M/s Rajsthan Liquors Pvt. Ltd., Kanpur V. Astt. Commissioner of Income Tax-6, Kanpur

MA 29/LKW/2015

• Counselvise Citation: [2015] 124 COUNSELVISE.COM (IT) 3292 (ITAT-LUCKNOW)
• Duration Of Justice: 4 month(s) 7 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 24-07-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 05-06-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 17-03-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PUNIT KUMAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI. A. K. GARODIA, ACCOUNTANT MEMBER M.A. NO.29/LKW/2015 [ARISING OUT OF ITA NO.453/LKW/2012] ASSESSMENT YEAR:2009-10 M/S RAJASTHAN LIQUORS PVT. LTD. 312, 3 RD FLOOR CITY CENTRE THE MALL, KANPUR V. ACIT-6, KANPUR PAN:AABCR8605E (APPLICANT) (RESPONDENT) APPLICANT BY: SHRI. ABHINAV MEHROTRA, ADVOCATE RESPONDENT BY: SHRI. PUNIT KUMAR, D.R. DATE OF HEARING: 05 06 2015 DATE OF PRONOUNCEMENT: 24 07 2015 O R D E R PER SUNIL KUMAR YADAV: THIS MISCELLANEOUS APPLICATION IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE TRIBUNAL DATED 16.1.2015 IN ITA NO.453/LKW/2012 CONTENDING THEREIN THAT THE DECISION OF THE TRIBUNAL IS IN CONFLICT WITH THE MANDATE OF THE HON'BLE JURISDICTIONAL HIGH COURT AND THE TRIBUNAL HAS ALSO ADJUDICATED THE ISSUE WHICH WERE NOT SPECIFICALLY RAISED IN THE APPEAL OF THE REVENUE. 2. IT WAS CONTENDED BY THE LD. COUNSEL FOR THE ASSESSEE THAT THE TRIBUNAL IN ITS ORDER HAS ACCEPTED THAT THE ASSESSEE WAS NOT REQUIRED TO MAINTAIN SEPARATE BOOKS OF ACCOUNT UNIT-WISE AND APPROVED THE ORDER OF THE LD. CIT(A) WITH RESPECT TO THE REJECTION OF THE BOOKS OF ACCOUNT BY THE ASSESSING OFFICER, BUT THE TRIBUNAL HAS RESTORED THE MATTER TO THE LD. CIT(A) FOR ADJUDICATING THE ISSUE AFRESH AFTER AFFORDING AN OPPORTUNITY OF BEING :- 2 -: HEARD TO THE ASSESSEE. THEREFORE, THE FINDINGS OF THE TRIBUNAL ARE SELF- CONTRADICTORY, AS ON ONE HAND THE TRIBUNAL HAS CONFIRMED THE ORDER OF THE LD. CIT(A) AND ON THE OTHER HAND THE MATTER WAS REMANDED BACK TO THE LD. CIT(A) FOR RE-ADJUDICATION OF THE ISSUE. THEREFORE, AN ERROR IS CREPT IN THE ORDER OF THE TRIBUNAL WHICH CALLS FOR RECTIFICATION. 3. THE LD. D.R., ON THE OTHER HAND, HAS OPPOSED THE CONTENTIONS OF THE LD. COUNSEL FOR THE ASSESSEE WITH THE SUBMISSION THAT THE TRIBUNAL HAS TAKEN INTO ACCOUNT ALL THE RELEVANT FACTS WHILE DISPOSING OF THE APPEAL. THE LD. COUNSEL FOR THE ASSESSEE HAS PICKED UP FEW LINES FROM THE ORDER OF THE TRIBUNAL INSTEAD OF READING THE ORDER AS A WHOLE. THE TRIBUNAL HAS GIVEN A SPECIFIC FINDING IN ITS ORDER THAT THE ASSESSEE IS NOT UNDER ANY OBLIGATION TO PREPARE SEPARATE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT FOR EACH AND EVERY UNIT, BUT WHENEVER THE ASSESSEE WAS ASKED BY THE ASSESSING OFFICER TO FURNISH THE DETAILS OF A PARTICULAR EXPENSE DEBITED TO THE PROFIT AND LOSS ACCOUNT, THE ASSESSEE IS UNDER OBLIGATION TO FURNISH COMPLETE DETAILS. SINCE THE ASSESSEE HAS NOT FURNISHED COMPLETE DETAILS OF INDIRECT EXPENSES OF RS.2,78,26,506/- DEBITED TO THE PROFIT AND LOSS ACCOUNT NEITHER BEFORE THE ASSESSING OFFICER NOR BEFORE THE LD. CIT(A), THE TRIBUNAL HAS RIGHTLY SET ASIDE THE ISSUE TO THE LD. CIT(A) FOR RE-ADJUDICATION OF THE ASSESSEE. THEREFORE, THERE IS NO ERROR APPARENT IN THE ORDER OF THE TRIBUNAL. 4. HAVING CAREFULLY EXAMINED THE ORDER OF THE TRIBUNAL VIS--VIS THE MISCELLANEOUS APPLICATION, WE FIND THAT THE CONTROVERSY REVOLVES AROUND THE ISSUE OF INDIRECT EXPENSES OF RS.2,78,26,506/- DEBITED TO THE PROFIT AND LOSS ACCOUNT BY THE ASSESSEE. IN ORDER TO VERIFY THESE EXPENSES, THE ASSESSING OFFICER HAS ASKED THE ASSESSEE TO FURNISH COMPLETE DETAILS AND THE ASSESSEE COULD NOT FURNISH THE SAME. SIMILAR WAS THE POSITION BEFORE THE LD. CIT(A), BUT THE LD. CIT(A) HAS DELETED THE ADDITION HAVING OBSERVED THAT THE ASSESSEE WAS NOT UNDER ANY OBLIGATION TO MAINTAIN SEPARATE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT FOR EACH AND EVERY UNIT. WHILE ADJUDICATING THE :- 3 -: ISSUE, THE TRIBUNAL HAS GIVEN A CATEGORICAL FINDING THAT THE ASSESSEE IS NOT UNDER ANY OBLIGATION TO PREPARE SEPARATE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT FOR EACH AND EVERY UNIT, BUT WHENEVER THE ASSESSEE WAS ASKED BY THE ASSESSING OFFICER TO FURNISH THE DETAILS OF A PARTICULAR EXPENSE DEBITED TO THE PROFIT AND LOSS ACCOUNT, THE ASSESSEE IS UNDER OBLIGATION TO FURNISH THE COMPLETE DETAILS. SINCE THE ASSESSEE HAS NOT FURNISHED COMPLETE DETAILS BEFORE THE LD. CIT(A), THE DELETION OF ADDITION WAS NOT PROPER. HOWEVER, THE TRIBUNAL HAS RESTORED THE MATTER TO THE LD. CIT(A) FOR RE-ADJUDICATING THE IMPUGNED ISSUE AFRESH. THE TRIBUNAL HAS EXAMINED THE FACTS AND GIVEN A CATEGORICAL FINDING ON THIS ISSUE. THE FINDINGS OF THE TRIBUNAL CANNOT BE REVIEWED UNDER THE GARB OF RECTIFICATION. IF THE ASSESSEE IS AGGRIEVED WITH THE FINDINGS OF THE TRIBUNAL ON A PARTICULAR ISSUE, THE REMEDY AVAILABLE TO THE ASSESSEE IS NOT UNDER SECTION 254(2) OF THE ACT BUT LIES SOMEWHERE ELSE. 5. THE SCOPE OF PROVISIONS OF SECTION 254(2) OF THE ACT HAS BEEN REPEATEDLY EXAMINED BY THE HON'BLE APEX COURT AND VARIOUS HIGH COURTS AND IT WAS HELD THAT THE TRIBUNAL CAN RECTIFY ONLY THOSE MISTAKES WHICH ARE ARITHMETICAL OR CLERICAL OR APPARENT IN ITS ORDER. THE TRIBUNAL HAS NO JURISDICTION TO REVIEW ITS OWN ORDER IN THE GRAB OF RECTIFICATION. IT WAS ALSO HELD THAT IF THE TRIBUNAL COMMITS AN ERROR OF JUDGEMENT, THAT ERROR CANNOT BE RECTIFIED UNDER THE PROVISIONS OF SECTION 254(2) OF THE ACT AS THE TRIBUNAL IS NOT EMPOWERED BY THE STATUTE TO REVIEW ITS OWN ORDER. IN THE CASE OF CIT VS. VARDHMAN SPINNING; 226 ITR 296 THEIR LORDSHIPS OF THE PUNJAB AND HARYANA HIGH COURT HAVE HELD IN SPECIFIC TERMS THAT THE APPELLATE TRIBUNAL IS CREATION OF STATUTES AND IT CAN EXERCISE ONLY THOSE POWERS WHICH HAVE BEEN CONFERRED UPON IT. THE ONLY POWER CONFERRED ON THE TRIBUNAL U/S 254(2) OF THE I.T. ACT, 1961 IS TO RECTIFY ANY MISTAKE APPARENT FROM RECORD. THE JURISDICTION TO REVIEW OR MODIFY ORDERS PASSED BY THE AUTHORITIES UNDER THE ACT CANNOT BE INTERFERED WITH ON THE BASIS OF :- 4 -: SUPPOSED INHERENT RIGHTS. U/S 254(1) OF THE ACT, THE APPELLATE TRIBUNAL, AFTER HEARING THE CONTESTING PARTIES, CAN PASS SUCH ORDER AS IT DEEMS FIT. SEC. 254(2) OF THE ACT SPECIFICALLY EMPOWERS THE APPELLATE TRIBUNAL AT ANY TIME WITHIN FOUR YEARS OF THE DATE OF AN ORDER TO AMEND ANY ORDER PASSED BY IT U/S 254(1) OF THE ACT WITH A VIEW TO RECTIFY ANY MISTAKE APPARENT FROM RECORD EITHER SUO MOTO OR ON AN APPLICATION MADE . WHAT CAN BE RECTIFIED UNDER THIS SECTION IS A MISTAKE WHICH IS APPARENT AND PATENT. THE MISTAKE HAS TO BE SUCH FOR WHICH NO ELABORATE REASONS OR INQUIRY IS NECESSARY. WHERE TWO OPINIONS ARE POSSIBLE, THEN IT CANNOT BE SAID TO BE AN ERROR APPARENT ON THE FACE OF THE RECORD. 6. IN THE CASE OF CIT VS. SUMAN TEA AND PLYWOOD INDUSTRIES (P) LTD., 226 ITR 34 THEIR LORDSHIPS OF CALCUTTA HIGH COURT HAVE EXPRESSED SIMILAR OBSERVATIONS AFTER HOLDING THAT UNDER SECTION 254(2) OF THE INCOME- TAX ACT, AN ORDER, WHICH HAS BEEN PASSED BY THE TRIBUNAL REACHES FINALITY THE MOMENT THE SAME IS PASSED; CANNOT BE TOUCHED THEREAFTER. BY SECTION 254(2) OF THE ACT, THE TRIBUNAL, HOWEVER, HAS BEEN AUTHORIZED TO RECTIFY MISTAKES IN ITS ORDERS, WHICH ARE APPARENT ON THE FACE OF THE RECORDS. THE EXPRESSION `MISTAKE APPARENT ON THE RECORD MEANS A MISTAKE EITHER CLERICAL OR GRAMMATICAL OR ARITHMETICAL OR OF LIKE NATURE, WHICH CAN BE DETECTED WITHOUT THERE BEING ANY NECESSITY TO RE-ARGUE THE MATTER OR TO RE-APPRAISE THE FACT AS APPEARING FROM THE RECORDS. IN ANOTHER CASE CIT VS. GOLAL CHAND AGARWAL; 202 ITR 14 THEIR LORDSHIPS OF CALCUTTA HIGH COURT HAVE ALSO HELD THAT SECTION 254(2) OF THE INCOME-TAX ACT, 1961 EMPOWERS THE TRIBUNAL TO AMEND ITS ORDER PASSED U/S 254(1) TO RECTIFY ANY MISTAKE APPARENT FROM THE RECORD EITHER SUO MOTO OR ON AN APPLICATION. IF IN ITS ORDER THERE IS NO MISTAKE WHICH IS PATENT AND OBVIOUS ON THE BASIS OF THE RECORD, THE EXERCISE OF THE JURISDICTION BY THE TRIBUNAL U/S 254(2) WILL BE ILLEGAL AND IMPROPER. AN OVERSIGHT OF THE FACT CANNOT CONSTITUTE AN APPARENT MISTAKE RECTIFIABLE UNDER SECTION 254(2). THIS MIGHT, AT THE WORST, LEAD TO :- 5 -: PERVERSITY OF THE ORDER FOR WHICH THE REMEDY AVAILABLE TO THE ASSESSEE IS NOT UNDER SECTION 254(2) BUT A REFERENCE PROCEEDINGS U/S 256. THE NORMAL RULE IS THAT THE REMEDY BY WAY OF REVIEW IS A CREATURE OF THE STATUTE AND UNLESS CLOTHED WITH SUCH POWER BY THE STATUTE, NO AUTHORITY CAN EXERCISE THE POWER. 7. THE HONBLE HIGH COURT OF ALLAHABAD IN THE CASE OF CIT VS. ITAT; 143 CTR 446 HAS HELD THAT SUB-SECTION (1) OF SECTION 254 CONFERS AMPLE POWERS ON THE TRIBUNAL TO PASS SUCH ORDERS IN ANY APPEAL FILED BEFORE IT AS IT THINKS FIT. SUB-SECTION (2) OF SECTION 254 POSTULATES THAT THE TRIBUNAL MAY AMEND ANY ORDER PASSED BY IT UNDER SUB-SEC. (1) OF SECTION 254 WITH A VIEW TO RECTIFYING ANY MISTAKE APPARENT FROM THE RECORD. THE POWER OF THE TRIBUNAL CONFERRED BY SUB-SECTION (2) OF SECTION 254 FOR RECTIFYING ANY MISTAKE APPARENT FROM THE RECORD CANNOT BE EXERCISED BY THE TRIBUNAL TO RECALL ANY ORDER PASSED BY IT UNDER SECTION 254(2). FURTHER, REVIEWING AND RECALLING AN ORDER IS ONE THING AND RECTIFYING A MISTAKE IN THE ORDER WHICH IS APPARENT FROM THE RECORD IS QUITE ANOTHER. IN THE ABSENCE OF ANY STATUTORY PROVISION FOR REVIEW BY TRIBUNAL, THE ORDER PASSED BY THE TRIBUNAL CANNOT BE RECALLED OR REVIEWED UNDER SECTION 254(2) OF THE ACT. THE PROVISIONS OF SECTION 254 WERE ALSO EXAMINED BY THE HONBLE HIGH COURT OF M.P. IN THE CASE OF PRAKASH CHAND MEHTA VS. CIT; 220 ITR 277 IN WHICH THEIR LORDSHIP HAVE HELD THAT SCOPE OF SECTION 254(2) OF THE INCOME-TAX ACT IS VERY LIMITED AND IT IS ONLY THE APPARENT ERROR WHICH CAN BE RECTIFIED. 8. THEIR LORDSHIPS OF THE APEX COURT IN THE CASE OF T.S. BALARAM ITO VS. VOLKART BROTHERS; 82 ITR 50 (SC) HAVE HELD THAT A MISTAKE APPARENT ON THE RECORD MUST BE AN OBVIOUS AND PATENT MISTAKE AND NOT SOMETHING WHICH CAN BE ESTABLISHED BY A LONG DRAWN PROCESS OF REASONING ON POINTS ON WHICH THERE MAY BE CONCEIVABLY TWO OPINIONS. A DECISION ON A DEBATABLE POINT OF LAW IS NOT A MISTAKE APPARENT FROM RECORD. THEIR LORDSHIPS HAVE FURTHER HELD THAT IF A STATEMENT OF ANY PERSON HAS BEEN :- 6 -: RECORDED WITHOUT PRODUCING HIM IN THE WITNESS BOX, THE AUTHORITIES SHOULD NOT ACT UPON THAT STATEMENT WITHOUT AFFORDING THE ASSESSEE AN OPPORTUNITY TO CROSS-EXAMINE THE WITNESS, BUT THAT IS A MATTER NOT FOR RECTIFICATION BUT IT IS A MATTER RELATING TO THE MERITS OF THE CASE AS TO WHETHER THE TRIBUNAL HAS GONE WRONG IN NOT CONSIDERING THE AFFIDAVIT OF A PARTICULAR PERSON AND HAS ACTED UPON THE STATEMENT OF THE SAME PERSON WHICH WAS RECORDED BY THE ITO WITHOUT BEING PERMITTED TO CROSS EXAMINE BY THE ASSESSEE. THIS IS NOT A MATTER IN WHICH THE APPARENT ERROR IS INVOLVED BUT IT IS A MATTER MORE OF MERIT AND CANNOT BE RECTIFIED WITHIN THE SCOPE OF RECTIFICATION. THE POWERS OF THE TRIBUNAL WHILE MAKING A RECTIFICATION WERE AGAIN EXAMINED BY THE APEX COURT IN THE CASE OF CIT VS. HERO CYCLES PVT. LTD.; 228 ITR 463 IN WHICH THEIR LORDSHIPS HAVE HELD THAT RECTIFICATION CAN ONLY BE MADE WHEN A GLARING MISTAKE OF FACT OR LAW COMMITTED BY THE OFFICER PASSING THE ORDER BECOMES APPARENT FROM RECORD. RECTIFICATION IS NOT POSSIBLE IF THE QUESTION IS DEBATABLE. MOREOVER, A POINT WHICH WAS NOT EXAMINED ON FACTS OR IN LAW CANNOT BE DEALT WITH AS MISTAKE APPARENT FROM RECORD. IN THE CASE OF ITO VS. ITAT; 229 ITR 651 THEIR LORDSHIPS OF PATNA HIGH COURT HAVE ALSO EXPRESSED A SIMILAR OBSERVATION AFTER HOLDING THAT SECTION 254(2) OF THE ACT EMPOWERS THE TRIBUNAL TO AMEND ANY ORDER PASSED BY IT UNDER SUB-SECTION (1) WITH A VIEW TO RECTIFYING A MISTAKE FROM RECORD. HOWEVER, SECTION 254(2) DOES NOT AUTHORIZE THE TRIBUNAL TO REVIEW ITS ORDER OR TO SIT IN APPEAL OVER ITS EARLIER ORDER. IF IT IS DONE, IT WOULD AMOUNT TO AN AMENDMENT OF AN EARLIER ORDER WITH A VIEW TO RECTIFY A MISTAKE APPARENT FROM RECORD, BUT IT WOULD BE AN ORDER PASSED ON REAPPRAISAL OF THE MATERIAL FACTS AND CIRCUMSTANCES AND ON A FRESH APPLICATION OF THE LEGAL POSITION WHICH IS NOT PERMISSIBLE WITHIN THE SCOPE OF SECTION 254(2) OF THE ACT. 9. IN THE CASE OF MS. DEEKSHA SURI VS. ITAT; 232 ITR 395 THEIR LORDSHIPS OF DELHI HIGH COURT HAVE HELD IN SPECIFIC TERMS THAT THE INCOME- TAX APPELLATE TRIBUNAL IS A CREATURE OF THE STATUTE. IT HAS NOT BEEN VESTED :- 7 -: WITH THE REVIEW JURISDICTION BY THE STATUTE CREATING IT. THE TRIBUNAL DOES NOT HAVE ANY POWER TO REVIEW ITS OWN JUDGEMENTS OR ORDERS. THE GROUNDS ON WHICH THE COURTS MAY OPEN OR VACATE THEIR JUDGEMENTS ARE GENERALLY MATTERS WHICH RENDER THE JUDGEMENT VOID OR WHICH ARE SPECIFIED IN THE STATUTES AUTHORIZING SUCH SECTIONS. THE LANGUAGE OF SECTION 254(2) OF THE INCOME-TAX ACT, 1961 IS CLEAR. THE FOUNDATION FOR THE EXERCISING THE JURISDICTION IS WITH A VIEW TO RECTIFY ANY MISTAKE APPARENT ON THE RECORD AND THE OBJECT IS ACHIEVED BY AMENDING ANY ORDER PASSED BY IT. A MISTAKE APPARENT ON THE RECORD MUST BE AN OBVIOUS AND PATENT MISTAKE AND NOT SOMETHING WHICH CAN BE ESTABLISHED BY A LONG DRAWN PROCESS OF REASONING ON POINTS ON WHICH THERE MAY BE CONCEIVABLY TWO OPINIONS. A DECISION ON A DEBATABLE POINT OF LAW IS NOT A MISTAKE APPARENT ON THE RECORD. 10. SIMILAR VIEWS HAVE ALSO BEEN EXPRESSED BY THE GUWAHATI HIGH COURT IN THE CASE OF CIT VS. PRAHLAD RAI TODI 251 ITR 833 BY HOLDING THAT A BARE LOOK AT SECTION 254(2) WILL SHOW THAT THIS SECTION GIVES THE POWER TO RECTIFY ANY MISTAKE APPARENT FROM THE RECORD AND NOT TO AMEND ANY ORDER PASSED BY IT AND TO MAKE SUCH AMENDMENT IF THE MISTAKE IS BROUGHT TO ITS NOTICE BY THE ASSESSING OFFICER OR THE ASSESSEE. SO, WHEN WE SPEAK OF AMENDMENT OR RECTIFYING THE MISTAKE THE EARLIER ORDER CAN NEVER BE RECALLED BY THE TRIBUNAL. THE EARLIER ORDER MUST HOLD THE FIELD AND THE MISTAKE CAN BE RECTIFIED OR AMENDED CAN BE MADE TO THE ORDER. THE TRIBUNAL CANNOT, IN LAW AND FACTS, RECALL AND DESTROY ITS FINAL ORDER AS A WHOLE WITH A VIEW TO RECTIFY THE SAME ORDER UNDER SECTION 254(2) OF THE ACT. THE ACTION OF THE TRIBUNAL ACTUALLY AMOUNTS TO REVIEW OF ITS EARLIER ORDER AND THAT POWER TO REVIEW IS NOT AVAILABLE TO THE TRIBUNAL. 11. WE, THEREFORE, FIND NO MERIT IN THIS MISCELLANEOUS APPLICATION OF THE ASSESSEE, AS NO ERROR APPARENT IN THE ORDER OF THE TRIBUNAL IS POINTED OUT. THE LD. COUNSEL FOR THE ASSESSEE HAS TRIED TO DISPUTE THE FINDINGS OF :- 8 -: THE TRIBUNAL AND SEEKING A REVIEW OF THE ORDER OF THE TRIBUNAL WHICH IS NOT PERMISSIBLE UNDER SECTION 254(2) OF THE ACT AND WE ACCORDINGLY REJECT THIS MISCELLANEOUS APPLICATION. 12. IN THE RESULT, MISCELLANEOUS APPLICATION OF THE ASSESSEE STANDS DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTIONED PAGE. SD/- SD/- [A. K. GARODIA] [SUNIL KUMAR YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 24 TH JULY, 2015 JJ:0907 COPY FORWARDED TO: 1. APPLICANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR