ANANYA AJAY MITTAL, MUMBAI V. DCIT CC 6 (4), MUMBAI

MA 136/MUM/2022

• Counselvise Citation: [2022] 103 COUNSELVISE.COM (IT) 8562 (ITAT-MUMBAI)
• Duration Of Justice: 17 year(s) 5 month(s) 18 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 13-11-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 22-09-2022
• Assessment Year: misc
• Appeal Filed On: 26-05-2005
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Residential status
• Section: 132; 56(2); 153A; 139(1); 254(2); 153

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “A”, MUMBAI BEFORE SHRI AMIT SHUKLA, HON'BLE JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, HON'BLE ACCOUNTANT MEMBER MA.Nos. 136 & 137/MUM/2022 [ARISING OUT OF ITA NO. 6950 & 6949/MUM/2019 (A.Y: 2011-12 &2010-11)] Ananya Ajay Mittal 62-A, 3 rd Floor, Mittal Bhavan-2 Peddar Road, Mumbai – 400026 PAN: AZTPM4759N v. DCIT – Central Circle – 6(4) Room No. 1925, 19 th Floor Air India Building, Nariman Point Mumbai – 400 021 (Appellant) (Respondent) Assessee Represented by : Piyush Chahhjed Department Represented by : Mahita Nair Date of Hearing : 23.09.2022 Date of Pronouncement : 14.11.2022 O R D E R PER S. RIFAUR RAHMAN (AM) 1. Through these Miscellaneous Applicationsassessee is seeking for rectification of certain mistakes crept in the common order passed by the Tribunal in ITA.No. 6949 & 6250/Mum/2019 dated 23.03.2022 for the A.Y.2010-11 and 2011-12 and requested for suitable amendment in the Tribunal order. 2 MA.Nos. 136 & 137/MUM/2022 Ananya Ajay Mittal 2. At the time of hearing Ld. AR submitted as under: - “3. The above Appeal was heard by Honorable 'A' Bench on 03.01.2022 along with other Appeal for A.Y. 2010-11. The said Appeals were filed against the Order passed by Commissioner of Income Tax (Appeals) confirming certain additions made in impugned assessment order passed U/s.143(3) r.w.s. 153A. 4. The Appellant had filed the Revised Grounds of Appeal for AY 2011-12 interalia taking following grounds; 1. On the facts and circumstances of the case, the Ld. CIT (Appeals) has erred in law and on facts in upholding the addition in respect of the foreign bank account u/s 153A in spite of the fact that no incriminating material wasfound/seized during search operation u/s 132 of the Act pertaining to the assessment year under appeal. 2. On the facts and circumstance of the case, the Ld. CIT (Appeals) has erred in law and on facts in upholding the additions without appreciating that the Ld. assessing officer made addition after considering the appellant as "Resident" even though it is admitted fact that he was non-resident and the assessment order also is passed assessing him as "Non- Resident". 3. On the facts and circumstance of the case, the Ld. CIT (Appeals) has erred in law and on facts in upholding the additions of credit balance in foreign Bank account of Rs.3,15,034/- 5. During the course of hearing, the Ground No.1 & 3 never came up for the argument and no submissions were made in regard to same either by the appellant or department. Since, during the course of hearing of Ground No 2 in regard to whether when the assessment was made as a non-resident, any income earned outside India can be bought to tax, there was obvious satisfaction drawn in this regard in favour of appellant. 6. We draw your honors attention to Para '12' of the impugned order wherein it is observed as under: "In the rejoinder Ld. AR submitted that section 6(1)(c) provisions raised by the Ld DR, it is submitted that Assessing Officer and Ld. CIT(A) has accepted that assesseis NRI, Ld. DR cannot improvise the case". 3 MA.Nos. 136 & 137/MUM/2022 Ananya Ajay Mittal 7. Further, in Para 14 & 15 of the impugned order, your honour has placed reliance upon Provisions of Section 6(1)(c) and concluded that the Assessee is a resident andtherefore, he had to disclose the source of income outside India 8. Your honor will appreciate that during the course of hearing, he following factswere brought up: a. At no point of time it was disputed that Assesse is a "Non-Resident" and therefore the return filed u/s 153A as a Non-resident was assessed as Non Resident by the Assessing Officer and also by the CIT Appeal. The assessing officer disregarded the claim of Assesse of non-resident only since the original Return u/s 139(1) was filed as a "Resident" but still assessed him as the non resident. For the purpose of which attention is drawn to Para 7.9 of the assessment order, b. CIT (Appeal) has not denied that the assesse was non- resident attention is drawn to Para 5.8 of the CIT (A) order. c Your honour will appreciate that the original return became Non-Est pursuant to Section 153A, where the fresh return was filed and was assessed in the status of Non- Resident. d. During the course of argument by learned DR, your honor also appreciated the same and raised the query to the Ld. DR by the Department in regard to whether we can go beyond the Assessment Order, whether now the case can be improvised when the Assessee is already assessed as "Non- Resident". e. In response to the same Ld. DR made the submission on Section 6(1)(c) as toAssessee is a resident. f. In rejoinder to same, it was specifically argued by the Appellant that he is a Non-resident even u/s 6(1)(c) read with Sub-Clause 'b' of Explanation 1, wherein in case of person outside India, the requirement of 60 days has to be read as 182 days and also cited the Delhi High Court Judgment on the similar facts in case of Suresh Nanda reported at 352 ITR 611. 9. It seems that the submission made by the appellant in the rejoinder seems to have been mistakenly not taken on record and therefore, the Explanation '1' to Section 6(1)(c) has not at all been 4 MA.Nos. 136 & 137/MUM/2022 Ananya Ajay Mittal considered before deciding the residential status in the impugned order. 10. The same is a mistake apparent from record since same has resulted into incorrect application of the Provision of Law and incomplete application without actuallyreferring the Explanation 1 and the Delhi High Court Judgment. 11. In view of the above, it is our humble submission that the same is a mistake apparent from record in regard to incomplete reliance upon 6(1)(c) and also against the ratio laid down by High Court of Delhi in case of Suresh Nanda (supra) 12. In view of the above, the same been a mistake apparent from the record in regard to incomplete appreciation of Section 6(1) and therefore, the same needs to be rectified which has a very important bearing on the Assesses Appeal. 13. Further Your honor will appreciate that, Non-consideration of the judgment of the Hon'ble Delhi High Court, renders the Judgments erroneous and therefore, it is a mistake apparent from record which requires to be rectified. 14. At the stage, the Appellant places reliance upon the various judgments wherein the various authorities including apex court has held that Non consideration of Judgments relied upon by the Appellant his mistake apparent from the record and requires to be rectified. 15. In this regard, we hereby invite your honours attention to Judgment rendered byHonourable Supreme Court in case of HONDA SIEL POWER PRODUCTSLTD, 295 ITR 466 wherein it is held that; "Rule of precedent" is an important aspect of legal certainty in rule of law. That principle is not obliterated by Section 254(2) of the IT Act, 1961. When prejudice results from an impugned order attributable to the Tribunal's mistake, error or omission, then it is the duty of the Tribunal to set it right. Atonement to the wronged party by the Court or Tribunal for the wrong committed by it has nothing to do with the concept of inherent power to review. In the present case, the Tribunal was justified in exercising its powers under Section 254(2) when it was pointed out to the Tribunal that the judgment of the co-ordinate Bench was placed before the Tribunal when the original impugned order came to be passed but it had committed a mistake in not considering the material which was already on record. The Tribunal has 5 MA.Nos. 136 & 137/MUM/2022 Ananya Ajay Mittal acknowledged its mistake, it has accordingly rectified its impugned order." 16. The Appellant also places reliance on the Judgment rendered by Honourable Supreme Court in case of SAURASHTRA KUTCH STOCK EXCHANGE LIMITED, 305 ITR 227 wherein it is held that "The core issue, therefore, is whether non-consideration of a decision of Jurisdictional Court (in this case a decision of the High Court of Gujarat) or of the Supreme Court can be said to be a "mistake apparent from the record"? In our opinion, both the Tribunal and the High Court were right in holding that such a mistake can be said to be a "mistake apparent from the record" which could be rectified under section 254(2)." Ground No 1-No incriminating material 17. We further invite your honors attention to the impugned order wherein ground No. 1 was not in regard to the addition made in the order passed u/s 153 in regard to absence of incriminating material. The said ground has not at all been adjudicated in the impugned order and therefore, the same been mistake apparent from record, needs to be rectified. 18. The attention is drawn to Assessment Order wherein on perusal of Para 7.1. it would be appreciated that the Assessing Officer has relied upon Pages 12 to 15 seized in Annexure A-2 during the course of search. 19. Further Para 7.2 of the said Assessment Order brings out the details submitted and found during the post search proceedings. The issue that needed to be considered was underground No. 1 was whether Pages 12 to 15 found during the course of search can be treated as an incriminating document for the purpose of making the addition u/s 153 A. 20. It would be appreciated that the said pages contained a letter issued by the Sovereign Bank for submission of certain forms. The same in no way is an incriminating documents for the purpose of Section 153A. 21. But unfortunately, there was no argument made on the same since your honors had already sought to conclude the hearing on the basis of Non-residential status of the Assesse and therefore the said ground was not at all argued. 22. Nevertheless, irrespective of the same in Interest of Justice the said ground needs tobe adjudicated. The Non-Adjudication of 6 MA.Nos. 136 & 137/MUM/2022 Ananya Ajay Mittal the ground No. 1 renders the ordererroneous and the therefore the same needs to be rectified by adjudicating theground No. 1 basis the seized material relied upon by the Assessing Officer at pages12 to 15 of A-2 Annexure. 23. The Appellant craves the leave to make submissions and rely upon the documents during the hearing of Miscellaneous Application. 24. Similarly, in regard to ground No. 3 on the merits of the case also no argument could be advanced by the Appellant since the hearing was sought to be concluded on the ground No. 2 itself and the remaining grounds would have become infructuous. 25. The Ground No 2 has been ultimately decided and concluded in Para 17 by upholding the addition under the Section 56(2)(v) of the Act. The same is also discussed in Para 16 on the basis of papers filed in the Paper Book though virtually no argument was made by the Appellant on the merits of the same. 26. The attention is drawn to Para 17 of the impugned order, the addition has been upheld u/s 56(2)(v) whereas the said Section ceases to be applicable with effect from 1.04.2006 and therefore, the addition made under sub-clause (v) of section 56(2) itself was bad in law which has not being considered in the impugned order. 27. Thus your honor will appreciate that the same is mistake apparent from record due to mistaken application of law which is not applicable from 1.04.2006 and therefore not applicable for A.Y. 2010-11 & 2011-12 and therefore, it is our humble request to kindly rectify the above mistakes which are apparent from record in the impugned order. 28. The said ground was decided without proper opportunity of hearing and therefore, we request your honors to kindly amend the order to rectify the same said mistake which is very important since the payments made by the third party towards the support for the education cannot be taxed u/s 56(2)(v). The same were towards reimbursement of education expenses and not money received without consideration. 29. The Appellant craves the leave to place its arguments during the course of hearing of this application. 30. The Appellant hereby place reliance on the Judgment rendered by the Jurisdictional Honourable Bombay High Court in case of State Bank of India, ITA No.1481 of 2012 decided on 7 MA.Nos. 136 & 137/MUM/2022 Ananya Ajay Mittal 17.12.2014 wherein Para 10 of the ImpugnedOrder, it has been held as under "That we do not think that interest of justice and equity is served by non consideration of vital materials by the last fact finding authority, namely the Income Tax Appellate Tribunal. That Tribunal was required to recall its earlier impugned orders and for the reasons which have been assigned by it would indicate that it failed to apply its mind at the initial stage to the grounds raised in the appeal and in their entirety. It omitted from consideration crucial documentary evidence as well. In such circumstances, such partial revival of appeal would not meet the ends of justice. We modify the impugned orders passed on the Miscellaneous Application and direct that Appeal shall be heard on its own merits and in accordance with law, permitting the Assessee to raise all grounds that are to be found in the Memo of Appeal." 31. The Honourable ITAT being the last fact-finding authority on factual issues deciding without documentary factual evidences being on record has resulted into grave injustice which needs to be rectified. In the circumstances, it is humble prayer before your honor to kindly carry the necessary rectification based on the arguments on all grounds. 32. The Appellant therefore respectfully prays that the Impugned Order dated 23rd March 2022 suffers from mistake that is apparent from record and therefore prays to suitably recall/modify the above Impugned Order.” 3. On the other hand, Ld.DR submitted that assessee is a student and she has to depend on their parents and the order clearly indicates that assessee has not disclosed the details of accounts held outside India. Further, she submitted that there is no mistake apparent on record in the Tribunal order. Therefore, Ld.DR objected to the submissions made by the Ld. AR. 8 MA.Nos. 136 & 137/MUM/2022 Ananya Ajay Mittal 4. Considered the rival submissions and material placed on record. It is submitted before us that the assessee has not argued the issues raised in the Ground Nos. 1 and 3. Further, even on Ground No. 2, the Ld.AR has submitted that the assessment was completed treating the assessee as a NRI and the ITAT has adjudicated taking que from the original assessment and ROI, which was filed by the assessee herself as a resident. Since the Assessing Officer himself accepted the assessee as a NRI in the revised proceedings u/s 153A. Further he submitted that the Hon’ble bench while considering the applicability of section 6(1)(c) and failed to consider the Explanation 1 to section 6(1)(b) and decision of Hon’ble Delhi High Court in the case of Suresh Nanda (supra), non consideration of High Court decision is mistake apparent on record and prayed that the above said mistake be rectified. 5. After considering the submissions, we observe that the decision relied by the Ld AR in which the Hon’ble High Court has analyzed the status of the assessee based on the duration of stay in India. Further, there is no such discussion in the assessment order or in first appellate order. The issue raised by the assessee goes to root of the matter and we have also not dealt with the issue in the matter of search except dealt with the merit on upholding the addition. Therefore, in our 9 MA.Nos. 136 & 137/MUM/2022 Ananya Ajay Mittal considered view, to meet the ends of justice, we are inclined to give opportunities to both parties and rehear the matter to uphold the legal convention, we are recalling this order so that both parties can have proper opportunities to put forth their submissions and arguments. Hence, we direct the registry to fix the case for hearing in due course and inform the parties accordingly. 6. In the result, Miscellaneous Applications filed by the assessee are allowed for statistical purpose. 7. The facts and submissions are same in the both the miscellaneous applications filed, we are inclined to recall both the applications under consideration. Order pronounced in the open court on 14 th November, 2022. Sd/- Sd/- (AMIT SHUKLA) (S. RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai / Dated 14/11/2022 Giridhar, Sr.PS 10 MA.Nos. 136 & 137/MUM/2022 Ananya Ajay Mittal Copy of the Order forwarded to: 1. The Appellant 2. The Respondent. 3. The CIT(A), Mumbai. 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. //True Copy// BY ORDER (Asstt. Registrar) ITAT, Mum