORDER OF THE TRIBUNAL IN ITA NOS.463 TO 468/MDS /2016, DATED 15.03.2017 FOR ASSESSMENT YEARS 2003-2004 TO 2008-2 009. 2 M.P. N OS.102 TO 107/MDS/2017 2. LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT DEPART MENT CAME IN APPEAL BEFORE THIS TRIBUNAL IN ITA NOS. 463 TO 468 /MDS/2016 (SUPRA) CHALLENGING THE COMMON ORDER OF LD. COMMISSIONER O F INCOME TAX (APPEALS)-18, CHENNAI, DATED 30.11.2015 FOR THE ASS ESSMENT YEARS 2003-04 TO 2008-2009 WHEREIN THE LD. COMMISSIONER OF INCOME TAX (APPEALS) QUASHED THE ASSESSMENT ORDERS BY PLACING RELIANCE ON THE ORDER OF THE SPECIAL BENCH IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD VS. DCIT (2012) 137 ITD 287 (MUM) (SB) . THE TRIBUNAL WHILE ADJUDICATING THE ABOVE APPEALS REMITTED THE ISSUE I N DISPUTE TO THE FILE OF THE LD. ASSESSING OFFICER WITH THE FOLLOWING OBSERV ATIONS. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. ADMITTEDLY, AGAINST THE ORDER PASSED U/S .263 THE ASSESSEE CARRIED THE APPEALS BEFORE THE TRIBUNAL IN ITA NOS.1724 TO 1729/13 VIDE ORDER DATED 29TH MAY, 2015 WHEREIN THE TRIBUNAL CONFIRMED THE ORDER OF CIT. THE AO PASSED HIS ASSESSMENT ORDER IN ALL THESE ASSESSMENT YEARS ON 0 7.03.2014 AND HE HAD NO OCCASION TO GO THROUGH THE FINDINGS O F THE TRIBUNAL. AT ALL FAIRNESS, WHEN THE ASSESSMENT ORD ERS ARE CHALLENGED BEFORE THE LD.CIT(A) BY THE ASSESSEE, HE SHOULD HAVE REMITTED BACK TO THE FILE OF AO FOR FRESH CONSIDERA TION. THE LD.CIT(A) AT THE RELEVANT POINT OF TIME HAVE NO POW ER TO REMAND THE CASE BACK TO THE FILE OF LD. ASSESSING OFFICER, HE DECIDED THE ISSUE HIMSELF. 8. WE FIND FORCE IN THE ARGUMENT OF THE LD.D.R. AS RIGHTLY POINTED OUT BY THE LD.D.R, THE LD.CIT(A) STRAIGHTAW AY PLACED RELIANCE IN THE DECISION OF SPECIAL BENCH OF MUMBA I IN THE CASE 3 M.P. N OS.102 TO 107/MDS/2017 OF M/S.ALL CARGO GLOBAL LOGISTICS LTD. VS. DCIT (SU PRA), THOUGH THERE WERE SEIZED MATERIALS FOUND DURING THE COURSE OF SEARCH. THE ORDER IS CRYPTIC AND HE HAS NEVER DISCUSSED ANY RELEVANCE OF THE SEIZED MATERIALS FOUND DURING THE COURSE OF SEA RCH TO FRAMING THE ASSESSMENT. IN OUR OPINION, IT IS APPROPRIATE TO REMIT THE ENTIRE ISSUE IN DISPUTE TO THE FILE OF AO TO PASS T HE ORDERS AFTER GOING THROUGH THE ORDER OF THE TRIBUNAL IN ITA NOS. 1724 TO 1729/MDS./2013 IN ASSESSEE'S OWN CASE (SUPRA) AND A LSO WE MAKE IT CLEAR THAT WHILE PASSING THE CONSEQUENTIAL ORDER, THE AO IS DIRECTED TO CONSIDER THE JUDGMENET OF KERALA HI GH COURT IN THE CASE OF DR.P.SASIKUMAR IN [2016] 387 ITR 8(KERALA) WHEREIN HELD THAT: ON A PLAIN READING OF SECTION 153A, IT IS CLEAR THA T ONCE SEARCH IS INITIATED UNDER SECTION 132 OR A REQUISITION IS MADE UNDER SECTION 132A AFTER THE 31 ST DAY OF MAY 2003, THE ASSESSING OFFICER IS EMPOWERED TO ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FURNISH RETURN OF INCOME IN RESPECT OF EACH ASSESSMENT YEAR FOLLOWING WITHIN SIX ASSESSMENT YEARS REFERRED TO IN CLAUSE (B). IT FURTHER TREATS THE RETURNS SO FILED AS IF SUCH RETURN WERE A RETURN REQUIRED TO BE FURNISHED UNDER SECTION 139. SO THAT ON A READING OF SECTION 153A(1) IT IS CATEGORICAL A ND CLEAR THAT ONCE A NOTICE IS ISSUED AND THE ASSESSIN G OFFICER HAS REQUIRED THE ASSESSEE TO FURNISH RETURN FOR A PERIOD OF SIX ASSESSMENT YEARS AS CONTEMPLATE D UNDER CLAUSE (B) THEN THE ASSESSEE HAS TO FURNISH A LL DETAILS WITH RESPECT TO EACH ASSESSMENT YEAR SINCE THE SAME IS TREATED AS A RETURN FILED UNDER SECTION 139. IT IS TRUE THAT AS PER THE FIRST PROVISO, THE ASSESSING OFFICER IS BOUND TO ASSESS OR REASSESS TH E TOTAL INCOME WITH RESPECT TO EACH ASSESSMENT YEAR FOLLOWING THE SIX ASSESSMENT YEARS SPECIFIED IN SUB - CLAUSES (A) AND (B) OF SECTION 153A. HOWEVER, EVEN IF NO DOCUMENTS ARE UNEARTHED OR ANY STATEMENT MADE BY THE ASSESSEE DURING THE COURSE OF SEARCH UNDER SECTION 132 AND NO MATERIALS ARE RECEIVED FOR THE AFORE SPECIFIED PERIOD OF SIX YEARS, THE ASSESSEE I S BOUND TO FILE A RETURN, IS THE SCHEME OF THE PRO VISION. EVEN THOUGH THE SECOND PROVISO TO SECTION 153A SPEAKS OF ABATEMENT OF ASSESSMENT OR 4 M.P. N OS.102 TO 107/MDS/2017 REASSESSMENT PENDING ON THE DATE OF THE INITIATION OF SEARCH WITHIN THE PERIOD OF SIX ASSESSMENT YEARS SPECIFIED UNDER THE PROVISION THAT WILL ALSO NOT ABSOLVE THE ASSESSEE FROM HIS LIABILITY TO SUBMIT RETURNS AS PROVIDED UNDER SECTION 153A(1)(A). THIS BEING THE SCHEME OF THE PROVISIONS OF THE ACT, THE APPELLATE TRIBUNAL OUGHT TO HAVE CONSIDERED THE ISSUE WITH SPECIFIC REFERENCE TO THE FACTS INVOLVED IN THE CASE AND AS PROVIDED UNDER SECTION 153A.' IN THE LIGHT OF THE JUDGMENT OF THIS COURT, THE AFO RESAID CONCLUSION OF THE TRIBUNAL CANNOT BE SUSTAINED. ACCORDING TO THE LD. AUTHORISED REPRESENTATIVE, THE FACT OF THE DIRECTIONS IN THE REVISION ORDERS PASSED IN SETTING ASIDE THE ORIGINAL SEARCH ASSESSMENTS WAS MODIFIED IN THE EARLIER COMM ON ORDER OF THE BENCH DATED 29.05.2015 IS NOTICED BY THE BENCH WHIL E CONSIDERING THE REVENUE'S APPEALS IN THE SECOND ROUND EMANATED FROM THE EFFECT GIVING ORDERS IN PARA 7 OF THE IMPUGNED ORDER. THE FACT OF THE MODIFICATION OF THE DIRECTION BY THE BENCH IN THE EARLIER COMMON OR DER DATED 29.04.2015 BY RESTRICTING THE SCOPE OF THE ADDITION S BASED ON SEIZED MATERIALS IS ALSO NOT DISPUTED INASMUCH AS THE APPE LLATE TRIBUNAL IN THE COMMON ORDER DATED 29.05.2015 HAD H ELD AS FOLLOWS: '..... WE ALSO OBSERVE THAT THE ASSESSING OFFICER WHILE FRAMING THE ASSESSMENT AFRESH SHALL TAKE INTO CONSIDERATION THE PRINCIPLES LAID DOWN BY THE TRIBUNAL IN THE CASES OF ALL CARGO GLOBAL LOGISTICS LTD. VS. DCIT (SB) (SUPRA) AND M/S RM. 5 M.P. N OS.102 TO 107/MDS/2017 K.VISWANATHAPILLAI & SONS (SUPRA)' HOWEVER, IN THE EFFECT GIVING ORDERS THE ASSESSING OFFICER MADE ADDITIONS WITHOUT REFERRING TO THE SEIZED MATERIALS ON THE PRESUMPTION OF THE ENTIRE ASSESSMENT PROCEEDINGS WE RE OPENED UP BEFORE HIM IN VIEW OF THE REVISION ORDERS PASSED BY THE CIT WHICH NO DOUBT GOT MODIFIED LATER AS OBSERVED IN PARA 7 O F THE IMPUGNED ORDER. EVEN THE POWER OF THE FIRST APPELLATE AUTHOR ITY WAS RESTRICTED IN THE PRESENT CASE ESPECIALLY HE WAS SITTING IN JU DGMENT OVER THE EFFECT GIVING ORDERS PASSED AND CHALLENGED IN APPEA L BEFORE HIM. IN VIEW OF THE REMOVAL OF THE POWER OF SET ASIDE WHICH WAS VESTED EARLIER WITH THE FIRST APPELLATE AUTHORITY UNDER TH E SCHEME OF THE ACT, THE FIRST APPELLATE AUTHORITY WHILE TAKING NOT E OF THE SUBSEQUENT DECISION OF THE APPELLATE TRIBUNAL DATED 29.05.2015 HAD CALLED FOR A REMAND REPORT AND THE SAID FACT IS ALS O NOT DISPUTED IN THE IMPUGNED ORDER. IN PARA 8, THE BENCH CONCLUDED THAT THE FIRST APPELLATE AUTHORITY'S DECISION IN STRAIGHT AWAY PLA CING RELIANCE ON THE DECISION OF ALL CARGO GLOBAL LOGISTICS LTD. FOR DELETING THE ADDITIONS MADE WITHOUT SEIZED MATERIALS WAS CRYPTIC AND NEVER DISCUSSED ANY RELEVANCE OF SEIZED MATERIALS. THE S AID FINDINGS OF THE BENCH ARE COMPLETELY MISDIRECTED AND NOT IN TUN E WITH THE FACTS AVAILABLE ON RECORD. IN PARA 6 OF THE IMPUGNED ORDE R, THE BENCH NOTICED THE FACT OF THE FIRST APPELLATE AUTHORITY O BTAINING THE 6 M.P. N OS.102 TO 107/MDS/2017 REMAND REPORT AS WELL AS AFTER ASCERTAINING THE FAC T FROM THE ASSESSING OFFICER ON THE NON AVAILABILITY OF SEIZED MATERIALS TO JUSTIFY THE ADDITIONS MADE WHICH WOULD GO CONTRARY TO THE F ACTUAL FINDINGS IN PARA 8. THE FUNCTIONS OF THE ASSESSING OFFICER A S MANDATED BY THE BENCH IN THE FIRST ORDER WERE FOLLOWED SCRUPULOUSLY BY THE FIRST APPELLATE AUTHORITY AND AFTER ENSURING THE NON AVAI LABILITY OF SEIZED MATERIALS, THE ADDITIONS WERE KNOCKED OFF. THE SAID COMMON ORDER WAS WRONGLY CHALLENGED BY THE REVENUE WITHOUT CHALL ENGING THE ORDER OF THE BENCH PASSED IN THE FIRST ROUND AND H AVING NOT CHALLENGED THE ORDER OF THE BENCH IN THE FIRST ROUN D, THE PETITIONER/RESPONDENT HUMBLY SUBMITS THAT THE R EVENUE HAS MISSED THE OPPORTUNITY SO AS TO APPLY THE PRINCIPLE S LAID DOWN IN THE DECISION OF KERALA HIGH COURT REFERRED TO BY THE BE NCH. UNDER THESE CIRCUMSTANCES, IT WAS SUBMITTED THAT THE ORDER D ATED 15.03.2017 MAY BE RECALLED SO TO CONSIDER THE IMPACT OF THE R EMAND REPORT OBTAINED BY THE FIRST APPELLATE AUTHORITY IN PASSIN G HIS COMMON APPELLATE ORDER DATED 30.11.2015 AS PER THE DIRECTI ONS OF THIS HON'BLE BENCH'S FIRST ORDER DATED 29.05.2015 AND TH US RENDER JUSTICE. 7 M.P. N OS.102 TO 107/MDS/2017 3. PER CONTRA, LD. DEPARTMENTAL REPRESENTATIVE SUBMIT TED THAT THERE IS NO MISTAKE APPARENT ON RECORD TO RECALL OR RECTIFY THE EARLIER ORDER OF THE TRIBUNAL. HE RELIED ON THE EARLIER ORDER OF THE TRI BUNAL. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL ON RECORD. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE PAR TIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND T HAT THE GRIEVANCE OF THE ASSESSEE IN THESE MISCELLANEOUS PETITIONS ARE M ISCONCEIVED. THE TRIBUNAL CONSIDERED THE ENTIRE FACTS AND THE CIRCUM STANCES OF THE CASE AND CAME TO THE CONCLUSION THAT THE ASSESSMENT TO B E REFRAMED BY LD. ASSESSING OFFICER ON THE REASON THAT LD. ASSESSING OFFICER HAD NO OCCASION OF CONSIDERING THE TRIBUNAL ORDER ON EARL IER OCCASION. THE TRIBUNAL HAD GIVEN A CATEGORICAL FINDING IN ITS ORD ER THAT THE LD. ASSESSING OFFICER HAS TO RELOOK INTO THE MATTER IN THE LIGHT OF JUDGEMENT CITED THEREIN. 5. NOW THE ASSESSEE WANTS TO REVIEW THE ORDER OF THE TRIBUNAL IN THE INSTANT CASE CITING CERTAIN DECISIONS OF THE TRIBUN AL. 6. IT IS WELL-SETTLED THAT STATUTORY AUTHORITY CANNOT EXERCISE POWER OF REVIEW UNLESS SUCH POWER IS EXPRESSLY CONFERRED. TH ERE IS NO EXPRESS POWER OF REVIEW CONFERRED ON THIS TRIBUNAL. EVEN OT HERWISE, THE SCOPE OF REVIEW DOES NOT EXTENT TO RE HEARING OF THE CASE ON MERIT. IT IS HELD IN THE 8 M.P. N OS.102 TO 107/MDS/2017 CASE OF CIT V. PEARL WOOLEN MILLS [2011] 330 ITR 164/[2010] 191 TAXMAN 286 (PUNJ. & HAR .) 'HELD, THAT THE TRIBUNAL COULD NOT RE-ADJUDICATE TH E MATTER UNDER SECTION 254(2). IT IS WELL SETTLED THAT A STA TUTORY AUTHORITY CANNOT EXERCISE POWER OF REVIEW UNLESS SU CH POWER IS EXPRESSLY CONFERRED. THERE WAS NO EXPRESS POWER OF REVIEW CONFERRED ON THE TRIBUNAL. EVEN OTHERWISE , THE SCOPE OF REVIEW DID NOT EXTENT TO REHEARING A CASE ON THE MERITS. NEITHER BY INVOKING INHERENT POWER NOR THE PRINCIPLE OF MISTAKE OF COURT NOT PREJUDICING A LITIGANT NOR BY INVOLVING DOCTRINE OF INCIDENTAL POWER, COULD THE TRIBUNAL RE VERSE A DECISION ON THE MERITS. THE TRIBUNAL WAS NOT JUSTIF IED IN RECALLING ITS PREVIOUS FINDING RESTORING THE ADDITI ON, MORE SO WHEN AN APPLICATION FOR THE SAME RELIEF HAD BEEN EA RLIER DISMISSED.' 7. THE SCOPE AND AMBIT OF APPLICATION OF SECTION 254(2 ) IS VERY LIMITED. THE SAME IS RESTRICTED TO RECTIFICATION OF MISTAKES APPARENT FROM THE RECORD. WE SHALL FIRST DEAL WITH THE QUESTION OF TH E POWER OF THE TRIBUNAL TO RECALL AN ORDER IN ITS ENTIRETY. RECALLING THE ENTI RE ORDER OBVIOUSLY WOULD MEAN PASSING OF A FRESH ORDER. THAT DOES NOT APPEAR TO BE THE LEGISLATIVE INTENT. THE ORDER PASSED BY THE TRIBUNAL UNDER SECT ION 254(1) IS THE EFFECTIVE ORDER SO FAR AS THE APPEAL IS CONCERNED. ANY ORDER PASSED UNDER SECTION 254(2) EITHER ALLOWING THE AMENDMENT OR REF USING TO AMEND GETS MERGED WITH THE ORIGINAL ORDER PASSED. THE ORDER AS AMENDED OR REMAINING UN-AMENDED IS THE EFFECTIVE ORDER FOR ALL PRACTICAL PURPOSE. AN ORDER UNDER SECTION 254(2) DOES NOT HAVE EXISTENCE DE HORS THE ORDER UNDER SECTION 254(1). RE-CALLING OF THE ORDER IS NOT PERMISSIBLE UNDER SECTION 254(2). RECALLING OF AN ORDER AUTOMATICALLY NECESSITATES RE HEARING AND RE- 9 M.P. N OS.102 TO 107/MDS/2017 ADJUDICATION OF THE ENTIRE SUBJECT-MATTER OF APPEAL . THE DISPUTE NO LONGER REMAINS RESTRICTED TO ANY MISTAKE SOUGHT TO BE RECT IFIED. POWER TO RECALL AN ORDER IS PRESCRIBED IN TERMS OF RULE 24 OF THE ITAT RULES, 1963, AND THAT TOO ONLY IN CASE WHERE THE ASSESSEE SHOWS THAT IT H AD A REASONABLE CAUSE FOR BEING ABSENT AT A TIME WHEN THE APPEAL WAS TAKE N UP AND DECIDED EX PARTE. JUDGED IN THE ABOVE BACKGROUND THE ORDER PAS SED BY THE TRIBUNAL IS INDEFENSIBLE. 8. THE WORDS USED IN SECTION 254(2) ARE 'SHALL MAKE S UCH AMENDMENT, IF THE MISTAKE IS BROUGHT TO ITS NOTICE'. CLEARLY, IF THERE IS A MISTAKE, THEN AN AMENDMENT IS REQUIRED TO BE CARRIED OUT IN THE ORIG INAL ORDER TO CORRECT THAT PARTICULAR MISTAKE. THE PROVISION DOES NOT IND ICATE THAT THE TRIBUNAL CAN RECALL THE ENTIRE ORDER AND PASS A FRESH DECISI ON. THAT WOULD AMOUNT TO A REVIEW OF THE ENTIRE ORDER AND THAT IS NOT PERMIS SIBLE UNDER THE I T ACT. THE POWER TO RECTIFY A MISTAKE UNDER SECTION 254(2) CANNOT BE USED FOR RECALLING THE ENTIRE ORDER. NO POWER OF REVIEW HAS BEEN GIVEN TO THE TRIBUNAL UNDER THE I T ACT. THUS, WHAT IT COULD NOT DO DIRECTLY COULD NOT BE ALLOWED TO BE DONE INDIRECTLY. 9. IN THE CASE OF CIT V. HINDUSTAN COCA COLA BEVERAGES (P.) LTD. [ 2007] 293 ITR 163 , THEIR LORDSHIPS WHILE CONSIDERING THE POWERS OF T HE TRIBUNAL UNDER SECTION 254(2) OF THE IT ACT, 1961 OBSERVED A S UNDER: ' UNDER SECTION 254(2) OF THE IT ACT, 1961, THE TRIBU NAL HAS THE POWER TO RECTIFY MISTAKES IN ITS ORDER. HOW EVER, 10 M.P. NOS.102 TO 107/MDS/2017 IT IS PLAIN THAT THE POWER TO RECTIFY A MISTAKE IS NOT EQUIVALENT TO A POWER TO REVIEW OR RECALL THE ORDER SOUGHT TO BE RECTIFIED. RECTIFICATION IS A SPECIES OF THE LARGER CONCEPT OF REVIEW. ALTHOUGH IT IS POSSIBLE T HAT THE PRE-REQUISITE FOR EXERCISE OF EITHER POWER MAY BE S IMILAR) A MISTAKE APPARENT FROM THE RECORD), BY ITS VERY NA TURE THE POWER TO RECTIFY A MISTAKE CANNOT RESULT IN THE RECALL AND REVIEW OF THE ORDER SOUGHT TO BE RECTIFIED.' 10. IN VIEW OF THE ABOVE, WE ARE OF THE CONSIDERED OPIN ION THAT THE MISCELLANEOUS APPLICATIONS FILED BY THE ASSESSEE AR E MIS-CONCEIVED AND ACCORDINGLY THE SAME ARE DISMISSED. 11. IN THE RESULT, THE MISCELLANEOUS PETITION FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED ON MONDAY, THE 19 TH DAY OF JUNE, 2017, AT CHENNAI. SD/- SD/- ( ! ' ! # . $% ) DUVVURU R.L. REDDY) & /JUDICIAL MEMBER ( ) (CHANDRA POOJARI) /ACCOUNTANT MEMBER /CHENNAI, H /DATED, THE 19TH JUNE, 2017. KV COPY TO: PETITIONER/RESPONDENT/CIT(A)/CIT/DR 11 M.P. NOS.102 TO 107/MDS/2017