ACIT, UDAIPUR V. M/s. Chetak Enterprises Pvt. Ltd., UDAIPUR

MA 28/JODH/2014

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 2323 (ITAT-JODHPUR)
• Duration Of Justice: 4 month(s) 3 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 03-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 07-08-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 30-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Assessee Lawyers: G K GARGIEYA; DINESH SHRIMALI
• Keywords: Rectification of order; Rule of consistency
• Section: 194C

Judgement Text

IN THE INCOMETAX APPELLATE TRIBUNAL JODHPUR BENCH: J ODHPUR ( BEFORE SHRI H.M. MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER ) M.A. NO. 28 /JODH/2014 (ARISING OUT OF I.T.A. NO. 207 / JODH /201 2 ASSTT. YEAR - 20 0 7 - 0 8 ) ACIT, CIRCLE - 1 , VS M/S CHETAK ENTERPRISES PVT. LTD UDAI PUR. 396, SECTOR 11, HIRAN MAGRI UDAIPUR PAN NO. AACCC 1498 H (APPELLANT) (RESPONDENT) ASSESSEE S BY : - SHRI G.K. GARGIEYA AND SHRI DINESH SHRIMALI . DEPARTMENT BY : - SHRI N.A. JOSHI CIT - D.R. DATE OF HEARING : 07 /0 8 /201 4 DATE OF PRONOUNCEMENT : 03 /0 9 /2014 O R D E R P E R : HARI OM MARATHA, J.M. . THIS MISCELLANEOUS APPLICATION (MA) HAS BEEN FILED BY THE REVENUE IN RELATION TO TRIBUNAL ORDER DATED 2 2 . 03 .2013 PASSED IN ITA NO. 207 /JODH/201 2 (A.Y. 200 7 - 09). THROUGH THIS M.A. REVIEW OF THE ORDER HAS BEEN SOUGHT ON FACTS. 2 2. THE RELEVANT P ORTION OF THIS M.A. READS AS UNDER : - 3. ON GOING THROUGH THE DETAILS OF THE SAID ORDE R IT IS OBSERVED THAT THE ISSUE RAISED THROUGH GROUND NO.3 IN THE AY 2006 - 07 RELATED TO THE PAYMENT WHICH WAS MADE AGAINST CONSULTANCY CHARGES WHEREAS IN AY 2007 - 08 THE GROUND NO.3 DEALS WITH THE PAYMENT MADE AGAINST HIRE CHARGES. NOWHERE IN THE SAID ORDER THE HON'BLE ITAT DISCUSSED THE ISSUE IN RESPECT OF PAYMENT OF RS.62,43,096/ - MADE AGAINST HIRE CHARGES AND DUE TO NON - DEDUCTION OF TDS THEREON THE AO DISALLOWED THE SAME U/S 40(A)(IA) OF THE ACT. 4. IN RESPECT OF THE GROUND NO.4 THE HONBLE ITAT DISMISSE D THE APPEAL OF THE REVENUE AS DECIDED IN THE AY 2006 - 07. HOWEVER, IT IS OBSERVED THAT IN THE AY 2006 - 07 THE HONBLE ITAT RESTORED THE ISSUE TO THE FILE OF THE AO WITH DIRECTION THAT HE SHALL DECIDE THIS ISSUE AFRESH AFTER ACCORDING PROPER OPPORTUNITY OF B EING HEARD TO THE ASSESSEE, IN RESPECT OF EXPENSE INCURRED ON SIGN BOARD AMOUNTING TO RS. 1,30,82,379/ - WHICH WAS DISALLOWED U/S 40(A)(IA) OF THE ACT DUE TO NON - DEDUCTION OF TDS U/S 194C OF THE ACT. WHEREAS THE HONBLE ITAT DISMISSED THE REVENUES GROUND N O.4 IN THE AY 2007 - 08 THOUGH THE FACTS FOR A.Y 2006 - 07 & 2007 - 08 ARE SIMILAR ON THIS ISSUE. IT IS RESPECTFULLY SUBMITTED THAT THERE IS AN APPARENT CONTRADICTION IN BOTH THE JUDGMENT FOR A.Y. 07 & AY 2007 - 08 IN RESPECT OF EXPENSE INCURRED ON SIGN BOARD WHIC H WERE DISALLOWED BY THE AO DUE TO NON - DEDUCTION OF TDS. IT IS REQUESTED THAT DECISION GIVEN IN AY 2006 - 07 MAY KINDLY BE FOLLOWED IN AY 2007 - 08 ON THIS ISSUE. 5. IT IS SUBMITTED THAT NON - CONSIDERATION OR OMISSION OF THE ISSUE WITHOUT ANY JUSTIFICATION TA NTAMOUNTS TO BE A MISTAKE APPARENT ON RECORD. THIS OMISSION HAS CAUSED PREJUDICE TO THE REVENUE IN THE SENSE THAT IT HAS GIVEN RISE TO THE LEGAL POSITION ALTOGETHER DIFFERENT AND CONTRADICTORY TO THE POSITION ALREADY STOOD CONCLUDED BY THE ORDER OF THE SAM E TRIBUNAL FOR THE 3 AY 2006 - 07 IN THE CASE OF ASSESSEE ITSELF. ACCORDINGLY, THIS MISCELLANEOUS APPLICATION IS BEING FILED BY THE REVENUE U/S 254(2) OF THE ACT. 6. IT IS A SETTLED LAW THAT THE RULE OF CONSISTENCY IS AN IMPORTANT PRINCIPLE IN INCOME TAX LAWS AND THE APPLICANT IS ENTITLED TO REASONABLY EXPECT THAT ITS CASE ON SIMILAR FATS WOULD BE ACCEPTED WITHOUT DEMUR. THERE ARE CONFLICTING JUDGMENTS IN BOTH THE A.YS. ON THE SAME ISSUE BY THE SAME AUTHORITY. 7. IT IS AGAIN A TRITE LAW THAT WHERE THE TRIBUN AL OMITS TO DEAL WITH AN IMPORTANT ASPECT AFFECTING THE FATE OF THE APPEAL, IT MUST BE DEEMED TO BE A MISTAKE APPARENT FROM RECORD, EMPOWERING THE TRIBUNAL TO RECTIFY THE APPEAL ORDER. 2.1 AFTER HEARING BOTH SIDES, WE ARE IN AGREEMENT WITH LD. A.R. THAT THERE IS NO MISTAKE IN THE TRIBUNAL ORDER WHICH CAN BE RECTIFIED U/S 254(2) OF THE I.T. ACT, 1961, THE ACT FOR SHORT. THE REVENUE IS SEEKING REVIEW OF THE ORDER WHICH IS BEYOND THE SCOPE OF THIS PROVISION. 2.2 THE LEGAL POSITION IN RESPECT OF RECTIFI CATION U/S 254(2) CAN BE DETAILED AND DISCUSSED HERE : - SECTION 254(2) OF INCOME TAX ACT, 1961. RECTIFICATION OF MISTAKES APPARENT FROM THE RECORDS SECTION 254 : READS AS UNDER : - 4 254(1) - THE APPELLATE TRIBUNAL MAY, AFTER GIVING BOTH THE PARTIES TO THE APPEAL AN O PPORTUNITY OF BEING HEARD, PASS SUCH ORDERS THEREON AS IT THIN K FIT. 254(2) - THE APPELLATE TRIBUNAL MAY, AT ANY TIME WITHIN FOUR YEARS FROM THE DATE OF THE ORDER; WITH A VIEW TO RECTIFYING ANY MISTAKE APPARENT FROM THE RECORD, AMEND A NY ORDER PASSED BY IT UNDER SUB - SECTION (1), AND SHALL MAKE SUCH AMENDMENT IF THE MISTAKE IS BROUGHT TO ITS NOTICE BY THE ASSESSEE OR THE ASSESSING OFFICER: PROVISO (1) & PROVISO (2) THE WORDS AND EXPRESSIONS USED IN SECTION 254(2) ARE UNA M BIGUOUS BEING PLAIN AND WITHOUT ANY INTRICACIES. ANY ORDER CAN BE AMENDED BY THE APPELLATE TRIBUNAL WITH A VIEW TO RECTIFY ANY MISTAKE APPARENT FROM THE RECORD. IN THIS SECTION THE WORD AMENDMENT MEANS AND IMPLIES THE MODIFICATION OF THE ORDER. WHEN AN ORDER OF AMENDMENT IS PASSED THE ORIGINAL ORDER IS NOT EFFECTED, IT SURVIVES EXCEPT FOR THE AMENDMENT. WHEN AN ORDER IS RECALLED IT STANDS OBLITERATED IN ITS ENTIRETY. RECALLING OF THE ORDER IS NOT PERMISSIBLE UNDER SECTION 254(2) BECAUSE WHEN AN ORDER IS RECALLED IT HAS TO BE NECESSARILY RE - ADJUDICATED ON THE ENTIRE SUBJECT - MATTER OF APPEAL. [KARAN & CO. VS. ITAT (2002) 253 ITR 131 (DEL.)]. 5 NOW THE QUESTION ARISES AS TO WHAT CONSTITUTES A MISTAKE WHICH CAN ONLY BE RECTIFIED U/S 254(2). NUMEROUS JUDICIAL PRONO UNCEMENTS HAVE BEEN RENDERED ON THIS ASPECT. THERE ARE VIVID REASONS AND CONDITIONS THE EXISTENCE OF WHICH HAS BEEN HELD AS A RECTIFIABLE MISTAKE AND IN THIS MAKE EVEN THE TOTAL RECALL OF THE ORDER HAS BEEN TREATED AS RECTIFICATION OF A MISTAKE. BEFORE DWE LLING ON THIS ISSUE WE WOULD LIKE TO DISCUSS AS TO WHEN THIS MODIFICATION OF THE ORDER WITH A VIEW TO RECTIFY THIS MISTAKE CAN BE CARRIED OUT. AT ANY TIME WITHIN FOUR YEARS FROM THE DATE OF THE ORDER. IF SUCH A MISTAKE IS NOTICED THE APPELLATE TRIBUNAL MA Y RECTIFY IT, BUT IF IT IS MISTAKE AND THE BROUGHT TO ITS NOTICE BY THE ASSESSEE OR THE ASSESSING OFFICER IT SHALL MAKE SUCH AMENDMENT. A MISTAKE MEANS TO TAKE OR UNDERSTAND WRONGLY OR INACCURATELY; TO MAKE AN ERROR IN INTERPRETING; IT IS AN ERROR, A FAULT, A MISUNDERSTANDING, A MISCONCEPTION. THE LITERAL MEANING OF THIS WORD HAS A SPECIAL SIGNIFICANCE IN THE TAXATION LAWS. IT MAY NOT BE AN ARITHMETICAL OR CLERICAL ERROR ALONE THAT COMES WITHIN ITS PURVIEW. BUT, IT COMPREHENDS AN ERROR WHICH AFTER A JUDICIOUS PROBE INTO THE RECORD FROM WHICH IT IS SUPPOSED TO EMANATE ARE DISCERNED. THEREFORE, THE WORD IS INHERENTLY CARRIES INDEFINITE SCOPE. T HE MEANING OF APPARENT HAS ALSO BEEN THE SUBJECT OF JUDICIOUS ADJUDICATION. THE PLAIN MEANING OF THE WORD AP PARENT IS THAT IT MUST BE SOMETHING WHICH APPEAR TO BE SO EX FACIE AND IS INCAPABLE OF ARGUMENT OR 6 DEBATE. IT IS THAT LAPSE OR INACCURACY WHICH IS APPARENT FROM THE RECORD. THE RECORD MEANS THE RECORD AVAILABLE BEFORE THE APPELLATE TRIBUNAL. THE APPELLA TE TRIBUNAL HAS NOT INHERENT POWER TO REHEAR ON MERITS EXPART E FOR IT IS PERMITTED. UNDER SECTION 254(2). THE ORDER PASSED BY THE APPELLATE TRIBUNAL UNDER SECTION 254(1) IS THE EFFECTIVE ORDER SO FAR AS THE APPEAL IS CONCERNED. ANY ORDER PASSED U/S 254(2), EITHER ALLOWING THE AMENDMENT SOUGHT OR REFERRING TO AMEND GETS MERGED WITH THE ORIGINAL ORDER PASSED. THE ORDER AS AMENDED OR REMAINING UNAMENDED IS THE EFFECTIVE ORDER FOR ALL PRACTICAL PURPOSES. THE SAME CONTINUES TO BE AN ORDER UNDER SECTION 254(2). A N ORDER PASSED U/S 254(2) DOES NOT HAVE EXISTENCE DE HORS THE ORDER U/S 254(1) OF THE ACT. GENERALLY, WHEN PREJUDICE IS CAUSED FROM AN ORDER OF THE APPELLATE TRIBUNAL DUE TO ITS MISTAKE, ERROR OR OMISSION, THEN IT IS ITS DUTY TO SET IT RIGHT. NOW WE WIL L DISCUSS AS TO WHAT ARE THE APPARENT MISTAKE FROM THE RECORD WHICH HAVE BEEN SO HELD . THE BASIS EPILOGUE IS THAT THE APPELLATE TRIBUNAL (AT) HAS JURISDICTION ONLY TO RECTIFY MISTAKES APPARENT FROM RECORD THAT ARE BROUGHT TO ITS NOTICE. IT CANNOT REVIEW I TS EARLIER ORDER. IT CANNOT GO INTO THE MERITS OF APPEAL AGAIN AND COME TO A FINDING THAT THE ORDER WAS SOUND EVEN ON THE BASIS OF THE MATERIALS SOUGHT TO BE RELIED, PRESUMABLY BECAUSE IT WOULD AMOUNT TO REVIEW. THE APPELLATE TRIBUNAL HAS NO STATUTORY POWE R TO REVIEW, TO RE - EXAMINE AND GIVE A SECOND VIEW ON THE MATTER WITH A VIEW TO ALTER OR REVERSE 7 THE VIEW ALREADY TAKEN BY IT. HOWEVER, IT HAS INCIDENTAL OR ANCILLARY POWERS WHICH CAN BE EXERCISED BY IT. MISTAKE IS AN ORDINARY WORD, BUT IN TAXATION LAWS, IT HAS A SPECIAL SIGNIFICANCE. IT IS NOT AN ARITHMETICAL OR CLERICAL ERROR ALONE THAT COMES WITHIN ITS PURVIEW. IT COMPREHENDS ERRORS WHICH AFTER A JUDICIOUS PROBE INTO THE RECORD FROM WHICH IT IS SUPPO S ED TO EMANATE, ARE DISCERNED. THIS WORD IS INHERENTLY INDEFINITE IN SCOPE, AS WHAT MAY BE A MISTAKE FOR ONE MAY NOT BE ONE FOR ANOTHER. IT IS SOMETHING WHICH A DULY AND JUDICIOUSLY INSTRUCTED MIND CAN FIND OUT FROM THE RECORD. WHEN APPELLATE TRIBUNAL FAILS INADVERTENTLY, TO NOTICE ANY QUESTION RAISED BEFORE IT OR MISCONCEIVE MATERIAL FACTS WHICH GOES TO THE VERY ROOT OF THE MATTER, IT MUST CORRECT THAT MISTAKE EX BEBITO JUSTITIAE. SIMILAR VIEW HAS BEEN EXPRESSED BY HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS RAMESH CHAND MODI (2001) 249 ITR 323 (RAJAS THAN). WHEN PREJUDICE RESULTS FROM AN ORDER ATTRIBUTABLE TO APPELLATE TRIBUNALS MISTAKES / ERROR / OR OMISSION, THEN IT IS ITS DUTY TO SET IT RIGHT. NON CONSIDERATION OF A DECISION OF A CO - ORDINATE BENCH IS SUCH CATEGORY OF A MISTAKE. THE DECISION OF HON BLE APEX COURT RENDERED IN THE CASE OF HONDA SI EL POWER PRODUCTS LTD. VS. CIT (2007) 295 ITR 466 (SC). LIKEWISE NON CONSIDERATION OR OMISSION TO NOTICE A DECISION OF JURISDICTIONAL HIGH COURT OR OF THE HONBLE SUPREME COURT IS A MISTAKE APPARENT FROM REC ORD ACIT VS. SAURASHTRA KUTCH STOCK EX CHANGE LTD. (2008) 305 ITR 227 ( SC). WHEN THERE IS AN OMISSION TO DEAL WITH AN 8 IMPORTANT CONTENTION AFFECTING THE MAINTAINABILITY OR MERITS OF AN APPEAL IT MUST BE DEEMED AS A MISTAKE APPARENT FROM RECORD EMPOWERING TO APPELLATE TRIBUNAL TO REOPEN THE APPEAL AND TO RECTIFY THE SAME IF IT IS SATISFIED. LAXMI ELECTRONIC CORPORATION LIMITED VS. CIT (1991) 188 ITR 398 (ALL). FURTHER, RELYING ON AN INFORMATION RECEIVED AFTER COMPLETION OF HEARING WHICH WAS NOT DISCLOSED TO THE ASSESSEE IS AN APPARENT MISTAKE. THE APPELLATE TRIBUNAL WOULD BE JUSTIFIED IN RECALLING ITS ORDER ON THE RELEVANT POINT AND DIRECTING THE APPEAL TO BE PLACED FOR HEARING IN DUE COURSE. THIS HAS BEEN HELD BY THE HONBLE RAJASTHAN HIGH COURT WHILE DECIDI NG THE CASE OF CIT VS. S.S. GUPTA (2002) 257 ITR 440 (RAJ.). THE TIME LIMIT OF FOUR YEARS PROVIDED IN SECTION 254(2) MUST BE ADHERED TO AND ANY APPLICATION FOR RECTIFICATION FILED BEYOND THE PERMISSIBLE TIME HAS TO BE SUMMARILY DISMISSED, AS IT HAS TO BE H ELD AS TIME BARRED. THE CASE OF SHREE AYYANAR SPINNING & WEAVING MILLS LTD. VS. CIT (2008) 301 ITR 434 (SC) IS RENDERED IN THIS REGARD. 3. ACCORDINGLY, WE CANNOT ALLOW THIS M.A. AND DISMISS THE SAME. 9 4. IN THE RESULT, THIS M.A. OF THE REVENUE STAND S DISMISSED. SD/ - SD/ - [N.K. SAINI] [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 3 RD SEPTEMBER , 2014. VL/ - COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) BY ORDER 5. THE DR SENIOR PRIVATE SECRETARY ITAT, JODHPUR