ITO, Ward-2, Warangal V. M/s K.N. Murthy Jewellers, Warangal

MA 169/HYD/2012

• Counselvise Citation: [2013] 124 COUNSELVISE.COM (IT) 0546 (ITAT-HYDERABAD)
• Duration Of Justice: 10 month(s) 3 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 21-06-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 17-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M H NAIK
• Assessee Lawyers: A V RAGHURAM
• Keywords: Business income; Reasonable cause

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER M.A. NOS. 168, 169 & 170/HYD/2012 (IN ITA NOS. 479, 480 & 481/HYD/2006 ASSESSMENT YEARS: 2002-03, 2003-04 & 2004-05) INCOME TAX OFFICER, WARD 2, WARANGAL. APPLI CANT VS. M/S K.N. MURTHY JEWELLERS, WARANGAL. RESPONDENT (PAN - APPLICANT BY : SHRI. M.H. NAIK RESPONDENT BY : SHRI A.V. RAGHURAM DATE OF HEARING : 24/05/2013 DATE OF PRONOUNCEMENT : 21 /06/2013 ORDER PER CHANDRA POOJARI, A.M.: THESE MISCELLANEOUS APPLICATIONS FILED BY THE REVEN UE ARISE OUT OF THE ORDER OF ITAT A BENCH, HYDERABAD BENCH ES, HYDERABAD, IN APPEALS ITA NO. 479 TO 481/HYD/2006 D ATED 26/08/2011, WHEREIN THE DEPARTMENT SOUGHT RECTIFICA TION IN THE SAID ORDER. 2. THE LEARNED DR SUBMITTED THAT THE DEPARTMENT CAM E ON APPEAL BEFORE THIS TRIBUNAL WITH REGARD TO ISSUE OF NON CONSIDERATION OF RS. 33,57,146/- RELATING TO REPEAT ED/DUPLICATE ENTRIES WHILE WORKING OUT BUSINESS INCOME OF THE AS SESSEE AS WELL AS PEAK INVESTMENT IN PURCHASES. THE TRIBUNAL CONFI RMED THE 2 MA NOS. 168 TO 170/HYD/12 M/S K.N. MURTHY JEWELLERS, WARANGAL ORDER OF THE CIT(A) WHILE ADJUDICATING THE ISSUE IN FAVOUR OF THE ASSESSEE. ACCORDING TO THE LEARNED DR, WHILE PASSIN G THE ORDER, THE TRIBUNAL HELD THAT WEIGHT AND WASTAGE FIGURES M ENTIONED IN THE CHART PREPARED BY THE CIT(A) IN HIS ORDER, ARE VERY MUCH THE SAME AND MATCHES WITH DUPLICATE ITEMS/ENTRIES AND H ENCE OBSERVED THAT THE CIT(A) IS JUSTIFIED IN ARRIVING T O THE CONCLUSION THAT THERE WERE SOME DUPLICATE ENTRIES WHICH WERE T OTALED AND TREATED BY THE AO AS TURNOVER OF THE ASSESSEE. HOW EVER, THE DR CONTENDED THAT AS PER THE CHART PREPARED BY THE CIT (A), IT IS NOTICED THAT THE TOTAL OF ALL THE ITEMS MATCH WITH THE DUPLICATE ITEMS/ENTRIES BUT IT IS SEEN THAT THERE IS DIFFEREN CE IN THE ITEMS AND CONTENTS OF JEWELLERY. HE, THEREFORE, SUBMITTED THAT THERE IS A MISTAKE APPARENT IN THE ORDER OF THE TRIBUNAL (SUPR A) AND PLEADED FOR RECTIFICATION. 3. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE A SSESSEE SUBMITTED THAT THE TRIBUNAL HAD CONSIDERED THE ENTI RE FACTS AND CIRCUMSTANCES OF THE CASE AND CONFIRMED THE ORDER O F THE CIT(A) AFTER AGREEING WITH THE FINDINGS OF THE CIT(A). HE SUBMITTED THAT THE ARGUMENT PUT-FORTH BY THE DR IS ALMOST RESULTI NG INTO REVIEW ITS OWN ORDER BY THE TRIBUNAL, FOR WHICH THE TRIBUN AL HAS NO POWER. 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIES. AFTER CONSIDERING THE ARGUMENTS OF BOTH THE PARTIES, THE TRIBUNAL CONCURRED WITH THE ORDER OF THE CIT(A) AND DISMISSE D THE GROUNDS TAKEN BY THE DEPARTMENT. BY THIS MA, THE LEARNED DR WANTED THE TRIBUNAL TO REVIEW ITS EARLIER ORDER, WHICH THE TRI BUNAL CANNOT DO IT IN VIEW OF THE PROVISIONS OF SECTION 254(2), AS PER WHICH, THE POWERS OF THE TRIBUNAL ARE LIMITED. FURTHER IT IS WELL SETTLED THAT STATUTORY AUTHORITY CANNOT EXERCISE POWER OF REVIEW UNLESS SUCH 3 MA NOS. 168 TO 170/HYD/12 M/S K.N. MURTHY JEWELLERS, WARANGAL 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 RE-HEARING OF THE CASE ON MERIT. IT IS HELD IN THE CASE OF CIT VS. PEARL WOOLLEN MILLS (33 0 ITR 164): HELD, THAT THE TRIBUNAL COULD NOT READJUDICATE THE MATTER UNDER SECTION 254(2). IT IS WELL SETTLED TH AT A STATUTORY AUTHORITY CANNOT EXERCISE POWER OF REVIEW UNLESS SUCH POWER IS EXPRESSLY CONFERRED. THERE WA S NO EXPRESS POWER OF REVIEW CONFERRED ON THE TRIBUNA L. EVEN OTHERWISE, THE SCOPE OF REVIEW DID NOT EXTENT TO REHEARING A CASE ON THE MERITS. NEITHER BY INVOKIN G INHERENT POWER NOR THE PRINCIPLE OF MISTAKE OF COUR T NOT PREJUDICING A LITIGANT NOR BY INVOLVING DOCTRINE OF INCIDENTAL POWER, COULD THE TRIBUNAL REVERSE A DECI SION ON THE MERITS. THE TRIBUNAL WAS NOT JUSTIFIED IN RECALLING ITS PREVIOUS FINDING RESTORING THE ADDITI ON, MORE SO WHEN AN APPLICATION FOR THE SAME RELIEF HAD BEEN EARLIER DISMISSED. 5. THE SCOPE AND AMBIT OF APPLICATION OF SECTION 25 4(2) IS VERY LIMITED. THE SAME IS RESTRICTED TO RECTIFICATION O F 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 PAS SING OF A FRESH ORDER. THAT DOES NOT APPEAR TO BE THE LEGISL ATIVE INTENT. THE ORDER PASSED BY THE TRIBUNAL UNDER S. 254(1) IS THE EFFECTIVE ORDER SO FAR AS THE APPEAL IS CONCERNED. ANY ORDER PASSED UNDER S. 254(2) EITHER ALLOWING THE AMENDMENT OR REFUSING TO AMEND GETS MERGED WITH THE ORIGINAL ORDER PASSED. THE OR DER AS AMENDED OR REMAINING UN-AMENDED IS THE EFFECTIVE OR DER FOR ALL PRACTICAL PURPOSES. AN ORDER UNDER S. 254(2) DOES NOT HAVE EXISTENCE DE HORS THE ORDER UNDER S. 254(1). RECALLING OF THE ORDER IS NOT PERMISSIBLE UNDER S. 254(2). RECALLIN G OF AN ORDER AUTOMATICALLY NECESSITATES REHEARING AND RE-ADJUDIC ATION OF THE ENTIRE SUBJECT-MATTER OF APPEAL. THE DISPUTE NO LO NGER REMAINS 4 MA NOS. 168 TO 170/HYD/12 M/S K.N. MURTHY JEWELLERS, WARANGAL RESTRICTED TO ANY MISTAKE SOUGHT TO BE RECTIFIED. POWER TO RECALL AN ORDER IS PRESCRIBED IN TERMS OF RULE 24 OF THE I TAT RULES, 1963, AND THAT TOO ONLY IN CASE WHERE THE ASSESSEE SHOWS THAT IT HAD A REASONABLE CAUSE FOR BEING ABSENT AT A TIME W HEN THE APPEAL WAS TAKEN UP AND WAS DECIDED EX-PARTE. JUDG ED IN THE ABOVE BACKGROUND THE ORDER PASSED BY THE TRIBUNAL I S INDEFENSIBLE. 6. THE WORDS USED IN S. 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 T O BE CARRIED OUT IN THE ORIGINAL ORDER TO CORRECT THAT PARTICULA R MISTAKE. THE PROVISION DOES NOT INDICATE THAT THE TRIBUNAL CAN R ECALL THE ENTIRE ORDER AND PASS A FRESH DECISION. THAT WOULD AMOUNT TO A REVIEW OF THE ENTIRE ORDER AND THAT IS NOT PERMISSIBLE UND ER THE IT ACT. THE POWER TO RECTIFY A MISTAKE UNDER S. 254(2) CANN OT BE USED FOR RECALLING THE ENTIRE ORDER. NO POWER OF REVIEW HAS BEEN GIVEN TO THE TRIBUNAL UNDER THE IT 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 COLA BEVER AGES (P) LTD. (2007) 207 CTR (DEL) 119; (2007) 293 ITR 163 ( DEL), THEIR LORDSHIPS WHILE CONSIDERING THE POWERS OF THE TRIBU NAL UNDER S. 254(2) OF THE IT ACT, 1961 OBSERVED AS UNDER: UNDER S. 254(2) OF THE IT ACT, 1961, THE TRIBUNAL HAS THE POWER TO RECTIFY MISTAKES IN ITS ORDER. HOWEVE R, 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 IT S VERY NATURE THE POWER TO RECTIFY A MISTAKE CANNOT RESULT IN THE RECALL AND REVIEW OF THE ORDER SOUGHT TO BE RECTIFIED. 5 MA NOS. 168 TO 170/HYD/12 M/S K.N. MURTHY JEWELLERS, WARANGAL 8. THUS THE SCOPE AND AMBIT OF APPLICATION U/S. 254 (2) IS AS FOLLOWS: (A) FIRSTLY, THE SCOPE AND AMBIT OF APPLICATION OF S. 2 54(2) OF IT ACT IS RESTRICTED TO RECTIFICATION OF THE MIS TAKES APPARENT FROM THE RECORD. (B) SECONDLY, THAT NO PARTY APPEARING BEFORE THE TRIBUN AL SHOULD SUFFER ON ACCOUNT OF ANY MISTAKE COMMITTED B Y THE TRIBUNAL AND IF THE PREJUDICE HAS RESULTED TO THE P ARTY, WHICH PREJUDICE IS ATTRIBUTABLE TO THE TRIBUNALS MISTAKE/ERROR OR OMISSION, AND WHICH AN ERROR IS A MANIFEST ERROR, THEN THE TRIBUNAL WOULD BE JUSTIFIED IN RECT IFYING ITS MISTAKE. THE RULE OF PRECEDENT IS AN IMPORTANT A SPECT OF LEGAL CERTAINTY IN THE RULE OF LAW AND THAT PRINCIP LE IS NOT OBLITERATED BY S. 254(2) OF THE ACT AND NON-CONSIDE RATION OF PRECEDENT BY THE TRIBUNAL CAUSES A PREJUDICE TO THE ASSESSEE. (C) THIRDLY, POWER TO RECTIFY A MISTAKE IS NOT EQUIVALE NT TO A POWER TO REVIEW OR RECALL THE ORDER SOUGHT TO BE RE CTIFIED. (D) FOURTHLY, UNDER S. 254(2) AN OVERSIGHT OF A FACT CA NNOT CONSTITUTE AN APPARENT MISTAKE RECTIFIABLE UNDER TH E SECTION. (E) FIFTHLY, FAILURE ON THE PART OF THE TRIBUNAL TO CON SIDER AN ARGUMENT ADVANCED BY EITHER PARTY FOR ARRIVING A T A CONCLUSION IS NOT AN ERROR APPARENT ON RECORD, ALTH OUGH IT MAY BE AN ERROR OF JUDGEMENT. (F) SIXTHLY, EVEN IF ON THE BASIS OF A WRONG CONCLUSION THE TRIBUNAL HAS NOT ALLOWED A CLAIM OF THE PARTY IT WI LL NOT BE A GROUND FOR MOVING AN APPLICATION UNDER S. 254(2) OF THE ACT. 6 MA NOS. 168 TO 170/HYD/12 M/S K.N. MURTHY JEWELLERS, WARANGAL (G) LASTLY, IN THE GARB OF AN APPLICATION FOR RECTIFICA TION UNDER S. 254(2) THE ASSESSEE CANNOT BE PERMITTED TO REOPEN AND REARGUE THE WHOLE MATTER AS THE SAME IS BEYOND THE SCOPE OF S. 254(2) OF THE IT ACT. 9. IN VIEW OF THE ABOVE DISCUSSION, WE CANNOT REVIE W EARLIER ORDER OF THE TRIBUNAL AS SOUGHT BY THE LEARNED DR. THEREFORE, WE DISMISS THE M.AS. FILED BY THE DEPARTMENT. 10. IN THE RESULT, THE MISCELLANEOUS APPLICATIONS FILE D BY THE DEPARTMENT ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 21/06/2013. SD/- SD/- (SAKTIJIT DEY) (CHANDRA POOJARI) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED: 21 ST JUNE, 2013. KV COPY TO:- 1) ITO, WARD 2, STATION ROD, WARANGAL 2) M/S KN MURTHY JEWELLERS, 6-2-202, CHOWRASTHA, HANMAKONDA, WARANGAL. 3) THE CIT (A)-VI, HYDERABAD 4) THE CIT, AP, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABAD.