Ramesh Karaka, Ardhavaram V. ITO, Ward-1, Tanuku

MA 15/VIZ/2023

• Counselvise Citation: [2023] 100 COUNSELVISE.COM (IT) 4758 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 8 month(s) 18 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 07-12-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 30-11-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 19-03-2023
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained investment
• Section: 69; 69C; 254(2)

Judgement Text

आयकर अपीलȣयअͬधकरण, ͪवशाखापटणम पीठ, ͪवशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM Įी दुåवूǽ आर एल रेɬडी, ÛयाǓयक सदèय एवं Įी एस बालाकृçणन, लेखा सदèय के सम¢ BEFORE SHRI DUVVURU RL REDDY, HON’BLE JUDICIAL MEMBER & SHRI S BALAKRISHNAN, HON’BLE ACCOUNTANT MEMBER (Through Hybrid Hearing) M.A. No.15/Viz/2023 (In आयकर अपील सं./ I.T.A. No.50/Viz/2022) (Ǔनधा[रण वष[ / Assessment Year : 2017-18) Ramesh karaka, 1-47, Velamapeta, Ardhavaram Ganapavaram Mandal, West Godavari, Andhra Pradesh. PAN: EIEPK 7762 M Vs. Income Tax Officer, Ward-1, Tanuku. (अपीलाथȸ/ Appellant) (Ĥ×यथȸ/ Respondent) अपीलाथȸ कȧ ओर से/ Appellant by : Sri K. Siva Ram Kumar, AR Ĥ×याथȸ कȧ ओर से / Respondent by : Sri Madhukar Aves, Sr. AR सुनवाई कȧ तारȣख / Date of Hearing : 01/12/2023 घोषणा कȧ तारȣख/Date of Pronouncement : 08/12/2023 O R D E R PER DUVVURU RL REDDY, Judicial Member : This Miscellaneous Application is filed by the assessee U/s. 254(2) of the Income Tax Act, 1961 seeking rectification of the 2 Tribunal’s order passed in ITA No.59/Viz/2022 (AY: 2017-18), dated 28/02/2023. 2. At the outset, the Ld. Authorized Representative [AR] submitted that the Hon’ble Tribunal while passing the order dated 28/02/2023 (supra) did not consider the legal ground and the binding precedents of the Hon’ble Supreme Court of India and the Hon’ble Jurisdictional High Court of Andhra Pradesh while deciding the issues raised by the assessee vide its grounds of appeal in ITA No.50/Viz/2022 (supra). The Ld. AR also submitted that the Ld. AO in the earlier Assessment Years ie., AY 2014-15; 2015-16 and 2016-17 has considered the unexplained investments U/s. 69 of the Act and taxed the undisclosed income under the applicable slab rates for the respective AY, which was admitted by the assessee during the survey proceedings. However, for the AY 2017-18, ie., which is the impugned assessment year, the Ld. AO invoked the provisions of section 115BBE of the Act and taxed the unexplained investment @ 60% . Therefore, the Ld. AR pleaded that in the earlier assessment years (ie., AY 2014-15; 2015-16 & 2016-17) since the Ld. AO has taxed the unexplained investment at applicable slab rates, the Ld. AO is precluded in invoking the provisions of section 115BBE 3 for the AY 2017-18. It is the prayer of the Ld. AR that while deciding this issue, the Tribunal has not considered the principle of res-judicata which is also applicable to the cases involving Income Tax thereby not considering the judgment of the Hon’ble Supreme Court as well as the jurisdictional High Court cited during the hearing of the appeal and therefore it constitutes a mistake apparent on record in the order of the Tribunal dated 28/02/2023. Thus, the Ld. AR pleaded that the order the Tribunal 28/02/2023 (supra) may be rectified and the Tribunal may pass the orders as deem fit. 3. Per contra, the Ld. Departmental Representative submitted that all the arguments of the Ld. AR have been considered by the Tribunal while hearing of the appeal of the assessee on 23/02/2023 and categorically distinguished the finding of the Ld. AO with respect to non-applicability of the case laws relied on by the Ld. AR (viz., Hon’ble Supreme Court, Hon’ble High Court and various decisions of the Tribunal) and passed the order. Therefore, the Ld. DR pleaded that there is no mistake apparent on record in the order of the Tribunal and therefore the MA filed by the assessee may be dismissed. 4 4. We have considered the rival contentions and perused the material available on record and also gone through the order of the Tribunal dated 28/02/2023 (supra). The main grievance of the Ld. AR before us is that the principle of res-judicata is also applicable to the Income Tax cases and the same was not followed by the Tribunal while passing the order dated 28/02/2023 (supra) in the case of the assessee. On careful perusal of the facts and circumstances of the case as well as the material available before us and the paper book filed by the assessee, we find that for the AY 2014-15, 2015-16 and 2016-17 with respect to the income offered during the course of survey, the assessee has computed the tax without invoking the provisions of section 115BBE of the Act which is very much applicable to the case of the assessee. Being a prudent assessee, the onus is on the assessee to compute the tax in accordance with the provisions of section 115BBE of the Act for the undisclosed income offered during the course of survey @ 30% , but the assessee did not discharge his onus. On the other hand, while accepting the computation of the assessee for the years 2014-15, 2015-16 and 2016-17, the Ld. AO has also overlooked the fact of applying the tax rate @ 30% as per the provisions of section 115BBE of the Act in the case of the assessee. However, 5 during the AY 2017-18, the Ld. AO has applied his mind and rightly applied the amended rate of tax as per section 115BBE of the Act which come into force by the Taxation Laws (Second Amendment) Act, 2015 w.e.f 01/04/2017, applicable for the AY 2017-18 onwards, and taxed the unexplained investment involved in the impugned assessment year at the rate of 60% . Considering these facts, we are of the strong view that when the assessee himself has wrongly computed the total income without applying the then existing provisions of section 115BBE of the Act @ 30% on the unexplained investment for the earlier years prior to AY 2017-18, which is overlooked by the Ld. AO and accepted the same, which is a mistake committed and apparent on the part of the assessee as well as the Ld. Revenue Authorities, we cannot appreciate the argument of the Ld. AR to apply the same wrong ratio to the AY 2017-18 wherein the Ld. AO has rightly computed the tax @ 60%. In our considered opinion, when the Ld. AO has rightly applied the amended provisions of section 115BBE of the Act though a mistake has been crept in while invoking this section in the earlier years ie., AY 2014-15, 2015-16 and 2016- 17, which is a mistake on the part of the Revenue, the Ld. AR cannot compel the Ld. Revenue Authorities or the Tribunal to perpetuate the same by invoking the principle of res-judicata. We 6 cannot apply the principles of res-judicata for the AY 2017-18 based on the mistakes committed by the assessee as well as the Ld. Revenue Authorities for the AYs 2014-15 to 2016-17. It is pertinent to mention here that the provisions of section 115BBE, which is a charging section, was introduced from the AY 2013-14. The title of this section is “Tax on income referred to in section 68, 69, 69A, 69B, 69C or section 69D”. Any income falling under the above said sections, shall be subject to tax at the flat rate of 30% under section 115BBE of the Act. This section 115BBE has been amended w.e.f 1/4/2017 wherein the amendment has enhanced the rate of tax from 30% to 60% , applicable for the AY 2017-18. It is also pertinent to note that there was no new liability created but the rate of tax merely stood enhanced from the commencement of the AY 2017-18. Now, coming to the instant case, on careful perusal of the order of the Tribunal dated 28/02/2023 (supra), we find that while passing the order, the Tribunal has correctly relied on the applicability of the amended provisions of section 115BBE of the Act w.e.f 1/4/2017 which is applicable from the AY 2017-18. Since the impugned assessment year is 2017-18, we have categorically given our finding that the assessment proceedings are independent for each and every assessment year (Assessment year centric) and therefore, after 7 taking into consideration of the amended provisions of section 115BBE, only the Ld. AO has invoked these provisions to the unexplained investment involved in the impugned assessment year 2017-18 and imposed the tax at the rate of 60% . This issue is also clearly discussed and mentioned in para 6 of the Tribunal’s order dated 28/02/2023 (supra). Therefore, in our considered opinion there is no mistake apparent in the order of the Tribunal (supra) as per the provisions of section 254(2) of the Act and therefore the Miscellaneous Application filed by the assessee is devoid of merits and the question of applicability of the principle of res-judiata does not arise. Further, all the case laws relied on by the assessee are not applicable to the facts of the assessee’s case. In the instant case, the assessee himself has wrongly computed the tax without applying the existing provisions of section 115BBE of the Act @ 30% of undisclosed income. Anyhow, the Revenue has also overlooked the assessee’s non-application of the provisions of section 115BBE of the Act for the AYs 2014-15 to 2016-17 but has rightly applied the amended provisions of section 115BBE for the AY 2017-18. Therefore, the principles of res-judicata would not be applicable for the AY 2017-18 since the Ld. AO has rightly invoked the amended provisions of section 115BBE of the Act while taxing the 8 undisclosed income. The Hon’ble Supreme Court and the Hon’ble High Courts have never said that even if the assessee or the Assessing Officer committed the mistake or wrong, the same should be continued for the subsequent AYs also by applying the principles of res-judicata. The basic principle is, principle of res- judicata is not applicable for the income tax cases. However, the Hon’ble Supreme Court held in various cases that the principle of consistency should be followed, that does not mean that in order to maintain consistency, the wrong computation should be allowed based on the principles of consistency. Thus, all the grounds raised by the assessee in the main appeal have been adjudicated and the Tribunal has given a categorical finding and there is no mistake apparent in the order of the Tribunal dated 28/02/2023. Hence, all the grounds raised by the assessee in the Miscellaneous Application filed are liable to be dismissed. It is ordered accordingly. 5. In the result, Miscellaneous Application filed by the assessee is dismissed. 9 Pronounced in the open Court on 08 th December, 2023. Sd/- Sd/- (एस बालाकृçणन) (दुåवूǽ आर.एल रेɬडी) (S.BALAKRISHNAN) (DUVVURU RL REDDY) लेखा सदèय/ACCOUNTANT MEMBER ÛयाǓयकसदèय/JUDICIAL MEMBER Dated : 08/12/2023 OKK - SPS आदेश कȧ ĤǓतͧलͪप अĒेͪषत/Copy of the order forwarded to:- 1. Ǔनधा[ǐरती/ The Assessee– Sri Ramesh, Karaka, 1-47, Ardhavaram, Velamapeta-534198, Ganapavaram Mandal, West Godavari District, Andhra Pradesh. 2. राजèव/The Revenue – Income Tax Officer, Ward-1, Tanuku-534211, West Godavari District, Andhra Pradesh. 3. The Principal Commissioner of Income Tax, 4.आयकर आयुÈत (अपील)/ The Commissioner of Income Tax (Appeals), 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण, ͪवशाखापटणम/ DR, ITAT, Visakhapatnam 6.गाड[ फ़ाईल / Guard file आदेशानुसार / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam