Smt. Renu Agrawal, Mathura V. I.T.O.-3(3), Mathura

MA 3/AGR/2012

• Counselvise Citation: [2013] 123 COUNSELVISE.COM (IT) 9771 (ITAT-AGRA)
• Duration Of Justice: 11 month(s) 17 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 11-01-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 03-01-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 25-01-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KK MISHRA
• Assessee Lawyers: RAKESH GUPTA
• Keywords: Gift; Opportunity of being heard; Additional evidence; Difference of opinion
• Section: 68; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER M.A. NO. 03/AGRA/2012 (IN ITA NO. 55/AGRA/2007) ASSTT. YEAR : 2003-04 SMT. RENU AGARWAL VS. INCOME-TAX OFFICER D/O SHRI LAXMI NARAYAN 3(3), MATHURA. 1639, LALA RAM PETCH, KOSI KALAN, MATHURA. (PAN : ABDPA 1965 G) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAKESH GUPTA, FCA RESPONDENT BY : SHRI K.K. MISHRA, JR. D.R. DATE OF HEARING : 03.01.2012 DATE OF PRONOUNCEMENT OF ORDER : 11.01.2013 ORDER PER BHAVNESH SAINI, J.M.: THIS ORDER SHALL DISPOSE OF THE MISCELLANEOUS APPL ICATION FILED BY THE ASSESSEE AGAINST THE ORDER OF THE ITAT, AGRA BENCH DATED 11.10.2011 IN ITA NO. 55/AGRA/2007 FOR THE ASSESSMENT YEAR 2003-04, WHERE BY THE APPEAL OF THE ASSESSEE WAS DISMISSED BY MAJORITY VIEW. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE PREFERRED APPEAL BEFORE THE TRIBUNAL AGAINST THE ORDER OF LD. CIT(A)-I, AGRA DA TED 28.11.2006, RAISING SEVERAL GROUNDS OF APPEAL. HOWEVER, AT THE TIME OF HEARING OF APPEAL, THE OTHER GROUNDS M.A. NO. 03/AGRA/2012. 2 WERE NOT PRESSED AND THE ASSESSEE AGITATED THE ADDI TION OF RS.4,00,000/- ON ACCOUNT OF TWO GIFTS ALLEGEDLY RECEIVED FROM SHRI JAI SINGH YADAV AND SHRI GAJANAND GOYAL IN A SUM OF RS.2,00,000/- EACH ON GROUNDS NOS . 4 & 5. THE THEN LD. JUDICIAL MEMBER, CONSIDERING THE SUBMISSIONS OF THE PARTIES WAS OF THE OPINION THAT SECTION 68 OF THE IT ACT IS ATTRACTED ONLY WHEN ANY CREDIT IS FOUND IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AND SINCE THE GIFT AMOUNTS WERE REC EIVED IN THE BANK PASSBOOK OF THE ASSESSEE IN INDIVIDUAL CAPACITY AND THE ASSESSE E DID NOT MAINTAIN BOOKS OF ACCOUNT IN HIS INDIVIDUAL CAPACITY, THEREFORE, NO A DDITION COULD BE MADE U/S. 68 OF THE IT ACT. THE APPEAL OF THE ASSESSEE WAS DECIDED ONLY ON THAT POINT WITHOUT DECIDING THE APPEAL ON MERITS OF THESE TWO GIFTS AN D APPEAL OF THE ASSESSEE WAS ACCORDINGLY ALLOWED. THE PROPOSED ORDER OF THE LD. JUDICIAL MEMBER WAS NOT AGREEABLE TO THE THEN LD. ACCOUNTANT MEMBER. THE LD . ACCOUNTANT MEMBER ALSO OBSERVED THAT FOR CLARIFICATION EVEN THE DEPOSITS I N THE ASSESSEES BANK ACCOUNT WOULD STAND TO BE COVERED U/S. 69 OR 69A OF THE IT ACT AND, THEREFORE, HE DID NOT AGREE WITH THE VIEW OF THE THEN LD. JUDICIAL MEMBER AND PASSED A SEPARATE DISSENTING ORDER ON 13.02.2009, DISMISSING THE CLAI M OF ASSESSEE OF GENUINE GIFT. THE MATTER WAS, THEREFORE, REFERRED TO THE HONBLE PRESIDENT, ITAT U/S. 255(4) OF THE IT ACT. THERE BEING THE DIFFERENCE OF OPINION O N THE MATTER IN ISSUE, HONBLE VICE-PRESIDENT, DELHI ZONE, NEW DELHI WAS APPOINTED AS THIRD MEMBER TO RESOLVE THE CONTROVERSY. THE LD. THIRD MEMBER (VP) DID NOT APPROVE THE VIEW OF THE THEN JUDICIAL MEMBER AND ENTIRELY AGREED WITH THE OPINIO N OF THE LD. ACCOUNTANT M.A. NO. 03/AGRA/2012. 3 MEMBER ON THE MATTER IN ISSUE AND PASSED AN ORDER O N 30.08.2011. THE MATTER WAS FIXED BEFORE THE DIVISION BENCH OF ITAT, AGRA FOR G IVING EFFECT TO THE MAJORITY VIEW AND THE DIVISION BENCH OF ITAT AGRA VIDE ORDER DATED 11.10.2011 IN VIEW OF THE MAJORITY DECISION, DISMISSED THE APPEAL OF THE ASSESSEE. 3. THE ASSESSEE HAS NOW PREFERRED THE MISCELLANEOUS APPLICATION AGAINST THE FINAL ORDER OF THE TRIBUNAL DATED 11.10.2011 AND IT IS STATED THAT THE APPEAL OF THE ASSESSEE HAS NOT BEEN DECIDED ON MERIT, THEREFORE, THERE IS A MISTAKE APPARENT ON RECORD AND APPEAL OF THE ASSESSEE SHALL HAVE TO BE DECIDED IN TOTO. THEREFORE, THE MISTAKE APPARENT ON RECORD MAY BE RECTIFIED. THE LD . COUNSEL FOR THE ASSESSEE REITERATED THE FACTS NARRATED IN THE MISCELLANEOUS APPLICATION. 4. ON THE OTHER HAND, THE LD. DR SUBMITTED THAT THE DIVISION BENCH OF THE TRIBUNAL WAS BOUND BY THE MAJORITY VIEW AND AS SUCH COULD NOT HAVE DECIDED THE APPEAL ON MERIT AND RELIED UPON THE DECISION OF HON BLE SUPREME COURT IN THE CASE OF T.S. BALRAM, ITO, COMPANY CIRCLE-IV, BOMBAY VS. VOLKART BROTHERS AND OTHERS, 82 ITR 50, IN WHICH IT WAS HELD - A MISTAKE APPARENT ON THE RECORD MUST BE AN OBVIOUS AND PATENT MISTAKE AND NOT SOMETHING WHICH CAN BE ESTAB LISHED 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 THE RECORD. M.A. NO. 03/AGRA/2012. 4 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD. SECTION 254 (2) OF THE IT ACT PROVIDES AS UNDER : THE APPELLATE TRIBUNAL MAY, AT ANY TIME WITHIN FO UR YEARS FROM THE DATE OF THE ORDER, WITH A VIEW TO RECTIFYI NG ANY MISTAKE APPARENT FROM THE RECORD, AMEND ANY ORDER PASSED BY IT UNDER SUB- SECTION (1), AND SHALL MAKE SUCH AMENDMENT IF THE M ISTAKE IS BROUGHT TO ITS NOTICE BY THE ASSESSEE OR THE ASSESSING OFFI CER : PROVIDED THAT AN AMENDMENT WHICH HAS THE EFFECT OF ENHANCIN G AN ASSESSMENT OR REDUCING A REFUND OR OTHERWISE INCREA SING THE LIABILITY OF THE ASSESSEE, SHALL NOT BE MADE UNDER THIS SUB-S ECTION UNLESS THE APPELLATE TRIBUNAL HAS GIVEN NOTICE TO THE ASSESSEE OF ITS INTENTION TO DO SO AND HAS ALLOWED THE ASSESSEE A REASONABLE OPP ORTUNITY OF BEING HEARD : PROVIDED FURTHER THAT ANY APPLICATION FILED BY THE ASSESSEE IN THIS SUB- SECTION ON OR AFTER THE 1ST DAY OF OCTOBER, 1998, S HALL BE ACCOMPANIED BY A FEE OF FIFTY RUPEES. SECTION 255(4) OF THE IT ACT PROVIDES AS UNDER : IF THE MEMBERS OF A BENCH DIFFER IN OPINION ON AN Y POINT, THE POINT SHALL BE DECIDED ACCORDING TO THE OPINION OF THE MAJORITY, IF THERE IS A MAJORITY, BUT IF THE MEMBERS ARE EQUALLY DIVIDED, THEY SHALL STATE THE POINT OR POINTS ON WHICH THEY DIFFER, AND THE CASE SHALL BE REFERRED BY THE PRESIDENT OF THE APPELLATE TRIBUNAL FOR HEARING ON SUCH POINT OR POINTS BY ONE OR MORE OF THE OTHER ME MBERS OF THE APPELLATE TRIBUNAL, AND SUCH POINT OR POINTS SHALL BE DECIDED ACCORDING TO THE OPINION OF THE MAJORITY OF THE MEM BERS OF THE APPELLATE TRIBUNAL WHO HAVE HEARD THE CASE, INCLUDI NG THOSE WHO FIRST HEARD IT. 5.1 ITAT SPECIAL BENCH, MUMBAI IN THE CASE OF DCIT VS. OMAN INTERNATIONAL BANK SAOG AND SPECTRUM BUSINESS SUPPORT LTD. VS. DC IT, 286 ITR (AT) 8, CONSIDERING ITS OTHER DECISIONS HELD THAT SANCTITY OF A THIRD MEMBER DECISION AND M.A. NO. 03/AGRA/2012. 5 THE SPECIAL BENCH DECISION IS OF THE SAME IN NATURE . THIRD MEMBER DECISIONS ARE BINDING ON SPECIAL BENCH. 5.2 ITAT, SPECIAL BENCH, MUMBAI IN THE CASE OF TULI P HOTELS (P) LTD. V. DCIT, 136 ITD 1 HELD AS UNDER : HOWEVER, IT IS FOUND THAT WHILE GIVING EFFECT TO TH E OPINION OF THE THIRD MEMBER, THE ACCOUNTANT MEMBER HAS AGAIN F ORMULATED THREE QUESTIONS. ACCORDING TO THE ACCOUNTANT MEMBER SINCE THE ADDITIONAL EVIDENCE HAS NOT BEEN FILED BEFORE THE A SSESSING OFFICER, THE THIRD MEMBER CANNOT DECIDE THE ISSUE BASED ON F RESH EVIDENCE FILED BEFORE THE TRIBUNAL, RATHER THE THIRD MEMBER IS REQUIRED TO RESTORE THE SAME TO THE FILE OF THE ASSESSING OFFIC ER FOR FRESH ADJUDICATION AFTER EXAMINING THE SAID EVIDENCE AND AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. FROM THE READING OF THE ABOVE, THERE IS NO DOUBT T HAT THE ACCOUNTANT MEMBER WHILE AGREEING WITH THE QUESTIONS FORMULATED AT THE TIME OF THE ORIGINAL REFERENCE TO THE PRESIDENT OF THE ITAT HAS AGAIN FRAMED THREE NEW QUESTIONS AT THE TIME OF GIV ING EFFECT TO THE OPINION OF THE MAJORITY DE HORSE THE PROVISIONS OF SECTION 255(4) AS HE HAD BECOME FUNCTUS OFFICIO AFTER HE PASSED HIS INIT IAL DRAFT ORDER. THE OPINION EXPRESSED BY THE THIRD MEMBER WAS VERY MUCH BINDING ON THE ACCOUNTANT MEMBER. THE ACCOUNTANT ME MBER WHO IS IN MINORITY WAS BOUND TO FOLLOW THE OPINION OF THE THIRD MEMBER IN ITS TRUE LETTER AND SPIRIT, IT WAS NECESSARY FOR JU DICIAL PROPRIETY AND DISCIPLINE THAT THE MEMBER WHO IS IN MINORITY MUST ACCEPT AS BINDING OPINION OF THE THIRD MEMBER. IN THIS VIEW OF THE MATTER, THE QUESTIONS FRAMED B Y THE ACCOUNTANT MEMBER WHILE GIVING EFFECT TO THE OPINIO N OF MAJORITY ARE OUTSIDE THE PURVIEW OF SECTION 255(4) AND, HENCE, H AVE NO RELEVANCE. FOR THE REASONS S DISCUSSED ABOVE IT IS HELD THAT ON A DIFFERENCE OF OPINION AMONG THE TWO MEMBERS OF THE TRIBUNAL, T HE THIRD MEMBER WAS CALLED UPON TO ANSWER TWO QUESTIONS ON WHICH TH ERE WAS M.A. NO. 03/AGRA/2012. 6 DIFFERENCE OF OPINION AMONG THE TWO MEMBERS WHO FRA MED THE QUESTIONS AND THE THIRD MEMBER IN A WELL CONSIDERED ORDER, ANSWERED THE REFERENCE BY GIVING SOUND AND VALID REASONS AGR EEING WITH THE VIEWS OF THE JUDICIAL MEMBER. THUS, THE MAJORITY VI EW WAS IN FAVOUR OF ASSESSEE. IT IS FURTHER HELD THAT THE PROPOSED O RDER DATED 18.02.2010 OF THE ACCOUNTANT MEMBER WHO IS IN THE M INORITY AND HAD BECOME FUNCTUS OFFICO WHEREIN HE HAS EXPRESSED HIS INABILITY TO GIVE EFFECT TO THE OPINION OF THE MAJORITY AND PROCEEDED TO FRAME THREE NEW QUESTIONS TO BE REFERRED TO THE PRESIDENT, ITAT AGA IN FOR RESOLVING THE CONTROVERSY CANNOT BE SAID TO BE A VALID OR LAWFUL ORDER PASSED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 255(4); H ENCE, THE SAID ORDER DATED 18.02.2010 PROPOSED BY THE ACCOUNTANT M EMBER IS NOT SUSTAINABLE IN LAW. ACCORDINGLY, THE QUESTION REFER RED TO IS ANSWERED IN THE NEGATIVE, I.E., IN FAVOUR OF THE ASSESSEE. 5.3 THE FACTS NOTED ABOVE ARE NOT IN DISPUTE. THE L D. JUDICIAL MEMBER HELD THAT SINCE THE ASSESSEE DID NOT MAINTAIN ANY BOOKS OF AC COUNT, THEREFORE, NO ADDITION COULD BE MADE ON ACCOUNT OF GIFT RECEIVED IN THE BA NK ACCOUNT OF THE ASSESSEE U/S. 68 OF THE IT ACT. THE APPEAL OF THE ASSESSEE WITH R EGARD TO GIFT WAS NOT DECIDED ON MERITS. THE LD. ACCOUNTANT MEMBER, HOWEVER, DID NOT AGREE WITH THE VIEW OF LD. JUDICIAL MEMBER AND HAS HELD THAT THE ADDITION COUL D BE MADE IN THE CIRCUMSTANCES OF CASE OF ASSESSEE AND IN ALTERNATE, THE PROVISION S OF SECTION 69 WOULD ALSO APPLY AGAINST THE ASSESSEE. THE LD. THIRD MEMBER AGREED W ITH THE VIEW OF THE LD. ACCOUNTANT MEMBER BY GIVING HIS OPINION THAT THE AD DITION COULD BE MADE AGAINST THE ASSESSEE IN FACTS & CIRCUMSTANCES OF CASE. THE DIVISION BENCH OF ITAT, AGRA VIDE ORDER DATED 11.10.2011 DECIDED THE ISSUE IN VI EW OF MAJORITY DECISION AND DISMISSED THE APPEAL OF THE ASSESSEE. WE, THEREFORE , DO NOT FIND ANY MISTAKE APPARENT ON RECORD OF TRIBUNAL BECAUSE THE SUBSEQUE NT DIVISION BENCH OF THE M.A. NO. 03/AGRA/2012. 7 TRIBUNAL WHO HAS ULTIMATELY DISMISSED THE APPEAL OF THE ASSESSEE VIDE ORDER DATED 11.10.2011 SHALL HAVE TO DECIDE THE POINTS IN ISSUE ACCORDING TO THE OPINION OF THE MAJORITY OF MEMBERS OF THE APPELLATE TRIBUNAL AS PE R SECTION 255(4) OF THE IT ACT. THE VIEW OF THIRD MEMBER IS THUS BINDING UPON THE D IVISION BENCH OF THE TRIBUNAL AS THEY HAVE ONLY TO DECIDE THE APPEAL AS PER MAJORITY VIEW. THE MAJORITY VIEW IN THIS CASE WAS THAT ADDITION HAS BEEN RIGHTL Y MADE ON ACCOUNT OF UNEXPLAINED GIFT. THEREFORE, JURISDICTION OF THE SU BSEQUENT DIVISION BENCH OF THE TRIBUNAL WAS CONFINED TO PASS THE ORDER AS PER THE MAJORITY VIEW OF THE MEMBERS OF THE TRIBUNAL. THE SUBSEQUENT DIVISION BENCH OF THE TRIBUNAL HAS NO ALTERNATIVE EXCEPT TO FOLLOW THE DECISION OF MAJORITY VIEW. THU S, THERE IS NO MISTAKE APPARENT ON RECORD OF THE TRIBUNAL WHILE GIVING EFFECT OF MA JORITY VIEW IN THE ORDER DATED 11.10.2011. THE POINT RAISED BY THE LD. COUNSEL FOR THE ASSESSEE IS HIGHLY DEBATABLE AND AS SUCH, IT WOULD NOT BE APPROPRIATE FOR THE SU CCEEDING BENCH TO REVIEW THE EARLIER ORDER ALREADY PASSED BY THE TRIBUNAL IN VIE W OF THE MAJORITY DECISION IN THE MATTER. HONBLE CALCUTTA HIGH COURT IN THE CASE OF HINDUSTAN LEVER LTD., 284 ITR 42 HELD THAT MISTAKE MUST BE SO OBVIOUS THAT IT CAN BE EASILY CORRECTED, TO WIT AN ARITHMETICAL MISTAKE, A WRONG QUOTATION OF SECTION, ETC., BUT NOT ON DEBATABLE ISSUE. HONBLE BOMBAY HIGH COURT IN THE CASE OF EARNEST EX PORT LTD., 323 ITR 577 HELD THAT THE ORDER PASSED AFTER CONSIDERING THE MATERIA L AND THE DECISIONS CITED, ORDER CANNOT BE RECALLED. IT IS ALSO WELL SETTLED LAW THA T THE TRIBUNAL HAS NO POWER TO REVIEW ITS ORDERS. FURTHER, SINCE IN THIS CASE, THE ORDER IS PASSED AFTER REFERRING THE M.A. NO. 03/AGRA/2012. 8 MATTER TO THE THIRD MEMBER, THEREFORE, IT IS A DECI SION LIKE THE DECISION PASSED BY SPECIAL BENCH OF THREE MEMBERS. THEREFORE, SUBSEQUE NT DIVISION BENCH IS NOT COMPETENT TO COMMENT UPON THE ORDER PASSED BY THE T HIRD MEMBER. THEREFORE, WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE TRIBUNAL DATED 11.10.2011 PASSING THE CONSEQUENTIAL ORDER AS PER M AJORITY VIEW OF THE MEMBERS IN VIEW OF THE FACTS AND CIRCUMSTANCES, MENTIONED ABOV E. M.A. OF THE ASSESSEE IS, ACCORDINGLY DISMISSED. 6. IN THE RESULT, THE MISCELLANEOUS APPLICATION OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY