Ashok Kumar Singhania, Hooghly V. CIT -XX Kolkata, Kolkata

MA 19/KOL/2017

• Counselvise Citation: [2017] 124 COUNSELVISE.COM (IT) 5907 (ITAT-KOLKATA)
• Duration Of Justice: 9 month(s) 29 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 22-11-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 23-01-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DAVID Z CHOWNGTHU
• Assessee Lawyers: SURAJIT SAMANTA
• Keywords: Rectification of order; Right to appeal
• Section: 143(3); 263; 63

Judgement Text

M.A.NO.19/KOL/2017 SHRI ASHOKE KUMAR SINGHANIA A.Y. 2009-10 1 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH B KOL KATA [BEFORE HONBLE SHRI N.V.VASUDEVAN, JM & SHRI M.B ALAGANESH, AM ] M.A.NO.19/KOL/2017 (A/O ITA NO.1407/KOL/2014) ASSESSMENT YEAR : 2009-10 MR.ASHOKE KUMAR SINGHANIA -VERSUS- C.I.T.- XX , KOLKATA KOLKATA (PAN: ALUPS 9226 P) (APPELLANT) (RESPONDENT) FOR THE APPELLANT :SHRI SURAJIT SAMANTA, ADVOCATE & SHRI TARAK NATH JAI SWAL, ADVOCATE FOR THE RESPONDENT: SHRI DAVID Z.CHOWNGTHU, ADDL. C IT(DR) DATE OF HEARING : 10.11.2017. DATE OF PRONOUNCEMENT : 22.11.2017. ORDER PER N.V.VASUDEVAN, JM: THIS IS A MISCELLANEOUS APPLICATION FILED BY THE AS SESSEE U/S 254(2) OF THE INCOME TAX ACT, 1961 (ACT) PRAYING FOR RECTIFICATIO N OF CERTAIN APPARENT ERRORS IN THE ORDER OF THE TRIBUNAL DATED 08.07.2016. 2. THE ASSESSEE IS AN INDIVIDUAL. HE DERIVES IN COME FROM BUSINESS AND ALSO INCOME IN THE FORM OF COMMISSION AS LIC AGENT AND INCOME F ROM OTHER SOURCES. AN ORDER OF ASSESSMENT U/S 143(3) OF THE ACT DATED 29.11.20111 WAS PASSED BY THE AO. THIS ORDER WAS REVISED BY CIT IN EXERCISE OF HIS POWERS U/S 26 3 OF THE ACT BY AN ORDER DATED 25.03.2014. THE ASSESSEE HAD FILED THE AFORESAID AP PEAL AGAINST THE ORDER DATED 25.03.2014 U/S 263 OF THE ACT. 3. IN THIS MISCELLANEOUS APPLICATION THE FIRST POIN T THAT WAS URGED ON BEHALF OF THE ASSESSEE WAS THAT IN THE APPEAL BEFORE THE TRIBUNAL THE ASSESSEE HAD CONTENDED THAT THE PROCEEDINGS U/S 263 OF THE ACT WERE INITIATED AT TH E BEHEST OF THE AO. THIS FACT IS DULY RECORDED BY THE CIT IN THE IMPUGNED ORDER U/S 263 O F THE ACT. THE ASSESSEE HAD PLACED RELIANCE ON THE DECISION OF ITAT, KOLKATA BE NCH IN THE CASE OF ARUN KANTI SONATA VS CIT IN ITA NO.1516/KOL/2014 DATED 20.02.2 015. IN THE AFORESAID DECISION A SHOW CAUSE NOTICE U/S 263 WAS ISSUED BY THE ITO AND THE TRIBUNAL IN THOSE CIRCUMSTANCES TOOK THE VIEW THAT THE POWER U/S 263 OUGHT TO BE EXERCISED BY CIT AFTER M.A.NO.19/KOL/2017 SHRI ASHOKE KUMAR SINGHANIA A.Y. 2009-10 2 PERUSING THE RECORDS AND SINCE NO SUCH EXAMINATION AND ISSUE OF SHOW CAUSE NOTICE U/S 263 OF THE ACT WAS ISSUED BY CIT THE ENTIRE PROCEED INGS WERE IN VALID. 4. THE TRIBUNAL REPELLED THE AFORESAID ARGUMENT S ON BEHALF OF THE ASSESSEE BY HOLDING AS FOLLOWS : 13. WE HAVE CONSIDERED THE SUBMISSIONS AND WE FIND THAT IN THE DECISION REFERRED TO ABOVE BY THE LD. COUNSEL FOR THE ASSESS EE IT WAS THE ITO-TECHNICAL- XX, KOLKATA WHO ISSUED A SHOW CAUSE NOTICE U/S 263 OF THE ACT AND TAKING NOTE OF THAT CIRCUMSTANCES THE ITAT HELD THAT THE JURISDICT ION U/S 263 OF THE ACT HAD NOT BEEN PROPERLY EXERCISED. IN THE PRESENT CASE HOWEVE R, WE FIND THAT CIT-XX, KOLKATA HAD ISSUED A SHOW CAUSE NOTICE ON 06.03.201 4 U/S 263 OF THE ACT. APART FROM ABOVE WE FIND THAT THE CIT AFTER TAKING NOTE O F THE FACTS BROUGHT TO HIS NOTICE BY THE AO, HAS, IN PARAGRAPH-2 AT PAGE-2 OF HIS ORDER, COME TO THE CONCLUSION THAT ORDER PASSED U/S143(3) OF THE ACT W AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AND THEREFORE PROCEE DINGS WERE BEING INITIATED U/S 263 OF THE ACT. WE ARE OF THE VIEW THAT THE FACTS O F THE PRESENT CASE CANNOT BE COMPARED TO THE DECISION RENDERED BY THE HONBLE IT AT IN THE CASE OF SHRI ARUN KANTI SAMANTA VS CIT (SUPRA). WE ARE ALSO OF THE VI EW THAT IN THE PRESENT CASE THE CIT HAS APPLIED HIS MIND AND HAS BEFORE ISSUING NOTICE U/S.263 OF THE ACT COME TO A CONCLUSION THAT THE SAID ORDER IS ERRONEO US AND PREJUDICIAL IN THE INTEREST OF THE REVENUE AND THEREAFTER ISSUED A SHO W CAUSE NOTICE U/S 263 OF THE ACT. IT MAY BE TRUE THAT THE FACTS WERE BROUGHT TO THE NOTICE OF CIT BY THE AO BUT THAT CANNOT BE A GROUND TO HOLD THAT JURISDICTION U /S 263 OF THE ACT HAD NOT BEEN EXERCISED BY THE CIT. WE ARE THEREFORE UNABLE TO AC CEPT THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE MADE BEFORE US. 5. IN THIS MISCELLANEOUS APPLICATION THE LD. COU NSEL FOR THE ASSESSEE SUBMITTED THAT THE JURISDICTION U/S 263 OF THE ACT COULD NOT HAVE BEEN EXERCISED AT THE BEHEST OF THE AO AND THAT CIT OUGHT TO HAVE ACTED ON HIS OWN. IT WAS SUBMITTED BY HIM THAT IF THE AO IS ALLOWED TO BRING TO THE NOTICE OF THE CIT CER TAIN ERRORS IN HIS ORDER AND REQUEST THE CIT TO REVISE THE ASSESSMENT ORDER U/S 263 OF T HE ACT THEN IT WOULD BE CONFERRING INDIRECTLY A POWER OF REVIEW ON THE AO. IT WAS SUBM ITTED BY HIM THAT IF AO FOUND SOME ERROR IN THE ORDER HE COULD HAVE RECTIFIED HIS ORDER AND IN THOSE CIRCUMSTANCES THE ASSESSEE WOULD HAVE RIGHT OF APPEAL TO THE CIT( A) AND FURTHER APPEAL TO THE TRIBUNAL. THE ACTION OF AO BY INVOKING THE JURISDIC TION U/S 263 INDIRECTLY HAS RESULTED IN THE ASSESSEE LOSING RIGHT OF APPEAL BEFORE CIT( A) . IT WAS SUBMITTED BY HIM THAT LOSS OF ONE FORUM IS DENIAL OF JUSTICE TO THE ASSES SEE AND THE SAME OUGHT NOT TO HAVE BEEN PERMITTED. THE LD. COUNSEL DREW OUR ATTENTION TO THE DECISION OF THE HONBLE M.A.NO.19/KOL/2017 SHRI ASHOKE KUMAR SINGHANIA A.Y. 2009-10 3 SUPREME COURT IN THE CASE OF RUPA ASHOK HURRA VS AS HOK HURRA & ANOTHER VIDE WRIT PETITION (CIVIL) 509 OF 1997 DATED 10.04.2002. HE D REW OUR ATTENTION TO THE LAST PARAGRAPH IN THE AFORESAID JUDGMENT IN WHICH THE HO NBLE SUPREME COURT HAD OBSERVED THAT WHERE THERE IS A MANIFEST INJUSTICE T HE DOCTRINE OF EXDEBITO JUSTITIAE WOULD APPLY AND IN THAT EVENT JUSTICE SHOULD BE DON E TO THE PARTY IGNORING THE PROCEDURAL HURDLES. 6. WE HAVE GIVEN A VERY CAREFUL CONSIDERATION TO THE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE AND ARE OF THE VIEW THAT THE SAME IS WITHOUT ANY MERIT. THE ADMITTED POSITION IS THAT THE VERY SAME ARGUMENT WAS ADVANCE D BY THE ASSESSEE AT THE TIME OF HEARING OF THE APPEAL AND THE TRIBUNAL HAS DULY CON SIDERED AND REJECTED THE SAID CONTENTION. IN APPLICATION U./S 254(2) OF THE ACT I T IS NOT POSSIBLE FOR THE TRIBUNAL TO REVIEW ITS OWN DECISION. THE POWER IS ONLY CONFINED TO RECTIFICATION OF MISTAKES THAT ARE APPARENT ON THE FACE OF THE RECORD. THE TRIBUNA L HAS RECORDED THE FACT THAT THE C IT HAS ISSUED SHOW CAUSE NOTICE DATED 06.03.2014 U/S 2 63 OF THE ACT AND HAS APPLIED HIS MIND TO THE RECORD BEFORE HIM. THE TRIBUNAL HAS ALS O OBSERVED THAT MERELY BECAUSE THE ERRORS WERE POINTED OUT BY THE AO IN HIS ORDER TO T HE CIT THAT CANNOT BE A GROUND TO HOLD THAT THE CIT HAD NOT APPLIED HIS MIND AND EXER CISED JURISDICTION U/S 263 OF THE ACT. IN THE LIGHT OF THE ABOVE, WE FIND NO MERIT IN THE CONTENTION PUT FORTH IN THE MISCELLANEOUS APPLICATION. 7. THE SECOND POINT WHICH WAS URGED BEFORE US THAT THE TRIBUNAL SUSTAINED THE ADDITION OF RS.14,11,763/- WHICH WAS THE UNEXPLAINED PORTIO N OF SUMS DEPOSITED IN TWO BANK ACCOUNTS OF THE ASSESSE. IN THE PROCEEDINGS BEFORE THE TRIBUNAL AT THE TIME OF HEARING OF THE APPEAL THE LD. COUNSEL FOR THE ASSESSE HAD FILE D WRITTEN SUBMISSION AND IN THE SAID SUBMISSION IT WAS URGED THAT CASH DEPOSITS TO THE E XTENT OF RS.9,77,275/- WOULD BE EXPLAINED BY THE ADDITIONAL CAPITAL ACCOUNT OF THE ASSESSE IN THE BALANCE SHEET AND THE REMAINING SUM WOULD BE EXPLAINED BY THE WITHDRAWALS AND DEPOSITS IN THE BANK ACCOUNTS. IN THE MISCELLANEOUS APPLICATION IT HAS B EEN SUBMITTED THAT THOUGH THIS PLEA WAS REFERRED TO IN THE ORDER OF THE TRIBUNAL IN PAR AGRAPH-14 OF THE ORDER OF THE TRIBUNAL THE SAME WAS NOT DEALT WITH ON MERITS. M.A.NO.19/KOL/2017 SHRI ASHOKE KUMAR SINGHANIA A.Y. 2009-10 4 8. ON THIS CONTENTION, WE FIND THAT THE ASSESSE ES PLEA IN THIS REGARD IS SET OUT IN PARAGRAPH-14 OF THE ORDER OF THE TRIBUNAL. IT IS AL SO NOTICED THAT IN THE PROCEEDINGS U/S 263 OF THE ACT SUCH A PLEA WAS NOT PUT FORTH BY THE ASSESSEE AND THEREFORE THERE WAS NO OCCASION FOR THE CIT TO EXAMINE THIS PLEA OF THE AS SESSEE. IN THESE CIRCUMSTANCES WE ARE OF THE VIEW THAT THE PLEA OF THE ASSESSEE EVEN THOUGH SUCH A PLEA WAS NOT TAKEN BEFORE THE CIT OUGHT TO HAVE BEEN EXAMINED BY THE T RIBUNAL AND FAILURE TO DO SO HAS RESULTED IN AN ERROR APPARENT ON THE FACE OF THE RE CORD. INTEREST OF JUSTICE WOULD BE SERVED BY RECALLING THE ORDER OF THE TRIBUNAL DATED 08.07.2016 TO THE LIMITED PURPOSE OF EXAMINATION OF THE AFORESAID CLAIM OF THE ASSESS EE. THE REGISTRY IS DIRECTED TO FIX THE APPEAL FOR HEARING FOR THE LIMITED PURPOSE OF ADJUD ICATION OF THE PLEA OF THE ASSESSEE AS SET OUT IN PARAGRAPH-14 OF THE ORDER OF THE TRIBUNA L IN USUAL COURSE AFTER NOTICE TO THE PARTIES. 9. THE THIRD POINT RAISED ON BEHALF OF THE ASSES SEE WAS THAT IN PARAGRAPH-6 OF THE ORDER OF THE TRIBUNAL ADDITION OF RS.58,090/- MADE BY CIT IN THE PROCEEDINGS U/S 263 OF THE ACT HAS BEEN RECORDED AS RS.58,00,090/-. IT IS AN ERROR APPARENT ON THE FACE OF THE RECORD AND THE SAME IS DIRECTED TO BE RECTIFIED BY READING ADDITION OF RS.58,00,090/- AS CONTAINED IN PARAGRAPH-6 OF THE ORDER OF TRIBUNAL AS RS.58,090/-. 10. IN THE RESULT THE MISCELLANEOUS APPLICATION IS PARTLY ALLOWED. O RDER PRONOUNCED IN THE COURT ON 22.11.2017. SD/- SD/- [M.BALAGANESH] [ N.V.VASUDEVAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 22.11.2017. [RG SR.PS] COPY OF THE ORDER FORWARDED TO: 1.SHRI ASHOKE KUMAR SINGHANIA, MOGRA TRIBENI ROAD, P.O.MOGRA, DIST: HOOGHLY, PIN: 712148. 2.C.I.T.- XX, KOLKATA. 3. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER, SENIOR PR IVATE SECRETARY HEAD OF OFFICE/D.D.O, ITAT KOLKA TA BENCHES