M/s. Biocon Limited, Bengaluru V. Commissioner of Income Tax, LTU, Bengaluru

MA 146/BANG/2021

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 3471 (ITAT-BANGALORE)
• Duration Of Justice: 7 month(s) 14 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 21-07-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 21-07-2022
• Assessment Year: 2011-2012
• Appeal Filed On: 07-12-2021
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: PADAMCHAND KHINCHA
• Keywords: Revision of order; Rectification of order; Reasonable cause
• Section: 263; 191; 254(2)

Judgement Text

MP No.146/Bang/2021 M/s. Biocon Limited, Bangalore IN THE INCOME TAX APPELLATE TRIBUNAL “C’’ BENCH: BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER M.P. No.146/Bang/2021 (Arising out of ITA No.1859/Bang/2018 Assessment Year: 2011-12 M/s. Biocon Limited 20 th KM, Hosur Road Electronic City Bengaluru 560 106 PAN NO : AAACB7461R Vs. CIT, LTU Bengaluru APPELLANT RESPONDENT Appellant by : Shri Padam Chand Khincha, A.R. Respondent by : Smt. Priyadarshini Baseganni, D.R. Date of Hearing : 22.07.2022 Date of Pronouncement : 22.07.2022 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: This is miscellaneous application filed by the assessee seeking rectification order of the Tribunal in ITA No.159/Bang/2018 dated 19.3.2021. The Ld. A.R. submitted that the Tribunal has wrongly mentioned in para Nos.7 & 8 of the order that no enquiry has been made by the AO or genuineness of the claim has not been examined. According to the Ld. A.R., enquiries have been made and there is no material to suggest that no enquiry has been made by the AO. The Ld. A.R., submitted that even in paras 9 & 10 of the Tribunal’s order, the Tribunal recorded that assessment order has been passed MP No.146/Bang/2021 M/s. Biocon Limited, Bangalore Page 2 of 6 without proper examination or enquiry or verification or objective consideration of the claim made by the assessee. There was a proper enquiry was made and verification has been done and what constitutes enough evidence is not stated by the Tribunal and a sufficiency of evidence is the exclusive domain of Ld. AO and it cannot be substituted by any other authority. The manner in which an assessment order is provided is not in the control of the assessee. The assessee only could furnish the details called for and it is presumed that the AO has applied the mind. The Tribunal without having any material recorded the finding that the AO as not applied the mind which is incorrect. The Tribunal recorded the findings in paras 9 & 11 without mentioning the details what are the incorrect facts assumed by the Ld. AO. and why there is an incorrect application of law by Ld. AO. In the presence of divergent views, if Ld. AO has taken one of the possible views after applying his mind and mere fact that the assessment concluded by the Ld. AO is in the favour of the assessee would not tantamount the order to be treated as erroneous and prejudicial to the interest of the revenue. Further, the eligibility of the claim u/s 80JJAA of the Income-tax Act,1961 ['the Act' for short] is now confirmed by the jurisdictional High Court decision in the case of CIT Vs. Texas Instruments India Pvt. Ltd. (141 of 2020). Further, Ld. A.R. submitted that if the Ld. AO accepts the deduction claimed by the assessee after making detailed enquiries, a detailed speaking order mentioning the arguments favouring the assessee is not required. The aforesaid principle finds support from the Hon’ble Supreme Court’s judgement in the case of Nirav Modi (2016) 71 taxmann.com 272) and other case laws. In relation to the above, the assessee relied on the judgement of the Hon’ble Supreme Court in the case of ACIT V. Saurashtra Kutch Stock Exchange Ltd. (2008) 173 taxmann 322) wherein the court has held that non- consideration of a decision of jurisdictional High Court or Hon’ble MP No.146/Bang/2021 M/s. Biocon Limited, Bangalore Page 3 of 6 Supreme Court will be a mistake apparent from record and the same can be rectified u/s 254(2) of the Act. Ld. A.R. submitted that non- consideration of the judgements relied on by the assessee and non- adjudication of the grounds raised by the assessee will constitute a mistake apparent from record. Ld. A.R. further submitted that in case a view favourable to the assessee has been taken by the Ld. AO in his order among the presence of divergent views after applying his mind, then the same order would not be considered as erroneous and prejudicial to the interest of the revenue. Ld. CIT in such a case cannot invoke the provision u/s 263 of the Act. The Apex Court in Malabar Industries in 243 ITR 83 has held that adopting one of the multiple views would not make an order erroneous or prejudicial. The Ld. A.R. submitted that the merits of the case have a bearing on whether the order of the Ld. AO is erroneous in so far as it is prejudicial to the interest of the revenue and non-adjudication of grounds on merits of the case constitutes an error, which is amenable to a rectification. 2. The Ld. D.R. relied on the order of the Tribunal and submitted that there is no error so as to levy the same u/s 254(2) of the Act. 3. We have heard the rival submissions and perused the materials available on record. In this case, assessee came in appeal before this Tribunal on earlier occasion with regard to the exercise of power of CIT, LTU, Bengaluru u/s 263 of the Act. The Tribunal after carefully considering the entire facts and circumstances of the case, upheld the order of CIT, LTU Bengaluru and dismissed the appeal of the assessee. Now the grievance of the assessee is that the Tribunal ought to have allowed the appeal of the assessee in view of the arguments mentioned in this petition. Now the assessee wants to MP No.146/Bang/2021 M/s. Biocon Limited, Bangalore Page 4 of 6 review the order of the Tribunal alleging that there are certain mistakes. 4. It is well-settled that statutory authority cannot exercise power of review unless such power is expressly conferred. There is no express power of review conferred on this Tribunal. Even otherwise, the scope of review does not extent to rehearing of the case on merit. It is held in the case of CIT vs. Pearl Woollen Millos (2011) 330 ITR 164/(2010) 191 Taxman 286 (Punj. & Har.) as follows:- “Held, that the Tribunal could not re-adjudicate the matter under section 254(2). It is well settled that a statutory authority cannot exercise power of review unless such 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 reverse a decision on the merits. The Tribunal was not justified in recalling its previous finding restoring the addition, more so when an application for the same relief had been earlier dismissed.” 5. 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 the power of the Tribunal to recall an order in its entirety. Recalling the entire 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 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 un-amended is the effective MP No.146/Bang/2021 M/s. Biocon Limited, Bangalore Page 5 of 6 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 undersection 254(2). Recalling of an order automatically necessitates rehearing and re-adjudication of the entire subject-matter of appeal. The dispute no longer remains restricted to any mistake sought to be rectified. 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 had a reasonable cause for being absent at a time when the appeal was taken up and decided ex parte. Judged in the above background the order passed by the Tribunal is indefensible. 6. The words used in section 254(2) are ‘shall make such 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 original order to correct that particular mistake. The provision does not indicate that the Tribunal can recall the entire order and pass a fresh decision. That would amount to a review of the entire order and that is not permissible 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. 7. In the case of CIT vs. Hindustan Coca Beverages (P) Ltd. (2007) 293 ITR 163/159 Taxman 127 (Delhi), their Lordships while considering the powers of the Tribunal under section 254(2) of the IT Act, 1961 observed as under:- MP No.146/Bang/2021 M/s. Biocon Limited, Bangalore Page 6 of 6 “Under section 254(2) of the IT Act, 1961, the Tribunal has the power to rectify mistakes in its order. However, 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 that the pre-requisite for exercise of either power may be similar) a mistake apparent from the record), by its very nature the power to rectify a mistake cannot result in the recall and review of the order sought to be rectified.” 8. In view of the above discussion, we find not merit in the arguments of Ld. A.R. The assessee’s counsel wants to review the earlier order of the Tribunal cited (supra), for which the Tribunal has no power. Accordingly, the miscellaneous petition filed by the assessee is dismissed. Order pronounced in the open court on 22 nd Jul, 2022. Sd/- (N.V. Vasudevan ) Vice President Sd/- (Chandra Poojari) Accountant Member Bangalore, Dated 22 nd Jul, 2022. VG/SPS Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR, ITAT, Bangalore. 6. Guard file By order Asst. Registrar, ITAT, Bangalore.