M/s.Esplanade Developers Private Limited, Bangalore V. Assistant Commissioner of Income-Tax, Circle-2(1), Bangalore

MA 11/BANG/2018

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 6168 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s) 5 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 21-02-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 16-01-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Rectification of order
• Section: 154

Judgement Text

MP.11/BANG/2018 PAGE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BENGALURU BENCH 'C', BENGALURU BEFORE SHRI. A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI. LALIET KUMAR, JUDICIAL MEMBER MISCELLANEOUS PETITION NO.11/BANG/2018 (IN I.T.A NO.998/BANG/2017 (ASSESSMENT YEAR : 2011-12) M/S. ESPLANADE DEVELOPERS P. LTD, 2, FRONTLINE GRANDEUR, 14, WALTON ROAD, BENGALURU 560 001 .. APPLICANT PAN : AAFCM0561L V. ASST. COMMISSIONER OF INCOME-TAX, CIRCLE -2(1), BENGALURU .. RESPONDENT ASSESSEE BY : SHRI. AJIT KUMAR JAIN, CA REVENUE BY : DR. P. V PRADEEP KUMAR, ACIT HEARD ON : 09.02.2018 PRONOUNCED ON : 21 .02.2018 O R D E R PER LALIET KUMAR, JUDICIAL MEMBER : THIS MISCELLANEOUS PETITION IS FILED BY THE ASSESS EE SEEKING RECTIFICATION OF CERTAIN MISTAKES THAT HAVE CREPT I N THE ORDER OF THE TRIBUNAL DT.13.09.2017, FOR THE ASSESSMENT YEAR 201 1-12. THE FOLLOWING ARE THE MISTAKES SOUGHT TO BE RECTIFIED B Y THE ASSESSEE : MP.11/BANG/2018 PAGE - 2 I. OBSERVATIONS THAT ACTUAL USE OF LOAN BY THE APPE LLANT AFTER BORROWING IT IS NOT VERIFIED BY THE LOWER TAX AUTHORITIES. II. OBSERVATIONS THAT LOAN WAS TAKEN FROM SISTER CO NCERN AS A STOP-GAP ARRANGEMENT TILL THE LOAN IS DISBURSED B Y THE FINANCIAL INSTITUTION / BANK IS NOT VERIFIED BY THE LOWER TAX AUTHORITIES. III.APPLICABILITY OF JURISDICTIONAL HIGH COURT JUDG MENT OF COMFUND FINANCIAL SERVICES HAS NOT BEEN APPRECIATED WHILE PASSING THE ORDER. ON THE BASIS OF THE ABOVE, THE ASSESSEE HAS PRAYED TO A. RECTIFY THE MISTAKES APPARENT ON RECORD OF ORDER DT.13.09.2017 AND GRANT THE RELIEF PRAYED FOR IN TH E APPEAL BY PASSING APPROPRIATE ORDER B. IN THE ALTERNATIVE THE ORDER DATED 13.09.2017 MA Y BE SET ASIDE ON THE SAID ISSUES AND THE APPEAL MAY BE DECI DED AFRESH BY GIVING REASONABLE OPPORTUNITY. C. ANY OTHER RELIEF, WHICH THE HONBLE BENCH DEEMS FIT AND PROPER CONSIDERING THE FACTS OF THE APPLICANT. 03. THE LD. DR VEHEMENTLY OPPOSED THE RECTIFICATION OF THE ORDER. 04. WE HAVE HEARD THE RIVAL CONTENTION AND HAVE GON E THROUGH THE ORDER OF THE TRIBUNAL DT.13.09.2017. BEFORE ADVERT ING TO THE ISSUES RAISED BY THE ASSESSEE, IT IS REQUIRED TO HAVE AN U NDERSTANDING WHAT CAN BE A SUBJECT OF RECTIFICATION U/S.254(2) OF THE ACT. VARIOUS HIGH COURTS AS WELL AS APEX COURT HAVE HELD CLEARLY SET OUT THROUGH VARIOUS JUDGMENTS WHAT IS A MISTAKE APPARENT ON REC ORD WHICH CAN BE RECTIFIED. THIS IS SUCCINCTLY SUMMARISED BY HON BLE MADRAS MP.11/BANG/2018 PAGE - 3 HIGH COURT IN THE CASE OF EXPRESS NEWSPAPERS V. DCI T [(2010) 320 ITR 12]. PERTINENT PARTS OF WHICH ARE REPRODUCED H EREUNDER : 14. THE SCOPE AND AMPLITUDE OF S. 254(2) AND THE A NALOGOUS PROVISION S. 154 OF THE ACT HAVE BEEN CONSIDERED BY CATENA OF DECISIONS OF THE APEX COURT AND OTHER HIGH COURTS. THE UNIFORM OPINION OF THE COURTS OF SUPERIOR JURISDICT ION IS THAT A PATENT, MANIFEST AND SELF-EVIDENT ERROR WHICH DOES NOT REQUIRE ELABORATE DISCUSSION OF EVIDENCE OR ARGUMENT TO EST ABLISH IT, CAN BE SAID TO BE AN ERROR APPARENT ON THE FACE OF THE RECORD AND CAN BE CORRECTED UNDER S. 254(2). AN ERROR CANN OT BE SAID TO BE APPARENT ON THE FACE OF THE RECORD IF ONE HAS TO TRAVEL BEYOND THE RECORD TO SEE WHETHER THE JUDGMENT IS CO RRECT OR NOT. AN ERROR APPARENT ON THE RECORD MEANS AN ERROR WHICH STRIKES ONE ON MERE LOOKING AND DOES NOT NEED A LON G DRAWN OUT PROCESS OF REASONING ON POINTS ON WHICH THERE M AY BE CONCEIVABLY TWO OPINIONS. THE ERROR SHOULD NOT REQU IRE ANY EXTRANEOUS MATTER TO SHOW ITS INCORRECTNESS. TO PUT IT DIFFERENTLY, IT SHOULD BE SO MANIFEST AND CLEAR THA T NO COURT WOULD PERMIT IT TO REMAIN ON RECORD. IF THE VIEW AC CEPTED BY THE COURT IN THE ORIGINAL JUDGMENT IS ONE OF POSSIB LE VIEWS, THE CASE CANNOT BE SAID TO BE COVERED BY AN ERROR APPAR ENT ON THE FACE OF THE RECORD. SEC. 254(2) SPECIFICALLY EMPOWE RS THE TRIBUNAL TO AMEND AT ANY TIME WITHIN FOUR YEARS FRO M THE DATE OF AN ORDER, ANY ORDER PASSED BY IT UNDER S. 254(1) WITH A VIEW TO RECTIFY ANY MISTAKE APPARENT FROM THE RECORD EIT HER SUO MOTU OR ON AN APPLICATION. IN ORDER TO ATTRACT THE APPLICATION OF S. 254(2), THE MISTAKE MUST EXIST AND THE SAME M UST BE APPARENT FROM THE RECORD. THE EXPRESS ION 'MISTAKE APPARENT FROM THE RECORD' CONTAINED IN SS. 154 AND 254(2) HA S WIDER CONTENT THAN THE EXPRESS ION 'ERROR APPARENT ON THE FACE OF THE RECORD' OCCURRING IN ORDER 47 R. 1 OF CPC. THE REST RICTIONS ON THE POWER OF REVIEW UNDER ORDER 47 R. 1 OF CPC DO N OT HOLD GOOD IN THE CASES OF SS. 254(2) AND 154 OF THE ACT. SEC. 254(2) DOES NOT CONFER POWER ON THE TRIBUNAL TO REVIEW ITS EARLIER ORDER. UNDER THE GARB OF RECTIFICATION OF MISTAKE I T IS NOT POSSIBLE FOR A PARTY TO TAKE FURTHER CHANCE OF RE-A RGUING THE APPEAL ALREADY DECIDED. WHAT CAN BE RECTIFIED UNDER S. 254(2) IS A MISTAKE WHICH IS APPARENT AND PATENT. THE MIST AKE HAS TO BE SUCH FOR WHICH NO ELABORATE REASONS OR ENQUIRY I S NECESSARY. WHERE TWO OPINIONS ARE POSSIBLE THEN IT CANNOT BE SAID TO BE A MISTAKE APPARENT ON THE RECORD. WHEN P REJUDICE MP.11/BANG/2018 PAGE - 4 RESULTING FROM AN ORDER IS ATTRIBUTABLE TO THE TRIB UNALS MISTAKE, ERROR OR OMISSION, IT IS ITS BOUNDEN DUTY TO SET IT RIGHT. THE PURPOSE BEHIND THE ENACTMENT OF S. 254(2) OF TH E ACT TO AMEND ANY ORDER PASSED UNDER SUB-S. (1), IF ANY MIS TAKE APPARENT FROM THE RECORDS IS BROUGHT TO THE NOTICE OF THE TRIBUNAL, IS BASED ON THE FUNDAMENTAL PRINCIPLE THA T NO PARTY APPEARING BEFORE THE TRIBUNAL, BE IT AN ASSESSEE OR THE DEPARTMENT, SHOULD SUFFER ON ACCOUNT OF ANY MISTAKE COMMITTED BY THE TRIBUNAL. THIS FUNDAMENTAL PRINCIP LE HAS NOTHING TO DO WITH THE INHERENT POWER OF THE TRIBUN AL. IF PREJUDICE IS RESULTED TO THE PARTY, WHICH PREJUDICE IS ATTRIBUTABLE TO THE TRIBUNALS MISTAKE, ERROR OR OM ISSION AND WHICH ERROR IS A MANIFEST ERROR, THEN THE TRIBUNAL WOULD BE JUSTIFIED IN RECTIFYING ITS MISTAKE. RECTIFICATION CAN BE MADE ONLY WHEN A GLARING MISTAKE OF FACT OR LAW COMMITTE D BY THE OFFICER PASSING THE ORDER BECOMES APPARENT FROM THE RECORD. THE RECTIFICATION IS NOT POSSIBLE IF THE QUESTION I S DEBATABLE. A POINT WHICH WAS NOT EXAMINED ON FACTS OR IN LAW CAN NOT BE DEALT WITH AS A MISTAKE APPARENT FROM THE RECORD. N O ERROR CAN BE SAID TO BE APPARENT ON THE FACE OF THE RECORD IF IT IS NOT MANIFEST OR SELF-EVIDENT AND REQUIRES AN EXAMINATIO N OR ARGUMENT TO ESTABLISH IT. WHERE WITHOUT ANY ELABORA TE ARGUMENT ONE COULD POINT TO THE ERROR AND SAY HERE IS A SUBSTANTIAL POINT OF LAW WHICH STARES ONE IN THE FA CE, AND THERE COULD REASONABLY BE NO TWO OPINIONS ENTERTAINED ABO UT IT, IS A CLEAR CASE OF ERROR APPARENT ON THE FACE OF THE REC ORD. VIDE ASSTT. CIT VS. SAURASHTRA KUTCH STOCK EXCHANGE LTD. (2008) 219 CTR (SC) 90 : (2008) 12 DTR (SC) 346 : (2008) 3 05 ITR 227 (SC), HONDA SIEL POWER PRODUCTS LTD. VS. CIT (2 007) 213 CTR (SC) 425 : (2007) 295 ITR 466 (SC), HARI VISHNU KAMATH VS. AHMAD ISHAQUE (1955) 1 SCR 1104, CIT VS. KESHRI METAL (P) LTD. (1999) 155 CTR (SC) 531 : (1999) 237 ITR 165 (SC), DEVA METAL POWER (P) LTD. VS. CIT 2008 (2) SC C 439, CIT VS. HERO CYCLES (P) LTD. (1997) 142 CTR (SC) 12 2 : (1997) 228 ITR 463 (SC), SATYANARAYAN LAXMINARAYAN HEGDE VS. MALLIKARJUN BHAVANAPPA TIRUMALE (1960) 1 SCR 89 0, THUNGABHADRA INDUSTRIES LTD. VS. GOVERNMENT OF ANDH RA PRADESH, REP. BY THE DY. CCT AIR 1964 SC 1372, BATU K K. VLYAS VS. SURAT BOROUGH MUNICIPALITY ILR 1953 BOM 1 91, MRS. K.T.M.S. UMMA SALMA VS. CIT (1983) 144 ITR 890, 895 (MAD), KIL KOTAGIRI TEA & COFFEE ESTATES CO. LTD. V S. ITAT (1989) 75 CTR (KER) 115 : (1988) 174 ITR 579 (KER), CIT VS. R. CHELLADURAI (1979) 11 CTR (MAD) 157 : (1979) 118 ITR MP.11/BANG/2018 PAGE - 5 108 (MAD), STATE OF TAMIL NADU VS. THAKOREBHAI & BR OS. (1983) 52 STC 104 (MAD), JAINARAIN JEEVRAJ VS. CIT (1979) 13 CTR (RAJ) 342 : (1980) 121 ITR 358, 363 (RAJ), CIT VS. VARDHMAN SPINNING (1997) 139 CTR (P&H) 322 : (1997) 226 ITR 296, 302 (P&H), BATA INDIA LTD. VS. DY. CIT (19 96) 217 ITR 871 (CAL) AND CIT VS. PRAHLAD RAI TODI (2001) 1 71 CTR (GAU) 537 : (2001) 251 ITR 833 (GAU). 15. HON APEX COURT IN THE CASE OF T S BALARAM ITO V S VOLKART BROTHERS AND ORS 82 ITR 50 HAD HELD IN RELATION TO THE POWERS OF AN ITO UNDER SECTION 154 OF THW ACT AS UNDER: FROM WHAT HAS BEEN SAID ABOVE, IT IS CLEAR THAT TH E QUESTION WHETHER S. 17(1) OF THE INDIAN IT ACT, 192 2, WAS APPLICABLE TO THE CASE OF THE FIRST RESPONDENT IS NOT FREE FROM DOUBT. THEREFORE, THE ITO WAS NOT JUSTIFIED IN THINKING THAT ON THAT QUESTION THERE C AN BE NO TWO OPINIONS. IT WAS NOT OPEN TO THE ITO TO GO I NTO THE TRUE SCOPE OF THE RELEVANT PROVISIONS OF THE AC T IN A PROCEEDINGS UNDER S. 154 OF THE IT ACT, 1961. A MISTAKE APPARENT ON THE RECORD MUST BE AN OBVIOUS AND PATENT MISTAKE AND NOT SOMETHING WHICH CAN BE ESTABLISHED BY A LONG DRAWN PROCESS OF REASONING ON POINTS ON WHICH THERE MAY CONCEIVABLY BE TWO OPINIONS. AS SEEN EARLIER, THE HIGH COURT OF BOMBAY OPINED THAT THE ORIGINAL ASSESSMENTS WERE IN ACCORDANCE WITH LAW THOUGH IN OUR OPINION THE HIGH COURT WAS NOT JUSTIFIED IN GOING INTO THAT QUESTION . IN SATYANARAYAN LAXMINARAYAN HEGDE VS. MALLIKARJUN BHAVANAPPA TIRUMALE (1960) 1 SCR 890, THIS COURT WHILE SPELLING OUT THE SCOPE OF THE POWER OF A HIGH COURT UNDER ART. 226 OF THE CONSTITUTION RULED THAT AN ERROR WHICH HAS TO BE ESTABLISHED BY A LONG-DRAW N PROCESS OF REASONING ON POINTS WHERE THERE MAY CONCEIVABLY BE TWO OPINIONS CANNOT BE SAID TO BE AN ERROR APPARENT ON THE FACE OF THE RECORD. A DECISIO N ON DEBATABLE POINT OF LAW IS NOT A MISTAKE APPARENT FROM THE RECORD [SEE SIDHRAMAPPA ANDANNAPPA MANVI VS. CIT (1952) 21 ITR 333 (BOM) : TC 8R.1234]. THE POWER OF THE OFFICERS MENTIONED IN S. 154 OF THE IT ACT, 1961, TO CORRECT 'ANY MISTAKE APPARENT FROM THE RECORD' IS UNDOUBTEDLY NOT MORE THAN THAT OF THE HIGH COURT TO ENTERTAIN A WRIT MP.11/BANG/2018 PAGE - 6 PETITION ON THE BASIS OF AN 'ERROR APPARENT ON THE FACE OF THE RECORD.' IN THIS CASE IT IS NOT NECESSA RY FOR US TO SPELL OUT THE DISTINCTION BETWEEN THE EXPRESS ION 'ERROR APPARENT ON THE FACE OF THE RECORD' AND 'MISTAKE APPARENT FROM THE RECORD'. BUT SUFFICE IT TO SAY THAT THE ITO WAS WHOLLY WRONG IN HOLDING THAT THERE WAS A MISTAKE APPARENT FROM THE RECORD OF THE ASSESSMENTS OF THE FIRST RESPONDENT. RECTIFICATORY POWERS VESTED ON THE TRIBUNAL UNDER S ECTION 254(2) IS ALSO ONLY ON A MISTAKE APPARENT FROM THE RECORD AND THEREFORE THE LAW AS ENUNCIATED BY THE HON APEX COU RT WILL FAIRLY APPLY. SEEN FROM THE EXPOSITION OF LAW ON THE SUBJECT GIVE N ABOVE, THIS TRIBUNAL CANNOT BE A REVIEWING AUTHORITY. WE FIND THAT THIS TRIBUNAL HAD CONSIDERED ALL THE ASPECTS OF THE CASE BEFORE GIVING ITS FINDING. WHAT THE ASSESSEE SEEKS NOW IS A REVIEW O F THE ORDER. ASSESSEE HAS NOT BEEN ABLE TO SHOW ANY MISTAKE IN T HE ORDER OF THE TRIBUNAL, MUCH LESS ANY MISTAKE APPARENT ON RECORD. 05. MOREOVER, THE STAND OF THE ASSESSEE IS THIS THA T IT WAS STOP GAP ARRANGEMENT TILL THE LOAN IS DISBURSED BY THE FINAN CIAL INSTITUTIONS AS STATED BY THE ASSESSEE IN PARA 4 (II) OF THE M. P. AS PER THE ASSESSMENT ORDER, THE ENTIRE DISCUSSION IS ABOUT AL LOWABILITY OF DEDUCTION U/S 57 AND THERE IS NO WHISPER ABOUT NATU RE OF LOAN. THERE IS NO DISCUSSION ON THIS ASPECT ALSO AS TO WHETHER LOAN WAS RECEIVED FROM FINANCIAL INSTITUTIONS AND IF RECEIVED THAN WH EN RECEIVED AND HOW UTILISED. AS PER THE TRIBUNAL ORDER, THE MATTER IS RESTORED TO AO FOR FRESH DECISION AFTER EXAMINING THE FACTS OF THE PRESENT CASE IN THE LIGHT OF THE JUDGMENT OF HONBLE KARNATAKA HIGH COU RT RENDERED IN THE CASE OF COMFOUND FINANCIAL SERVICES, IN ITRC NO . 49 OF 2000 DATED 07.12.2007, COPY AVAILABLE ON RECORD. HENCE, IN OUR MP.11/BANG/2018 PAGE - 7 CONSIDERED OPINION, THERE IS NO APPARENT MISTAKE IN THIS TRIBUNAL ORDER WHICH CAN BE RECTIFIED U/S 254 (2). 05. WE FIND NO MERIT IN THIS MP AND IT IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST DAY OF FEBRUARY, 2018. SD/- SD/- (A. K. GARODIA) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL M EMBER BENGALURU DATED : 21 FEBRUARY, 2018 MCN* COPY TO: 1. THE ASSESSEE 2. THE ASSESSING OFFICER 3. THE COMMISSIONER OF INCOME-TAX 4. COMMISSIONER OF INCOME-TAX(A) 5. DR 6. GF, ITAT, BANGALORE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.