M/s. Vertex Homes P. Ltd., V. DCIT,C-3(3), Hyd.,

MA 214/HYD/2013

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 1394 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 22 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 27-01-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 05-08-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: JEEVAN LAL LAVADIYA
• Assessee Lawyers: I RAMA RAO
• Keywords: Reasonable cause
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER MA NO. 214/HYD/2013 ARISING OUT OF ITA NO. 979/HYD/2012 ASSESSMENT YEAR 2008209 M/S. VERTEX HOMES PVT. LTD. HYDERABAD PAN: AABCV2364G VS. THE DEPUTY CIT CIRCLE23(3) HYDERABAD APPELLANT RESPONDENT APPELLANT BY: SRI I. RAMA RAO RESPONDENT BY: SRI JEEVAN LAL LAVADIYA DATE OF HEARING: 20.12.2013 DATE OF PRONOUNCEMENT: 27.01.2014 O R D E R PER CHANDRA POOJARI, AM: THIS MISCELLANEOUS APPLICATION (MA) BY THE ASSESSE E IS SEEKING RECTIFICATION IN THE ORDER OF THE TRIBUNAL DATED 22.03.2013 IN ITA NO. 979/HYD/2012 FOR A.Y. 2008209 . 2. THE LEARNED AR SUBMITTED THAT THE TRIBUNAL HAD WRON GLY GIVEN FINDING IN PARA 16 OF ITS ORDER BY REMITTING THE ISSUE BACK TO THE FILE OF THE AO THOUGH THE DEVELOPMENT AGREEM ENT IS AVAILABLE ON RECORD WHICH CLEARLY DEMONSTRATES THAT THE HOUSING PROJECT BEING DEVELOPED BY THE ASSESSEE IS AT ITS OWN RISK AND COST AND, THEREFORE, THE ASSESSEE IS UNDOU BTEDLY A MA NO. 214/HYD/2013 M/S. VERTEX HOMES PVT. LTD. ==============-======= 2 DEVELOPER AND NOT A WORK CONTRACTOR AND IS ENTITLED FOR DEDUCTION U/S. 80IB(10) OF INCOME2TAX ACT, 1961. A CCORDING TO THE AR THE TRIBUNAL OUGHT NOT HAVE REMITTED THE ISS UE BACK TO THE FILE OF THE AO FOR SUCH CONSIDERATION. 3. THE LEARNED DR SUBMITTED THAT THERE IS NO MISTAKE APPARENT IN THE ORDER OF THE TRIBUNAL WHICH NEEDS T O BE RECTIFIED AND CONSIDERATION OF THE PLEA OF THE AR W OULD AMOUNT TO REVIEWING OF ITS OWN ORDER BY TRIBUNAL WHICH IS NOT PERMISSIBLE UNDER THE LAW. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED MATERIAL ON RECORD. IN THIS CASE, THE ARGUMENT OF THE ASSESSEE 'S COUNSEL IS MISCONCEIVED. THE TRIBUNAL AFTER CONSIDERING THE E NTIRE FACTS AND CIRCUMSTANCES OF THE CASE HAD GIVEN THE FOLLOWI NG DIRECTIONS: '16. IN THE LIGHT OF THE FOREGOING DISCUSSION, IT H AS TO BE CONCLUDED THAT IT IS ONLY AN ASSESSEE, WHO IS A DEV ELOPER AND NOT A CONTRACTOR, WHO WOULD BE ELIGIBLE FOR DEDUCTI ON UNDER S. 80IB(10) OF THE ACT; AND FURTHER THAT SUCH RELIEF C OULD BE GIVEN ON YEAR TO YEAR BASIS, IN CASE THE ASSESSEE IS FOLL OWING PERCENTAGE OF PROJECT COMPLETION METHOD FOR RECOGNI SING THE INCOME FROM A LONG-TERM PROJECT, WITHOUT INSISTING ON THE 'COMPLETION CERTIFICATE' OF THE CIVIC AUTHORITIES W HICH COULD BE EXPECTED ONLY ON THE COMPLETION OF THE PROJECT AND NOT ANNUALLY. WE DO NOT HAVE COMPLETE DETAILS ON RECOR D TO DETERMINE THE STATUS OF THE ASSESSEE, VIZ., WHETHER A DEVELOPER OR A CONTRACTOR, IN RELATION TO SADGURU KRUPA PROJE CT, AND THE ALLOWABILITY OF DEDUCTION UNDER S. 80IB OF THE ACT TO THE ASSESSEE FOR THE YEAR UNDER APPEAL. WE ACCORDINGLY , SET ASIDE THE IMPUGNED ORDER OF THE CIT(A) AND RESTORE THE MA TTER TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO T HE ASSESSING OFFICER TO RE-EXAMINE THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER S. 80IB(10) OF THE ACT AFRESH, AFTER BRINING ON RECORD ALL THE REQUISITE MATERIAL ON RECORD. THE ASSESSEE SHA LL ALSO BE GIVEN ADEQUATE OPPORTUNITY TO BRING ON RECORD THE R ELEVANT MA NO. 214/HYD/2013 M/S. VERTEX HOMES PVT. LTD. ==============-======= 3 MATERIAL TO SUBSTANTIATE ITS CLAIM FOR DEDUCTION UN DER S. 80IB(10) OF THE ACT. THE ASSESSING OFFICER SHALL A CCORDINGLY PASS APPROPRIATE SPEAKING ORDERS RE-DECIDING THIS I SSUE IN ACCORDANCE WITH LAW AND AFTER GIVING REASONABLE OPP ORTUNITY OF HEARING TO THE ASSESSEE.' 5. IN OUR OPINION, THE ABOVE FINDING OF THE TRIBUNAL I S A CONSCIOUS DECISION AND IF THE ASSESSEE HAS ANY GRIE VANCE WITH THE FINDINGS OF THE TRIBUNAL, THE REMEDY LIES ELSEW HERE. CONSIDERATION OF ARGUMENT OF THE ASSESSEE'S COUNSEL AT THIS STAGE WILL AMOUNT TO REVIEW OF ITS OWN ORDER BY THE TRIBUNAL. THE ORDER OF THE TRIBUNAL SHOULD BE READ AS A WHOLE AND NOT IN A PIECEMEAL MANNER. THE TRIBUNAL HAD CONSIDERED THE C UMULATIVE EFFECT OF ALL THE FACTS AND CIRCUMSTANCES OF THE CA SE AND GIVEN THE FINDINGS THAT THE AO SHALL RE2EXAMINE THE ISSUE AFTER BRINGING ALL MATERIALS ON RECORD AND HE SHOULD ALSO SEE THE DEVELOPMENT AGREEMENT. 6. IT IS WELL2SETTLED THAT THE TRIBUNAL IS THE FINAL F ACT2FINDING BODY. THE FINDINGS OF THE TRIBUNAL ARE NOT LIABLE TO BE INTERFERED WITH UNLESS THE TRIBUNAL HAS TAKEN INTO CONSIDERATI ON ANY IRRELEVANT MATERIAL OR HAS FAILED TO TAKE INTO CONS IDERATION ANY RELEVANT MATERIAL OR THE CONCLUSION ARRIVED AT BY T HE TRIBUNAL IS PERVERSE IN THE SENSE THAT NO REASONABLE PERSON, ON THE BASIS OF THE FACTS BEFORE THE TRIBUNAL, COULD HAVE COME TO T HE CONCLUSION TO WHICH IT HAS COME. 7. FURTHER IT IS WELL SETTLED THAT STATUTORY AUTHORITY CANNOT EXERCISE POWER OF REVIEW UNLESS SUCH POWER IS EXPRE SSLY CONFERRED. THERE IS NO EXPRESS POWER OF REVIEW CO NFERRED ON MA NO. 214/HYD/2013 M/S. VERTEX HOMES PVT. LTD. ==============-======= 4 THIS TRIBUNAL. EVEN OTHERWISE, THE SCOPE OF REVIEW DOES NOT EXTENT TO RE2HEARING OF THE CASE ON MERIT. IT IS H ELD IN THE CASE OF CIT VS. PEARL WOOLLEN MILLS (330 ITR 164): HELD, THAT THE TRIBUNAL COULD NOT READJUDICATE THE MATTER UNDER SECTION 254(2). IT IS WELL SETTLED THAT A ST ATUTORY AUTHORITY CANNOT EXERCISE POWER OF REVIEW UNLESS SU CH POWER IS EXPRESSLY CONFERRED. THERE WAS NO EXPRESS POWER OF REVIEW CONFERRED ON THE TRIBUNAL. EVEN OTHERWISE, THE SCO PE OF REVIEW DID NOT EXTENT TO REHEARING A CASE ON THE MERITS. NEITHER BY INVOKING INHERENT POWER NOR THE PRINCIPLE OF MISTAK E OF COURT NOT PREJUDICING A LITIGANT NOR BY INVOLVING DOCTRIN E OF INCIDENTAL POWER, COULD THE TRIBUNAL REVERSE A DECI SION ON THE MERITS. THE TRIBUNAL WAS NOT JUSTIFIED IN RECALLIN G ITS PREVIOUS FINDING RESTORING THE ADDITION, MORE SO WHEN AN APP LICATION FOR THE SAME RELIEF HAD BEEN EARLIER DISMISSED. 8. THE SCOPE AND AMBIT OF APPLICATION OF SECTION 254(2 ) IS VERY LIMITED. THE SAME IS RESTRICTED TO RECTIFICAT ION OF 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 RE FUSING TO AMEND GETS MERGED WITH THE ORIGINAL ORDER PASSED. THE ORDER AS AMENDED OR REMAINING UN2AMENDED IS THE EFFECTIVE ORDER 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). RECA LLING OF AN ORDER AUTOMATICALLY NECESSITATES REHEARING AND RE2ADJUDIC ATION OF THE ENTIRE SUBJECT2MATTER OF APPEAL. THE DISPUTE NO LO NGER REMAINS MA NO. 214/HYD/2013 M/S. VERTEX HOMES PVT. LTD. ==============-======= 5 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 WHEN THE APPEAL WAS TAKEN UP AND WAS DECIDED EX2PARTE. JUDG ED IN THE ABOVE BACKGROUND THE ORDER PASSED BY THE TRIBUN AL IS INDEFENSIBLE. 9. 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 PERMISSI BLE UNDER THE IT ACT. THE POWER TO RECTIFY A MISTAKE UNDER S. 254(2 ) CANNOT BE USED FOR RECALLING THE ENTIRE ORDER. NO POWER OF R EVIEW HAS BEEN GIVEN TO THE TRIBUNAL UNDER THE IT ACT. THUS, WHAT IT COULD NOT DO DIRECTLY COULD NOT BE ALLOWED TO BE DONE IND IRECTLY. 10. IN THE CASE OF CIT VS. HINDUSTAN COCA COLA BEVERAGE S (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. HOWEVER, I T 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. ALTH OUGH IT IS MA NO. 214/HYD/2013 M/S. VERTEX HOMES PVT. LTD. ==============-======= 6 POSSIBLE THAT THE PRE-REQUISITE FOR EXERCISE OF EIT HER POWER MAY BE SIMILAR (A MISTAKE APPARENT FROM THE RECORD), BY ITS VERY NATURE THE POWER TO RECTIFY A MISTAKE CANNOT RESULT IN THE RECALL AND REVIEW OF THE ORDER SOUGHT TO BE RECTIFIED. 11. 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 T HE PARTY, WHICH PREJUDICE IS ATTRIBUTABLE TO THE TRIBU NALS MISTAKE/ERROR OR OMISSION, AND WHICH AN ERROR IS A MANIFEST ERROR, THEN THE TRIBUNAL WOULD BE JUSTIFIE D IN RECTIFYING ITS MISTAKE. THE RULE OF PRECEDENT IS AN IMPORTANT ASPECT OF LEGAL CERTAINTY IN THE RULE OF LAW AND THAT PRINCIPLE IS NOT OBLITERATED BY S. 254(2) OF T HE ACT AND NON-CONSIDERATION 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 RECTIFIED. (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 AT 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. (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. MA NO. 214/HYD/2013 M/S. VERTEX HOMES PVT. LTD. ==============-======= 7 12. KEEPING IN MIND THE ABOVE PARAMETERS, NOW WE ARE INCLINED TO DISMISS THE MISCELLANEOUS APPLICATION F ILED BY THE ASSESSEE. 13. IN THE RESULT, THE MA FILED BY THE ASSESSEE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH JANUARY, 2014. SD/2 (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER SD/2 (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED 27 TH JANUARY, 2014 TPRAO COPY FORWARDED TO: 1. THE DEPUTY CIT, CIRCLE23(3), HYDERABAD. 2. M/S. VERTEX HOMES PVT. LTD., PLOT NO. 8/B, NIZAM PET ROAD, KUKATPALLY, HYDERABAD. 3. THE CIT(A)2IV, HYDERABAD. 4. THE CIT2III, HYDERABAD 5. THE DR 'B' BENCH, ITAT, HYDERABAD