AVO Carbon Holding LLC, CHENNAI V. DCIT, CHENNAI

MA 227/CHNY/2017

• Counselvise Citation: [2017] 124 COUNSELVISE.COM (IT) 5770 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 01-09-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 31-07-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: B RAMANA KUMAR
• Keywords: Rectification of order; Reasonable cause
• Section: 143(3); 142(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI , ! ' ! # . $ % &' BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER M.P.NO.227/MDS./2017 ( I.T.A.NO.1912/MDS./2016 ASSESSMENT YEAR : 2012-13 ) M/S.AVO CARBON HOLDING LLC , 25/A2, DAIRY PLANT ROAD, SIDCO INDUSTRIAL ESTATE, AMBATTUR,CHENNAI 600 098. VS. THE DCIT, INTERNATIONAL TAXATION-1(2), 121, MAHATMA GANDHI ROAD, CHENNAI-34. [PAN AAJCA 5998 D ] ( () / APPELLANT) ( *+() /RESPONDENT) / APPELLANT BY : MR.B.RAMANA KUMAR, ADVOCATE /RESPONDENT BY : SHRI AUTHORISED REPRESENTATIVE OF ASSESSEE.V. SRINIVASAN, JCIT D.R / DATE OF HEARING : 0 1 - 09 - 201 7 / DATE OF PRONOUNCEMENT : 01 - 09 - 2017 , / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER BY THIS MISC. APPLICATION, THE ASSESSEE SEEKS RECAL L /RECTIFICATION OF THE TRIBUNAL ORDER DATED 08.02.20 17 IN ITA NO. 1912/MDS/2016 FOR ASSESSMENT YEAR 2012-13. MP NO.227/MDS./17 :- 2 -: 2. BEFORE US, THE LD.A.R SUBMITTED THAT THE PETITIO NER IS A FOREIGN COMPANY AND DEALS IN THE BUSINESS OF DESIG N, MANUFACTURING AND DISTRIBUTION OF CARBON BRUSHES AN D BRUSH ASSEMBLIES FOR THE AUTOMOTIVE AND CONSUMER GOODS (P OWER TOOLS, HOME APPLIANCES ETC.) INDUSTRIES. THE PETITIONER CO MPANY HAS A SUBSIDIARY IN INDIA. FURTHER, LD.A.R SUBMITTED THA T THE PETITIONER FILED THE RETURN OF INCOME ON 22.11.2012 DECLARING AN INCOME OF NIL. THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 142(1) OF THE INCOME TAX ACT, 1961 (THE ACT) WAS ISSUED ON 27TH JUNE 2014 BY THE LD. ASSESSING OFFICER. SUBSEQUENTL Y NOTICE UNDER SECTION 143(2) OF THE ACT DATED 08TH SEPTEMBE R 2014 WAS ISSUED BY THE AO. THE LD. ASSESSING OFFICER, PASSED A DRAFT ASSESSMENT ORDER DATED 25.03.2015 WITH THE TOTAL IN COME OF THE PETITIONER AS RS.1.83 CRORES, AGAINST WHICH THE PET ITIONER FILED AN APPEAL BEFORE THE DISPUTE RESOLUTION PANEL (DRP) ON 27 APRIL 2015. IT WAS SUBMITTED THAT THE DRP PASSED ITS DIRE CTION UNDER SECTION 144(5) OF THE ACT DATED 17.12.2015 AND THE DCIT PASSED THE FINAL ASSESSMENT ORDER UNDER SECTION 143(3) REA D WITH SECTION 144C(1) DATED 28.1.2016, SERVED ON 17.02.2016. MP NO.227/MDS./17 :- 3 -: 2.1 THE ASSESSEE CAME IN APPEAL BEFORE THIS TRIBUN AL, WHICH WAS FILED WITH DELAY OF 87 DAYS. THE TRIBUNAL THEN PASSED THE ORDER DATED 08.02.2017 IN ITA NO. 1912/MDS/2016, DI SMISSING THE APPEAL OF THE PETITIONER AS UN-ADMITTED BY NOT COND ONING THE DELAY. FURTHER, THE LD.A.R PLEADED FOR THE RECALL OF THE ORDER OF THE TRIBUNAL AND FURTHER PRAYS FOR THE RESTORATION OF THE APPEAL. THE SUBMISSION OF THE LD.A.R IS THAT THE PETITIONER UNDERTAKES TO PRODUCE ALL THE NECESSARY MATERIAL BEFORE THIS TRIB UNAL FOR IT TO DECIDE THE MATTER ON MERITS, IF THIS PETITION IS AL LOWED. FINALLY, LD.A.R SUBMITTED THAT FOR THE REASONS STATED ABOVE AND SUBMITTED IN THE ENCLOSING AFFIDAVIT, IT IS PRAYED THAT THIS BENCH MAY BE PLEASED TO RECALL THE ORDER DATED 08.02.2017 IN ITA NO. 1912/MDS/2016, PASS APPROPRIATE FURTHER ORDERS AND THUS RENDER JUSTICE. 3. ON THE OTHER HAND, LD.D.R PLACED RELIANCE IN TH E ORDER OF TRIBUNAL. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE MAIN CONTENTION OF THE LD.A.R IS THAT THE TRIBUNAL HAS NOT CONDONED THE DELAY BY DISMISSING THE APPEAL OF THE ASSESSEE, AS SUCH THE ORDER OF TRIBUNAL TO BE RECALLED. IN OUR OPINION, THIS MP NO.227/MDS./17 :- 4 -: ARGUMENT OF THE ASSESSEE COMPANY IS NOTHING BUT SEE KING REVIEW OF THE ORDER OF TRIBUNAL. IT IS WELL SETTLED THAT STATUTORY AUTHORITY CANNOT EXERCISE POWER OF REVIEW UNLESS SUCH POWER I S EXPRESSLY CONFERRED. THERE IS NO EXPRESS POWER OF REVIEW CONF ERRED ON THIS TRIBUNAL. EVEN OTHERWISE, THE SCOPE OF REVIEW DOES NOT EXTENT TO RE-HEARING OF THE CASE ON MERIT. 4 .1 THE SCOPE AND AMBIT OF APPLICATION OF SECTION 254(2 ) IS VERY LIMITED. THE SAME IS RESTRICTED TO RECTIFICATION 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 LEGISLA TIVE 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 REFUSING TO AMEND GETS MERGED WITH THE ORIGINAL ORDER PASSED. THE ORDER AS AMENDED OR REMAINING UN-AMENDED IS THE EFFECTIVE ORDER FOR ALL PRACTICAL PURPOSES. AN ORDER UNDER S. 254(2) DOES NOT HAVE EX ISTENCE DE HORS THE ORDER UNDER S. 254(1). RECALLING OF THE OR DER IS NOT PERMISSIBLE UNDER S. 254(2). RECALLING OF AN ORDER AUTOMATICALLY MP NO.227/MDS./17 :- 5 -: NECESSITATES REHEARING AND RE-ADJUDICATION OF THE E NTIRE SUBJECT- MATTER OF APPEAL. THE DISPUTE NO LONGER REMAINS RES TRICTED TO ANY MISTAKE SOUGHT TO BE RECTIFIED. POWER TO RECALL AN ORDER IS PRESCRIBED IN TERMS OF RULE 24 OF THE ITAT RULES, 1 963, AND THAT TOO ONLY IN CASE WHERE THE ASSESSEE SHOWS THAT IT H AD A REASONABLE CAUSE FOR BEING ABSENT AT A TIME WHEN TH E APPEAL WAS TAKEN UP AND WAS DECIDED EX-PARTE. JUDGED IN THE AB OVE BACKGROUND THE ORDER PASSED BY THE TRIBUNAL IS INDE FENSIBLE. 4.2. THE WORDS USED IN SEC. 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 PERMISSIBLE UNDER THE IT ACT. THE POWER TO RECTIFY A MISTAKE UNDER S. 254(2) CANNOT B E USED FOR RECALLING THE ENTIRE ORDER. NO POWER OF REVIEW HAS BEEN GIVEN TO THE TRIBUNAL UNDER THE IT ACT. THUS, WHAT IT COULD NOT DO DIRECTLY COULD NOT BE ALLOWED TO BE DONE INDIRECTLY. MP NO.227/MDS./17 :- 6 -: 5. THUS THE SCOPE AND AMBIT OF APPLICATION U/S. 254 (2) IS AS FOLLOWS: (A) FIRSTLY, THE SCOPE AND AMBIT OF APPLICATION OF S. 254(2) OF IT ACT IS RESTRICTED TO RECTIFICATION OF THE MISTAKES APPAREN T FROM THE RECORD. (B) SECONDLY, THAT NO PARTY APPEARING BEFORE THE TR IBUNAL SHOULD SUFFER ON ACCOUNT OF ANY MISTAKE COMMITTED BY THE TRIBUNAL AN D IF THE PREJUDICE HAS RESULTED TO THE PARTY, WHICH PREJUDICE IS ATTRI BUTABLE TO THE TRIBUNAL'S MISTAKE/ERROR OR OMISSION, AND WHICH AN ERROR IS A MANIFEST ERROR, THEN THE TRIBUNAL WOULD BE JUSTIFIED IN RECT IFYING 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 THE ACT AND NON-CONSIDERATION OF PRECEDENT BY THE TRIBUNAL CAUS ES A PREJUDICE TO THE ASSESSEE. (C) THIRDLY, POWER TO RECTIFY A MISTAKE IS NOT EQUI VALENT TO A POWER TO REVIEW OR RECALL THE ORDER SOUGHT TO BE RECTIFIED. (D) FOURTHLY, UNDER S. 254(2) AN OVERSIGHT OF A FAC T CANNOT CONSTITUTE AN APPARENT MISTAKE RECTIFIABLE UNDER THE SECTION. (E) FIFTHLY, FAILURE ON THE PART OF THE TRIBUNAL TO CONSIDER AN ARGUMENT ADVANCED BY EITHER PARTY FOR ARRIVING AT A CONCLUSI ON IS NOT AN ERROR APPARENT ON RECORD, ALTHOUGH IT MAY BE AN ERROR OF JUDGEMENT. (F) SIXTHLY, EVEN IF ON THE BASIS OF A WRONG CONCLU SION THE TRIBUNAL HAS NOT ALLOWED A CLAIM OF THE PARTY IT WILL NOT BE A GROUN D FOR MOVING AN APPLICATION UNDER S. 254(2) OF THE ACT. (G) LASTLY, IN THE GARB OF AN APPLICATION FOR RECTI FICATION 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. 6. ACCORDINGLY, IN OUR OPINION, THE ARGUMENT OF T HE LD.A.R IS NOTHING BUT TO REVIEW THE ORDER OF TRIBUNAL; AND T HE ARGUMENT OF THE LD.A.R, CANNOT BE CONSIDERED TO REOPEN THE CAS E U/S.254(2) OF MP NO.227/MDS./17 :- 7 -: THE INCOME TAX ACT, 1961. ACCORDINGLY, THE PLEA OF THE ASSESSEE IS REJECTED. 7. IN THE RESULT, THE MISCELLANEOUS APPLICATION FI LED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON 1 ST SEPTEMBER, 2017, AT CHENNAI. SD/ - SD/ - . ! '# $ ( DUVVURU RL REDDY ) ) % / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER %& / CHENNAI '() / DATED: 1 ST SEPTEMBER, 2017. K S SUNDARAM (*++,-.+/. / COPY TO: + 1 . / APPELLANT 3. + 0+$ / CIT(A) 5. .12+,,3 / DR 2. / RESPONDENT 4. + 0 / CIT 6. 2#4+5 / GF