Shri Mohan Balkrishnan Poolkulangara, Bangalore V. The Dy.CIT.,Circle-14, Ahmedabad

MA 196/AHD/2012

• Counselvise Citation: [2013] 123 COUNSELVISE.COM (IT) 9915 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 3 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 15-02-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 12-10-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAHUL KUMAR
• Keywords: Double taxation relief; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD A BENCH BEFORE: SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI ANIL CHATURVEDI, ACCOU NTANT MEMBER MOHAN BALAKRISHNAN POOLKULGANGARA (APPELLANT) PAN NO. AAKPP9329D VS. DY. COMMISSIONER OF INCOME- TAX, 14, AHMEDABAD (RESPONDENT) REVENUE BY : SRI RAHUL KUMAR, SR. D.R. ASSESSEE BY : SRI PRITESH SHAH, A.R. DATE OF HEARING : 04-01-2013 DATE OF PRONOUNCEMENT : 15-02-2013 / ORDER PER : ANIL CHATURVEDI, ACCOUNTANT MEMBER:- ON BEHALF OF ASSESSEE APPLICATIONS U/S 254(2) HAS BEEN MOVED VIDE LETTER DATED 12-10-2012 ARISING OUT OF ITA NOS. 196 &197/AHD/2012 DATED 04/05/2012 FOR ASSESSMENT YEAR 2005-06 & 2006-07 R ESPECTIVELY. IN THE APPLICATION, THE ASSESSEE HAS INTERALIA POINTED OUT ALLEGED MISTAKE WHICH ACCORDING TO IT ARE APPARENT ON RECORD AND WHICH NE EDS TO BE RECTIFIED, AND THEREFORE THE ORDER MAY BE RECALLED. M. A. NO. 196/AHD/2012 & M.A. NO. 197/AHD/2012 (ARISING OUT OF ITA NO. 2190 & 2191/AHD/2009) A.Y.:-2005-2006 & 2006-07 M.A NOS.196/AHD/2012 197/AHD/2012 A.Y. 2005-06& 200 6-07 PAGE NO MOHAN BALAKRISHNAN POOKULGARA VS. DY. CIT 2 2 ACCORDING TO THE APPLICATION, THE FIRST MISTAKE IN THE ORDER WAS THAT THE ORIGINAL CERTIFICATE FROM POLAND CERTIFYING THE ASSESSEE TO BE TOP OFFICIAL IN MANAGERIAL POSITION THAT WAS SUBMITTED DURING TH E COURSE OF HEARING WAS NOT CONSIDERED. THE OTHER MISTAKES ARE THAT THERE IS NO DISCUSSION ABOUT SECTION 90(2) IN THE ORDER AND CIRCULAR NO. 333 AND CIRCULAR NO. 621 ISSUED BY CBDT WERE NOT CONSIDERED WHILE PASSING THE ORDER . IT HAS BEEN FURTHER SUBMITTED THAT VARIOUS JUDGMENTS ON DTAA WHICH THE ASSESSEE HAS RELIED UPON AND SUBMITTED IN THE WRITTEN SUBMISSIONS HAVE NOT BEEN CONSIDERED WHILE PASSING THE ORDER. IT IS FURTHER STATED THAT ARTICLE 17(2) OF DTTA BETWEEN INDIA AND POLAND HAS BEEN INCORRECTLY INTER PRETED. LD. A.R. HAS FURTHER SUBMITTED THAT THE REAL INCOME CONCEPT HAS NOT BEEN CONSIDERED DUE TO WHICH THE TAX LEVIED BY POLAND GOVT. HAS BEEN CH ARGED TO TAX RESULTING INTO DOUBLE TAXATION OF INCOME. HE HAS FURTHER POI NTED OUT THERE ARE TYPOGRAPHICAL ERRORS IN THE ORDER, NAMELY, AT PAGE NO. 6 OF ORDER - FIRST TWO LINES, IT HAS BEEN STATED- ACCORDING TO THE ASSE SSEE IT IS CLEAR THAT THE ASSESSEE DID NOT FALL WITHIN THE CATEGORY OF TOP M ANAGERIAL POSITION. HE FURTHER POINTED OUT THAT ON PAGE NO. 5 PARA 7 IN T HE ORDER IT HAS BEEN STATED AS AS PER ARTICLE 17(2) OF THE AGREEMENT BETWEEN THE INDIA AND POLAND FOR AVOIDANCE OF DOUBLE TAXATION, THE PERSON IS REQUIRE D TO BE TOP LEGAL MANAGERIAL POSITION HE SUBMITTED THAT THE WORDS US ED IN DTAA IS TOP LEVEL MANAGERIAL POSITION. IN VIEW OF AFORESAID MISTAKES HE SUBMITTED THAT THE ORDER PASSED BY THE TRIBUNAL BE RECALLED. 3. LD. D.R. ON THE OTHER HAND, SUBMITTED THAT APART FROM TYPOGRAPHICAL ERRORS POINTED OUT BY LD. A.R., THE OTHER SO-CALLED MISTAKES DO NOT FALL IN THE CATEGORY OF MISTAKE APPARENT FROM RECORD AND THER EFORE OPPOSED THE PLEA OF LD. A.R. TO RECALL THE ORDER. M.A NOS.196/AHD/2012 197/AHD/2012 A.Y. 2005-06& 200 6-07 PAGE NO MOHAN BALAKRISHNAN POOKULGARA VS. DY. CIT 3 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. 5. WITH RESPECT TO NON-CONSIDERATION OF ORIGINAL C ERTIFICATE FROM POLAND, THE REASON STATED AT PARA 10 ON PAGE NO. 7 OF THE O RDER WAS VIZ. FIRSTLY IT WAS AN ADDITIONAL EVIDENCE WHICH WAS NOT FURNISHED BEFO RE THE LOWER AUTHORITIES AND SECONDLY, THE ADDITIONAL EVIDENCE IN THE FORM O F CERTIFICATE WAS SCANNED COPY WITHOUT ANY DATE OF ISSUANCE OF CERTIFICATE. FOR THE AFORESAID REASONS, THE CERTIFICATE WAS NOT CONSIDERED AND NOT TAKEN ON RECORD. LD. A.R. BEFORE US HAS SUBMITTED THAT NON-MENTIONING OF THE DATE ON THE CERTIFICATE WAS DUE TO OVERSIGHT BY THE POLAND COMPANY AND THE SAME CAN NOT BE THE BASIS OF NON-CONSIDERATION OF CERTIFICATE. WE FIND NO MERIT IN THE SUBMISSION OF THE LD. A.R. FOR THE REASON THAT THE DATE OF ISSUANCE IS CRUCIAL FOR A CERTIFICATE ON THIS POINT, WE, THEREFORE, REJECT THE SUBMISSION MA DE BY THE A.R. ON THIS POINT. 6. AT PARA 7 ON PAGE NO. 5 OF THE ORDER IT IS STAT ED: THE PERSON IS REQUIRED TO BE TOP LEGAL MANAGERIAL POSITION WHIC H IS A TYPOGRAPHICAL ERROR, AND SHOULD THEREFORE BE READ AS TOP LEVEL MANAGERIAL POSITION. 7. WITH RESPECT TO THE CONSIDERING THE GROSS SALAR Y AS TAXABLE INCOME, IN THE LAST SENTENCE OF PARA 7 ON PAGE 6 DUE TO TYPOGR APHICAL ERROR IT IS STATED AS THUS, ACCORDING TO THE A.R, IT IS CLEAR THAT THE ASSESSEE DID NOT FALL WITHIN THE CATEGORY OF TOP MANAGERIAL POSITION. THE SAME SHOULD THEREFORE BE READ AS THUS, ACCORDING TO THE A.R., IT IS CLEAR T HAT THE ASSESSEE DID FALL WITHIN THE CATEGORY OF TOP MANAGERIAL POSITION. M.A NOS.196/AHD/2012 197/AHD/2012 A.Y. 2005-06& 200 6-07 PAGE NO MOHAN BALAKRISHNAN POOKULGARA VS. DY. CIT 4 8. FROM THE COPY OF THE ASSESSMENT ORDER, IT IS SE EN THAT THE A.O. HAS GIVEN A FINDING THAT THE ASSESSEE HAS RECEIVED SALA RY FROM POLAND COMPANY OF RS. 8,69,560/- AFTER DEDUCTING AMOUNT OF TAX AT SOURCE AMOUNTING TO RS. 2,17,390/-. WHILE COMPUTING THE TOTAL INCOME THE A .O. HAS CONSIDERED THE GROSS SALARY OF RS. 10,86,950/- AS THE INCOME OF TH E ASSESSEE. THUS, THOUGH THE ASSESSEE HAS RECEIVED INCOME OF RS. 8,16,560/-, THE A.O. HAS TAXED THE GROSS INCOME OF RS. 10,86,950/- THE A.RS SUBMISS ION THAT ACCORDING TO THE REAL INCOME CONCEPT ONLY THE NET INCOME BE CONS IDERED AS TAXABLE. THIS SUBMISSION OF THE ASSESSEE WAS WITHOUT PREJUDICE TO ITS SUBMISSION THAT THE ASSESSEE IS NOT AT ALL LIABLE TO TAX ON THE SALARY RECEIVED FROM POLAND COMPANY. FURTHER, THE A.R. HAS RELIED ON FOLLOWING DECISIONS. 9. IN THE CASE OF H.M. KASHIPAREKH & CO. LTD. VS. CIT 39 ITR 706 THE HONBLE HIGH COURT OF BOMBAY HAS HELD THAT ONLY THE REAL INCOME OF THE ASSESSEE SHOULD BE LEVIED TO TAX AND INCOME SHOULD NOT INCLUDE THE AMOUNT FOREGONE BY THE ASSESSEE. 10. IN THE CASE OF CIT VS. SHAW WALLACE & CO. LTD. 132 ITR 466 HONBLE CALCUTTA HIGH COURT HAS HELD ONLY THE NET DIVIDEND INCOME OF THE ASSESSEE RECEIVED FROM U.K. COMPANY IS ASSESSABLE TO TAX AND NOT THE GROSS DIVIDEND AS THE PORTION OF DIVIDEND REPRESENTED BY TAX DEDUC TED AT SOURCE IS NOT AN INCOME OF THE ASSESSEE. 11. IN THE CASE OF CIT VS. YAWAR RASHID & OTHERS 2 18 ITR 699 (MP HIGH COURT) IT HAS BEEN HELD THE TAX DEDUCTED AT SO URCE OUTSIDE INDIA DO NOT FORM PART OF TOTAL INCOME. M.A NOS.196/AHD/2012 197/AHD/2012 A.Y. 2005-06& 200 6-07 PAGE NO MOHAN BALAKRISHNAN POOKULGARA VS. DY. CIT 5 12. ON PERUSAL OF THE ASSESSMENT ORDER, WE FIND THA T THE AO HAS TAXED THE GROSS INCOME INCLUDING THE TAX DEDUCTED BY POLAND G OVT. RELYING ON THE AFORESAID DECISIONS OF HIGH COURTS, WE, FEEL THAT THE ASSESSEE IS LIABLE TO TAX WITH RESPECT TO NET INCOME I.E. THE NET INCOME WHI CH IT HAS RECEIVED AFTER DEDUCTION OF TAX FROM THE POLAND COMPANY WE, THERE FORE, REMIT THIS ISSUE TO THE FILE OF A.O. FOR A LIMITED PURPOSE OF EXAMIN ING THE AMOUNT RECEIVED BY THE ASSESSEE AND THE TAX DEDUCTED BY THE POLAND COMPANY WITH A DIRECTION TO HIM TO CONSIDER ONLY THE INCOME RECEI VED AFTER PAYMENT OF TAX AS INCOME AS THE TAXABLE INCOME OF THE ASSESSEE. W ITH RESPECT TO OTHER MISTAKES NAMELY, THE INCORRECT INTERPRETATION AND N ON-CONSIDERING OF CIRCULAR AND DISCUSSION ABOUT SECTION 90(2), WE FIN D THAT THE A.R. HAS NOT BEEN IN A POSITION TO CONVINCELY DEMONSTRATE THAT H OW THESE ARE MISTAKES APPARENT FROM RECORD. 13. POWER U/S 254(2) CANNOT BE EXERCISED UNLESS AND UNTIL GRAVE ERROR ON FACTS/LAW FROM THE RECORD IS POINTED OUT WHICH IS A PPARENT ON ITS FACE CAUSING APPARENT INJUSTICE TO THE ASSESSEE. FOR THE AFORES AID CONCLUSION WE FIND SUPPORT IN THE DECISION OF M.P. HIGH COURT IN THE C ASE OF CIT VS CHHABRA GINNING UDYOG (2008) 303 ITR 182 (MP) WHERE IT IS HELD AS UNDER:- ALLOWING THE APPEAL, THAT A POWER TO RECTIFY THE M ISTAKE IN THE ORDER IS CONFINED TO ONLY THOSE ERRORS WHICH ARE APPARENT FROM THE RECORD OF THE CASE. THE POWERS UNDER SECTION 254(2) CANNOT B E EXERCISED AS A REVIEW COURT OR AS AN APPELLATE COURT SO AS TO VIRT UALLY CHANGE THE EARLIER DECISION UNLESS A GRAVE ERROR ON THE FACTS OR AT LAW FROM THE RECORDS IS APPARENT. A WELL REASONED DECISION WHIC H HAD GONE IN FAVOUR OF THE REVENUE IN A REGULARLY CONSTITUTED AP PEAL COULD NOT BE UPTURNED BY RECOURSE TO THE PROVISIONS OF SECTION 2 54(2) OF THE M.A NOS.196/AHD/2012 197/AHD/2012 A.Y. 2005-06& 200 6-07 PAGE NO MOHAN BALAKRISHNAN POOKULGARA VS. DY. CIT 6 INCOME-TAX ACT, 1961. THE TRIBUNAL WHILE HEARING AN APPLICATION UNDER SECTION 254(2) COULD NOT ACT AS AN APPELLATE COURT. THE APPLICATION MADE BY THE ASSESSEE UNDER SECTION 254( 2) DID NOT CONFORM TO THE REQUIREMENT OF SECTION 254(2) READ W ITH RULE 34A OF THE INCOME-TAX (APPELLATE TRIBUNAL) RULES, 1963, AND IT SHOULD HAVE BEEN DISMISSED. 14 IN THE CASE OF PERFETTI VAN MELLE INDIA P. LTD . VS. COMMISSIONER OF INCOME-TAX (2008) 296 ITR 595 (DEL) THE HONBLE HIG H COURT HAS HELD AS UNDER:- SECTION 254(2) OF THE INCOME-TAX ACT, 1961, ENABLE S THE CONCERNED AUTHORITIES TO RECTIFY ANY MISTAKE APPARENT FROM T HE RECORD. AN OVERSIGHT OF A FACT CANNOT CONSTITUTE AN APPARENT M ISTAKE RECTIFIABLE UNDER THIS SECTION. SIMILARLY, FAILURE OF THE TRIB UNAL TO CONSIDER AN ARGUMENT ADVANCED BY EITHER PARTY FOR ARRIVING AT A CONCLUSION IS NOT AN ERROR APPARENT ON THE RECORD, ALTHOUGH IT MAY BE AN ERROR OF JUDGMENT. THE MERE FACT THAT THE TRIBUNAL HAS NOT ALLOWED A DEDUCTION, EVEN IF THE CONCLUSION IS WRONG, WILL BE NO GROUND FOR MOVING AN APPLICATION UNDER SECTION 254(2) OF THE A CT. FURTHER, IN THE GARB OF AN APPLICATION FOR RECTIFICATION, THE ASSES SEE CANNOT BE PERMITTED TO REOPEN AND REARGUE THE WHOLE MATTER, W HICH IS BEYOND THE SCOPE OF THIS SECTION. 15. IN THE CASE OF COMMISSIONER OF INCOME-TAX VS. M ALWA TEXTURISING P. LTD (2007) 292 ITR 488 (MP) THE HONBLE HIGH COURT HAS HELD AS UNDER:- UNDER SUB-SECTION (2) OF SECTION 254 OF THE INCOME- TAX ACT, 1961, THE APPELLATE TRIBUNAL CAN ONLY RECTIFY ANY MISTAKE APP ARENT FROM THE RECORD AND CANNOT REHEAR AN APPEAL AND REVERSE ITS FINDINGS ON THE CONTENTIONS RAISED BY THE PARTIES AT THE TIME OF HE ARING THE APPEAL. FURTHERMORE, MISTAKES APPARENT FROM THE RECORD WOUL D MEAN PALPABLE MISTAKES ON THE FACE OF THE RECORD AND NOT MISTAKES WHICH THE TRIBUNAL WILL COME TO LEARN FROM LONG-DRAWN ARG UMENTS. M.A NOS.196/AHD/2012 197/AHD/2012 A.Y. 2005-06& 200 6-07 PAGE NO MOHAN BALAKRISHNAN POOKULGARA VS. DY. CIT 7 16. CONSIDERING AFORESAID FACTS SEEN IN THE LIGHT OF DECISIONS CITED ABOVE WE ARE OF THE VIEW THAT THE ENTIRE ORDER CANNOT BE RECALLED BUT ONLY THE TYPOGRAPHICAL MISTAKES CITED BE CORRECTED AS STATED HEREINABOVE. THUS, THIS M.A. IS PARTLY ALLOWED. 17. BEFORE US BOTH THE PARTIES HAVE ACCEPTED THAT T HE FACTS ARE SIMILAR IN BOTH THE YEARS. SINCE THE FACTS FOR A.Y. 2005-06 AR E SIMILAR TO THOSE OF A.Y. 06-07, WE FOR SIMILAR REASONS AND FINDINGS STATED H EREINABOVE WHILE DISPOSING M.A. NO. 196 ALSO APPLIES TO M.A. NO. 197 . WE THEREFORE FOR SIMILAR REASON PARTLY ALLOW THE M.A.S WITH SIMILAR DIRECTION CONTAINED HEREINABOVE. 18. IN THE RESULT, BOTH THE M.A.S ARE PARTLY ALLOW ED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE SD/- SD/- (G.C.GUPTA) (ANIL CHATURVEDI) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD : DATED 15/02/2013 A.K. / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. / CONCERNED CIT 4. - / CIT (A) 5. , ! , '# / DR, ITAT, AHMEDABAD 6. $% &' / GUARD FILE. BY ORDER/ , ( / ' ) ! , '#