The ITO, Ward-3(1)(4), Baroda V. Sheelaben D. Manglani, Godhra

MA 172/AHD/2020

AI Insights

The case involves the Income Tax Department (Revenue) seeking to recall a consolidated order passed by the ITAT concerning penalties levied under various sections of the Income Tax Act for the assessment years 2011-12 to 2013-14. The penalties were initially accepted by the Assessing Officer (AO) following a search and subsequent proceedings under sections 132 and 153A of the Act. The ITAT had previously allowed the appeals of the assessee group, which included Sheelaben D. Manglani, against these penalties, citing precedents that the Revenue argued were misapplied. The Revenue's MAs contended that the ITAT had overlooked crucial facts and distinctions in applying these precedents, leading to a decision that did not consider the specific circumstances of the assessee's case. The ITAT agreed with the Revenue's position, acknowledging the need to rectify the oversight and set the matter for a fresh hearing.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 127138 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 2 month(s) 14 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 19-01-2023
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 20-10-2022
• Assessment Year: 2012-2013
• Appeal Filed On: 05-11-2020
• Other Referred Cases: Rajkumar Gulab Badgujar vs. 111 taxmann.com 257, Prag V. Chugh vs. DCIT in ITA No. 581 to 586/Ahd/2018
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Revised return; Set aside
• Section: 132; 271(1)(c); 143(3); 153A; 254(2); 153C

Judgement Text

आयकर अपील य अ धकरण, अहमदाबाद यायपीठ IN THE INCOME TAX APPELLATE TRIBUNAL, ‘’ A’’ BENCH, AHMEDABAD BEFORE Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER And SHRI WASEEM AHMED, ACCOUNTANT MEMBER MA Nos.171 to 173/Ahd/2020 In आयकरअपीलसं./In ITA Nos.575 to 577/Ahd/2018 नधा रणवष /Asstt. Years:(2011-2012 to 2013-14) I.T.O, Ward-3(1)(4), Vadodara. Vs. Sheelaben D. Manglani, 1,SantKawar Ram Faliya, Baharpura, New Civil Hospital, Godhra-389001. PAN: ADFPM4823K (Applicant) (Respondent) Revenue by : Shri Atul Pandey, Sr. D.R. Assessee by : Shri Ketan Shah, A.R स ु नवाईक तार ख/Date of Hearing : 21/10/2022 घोषणाक तार ख/Date of Pronouncement: 20/01/2023 PER WASEEM AHMED, ACCOUNTANT MEMBER: The Revenue by way of these Miscellaneous Applications is seeking to recall the consolidated order passed by the ITAT in ITA Nos. 575 to 577/Ahd/2018 vide order dated 16/01/2020 on the reasoning that there is a mistake apparent from the record within the meaning of the provision of section 254(2) of the Act. M.A Nos.171 to 173/AHD/2020 In ITA No.575 to 577/Ahd/2020 Asstt. Years 2011-12 to 2013-14 2 First, we take up MA No. 171/Ahd/2020 in ITA No. 575/Ahd/2018 corresponding to A.Y. 2011-12 2. This bunch of 3 MA’s has been directed at the instance of the Revenue against the common order of ITAT dated 16-01-2020 in ITA No. 570 to 580/Ahd/2018 of different assessee. The facts in brief are that the assessee group was subject to search proceedingsdated 03-07-2012 under section 132 of the Act. As a result of search, the proceedingsunder section 153A of the Act were initiated. The assessee in the return filed in response to notice issued under section 153A of the Act declared certain additional income in AY 2011-12, 2012-13 and 2013-14 which was accepted by the AO without being made any further addition in the assessment order framed under section 143(3) r.w.s. 153A of the Act. However, the AO initiated penalty proceedings under section 271(1)(c) and finally levied penalty on account of deemed concealment of income under the provisions of explanation 5A to section 271(1)(c) of the Act in the AY 2011-12 and penalty under section 271AAB of the Act in AY 2012-13 and 2013-14. On appeal by the assessee, the learned CIT(A) also confirmed the levy of penalty under section 271(1)(c) and 271AAB of the Act in the respective assessment years. Finally, the assessee was in appeal before This Tribunal in ITA Nos. 575 to 577/Ahd/2018. There were also three other members of assessee group namely Smt. Kavitaben Luhana, Rohit S Luhana and Ravikant D Manglani who were also in the appeal against the penalty order bearing ITA Nos. 570/Ahd/2018, 571 to 574/Ahd/2018 and 578 to 580/Ahd/2018. Thus the Bench clubbed all the appeals of assessee group in ITA Nos. 570 to 580/Ahd/2018. The Bench has taken appeal of Smt. Kavitaben Luhana in ITA No. 570/Ahd/2018 for AY 2011-12 as lead year and finding given in said appeal was also applied on remaining appeals. The Tribunal while adjudicating the appeal of Smt. Kavitaben Luhana in ITA No. 570/Ahd/2018 deleted the penalty levied under section 271(1)(c) of the Act by holding that the fact of the case is in parity with the facts of the judgment of the Hon’ble Supreme Court in case of Rajkumar Gulab Badgujar reported in 111 taxmann.com 257 and M.A Nos.171 to 173/AHD/2020 In ITA No.575 to 577/Ahd/2020 Asstt. Years 2011-12 to 2013-14 3 order of the co-ordinate bench in case of Prag V. Chugh vs. DCIT in ITA No. 581 to 586/Ahd/2018 where the issue has been decided in favour of the assessee. Thus, applying the same ratio, the appeals of the present assessee’s in ITA Nos. 575 to 577/Ahd/2018 were also allowed. 3. Now the Revenue is in miscellaneous applications before us and has pointed out certain errors in the order of the ITAT which are apparent from record as detailed below: I. The facts of the case of Shri Rajkumar Gulab Badgujar are distinguishable from the facts of the case of the assessee. In the said case, the Hon’ble court found that the assessee declared additional income in revised return before issuance of notice under section 153C of the Act and the assessee was not the search person. Accordingly, the Hon’ble Court held that the provisions of explanation 5A to section 271(1)(c) of the Act are not applicable whereas in the present case the assessee was covered by the search action and the additional income was declared after search and issuance of notice under section 153A of the Act. Likewise, in case of Parag V Chughvs DCIT bearing ITA No. 581 to 586/Ahd./2018, the penalty was levied under section 271AAB of the Act whereas in case of present assessee i.e. in case of Smt. Kavitaben Luhana (the lead case of the assessee group), penalty was levied under section 271(1)(c) by invoking the provisions of explanation 5A for the A.Y. 2011-12. II. The appeal of the present assessee for A.Y. 2012-13 and 2013-14 in ITA No. 576 & 577/Ahd.2018 was allowed by applying the finding given in case of Smt. Kvitaben S Luhana for A.Y. 2011-12 in ITA No 570/Ahd/2018. However, the bench erred considering the fact that in case of Smt. kavitaben S Luaha penalty was levied under section M.A Nos.171 to 173/AHD/2020 In ITA No.575 to 577/Ahd/2020 Asstt. Years 2011-12 to 2013-14 4 271(1)(c) of the Act whereas in case of present assessee penalty was levied under section 271AAB of the Act for A.Y. 2012-13 and 2013-14. 3.1 In view of the above, the learned DR before us contended that the order of the ITAT suffers from apparent mistakes and therefore, the same needs to be recalled within the provisions of section 254(2) of the Act. 4. On the other hand, the learned AR for the assessee before us contended that the ITAT in the MA’s of the group cases has dismissed the MA filed by the Revenue. 5. We have duly considered the rival contentions and gone through the records carefully. It is settled position of law that power for rectification under section 254(2) of the Act can be exercised only when mistake, which is sought to be rectified, is an obvious and patent mistake, which is apparent from the record and not a mistake, which is required to be established by arguments and long drawn process of reasoning on points, on which there may conceivably be two opinions. We also note that if a crucial fact and argument brought on record by any party of the appeal which may have impacted the final outcome of the appeal not considered or omitted to be considered will amount mistake apparent from record. In holding so we draw support and guidance from the order of coordinate bench of Mumbai Tribunal in case GOLDEN MEADOWS PROPERTIES (P.) LTD vs, ITO reported in 149 Taxman 17 where it was held as under: Section 254(2) specifically empowers the Tribunal to rectify any mistake which is apparent from the record. The Tribunal has inherent power to set aside an order where an appeal has been decided on wrong grounds. The inherent power to rectify a mistake committed by the Tribunal is not really speaking a power to review. It is the atonement to the wronged party by the Court or the Tribunal for the wrong that it has itself committed. It is a basic principle of jurisprudence that if there is a mistake committed by the Tribunal, it needs to be rectified as no one should suffer or come to grief on account of the mistake committed by the Court. Even the rules of procedure and technicalities should not come in the way in rendering justice to the parties by correcting the mistake committed by the Tribunal. The purpose of the Tribunal is to render justice and not to negate it. M.A Nos.171 to 173/AHD/2020 In ITA No.575 to 577/Ahd/2020 Asstt. Years 2011-12 to 2013-14 5 The principles of law as enunciated by various decisions are summarized as follows: 1.That where there is a wrong assumption of facts it will constitute mistake apparent from record. 2.Where there is a failure to consider certain evidence brought on record it would also constitute a mistake apparent from record. 3.Where there is an omission on the part of the Tribunal to consider the principles of law enunciated by the decisions of various Courts on which reliance was placed in the course of hearing, it will also constitute mistake apparent from record. 5.1 We also find support and guidance from the order of Mumbai Tribunal in case of Rakesh Ramani vs. ITO reported in 5 SOT 547 where it was held as under: The principles of law are : (1) where there is a wrong assumption of facts, it will constitute a mistake apparent from record, (2) where there is a failure to consider certain evidence brought on record, it would also constitute a mistake apparent from record, and (3) where there is omission on the part of the Tribunal to consider the principles of law enunciated by the decisions of various Courts on which reliance is placed by the assessee, it will also constitute mistake apparent from record. In the light of the above principles of law, it could be found that mistakes had occurred in the Tribunal’s appellate order as various facts and materials brought on record had not been considered by the Tribunal while deciding the appeal. In the instant case, there had inadvertently been non-consideration of vital facts, brought on record and judicial decisions, cited during arguments of appeal, which all went to the root of the matter and were so crucial as might even tilt the balance of decision. Accordingly, in passing the impugned appellate order, mistake apparent from record had occurred, rendering the said appellate order of the Tribunal liable to be rectified by essentially recalling the same by passing a fresh order. Therefore, the Tribunal’s appellate order was liable to be set aside/recalled and the related appeal fixed so as to be decided afresh. [Para 7] 5.2 Coming to fact of case on hand, the contention of the learned DR is that the ITAT while deciding the issue relied on judicial pronouncement of Hon’ble Supreme Court in case of Rajkumar Gulab Badgujar reported in 111 taxmann.com 257 and order of the co-ordinate bench in case of Prag V. Chugh vs. DCIT in ITA No. 581 to 586/Ahd/2018 without considering the crucial distinguishable fact from the fact of the case of the assessee as narrated above. 5.3 Undoubtedly, these crucial facts cited above were not considered by the Bench at the time of hearing and ITAT inadvertently omitted to make a note of these facts which amounts to mistake apparent from record in the light of the M.A Nos.171 to 173/AHD/2020 In ITA No.575 to 577/Ahd/2020 Asstt. Years 2011-12 to 2013-14 6 cases cited above. Accordingly, we recall the order of the ITAT and restore to its original number with the direction to the registry to fix the same for fresh hearing under intimation to both the parties. Hence, the MA’s filed by the Revenue are allowed. 5.4 In the result, the MA’s filed by the Revenue are allowed. Order pronounced in the Court on 20/01/2023 at Ahmedabad. Sd/ Sd/- (SUCHITRA KAMBLE) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER (True Copy) Ahmedabad; Dated 20/01/2023 Manish/Tanmay आदेशक त ल प!े षत/Copy of the Order forwarded to : आदेशान ु सार/BY ORDER, उप/सहायकपंजीकार (Dy./Asstt.Registrar) आयकरअपील यअ धकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation :04/01/2023 2. Date on which the typed draft is placed before the Dictating Member 3. Date on which the approved draft comes to the Sr.P.S./P.S. - 4. Date on which the fair order is placed before the Dictating Member for Pronouncement .................... 5. Date on which the file goes to the Bench Clerk.. : 20/01/2023 6. Date on which the file goes to the Head Clerk.................................. 7. The date on which the file goes to the Assistant Registrar for signature on the order.......................... Date of Despatch of the Order.................. 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं धतआयकरआय ु त/ Concerned CIT 4. आयकरआय ु त(अपील) / The CIT(A) 5. !वभागीय $त$न ध, आयकरअपील यअ धकरण/ DR, ITAT, 6. गाड&फाईल / Guard file.