M/s. Patliputra Credit & Securities Ltd., Noida V. DCIT, New Delhi

MA 162/DEL/2018

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 3651 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 3 month(s) 22 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 05-07-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2009-2010
• Appeal Filed On: 13-03-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 250; 254(2); 113

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : ‘F’ NEW DELHI BEFORE SH. ANIL CHATURVEDI, ACCOUNTANT MEMBER & SHRI ANUBHAV SHARMA, JUDICIAL MEMBER M.A. No. 159 /Del./2018 (ITA No.-1932/Del./2013), A.Y. 2007-08 M.A. No. 160 /Del./2018 (ITA No.-1933/Del./2013), A.Y. 2006-07 M.A. No. 161 /Del./2018 (ITA No.-577/Del./2014), A.Y. 2008-09 M.A. No. 162 /Del./2018 (ITA No.-578/Del./2014), A.Y. 2009-10 M/s. Patliputra Credit & Securities Ltd., Shiv Sushil Bhawan D-219, Vivek Vihar Phase I New Delhi TAN / PAN : AAACP7122R vs DCIT, Central Circle 23 New Delhi Applicant Respondent Assessee by Sh. Vinod Kumar Bindal, CA and Ms. Rinky Sharma, ITP Revenue by Shri M. Baranwal, Sr. DR ORDER PER ANUBHAV SHARMA, J.M. The Miscellaneous applications in hand have been filed against the order dated 15.11.2017 by which ITA No. 1932 & 1933/Del/2013 for the Assessment Year 2006-07 and 2007-08 ITA No. 577 & 578/Del/2014 for the Assessment Year 2008-09 & 2009-10 were disposed of while partly allowing appeals for Assessment Year 2006-07 & 2007-08 and dismissing for 2008-09 & 2009-10. Date of Hearing 01.07.2022 Date of Pronouncement 06.07.2022 2 M.A. No. 159 & Ors. Patliputra Credit & Securities Ltd. 2. The assessee had challenged the impugned orders of assessment by which Assessing officer has rejected the annual letable value of a flat of assessee. The Bench had taken into consideration the fact of unauthorized possession and concluded that therefore ALV can be considered on basis of municipal taxes. 3. Assessee now submits that it had filed a civil suit against the unauthorized occupants on 02.08.2013 for their eviction and necessary documentary evidences in this regard were placed at page no. 3-18 in the paper books filed for the AYs 2008-09 and 2009-10. It is submitted that Bench has not taken this in consideration. Ld. Counsel submitted that in para no. 6 of the order dated 15.12.2017 the Bench observed that :- “Before us, the ld. counsel for the assessee, Shri V.K.Bindal, submitted that a suit was filed against the illegal occupier of the flat and assessee has been contesting that the flat was in illegal possession of Shri Prakash Chandra Yadav and, therefore, no rental value should be assessed in terms of section 23(1).” 3.1 He submitted that this argument was not taken into consideration and the Bench made contradictory observation in para 9 as follows :- “We have heard the rival submissions and also perused the relevant finding given in the impugned order. It is an undisputed fact that the assessee-company is the owner of the flat and despite various opportunities given, assessee could not prove that any legal action has been taken by the assessee against alleged unauthorized possession.” 4. Ld. Counsel submitted that the observations of the Bench are contradictory and an error apparent on record liable to be corrected. On the other hand, Ld. DR submitted that the civil suit was filed on 02.08.2013, therefore, it was 3 M.A. No. 159 & Ors. Patliputra Credit & Securities Ltd. inconsequential and otherwise there is no ambiguity in the order and the scope of rectification is limited. 5. Giving thoughtful consideration to the matter on record, this Bench is of the considered opinion that there is no substance in the present application for rectification. In Para no. 6, the submission of the Ld. Counsel for the asssessee have been reproduced while in para no. 9, the Bench had given a finding based upon appreciation of matter on record that assessee could not prove the fact that any legal action has been taken by the assessee against alleged unauthorized possession. Assessee’s own case is that the civil suit was filed by the assessee company on 02.08.2013 after the Ld. CIT(A) decision in the case of assessee for Assessment Years 2006-07 & 2007-08. 6. Even otherwise the alleged error cannot be considered to be one apparent on record which can be rectified within the powers of Section 254(2) of the Act as such the power is only for rectification and not review. The Bench is of considered opinion that averment of applicant that the Bench has made contradictory findings or failed to appreciate relevant evidence in correct perspective, is not an apparent error on record which can be rectified but it may amount to review which is not permissible under 254(2) of the Act. Reliance in this regard can be placed on the judgment of Hon’ble Delhi High Court in Commissioner Of Income-Tax v. Income-Tax Appellate Tribunal And Other, dated Jun 2, 2006; 2006 TAXMAN DELHI 155 378 where in para 7 it held; 4 M.A. No. 159 & Ors. Patliputra Credit & Securities Ltd. “ It is evident from the above that the power available to the Tribunal is not in the nature of a review as is understood in legal parlance. The power is limited to correction of mistakes apparent from the record. What is significant is that the section envisages amendment of the original order of the Tribunal and not a total substitution thereof. That position is fairly well-settled by two decisions of this court in Deeksha Suri v. ITAT, [1998] 232 ITR 395 (Karan & Co v. Income- Tax Appellate Tribunal., [2002] 253 ITR 131. This court has in both these decisions held that the foundation for the exercise of the jurisdiction lies in the rectification of a mistake apparent from the record which object is ensued by amending the order passed by the Tribunal. The said power does not, however, contemplate a rehearing of the appeal for a fresh disposal. Doing so would obliterate the distinction between the power to rectify mistakes and the power to review the order made by the Tribunal. The following passage from the decision of this court in Karan and Co., [2002] 253 ITR 131 elucidates the difference between review and rectification of an order made by the Tribunal (page 136): “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 unamended is the effective order for all practical purposes. The same continues to be an order under section 254(1). That is the final order in the appeal. An order under section 254(2) does not have existence de hors the order under section 254(1). Recalling of the order is not permissible under section 254(2). Recalling of an order automatically necessitates rehearing and readjudication 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 Income-tax (Appellate Tribunal) Rules, 1963, and that too only in cases where the 5 M.A. No. 159 & Ors. Patliputra Credit & Securities Ltd. 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. This position was highlighted by one of us (Justice Arijit Pasayat, Chief Justice) in CIT v. ITAT, [1992] 196 ITR 640 (Orissa). Judged in the above background the order passed by the Tribunal is indefensible.” 7. Also reference can be made to judgement in Baljeet Jolly v. Commissioner Of Income-Tax.; dated Aug 2, 2000 ; 2001 ITR DELHI 250 113 where it is held by Hon’ble Delhi High Court; “5. A bare look as Section 254(2) of the Act makes it clear that a “mistake apparent from the record” is rectified. In order to attract the application of Section 254(2), the mistake must exist and the same must be apparent from the record. The power to rectify the mistake, however, does not cover cases where a revision or review of the order is intended. “Mistake” means to take or understand wrongly or inaccurately; to make an error in interpreting; it is an error; a fault, a misunderstanding, a misconception. “Apparent” means visible; capable of being seen; easily seen; obious; plain. A mistake which can be rectified under Section 254(2) is one which is patent, which is obvious and whose discovery is not dependent on argument or elaboration. The language used in Section 254(2) makes it clear that only amendment to the order passed under Section 254(1) is permissible where it is brought to the notice of the Tribunal that there is any mistake apparent from the record. In our view amendment of an order does not mean obliteration of the Order originally passed and its substitution by a new order: What the assessee intends to do in the present case is precisely the substitution of the order, which according to us is not permissible under the provisions of Section 254(2) and, therefore, the Tribunal was justified in holding that there was no mistake apparent on the face of the record. Where an error is far from self-evident, it ceases to be an apparent error. It is no doubt true that a mistake capable of being rectified under Section 254 (2) is not confined to clerical or arithmetical mistakes. On the other hand, it does not cover any mistake may be discovered by a complicated 6 M.A. No. 159 & Ors. Patliputra Credit & Securities Ltd. process of investigation, argument or proof. As observed by the Apex Court in Master Construction Co. (P) Ltd. v. State of Orissa, (1966) 17 STC 360, an error which is apparent on the face of the record should be one which is not an error which depends for its discovery on elaborate arguments on questions of fact of law. Similar view was also expressed in Satyanarayan Laxminarayan Hegde v. Mallikarjun Bhavanappa Tirmule, AIR 1960 SC 137. It is to be noted that the language used in Order XI, VII, Rule 1, of the Code of Civil Procedure, 1908 (in short “the CPC”) is different from the language used in Section 254(2) of the Act. Power is given to various authorities to rectify and mistake “apparent from record”. In the Civil Procedure Code, the Words are “an error apparent on the face of the record”. The two provisions do not mean the same thing. The power of Tribunal in Section 254(2) to rectify “any mistake apparent from the record” is undoubtedly not more than that of the High Court to entertain a writ petition on the basis of “an error apparent on the face of the record”. (see T.S Balaram, ITO v. Volkart Brothers, (1971) 82 ITR 50 (SC) Mistake is an ordinary word, but in taxation laws, it has a special significance. It is not an arithmetical or clerical error alone that comes within its purview. It comprehends errors which, after a judicious probe into the record from which it is supposed to emanate, are discerned. The word “mistake” is inherently indefinite in scope, as what may be a mistake for one may not be one for another. It is mostly subjective and the dividing line in border areas is thin and indiscernible. It is something which a duly and judiciously instructed mind can find out from the record. In order to attract the power to rectify under Section 254(2) it is not sufficient if there is merely a mistake in the orders sought to be rectified. The mistake to be rectified must be one apparent from the record. A decision on a debatable point of law or disputed question of fact is not a mistake apparent from the record. The plain meaning of the word “apparent” is that it must be something which appears to be so ex facie and it is incapable of argument or debate. It therefore, follows that a decision on a debatable point of law or fact or failure to apply the law to a set of facts which remains to be investigated cannot be corrected by way of rectification.” 7 M.A. No. 159 & Ors. Patliputra Credit & Securities Ltd. 8. Honourable Supreme Court in the case of Reliance Telecom Limited reported in 133 taxmann. com 41, has held; “6. None of the aforesaid grounds are tenable in law. Merely because the Revenue might have in detail gone into the merits of the case before the ITAT and merely because the parties might have filed detailed submissions, it does not confer jurisdiction upon the ITAT to pass the order de hors Section 254(2) of the Act. As observed hereinabove, the powers under Section 254(2) of the Act are only to correct and/or rectify the mistake apparent from the record and not beyond that. Even the observations that the merits might have been decided erroneously and the ITAT had jurisdiction and within its powers it may pass an order recalling its earlier order which is an erroneous order, cannot be accepted. As observed hereinabove, if the order passed by the ITAT was erroneous on merits, in that case, the remedy available to the Assessee was to prefer an appeal before the High Court, which in fact was filed by the Assessee before the High Court, but later on the Assessee withdrew the same in the instant case.” Consequently the applications in hand are dismissed. Order pronounced in open court on this 6 th day of July, 2022. Sd/- Sd/- (ANIL CHATURVEDI) (ANUBHAV SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 06.07.2022 *BINITA, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT, NEW DELHI