Beautex (I) Pvt. Ltd, V. ITO Ward-2 (4),

MA 14/DEL/2010

• Counselvise Citation: [2010] 123 COUNSELVISE.COM (IT) 4656 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 5 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 14-05-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 08-01-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: BANITA DEVI NAOREM
• Assessee Lawyers: G S KOHLI
• Keywords: Reasonable cause
• Section: 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL [ DELHI BENCH A DELHI ] BEFORE SHRI RAJPAL YADAV, JM & SHRI K. D. RA NJAN, AM MISC. APP. NO. 14 (DEL) OF 2010. [ IN I. T. APPEAL NO. 271 (DEL) OF 2008 ] ASSESSMENT YEARS : 2005-06. M/S. BEAUTEX [INDIA] PVT. LTD., TH E INCOME-TAX OFFICER, E-163, PANDAV NAGAR, SAMASPUR ROAD, VS. W A R D : 2 (4), N E W D E L H I. N E W D E L H I. P A N / G I R NO. AAA CB 3386 P. ( APPLICANT ) ( RESPONDENT ) ASSESSEE BY : SHRI G. S. KOHLI , C. A.; DEPARTMENT BY : MS. BANITA DEVI NAOREM, SR. D. R .; O R D E R. P E R K. D. RANJAN : THIS MISC. APPLICATION BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE ITAT DATED 25 TH SEPTEMBER, 2009 IN ITA. NO. 271 (DEL) OF 2008 FOR ASSESSMENT YEAR 2005-06. IT HAS BEEN SUBMITTED BY THE ASSESSEE THAT DURING THE COUR SE OF HEARING OF THE APPEAL AN IMPRESSION WAS GIVEN BY THE BENCH TO SET ASIDE THE MATTER TO T HE FILE OF THE ASSESSING OFFICER IN RESPECT OF ADDITION OF RS.22,50,000/- RELATING TO SHARE APPLIC ATION MONEY. IT HAS ALSO BEEN SUBMITTED THAT THE ISSUE WAS NOT DISCUSSED AT FULL LENGTH AS THE BENCH WAS SATISFIED WITH THE SUBMISSIONS MADE BY THE LD. COUNSEL FOR THE ASSESSEE. IT HAS A LSO BEEN SUBMITTED THAT DURING THE COURSE OF HEARING, ATTENTION WAS INVITED TO LETTER DATED 2 ND FEBRUARY, 2007 FILED BEFORE THE ASSESSING OFFICER MAKING A REQUEST TO SUMMON THE SHARE APPLIC ANTS UNDER SECTION 131 OF THE ACT AND RECORD THEIR STATEMENTS IN THE PRESENCE OF THE ASSE SSEE. THIS FACT HAS ALSO NOT BEEN CONSIDERED BY THE BENCH WHILE DECIDING THE ISSUE. THEREFORE, O RDER HAS BEEN PASSED BY THE TRIBUNAL 2 MISC. APP. NO. 14 (DEL) OF 2010. CONTRARY TO IMPRESSION GIVEN IN THE OPEN COURT. HE NCE, A REQUEST HAS BEEN MADE FOR REVIEW OF THE ORDER DATED 25 TH SEPTEMBER, 2009. 2. BEFORE US DURING THE COURSE OF HEARING OF THE MI SC. APPLICATION THE ASSESSEE REITERATED THE SAME ARGUMENTS AS HAS BEEN MENTIONED IN THE MIS C. APPLICATION. IT HAS ALSO BEEN SUBMITTED THAT THE CASE WAS NOT FULLY ARGUED BY THE ASSESSEE. THEREFORE, DECISION GIVEN BY THE BENCH IS CONTRARY TO THE IMPRESSION GIVEN IN THE OP EN COURT FOR SETTING ASIDE THE MATTER TO THE FILE OF THE ASSESSING OFFICER. ON THE OTHER HAND, THE LD. SR. DR SUPPORTED THE ORDER OF THE TRIBUNAL. SHE SUBMITTED THAT THERE IS NO MISTAKE A PPARENT FROM RECORD. 3. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT DURING THE COURSE OF HEARING OF THE OR IGINAL APPEAL, THE LD. COUNSEL FOR THE ASSESSEE HAD SUBMITTED THAT THE SHARES HAVE BEEN AL LOTTED TO THE APPLICANTS. IT WAS ALSO SUBMITTED THAT NO OPPORTUNITY TO CROSS EXAMINE THE INVESTORS WAS PROVIDED. ITAT, WHILE DECIDING THE APPEAL, HAS CONSIDERED THE ARGUMENTS A DVANCED BY THE ASSESSEE AND MATERIAL BROUGHT ON RECORD. THESE ARGUMENTS FIND PLACE IN P ARA 6 OF THE ORDER. THE BENCH HAS DEALT WITH THE ISSUE IN DETAIL IN PARA 7 OF THE ORDER. S HRI YOGESH SAXENA AND SHRI MOOL CHAND NIRMAL HAVE DENIED TO HAVE MADE INVESTMENTS IN SHAR ES OF THE COMPANY. IT HAS ALSO BEEN HELD THAT THE ASSESSEE NEVER DEMANDED CROSS EXAMINA TION BEFORE THE ASSESSING OFFICER. REFERENCE HAS BEEN MADE TO PAPER-BOOK WHEREIN THE A SSESSEE HAS SUBMITTED BEFORE THE LD. CIT (APPEALS) THAT THE IDENTITY AND CREDITWORTHINES S OF THE SHARE HOLDERS HAD BEEN PROVED. WE ALSO FIND THAT BEFORE THE ASSESSING OFFICER A RE QUEST WAS MADE FOR SUMMONING THE INVESTORS. THE ASSESSING OFFICER MADE ENQUIRIES FRO M THE BANK AND RECORDED THE STATEMENTS OF SHRI YOGESH SAXENA AND SHRI MOOL CHAND NIRMAL AND T HE ASSESSEE WAS GIVEN OPPORTUNITY TO COMMENT ON THE EVIDENCE SO GATHERED BY THE ASSESSIN G OFFICER. THE ASSESSEE WAS GIVEN OPPORTUNITY BY THE ASSESSING OFFICER ON 6/03/2007; 12/03/2007; 21/03/2007 AND 27/04/2007. THE ASSESSEE WAS SEEKING SHORT ADJOURNMENTS ON THES E DATES. HOWEVER, VIDE LETTER DATED 27/04/2007, WHICH WAS RECEIVED ON 30 TH APRIL, 2007 THE ASSESSEE RELIED ON THE CONFIRMATIO NS FILED BY THE SHARE-HOLDERS. WHILE DECIDING THE ISS UE, THE BENCH HAS CONSIDERED ALL THESE FACTS AND HAS DECIDED THE ISSUE RELYING ON VARIOUS DECISI ONS. THEREFORE, THE CONTENTION OF THE ASSESSEE THAT THERE IS A MISTAKE APPARENT FROM RECO RD IS NOT PROVED FROM THE FACTS. THE 3 MISC. APP. NO. 14 (DEL) OF 2010. ASSESSEE IS SEEKING REVIEW OF THE ORDER, WHICH IS E VIDENT FROM THE APPLICATION ITSELF, WHICH READS AS FOLLOWS :- IN VIEW OF THE CIRCUMSTANCES AND THE FACTS ST ATED ABOVE THE APPELLANT COMPANY REQUEST YOUR HONOUR THAT THE ORDER DESERVES TO BE REVIEWED ON THE MATTER STATED ABOVE. 4. UNDER SECTION 254(2) THE APPELLATE TRIBUNAL MAY , AT ANY TIME WITHIN THE PERIOD OF FOUR YEARS FROM THE DATE OF THE ORDER, WITH A VIEW TO RECTIFYING ANY MISTAKE APPARENT FROM RECORD, AMEND ANY ORDER PASSED BY IT UNDER SUB-SECT ION (1), AND SHALL MAKE SUCH AMENDMENT IF THE MISTAKE IS BROUGHT TO ITS NOTICE BY THE ASSE SSEE OR THE ASSESSING OFFICER. THUS WHAT CAN BE RECTIFIED IS A MISTAKE APPARENT FROM RECORDS . AN ERROR APPARENT ON RECORD MEANS AN ERROR WHICH STRIKES ONE ON MERE LOOKING AND DOES NOT NEED A LONG-DRAWN OUT PROCESS OF REASONING ON THE POINTS ON WHICH THERE MAY BE CONCEIVABLY TWO OPINIONS. SUCH ERROR SHOULD NOT REQUIRE ANY EXTRANEOUS MATTER TO SHOW ITS INCORRECTNESS. IT AT DELHI BENCH C NEW DELHI IN THE CASE OF VIJAY KANT SHARMA (KARTA, HUF) M.A. NO 265 /D/2007 IN I.T.A. NO. 3391/D/2004 FOR ASSESSMENT YEAR 2001-02 ORDER DATED 24.04.2009 (WHERE TO ONE OF US (A.M) WAS PARTY) EXAMINED THE SCOPE OF RECTIFICATION U/S 254(2) IN T HE LIGHT OF DECISIONS OF HONBLE DELHI HIGH COURT AS BELOW: 13.................THE SCOPE OF RECTIFICATION U/S 254(2) THAT THE TRIBUNAL IS VERY LIMITED AND HAS BEEN DISCUSSED BY THEIR LORDSHIPS OF DELHI HIGH COURT IN THEIR VARIOUS DECISIONS, FEW OF WHICH ARE MENTIONED HEREIN UNDER :- I. IN THE CASE OF COMMISSIONER OF INCOME-TAX VS. IN COME-TAX APPELLATE TRIBUNAL AND OTHERS, [2007] 293 ITR 118 (DELHI), THEIR LORDSHIPS WHILE EXAMINING THE SCOPE AND AMBIT OF THE APPLICATION OF SECTION 254(2) OF THE INCOME TAX ACT, 1961 HAVE OBSERVED AS UNDER: - THE SCOPE AND AMBIT OF APPLICATION OF SECTION 254( 2) OF THE INCOME TAX ACT, 1961 IS VERY LIMITED. THE SAME IS RESTRIC TED TO RECTIFICATION OF 4 MISC. APP. NO. 14 (DEL) OF 2010. MISTAKES APPARENT FROM THE RECORD. POWER TO RECALL AN ORDER IS PRESCRIBED IN TERMS OF RULE 24 OF THE INCOME-TAX (APPELLATE TRIBU NAL) RULES, 1963, AND THAT TOO ONLY IN CASES WHERE THE ASSESSEE SHOWS THAT IT HAD A REASONABLE CAUSE FOR BEING ABSENT AT A TIME WHEN THE APPEAL WAS TAKEN UP AND WAS DECIDED EX PARTE. WHAT IS SIGNIFICANT IS THAT THE SECTION ENVISAGES A MENDMENT OF THE ORIGINAL ORDER OF THE TRIBUNAL AND NOT A TOTAL SUBSTITUTION THEREOF. THE ORDER PASSED BY THE TRIBUNAL UNDER SECTION 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 REFUSING TO AMEND GETS MERGED WITH THE ORIGINAL ORDER PASSED. THE ORDER AS AMENDED OR REMAINING UNAMENDED IS THE EFFECTIVE ORDER FOR ALL PRACTICAL PURPOSES. THE SAME CONTINUES TO BE AN OR DER UNDER SECTION 254 (1). THAT IS THE FINAL ORDER IN THE APPEAL. AN ORDER UN DER SECTION 254 (2) DOES NOT HAVE EXISTENCE DE HORS THE ORDER UNDER SECTION 254 (1). THEREAFTER, THEIR LORDSHIPS HELD AS UNDER: - HELD, ALLOWING THE PETITION, THAT THE TRIBUNAL WAS NOT JUSTIFIED IN RECALLING THE ORDER PASSED BY IT IN TOTO AND SETTIN G THE MATER DOWN FOR A FRESH HEARING. JUST BECAUSE A PRONOUNCEMENT MADE ON THE SUBJECT EITHER BY THE TRIBUNAL OR BY ANY OTHER COURT WAS NOT NOTICED BY T HE TRIBUNAL WHILE TAKING A PARTICULAR VIEW ON THE MERITS OF THE CONTROVERSY MAY CONSTITUTE AN ERROR THAT WOULD CALL FOR CORRECTION IN AN APPROPRIATE AP PEAL AGAINST THE ORDER. ANY SUCH ERROR MAY, HOWEVER, FALL SHORT OF CONSTITU TING A MISTAKE APPARENT FROM THE RECORD WITHIN THE MEANING OF SECTION 254(2 ). JUST BECAUSE A POINT WAS DEBATABLE COULD HARDLY PROVIDE A JUSTIFICATION FOR RECALLING THE ORDER AND FIXING THE APPEAL FOR A DE NOVO HEARING. THEREFORE , THE ORDER OF RECALL PASSED BY THE TRIBUNAL WAS QUASHED. II. IN THE CASE OF COMMISSIONER OF INCOME-TAX VS. H INDUSTAN COCA COLA BEVERAGES P. LTD., [2007] 293 ITR 163 (DELHI), THEI R LORDSHIPS WHILE CONSIDERING THE POWERS OF THE TRIBUNAL UNDER SECTION 254(2) OF THE INCOME TAX ACT, 1961 OBSERVED AS UNDER: - UNDER SECTION 254(2) OF THE INCOME-TAX ACT, 1961, THE TRIBUNAL HAS THE POWER TO RECTIFY MISTAKES IN ITS ORDER. HOWEVER, I T IS PLAIN THAT THE POWER TO RECTIFY A MISTAKE IS NOT EQUIVALENT TO A POWER TO R EVIEW OR RECALL THE ORDER SOUGHT TO BE RECTIFIED. RECTIFICATION IS A SPECIES OF THE LARGER CONCEPT OF 5 MISC. APP. NO. 14 (DEL) OF 2010. REVIEW. ALTHOUGH IT IS POSSIBLE THAT THE PREREQUIS ITE FOR EXERCISE OF EITHER POWER MAY BE SIMILAR (A MISTAKE APPARENT FROM THE R ECORD), BY ITS VERY NATURE THE POWER TO RECTIFY A MISTAKE CANNOT RESULT IN THE RECALL AND REVIEW OF THE ORDER SOUGHT TO BE RECTIFIED. WHERE IT IS SHOWN TO THE COURT IN APPEAL THAT A GRO UND THAT HAS BEEN SPECIFICALLY RAISED IN THE MEMO OF APPEAL BEFORE TH E TRIBUNAL HAS NOT BEEN CONSIDERED BY IT, THAT CAN PERSUADE THE COURT, IF T HE CIRCUMSTANCES SO JUSTIFY, TO REMAND THE CASE TO THE TRIBUNAL FOR CONSIDERATIO N OF THAT GROUND. III. IN THE CASE OF RAS BIHARI BANSAL VS. COMMISSIO NER OF INCOME-TAX AND ANOTHER, [2007] 293 ITR 365 (DELHI) THEIR LORDSHIPS HELD AS UNDER: - SECTION 254 ENABLES THE CONCERNED AUTHORITIES TO R ECTIFY ANY MISTAKE APPARENT FROM THE RECORD. IT IS WELL SETTLED THAT AN OVERSIGHT OF A FACT CANNOT CONSTITUTE AN APPARENT MISTAKE RECTIFIABLE U NDER THIS SECTION. SIMILARLY, FAILURE OF THE TRIBUNAL TO CONSIDER AN A RGUMENT ADVANCED BY EITHER PARTY FOR ARRIVING AT A CONCLUSION IS NOT AN ERROR APPARENT ON THE RECORD, ALTHOUGH IT MAY BE AN ERROR OF JUDGMENT. T HE MERE FACT THAT THE TRIBUNAL HAD NOT ALLOWED A DEDUCTION, EVEN IF THE C ONCLUSION IS WRONG, WILL BE NO GROUND FOR MOVING AN APPLICATION UNDER S ECTION 254(2) OF THE ACT. FURTHER, IN THE GARB OF AN APPLICATION FOR R ECTIFICATION, THE ASSESSEE CANNOT BE PERMITTED TO REOPEN AND RE-ARGUE THE WHOL E MATTER, WHICH IS BEYOND THE SCOPE OF THIS SECTION. 14. WHAT EMERGES FROM THE DECISIONS (SUPRA) OF THE HONBLE JURISDICTIONAL HIGH COURT OF DELHI FOR EXAMINING THE SCOPE AND AMBIT OF THE APPLICATION OF SECTION 254(2) OF INCOME TAX ACT CAN BE SUMMARIZED AS UNDER: - FIRST, THE SCOPE AND AMBIT OF APPLICATION OF SECTIO N 254 (2) OF INCOME TAX ACT IS RESTRICTED TO RECTIFICATION OF THE MISTAKES APPA RENT FROM THE RECORD. SECOND, POWER TO RECTIFY A MISTAKE IS NOT EQUIVALEN T TO A POWER TO REVIEW OR RECALL THE ORDER SOUGHT TO BE RECTIFIED. 6 MISC. APP. NO. 14 (DEL) OF 2010. THIRD, U/S 254 (2) AN OVERSIGHT OF FACT CANNOT CONS TITUTE AN APPARENT MISTAKE RECTIFIABLE UNDER THE SECTION. FOURTH, FAILURE ON THE PART OF THE TRIBUNAL TO CONS IDER AN ARGUMENT ADVANCED BY EITHER PARTY FOR ARRIVING AT A CONCLUSION IS NOT AN ERROR APPARENT ON RECORD, ALTHOUGH IT MAY BE AN ERROR OF JUDGMENT. FIFTH, EVEN IF ON THE BASIS OF A WRONG CONCLUSION T HE TRIBUNAL HAS NOT ALLOWED A DEDUCTION IT WILL NOT BE A GROUND FOR MOVING AN A PPLICATION U/S 254(2) OF THE ACT. LASTLY, IN THE GARB OF AN APPLICATION FOR RECTIFICA TION U/S 254(2) THE ASSESSEE CANNOT BE PERMITTED TO REOPEN AND REARGUE THE WHOLE MATTER AS THE SAME IS BEYOND THE SCOPE OF SECTION 254(2) OF INCOME TAX AC T. 5. KEEPING IN VIEW THE GUIDELINES ISSUED IN THE R ECENT DECISIONS BY THE HONBLE JURISDICTIONAL HIGH COURT OF DELHI, WE ALSO PROCEED TO CONSIDER AVERMENTS OF THE ASSESSEE CALLING FOR RECTIFICATION UNDER SECTION 254(2) OF T HE ACT. IN THE INSTANT CASE, AS IS APPARENT FROM THE FACTS OF THE CASE, THE ASSESSING OFFICER M ADE ENQUIRIES FROM THE BANK AND RECORDED THE STATEMENTS OF SHRI YOGESH SAXENA AND SHRI MOOL CHAND NIRMAL AND THE ASSESSEE WAS GIVEN OPPORTUNITY TO COMMENT ON THE EVIDENCE SO GAT HERED BY THE ASSESSING OFFICER. THE ASSESSEE WAS GIVEN OPPORTUNITY BY THE ASSESSING OFF ICER ON 6/03/2007; 12/03/2007; 21/03/2007 AND 27/04/2007. THE ASSESSEE WAS SEEKIN G SHORT ADJOURNMENTS ON THESE DATES. HOWEVER, VIDE LETTER DATED 27/04/2007, WHICH WAS RE CEIVED ON 30 TH APRIL, 2007 THE ASSESSEE RELIED ON THE CONFIRMATIONS FILED BY THE SHARE-HOLD ERS. IF THE APPLICANT ASSESSEE DOES NOT NOW AGREE WITH THE REASONING GIVEN BY THE TRIBUNAL, IT CANNOT BE SAID THAT AN APPARENT MISTAKE HAS CREPT IN THE ORDER OF THE TRIBUNAL WHICH IS RECTIFI ABLE U/S 254(2) OF THE ACT. THE BENCH HAS DECIDED THE ISSUE AFTER TAKING ALL THE EVIDENCES ON RECORD. THE ASSESSEE BY FILING MISCELLANEOUS APPLICATION HAS SOUGHT TO GET THE ORD ER REVIEWED FOR WHICH WE DO NOT HAVE ANY POWER. THE TRIBUNAL HAS DECIDED THE APPEAL ON MERIT S TAKING INTO CONSIDERATION ALL THE FACTS AVAILABLE ON RECORD. THEREFORE, ORDER PASSED BY THE TRIBUNAL ON MERITS CANNOT BE RECALLED FOR THE PURPOSES OF REVIEW AS DEMANDED BY THE ASSESSEE. ACCORDINGLY, THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE IS DISMISSED. 7 MISC. APP. NO. 14 (DEL) OF 2010. 6. IN THE RESULT, THE MISC. APPLICATION FILED BY T HE ASSESSEE IS DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON : 14 TH MAY, 2010. SD/- SD/- [ RAJPAL YADAV ] [ K. D. RANJAN ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 14 TH MAY, 2010. *MEHTA * COPY OF THE ORDER FORWARDED TO : - 1. APPLICANT. 2. RESPONDENT. 3. CIT, 4. CIT (APPEALS), 5. DR, ITAT, NEW DELHI. TRUE COPY. BY ORDER. ASSISTANT REGISTRAR, ITAT. 8 MISC. APP. NO. 14 (DEL) OF 2010.