DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, JAMMU V. SHRI RAM AGGARWAL , JAMMU

MA 2/ASR/2020

AI Insights

The case involves two miscellaneous applications filed by the revenue against the orders of the ITAT Amritsar Bench, which had allowed the appeals of the assessee, Smt. Meenakshi Devi and Sh. Ram Aggarwal, for the assessment year 2014-15. The revenue challenged the ITAT's decision, arguing that the Tribunal had erred in not applying the provisions of section 271AAB of the Income Tax Act, which pertains to penalties for undisclosed income admitted during a search. The Tribunal's original decision was based on the Supreme Court's judgment in M/s. SSA's Emerald Meadows, which the revenue contended was misapplied. The Tribunal dismissed the revenue's applications, stating that it could not alter its original decision as it had become functus officio and the applications did not point out any apparent mistakes in the record.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 115159 (ITAT-AMRITSAR)
• Duration Of Justice: 10 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 07-12-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 10-11-2022
• Assessment Year: misc
• Appeal Filed On: 27-11-2022
• Other Referred Cases: M/s. SSA's Emerald Meadows (2016) 73 Taxman 248, Pr. CIT Vs Sh. Sandeep Chandok in ITA No. 122/2017, CIT(IT-4) Mumbai vs Reliance Telecom Ltd. 133 taxmann.com 41 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reasonable cause
• Section: 132; 274; 254(2); 64; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE, JUDICIAL MEMBER M.A. No. 01/Asr/2020 (In I.T.A.No. 402/Asr/2018) Assessment Year: 2014-15 DCIT-Central Circle, Jammu. (Appellant) Vs. Smt. Meenakshi Devi, 116, Jullakha Mohalla Jain Bazar,Jammu. [PAN: AASPA5255H] (Respendent) M.A. No. 02/Asr/2020 (In I.T.A.No. 406/Asr/2018) Assessment Year:2014-15 DCIT-Central Circle, Jammu. (Appellant) Vs. Sh. Ram Aggarwal, 116, Jullakha Mohalla Jain Bazar,Jammu. [PAN: AQZPA9424H] (Respendent) Appellant by Sh. Sandeep Vijh, CA. Respondent by Sh. Girish Bali, CIT.D.R. Date of Hearing 11.11.2022 Date of Pronouncement 08.12.2022 ORDER Per Anikesh Banerjee, JM: Both the instant miscellaneous applications were filed by the revenue against the order of the ITAT Amritsar Bench bearing ITA No. 406/Asr/2018 for A.Y. M.A. No. 01 & 02 (in I.T.A. Nos. 406 & 402/Asr/2018) 2 2014-15 and ITA No. 402/Asr/2018 A.Y. 2014-15. Both the appeals are passed by a combined order& have a common date of pronouncement on dated 04.04.2019. The the concurrent order was passed by the two members for a divergent view. But at the end the appeal order is in favour of assessee as per the view of both the members. The order was passed for determining the application of section 271AAB related to admit additional income u/s 132 (4) of the Act. 2. Against both the orders, the revenue has filed miscellaneouspetition u/s 254(2) on dated 28.10.2019. 2.1 The revenue has taken the following plea in relation to the Miscellaneous Applications which is extracted as below: “(1) That on an appeal filed by the appellant assessee for the above assessment year against the order of the Id. CIT(A)-5, Ludhiana dated 14-05-2018 wherein penalty order of the AO u/s 271AAB of the I. T. Act, 1961 was confirmed, the Hon'ble ITAT, Amritsar bench decided the appeal vide order dated 04- 04-2019 wherein appeal of the assessee was allowed. (2) That while deciding the appeal in favour of the assessee, the Hon'ble Tribunal relied upon the judgement of the Hon'ble Apex Court in the case of M/s. SSA's Emerald Meadows (2016) 73 Taxman 248 and held that the AO while initiating penalty proceedings u/s 271AAB simply stated that penalty proceedings M.A. No. 01 & 02 (in I.T.A. Nos. 406 & 402/Asr/2018) 3 u/s 271AAB were being initiated without specifying the limb such as clause 'a', 'b' or 'c' of the section 271AAB of the Act, which goes to show that the AO at the time of initiating penalty and while issuing the notice u/s 271AAB read with section 274 of the Act was not decisive qua penalty to be imposable. (3) That the kind attention of the Honb'e ITAT is drawn to the fact thefacts and circumstances under consideration and the facts in the case of M/s. SSA's Emerald meadow (Supra) are not identical and are different from each other completely. In the case of M/s. SSA's Emerald meadow (supra), the issue involved was imposition of penalty u/s 271(l)(c) of the Act where the AO had not clearly mentioned under which limb of section penalty is to be imposed whereas the issue in the present case is imposition of penalty u/s 271AAB of the Act. (4) That it is relevant to mention that section 271(l)(c) of the Act, has two limbs i.e., "concealment of particulars of income" and "furnishing of inaccurate particulars of income". Whereas section 271AAB of the Act has only one limb which deals with the "undisclosed Income". Once the search u/s 132(1) of the Act is initiated in the case of a particular assessee and he during the course of search admits the undisclosed income u/s 132(4) of the Act, the provisions of section 271AAB are automatically attracted. (5) That the above view has been held by the Honble High Court of Allahabad, Allahabad in the case of Pr. CIT Vs Sh. M.A. No. 01 & 02 (in I.T.A. Nos. 406 & 402/Asr/2018) 4 Sandeep Chandok in the Income Tax Appeal 122 of 2017 dated 27-11-2017 (Copy enclosed). The SLP filed by the assessee against this order was dismissed by the Honble Apex Court in the SLP NO. 7085-7087/ 2018 dated 23/4/2018 (copy Enclosed). Hon'ble High Court of Allahabad, Allahabad has held as under: " Section 271AAB provides the procedure for penalty where the search has been initiated. In the present case, admittedly a search and seizure operation is carried out in which the assessee have surrendered the amount of Rs. 4 crores each (Rs. 4 lakh each by all the three assessees) and therefore, in view of the provisions of Section 271AAB the assessees are required to pay, by way of, penalty in addition to tax, if any, a sum computed @ 10% of undisclosed income of the specified period of previous years, In the case where the assessee in the course of search in a statement (under Section 4 of Section 132) admits the undisclosed income and specified manner in which such income has been derived, than the provisions of Section 271AAB automatically attracts and the proceedings are to be carried out/completed". 2.2 The ld. CIT DR in argument mentioned that the judgment of Hon’ble Allahabad High Court in the case of Pr. CIT vs. Sandeep Chandok in ITA No. 122/2017 order dated 27.11.2017, [2018] 93 taxmann.com 405 (Allahabad); M.A. No. 01 & 02 (in I.T.A. Nos. 406 & 402/Asr/2018) 5 The order was passed against the assessee and in favour of the revenue. The said order was challenged before the Hon’ble Apex Court in SLP No. 7085-7087/2018 dated 23/04/2018 and the SLP was dismissed. So, the controversy u/s 271AAB is automatic and non-recovered any reasonable cause for allowing the penalty on the undisclosed income. 3. The ld. Counsel for the assessee filed the written submission &argued on the order of the Hon’ble High Court of Allahabad. The ld. Counsel mentioned that Hon’able High Court of Allahabad is not binding on the ITAT, Amritsar Bench. The said order was never be mentioned during the appeal hearing. The ld. Counsel relied on the judgments of apex court& argued that perusal of the order of the Hon’ble Supreme Court dismissing the SLP will show that the SLP filed by Sandeep Chandak against the order of the High Court of Allahabad was a dismissed without going into the merits/ details of the matter and as such it cannot be said that any view has been expressed by the Hon’ble Apex court. The order of the Hon’ble Apex courtis not admitting the SLP is a non-speaking order. The dismissal of SLP through a non-speaking order/ order dismissing in limine cannot be said to be declaration of law by the Supreme Court. Attention is drawn to the following decisions: M.A. No. 01 & 02 (in I.T.A. Nos. 406 & 402/Asr/2018) 6 a) Principal Chief Conservator vs. M/s Gupta Exports, MP No-1 of 2015, Pronounced on 13/10/2015 (High Court of Madras): Relevant paragraph in page 16 of the Orderis extracted as follows: - “(iv) An order refusing special leave to appeal may be a non-speaking order or speaking one. In either case, it does not attract the doctrine of merger. An order refusing special leave to appeal does not stand substituted in place ofthe order under challenge. All that it means is that the Court was not inclined to exercise its discretion so as to allow the appeal being filed.” Copy of the decision is enclosed atAPB, page no. 38 to 46 [please see point no. (iv) APB page no. 45]. b) P. Singaravelan&Ors. Vs The District Collector Tiruppur and DT &Ors, Civil Appeal No(S) 9533-9537 of 2019, Date of Order 18/12/2019 (SC): It was held that if an order of the Supreme Court was non-speaking, it did not constitute a declaration of law under Article 141 of the Constitution or attract the doctrine of merger. While giving this decision, various earlier decisions of Supreme Court on this issue were also considered. Copy of the decision is enclosed atAPB page no. 47 to 58. c) State of Orissa vs. Dhirendra Sundar Das &Ors , Civil Appeal No. 4647-4651 of 2019 date of order 06/05/2019 (Supreme Court): Relevant paragraph from Page no-11of the order is extracted as below:- M.A. No. 01 & 02 (in I.T.A. Nos. 406 & 402/Asr/2018) 7 “It is a well Settled principle of law emerging from a catena of decisions of this Court, including Supreme Court Employees Welfare Association v. Union of India & Anr.12 and State of Punjab v. Davinder Pal Singh Bhullari3, that the dismissal of a S.L.P. in limine simply implies that the case before this Court was not considered worthy of examination for a reason, which may be other than the merits of the case. Such in limine dismissal at the threshold without giving any detailed reasons, does not constitute any declaration of law or a binding precedent under Article 141 of the Constitution. 12 (1989) 1SCC187 (paras 22 and 23). Copy of the order is enclosed atAPB page no. 59 to 64 [please see 3rd para at page no. 64]” 4. We heard the rival submission and relied on the documents available in the record. The judgment of Hon’ble Allahabad High Court is not binding on the ITAT Amritsar Bench. During hearing the said judgment was not mentioned by the revenue. The order was passed by a speaking order during adjudication. After the order, the ITAT has no power to recall the order except there is any mistake apparent from the record. We respectfully relied on the order of the Hon’ble Supreme Court in the case of CIT(IT-4) Mumbai vs Reliance Telecom Ltd. 133 taxmann.com 41 (SC). The relevant paragraph of the order of apex court is extracted as below:- M.A. No. 01 & 02 (in I.T.A. Nos. 406 & 402/Asr/2018) 8 “5. From the impugned judgment and order passed by the High Court, it appears that the High Court has dismissed the writ petitions by observing that (i) the Revenue itself had in detail gone into merits of the case before the ITAT and the parties filed detailed submissions based on which the ITAT passed its order recalling its earlier order; (ii) the Revenue had not contended that the ITAT had become functus officio after delivering its original order and that if it had to relook/revisit the order, it must be for limited purpose as permitted by section 254(2) of the Act; and (iii) that the merits might have been decided erroneously but ITAT had the jurisdiction and within its powers it may pass an erroneous order and that such objections had not been raised before ITAT. 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 M.A. No. 01 & 02 (in I.T.A. Nos. 406 & 402/Asr/2018) 9 Assessee before the High Court, but later on the Assessee withdrew the same in the instant case. 7. In view of the above and for the reasons stated above, the impugned common judgment and order passed by the High Court as well as the common order passed by the ITAT dated 18-11-2016 recalling its earlier order dated 6-9-2013 deserve to be quashed and set aside and are accordingly quashed and set aside. The original orders passed by the ITAT dated 6-9-2013 passed in the respective appeals preferred by the Revenue are hereby restored. 8. Considering the fact that the Assessee had earlier preferred appeal/s before the High Court challenging the original order passed by the ITAT dated 6-9-2013, which the Assessee withdrew in view of the subsequent order passed by the ITAT dated 18-11-2016 recalling its earlier order dated 6-9-2013, we observe that if the Assessee/s prefers/prefer appeal/s before the High Court against the original order dated 6-9-2013 within a period of six weeks from today, the same may be decided and disposed of in accordance with law and on its/their own merits and without raising any objection with respect to limitation. 9. Both the appeals are accordingly allowed in the aforesaid terms. However, there shall be no order as to costs.” M.A. No. 01 & 02 (in I.T.A. Nos. 406 & 402/Asr/2018) 10 Respectfully considering the order of Hon’ble Apex court the ITAT cannot go on the merit of the case U/s 254(2) of the Act&functus officio after passing the original order. Both the miscellaneous petitions of the revenue are rejected. 5. In the result, the Miscellaneous Applications of the revenue bearing M.A. Nos. 01/Asr/2020 and 02/Asr/2020 are dismissed. Order pronounced in the open court on 08.12.2022 Sd/- Sd/- (Dr. M. L. Meena) (ANIKESH BANERJEE ) Accountant Member Judicial Member Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By Order