Mohan Kumar, Churu V. DCIT, Intl. Taxation, Jaipur

MA 3/JPR/2022

AI Insights

This case involves a second miscellaneous application (MA) filed by the assessee, Sh. Mohan Kumar, seeking rectification of an earlier ITAT order concerning the addition of Rs. 3,10,000 as unexplained cash credits under section 68 of the Income Tax Act. The assessee argued that the addition was unjustified as he, being a non-resident, was not required to maintain books of accounts. The Tribunal initially dismissed the first MA, noting that the assessee did not raise the issue of section 68 in his appeal. In the second MA, the assessee contended that the issue remained unanswered in the previous orders. However, the Tribunal found that the issue was not part of the original grounds of appeal and thus not subject to rectification under section 254(2).

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 132126 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 1 month(s) 26 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 15-03-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 24-01-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 19-01-2022
• Other Referred Cases: SUPREME INDUSTRIES LIMITED vs. ADDITIONAL CIT & OTHERS, ROLLS-ROYCE MARINE INDIA (P) LTD. vs. INCOME TAX APPELLATE TRIBUNAL & ANR., AMORE JEWELS (P) LTD. vs. DEPUTY COMMISSIONER OF INCOME TAX, CIT vs Reliance Telecom Ltd.
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Salary income; Source of fund; Set aside
• Section: 147; 68; 148; 271(1)(c); 143(3); 274; 139(1); 254(2)

Judgement Text

vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,’A’ JAIPUR Jh laanhi xkslkbZ] U;kf;d lnL; ,oa Jh jkBkSM deys’k t;arHkkbZ] ys[kk lnL; ds le{k BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM M.A. No. 03/JP/2022 (Arising out of MA No. 04/JP/2019) (Arising out of IT(IT) No. 10/JP/2019) fu/kZkj.k o"k Z@Assessment Years : 2013-14 Mohan Kumar Ward No. 25, Churu Sadulpur, Churu cuke Vs. The DCIT, International Taxation, Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: CLNPK 1171 Q vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Sh. R. P. Sharma (CA) jktLo dh vksj ls@ Revenue by : Sh. A. S. Nehara (Addl. CIT) lquokbZ dh rkjh[k@ Date of Hearing : 25/01/2023 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 16/03/2023 vkns'k@ ORDER PER: RATHOD KAMLESH JAYANTBHAI, A.M. This is a second Miscellaneous Application [ MA ] filed by the assessee seeking rectification u/s. 254(2) of the Income Tax Act, [ here in after Act ] against the order passed by the Co-ordinate Bench decision in MA No. 04/JP/2021 dated 30/04/2021 (Arising out of IT(IT) No. 10/JP/2019 dated 10/12/2020). MA No. 03/JP/2022 Sh. Mohan Kumar, Churu vs. DCIT, Intl. Taxation 2 2. At outset the registry pointed out that there is delay of about 3 month in filling this MA. In support of this delay the ld. AR of the assessee has filed a detailed affidavit stating that as he was actively engaged in his sons marriage function he could not file the MA in time. He has relied upon the decision of apex court and submitted that the tribunal while discharging the judicial function has to adopt a justice-oriented approach and not defeat the legitimate right on the altar of procedures and technicalities. Based on these set of arguments he prayed to considered the MA of the having be heard on its merits. 2.1 Per contra, the ld. DR submitted that there is no provision in the Act to have the MA out of the MA. He has also relied on the order of the ITAT Nagpur bench in the case of Daryapur Shetkari Sahakari Ginnning and Pressing Factory Ltd. VS. ACIT submitted that there is no power to condone the delay with the Tribunal as the MA is filed beyond the time limit and there is almost 3 months delay. He also submitted that the power of condoning the delay can only be exercised if it is specifically provided in the statute itself. MA No. 03/JP/2022 Sh. Mohan Kumar, Churu vs. DCIT, Intl. Taxation 3 2.2 in the rejoinder the ld. AR of the assessee submitted that the in fact there is no condonation of delay after counting the period given by the hon’ble supreme court on account of Covid 19 and therefore, this MA is well in time after considering the extension granted on account of Covid-19. He has submitted that there is no provision in the act that MA of MA is not permitted but the only object of MA is to have the mistake brought to the notice of the bench and thus to seek the justice. 2.3 Considering the rival contentions and decisions relied upon by the parties the bench is of the considered view that since the period for which the delay the ld. AR of the assessee has filed affidavit explaining the delay and also submitted that the period is covered by the extension granted on account covid 19. Considering the overall facts presented before us we consider the MA filed by the assessee to be decided on its merits. 3. In the MA, the assessee has prayed that certain error has crept in the said order of the ITAT which has apparent mistake as it appears from the records. Based on these averments the assessee MA No. 03/JP/2022 Sh. Mohan Kumar, Churu vs. DCIT, Intl. Taxation 4 prays to recall its order in IT(IT) No. 10/JP/2019 dated 10/12/2020 for considerations and to pass order after considering the facts and merits of this second MA. 4. For the sake of convenience and brevity of the case, the grievance raised by the assessee in his second MA is reiterated here in below: “1. In support of our view we put the following case laws:- a) Hon'ble Bombay High Court, in the case of SUPREME INDUSTRIES LIMITED vs. ADDITIONAL CIT & OTHERS (2014) 369 ITR 758 (Bom) (as per Annexure A) has held that "It is expected from the Tribunal to adopt a justice oriented approach and not defeat the legitimate rights on the altar of procedures and technicalities." b) Hon'ble Bombay High Court, in the case of ROLLS-ROYCE MARINE INDIA (P) LTD. vs. INCOME TAX APPELLATE TRIBUNAL & ANR. (2020) 313 CTR (Bom) 606 (as per Annexure B) held that "A ground which is raised and not given up when remains undecided in the judgment of the Tribunal, gives rise to an error on the face of record, which is rectifiable." c) Hon'ble Bombay High Court, in the case of AMORE JEWELS (P) LTD. vs. DEPUTY COMMISSIONER OF INCOME TAX (2018) 305 CTR (Bom) 305 (as per Annexure C) held that "Tribunal having dismissed assessee's appeal without considering various case laws cited by the assessee in support of its case, it ought to have allowed assessee's rectification application and considered the appeal on merits inter alia, taking into account the case laws which were already cited during the hearing of the appeal; impugned order passed by Tribunal dismissing the assessee's M.A. as well as appellate order are set aside." 2. We have filed M.A. because our previous filed M.A. is dismissed without going into merits. MA No. 03/JP/2022 Sh. Mohan Kumar, Churu vs. DCIT, Intl. Taxation 5 We are submitting the matter proceedings as under: - S. No. Appeal Ref. Grounds Assessment Order 1 Main Appeal That no addition could be made u/s 68 for any unexplained cash credits where books of accounts are not maintained. In Para No. 11, Pg. No. 5, Hon’ble ITAT mentioned our grounds that “Assessing being a Non- Resident Individual not having any business in India is not required to maintain Books of Accounts therefore addition made u/s 68 of the Income Tax Act is unjustified” but it remained unanswered. 2 First MA It is settled law that where books of accounts could be made u/s 68 for cash deposited in bank account. Assessee being a Non- Resident had no business income and therefore he was not required to maintain books of accounts. However Ld. AO wrongly made addition under section 68 of the income tax act as unexplained credit. Hon’ble ITAT mentioned that “Neither AO nor the Ld. CIT(A) while affirming the findings of the AO have invoked the provisions of section 68 of the Income Tax Act. Also no grounds of section 68 is taken before the CIT(A) and before the Tribunal so there was thus no basis for the assessee to raise any such contention.” In view of above kindly accept the MA because legal point remains unanswered in the main order and the First MA order. There was addition u/s 68 of the Income Tax Act as per the order sheet of AO, this issue raised before CIT(Appeals) as well as before the Hon’ble Tribunal remained unanswered.” 5. On the other hand, the ld. DR prayed that the assessee by way of filling this MA want to get its order reviewed whereas there is no infirmity in the order of the ITAT (supra) for which the ld. DR relied upon the decision of Hon’ble Supreme Court in the case of MA No. 03/JP/2022 Sh. Mohan Kumar, Churu vs. DCIT, Intl. Taxation 6 CIT vs Reliance Telecom Ltd. (2021) 323 CTR 873 (SC). The relevant submission of the ld. DR in this case is as under:- ‘’In this case, it has been held that order of the ITAT cannot be recalled by the Tribunal in exercise of power u/s 254(2) of the Act. If the order passed by the ITAT is erroneous either on the facts or in law in that case, the only remedy available to the assessee is to prefer the appeal before the Hon’ble High Court.’’ The ld. DR also submit that the arguments placed before the bench are the same which were submitted in his first MA and nothing new is coming this MA and there is no force in the arguments advanced by the ld. AR of the assessee on the issue raised in this MA. 6. We have taken into consideration the MA filed by the assessee wherein the bench found that the issue that the assessee has raised that the addition of Rs. 3,10,000/- under section 68 raised before us by the assessee has not been adjudicated upon. On perusal of the order of the bench in the original order in IT(IT) 10/JP/2019 dated 10/12/2020 the bench noted that the order of the ITAT explicitly in the order dealt the issue raised in this MA in Para 11 of the bench order dated 10.12.2020. The bench has also taken into consideration the order MA No. 03/JP/2022 Sh. Mohan Kumar, Churu vs. DCIT, Intl. Taxation 7 of the ld. CIT(A) and ld. AO where it does not indicate or discuss the issue which is raised by the assessee in this MA. Thus, this issue has no connection to the ground raised before us and is not arising out of the order of the lower authority. Since the issue raised before us by the assessee has not been raised before the lower authorities and there is no finding in orders of the lower authorities of making the addition u/s. 68. Therefore, the bench is of the view that there is no mistake apparent on order. This fact is very well taken in the order of the first MA of the assessee. The finding of the first MA is reiterated here in below: “4. We have heard the rival contentions and carefully perused the order passed by the Bench and we are of the considered view that there is no merit in present misc. application filed by the assessee. We find that the AO has nowhere invoked the provisions of section 68 while passing the assessment order u/s 148 r/w 143(3) and the reason why the addition was made was on account of failure on part of the assessee to explain the source of cash deposits and corroborate the same with documentary evidence as evident from para 5 of the assessment order dated 11.12.2018 which reads as under:- “5. I have carefully considered the submission of the assessee find the same not acceptable in view of the reason that the claim of the assessee that the cash of Rs. 3,10,000/- is from out of the salary and agriculture past saving income, but he had not submit any documentary evidence of cash withdrawal for verification and he also had not established the nexus of cash deposit and withdrawal through bank account. Also assessee has not given any documentary evidence of source of such cash deposit. Hence, the assessee failed to discharge his onus and nexus between the deposits and withdrawals, accordingly, cash deposit of Rs. 3,10,000/- is hereby added to the total income of the assessee. With above remarks, the income of the assessee is re-assessed u/s 148 of the I.T. Act, 1961 as under:- Income as declared by the assessee Rs. NIL/- MA No. 03/JP/2022 Sh. Mohan Kumar, Churu vs. DCIT, Intl. Taxation 8 Add: Unexplained cash Rs. 3,10,000/- Total income Rs. 3,10,000/- Assessed at Rs. 3,10,000/-. Issue demand notice and challan. Penalty proceedings u/s 271(1)(c) is being initiated separately for concealment of income and Penalty notice u/s 271F r.w.s. 274 issued for non compliance of provisions of section 139(1) of the Act.” 5. Further, on appeal by the assessee before the ld CIT(A), the assessee didn’t carry any such understanding that the addition has been made u/s 68 and consequently, the assessee didn’t take any ground of appeal regarding invocation of section 68 or raise any contention before him and even the findings of the ld CIT(A) are thus silent on the said matter as apparent from para 5.2 to 5.5 of his order which reads as under: “5.2 The relevant facts of the case are that the AO was in possession of information regarding cash deposits of Rs. 10,92,000/- in the saving bank account for the relevant year. The AO noticed that no return was filed by the assessee. Accordingly, the case was re-opened as per the provisions of section 147 of the Income Tax Act. The AO show caused the assessee to explain the source of cash deposits in the bank account out of cash deposits of Rs. 10,92,000/-. Cash deposit of Rs. 7,82,000/- was found to be explained by the AO as the assessee was having cash on account of sale of agriculture land. However, as regards, remaining cash of Rs.3,10,000/-, the AO found it to be unexplained as the assessee could not furnish the nexus of cash deposit and the withdrawals made through bank account. Accordingly, the AO show caused the assessee vide note sheet dated 08.10.2018 to explain as to why the same may not be treated as income for the year under consideration. The response of the assessee in this regard is reproduced as under:- "As regards deposits of Rs. 10,000/- on 03.04.2012 and Rs. 3,00,0001 (three lakh only) on 07.05.2012 in the bank account it is stated that the assessee is doing service in Nepal since last 28 years. And having income of Rs. 4,75,900/- as salary income from Nepal and having agricultural income in India about Rs. 1 lakh in a year. The evidence of Salary income has already been produced before you and a copy again being filed herewith for your kind verification. Out of salary and agriculture past saving income the assessee has deposited the above amount in the Bank account.” 5.3 The AO did not accept the contention of the assessee that the cash of Rs.3,10,000/- is out of salary and agricultural past savings income in the absence of documentary evidence. MA No. 03/JP/2022 Sh. Mohan Kumar, Churu vs. DCIT, Intl. Taxation 9 5.4 During the appellate proceedings, the appellant has brought out the following facts in order to impress upon the point that the cash deposit of Rs. 3,10,000/- is out of past accumulated savings: 1. The assessee is working in Nepal and earning income there from, as per the appellant; he used to send part of his income on regular basis to his family in the village. Copy of the salary certificate was duly submitted before the AO. Certain amount of cash was lying out of past accumulated savings by his mother and his other relatives. 2. The assessee owns some agricultural land at village which is yielded certain agricultural income. 3. Cash was withdrawn from the bank account in the month of February and March2012 through various neighbors. Copy of the bank statement alongwith confirmation from such persons has been submitted to support the contention. The assessee justified such cash withdrawals and it's deposits back to the bank account on the ground that cash was required to purchase a residential house which, however, was deferred due to shortage of funds. 5.5 I find that the appellant has not submitted any evidence to demonstrate the exact nexus of cash deposit with the possible sources of income as claimed by the assessee. The argument that the cash withdrawals were made from the bank account count in the month of February and March 2012 for depositing the same in the month of April is not acceptable because, as per the bank narration, the withdrawals made in the month of February and March are not cash withdrawals whereas the same are payments through cheques to different persons. Further, the appellant has relied on the confirmations from such persons to whom the cheques were issued. However, the same are not reliable as the same are in the nature of self serving and are not verifiable from independent source. Accordingly, I find that the AO has rightly made an addition of Rs.3,10,000/- as unexplained cash deposits in this case. The ground of appeal is dismissed.” 6. Therefore, neither the AO nor the ld CIT(A) while affirming the findings of the AO have invoked the provisions of section 68 of the Act. Thereafter, again in his grounds of appeal taken before the Tribunal both at the time of filing the original appeal and later on, by way of additional grounds of appeal, the assessee has not taken any grounds of appeal challenging the invocation of Section 68 by the AO and confirmation thereof by the ld CIT(A). Therefore, where there is no specific ground of appeal taken by the assessee at first place, the question of adjudication doesn’t arise and we donot see any mistake by MA No. 03/JP/2022 Sh. Mohan Kumar, Churu vs. DCIT, Intl. Taxation 10 the Tribunal in non-adjudication of any such ground of appeal. It is further noted that it is only as part of ground of appeal no. 2 (as part of original ground of appeals) where the assessee has challenged the sustenance of addition of Rs 3,10,000/-, the assessee took a contention for the first time that the addition made by the AO under section 68 of the Act is not correct. We therefore that where the AO has not invoked the provisions of section 68 at first place and the said fact is clearly emerging from the proceedings during the assessment and first appellate stage, there cannot be any presumption of invocation of section 68 by the AO. There was thus no basis for the assessee to raise any such contention and even where such a contention has been taken, there was no basis for entertaining any such contention advanced before us and where the Tribunal has decided not to entertain and examine the said contention, we don’t find that there is any mistake which has been committed by the Tribunal while passing the impugned order based on appreciation and duly consideration of all relevant facts and circumstances of the case and cannot be subject matter of rectification within the limited scope of section 254(2) as the same would effectively amount to review of its own decision which is clearly outside the purview and has infact now been envisaged and intended while introducing the said provisions in the statute. In the result, miscellaneous application so filed by the assessee is dismissed in light of aforesaid discussions.” 7. Since, ld. AR appearing on behalf of the assessee did not controvert the specific finding of the bench that alleged ground is not coming from the order of the lower authority. The ld. AR except the above contention did not draw our attention that in fact there is no other error in the order of the ITAT. Therefore, where there is no specific ground of appeal emerging from the order of the lower authority making the addition u/s. 68 deciding that issue is out of the scope of the original appeal of the assessee. Thus we see no apparent mistake in order of the bench in this case. In terms of this MA No. 03/JP/2022 Sh. Mohan Kumar, Churu vs. DCIT, Intl. Taxation 11 observations, we do not see merits in the MA filed by the assessee and the same is thus dismissed. In the result, the miscellaneous application filed by the assessee is dismissed. Order pronounced in the open Court on 16/03/2023. Sd/- Sd/- ¼ lanhi xkslkbZ ½ ¼ jkBkSM deys’k t;arHkkbZ ½ (Sandeep Gosain) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@ Jaipur fnukad@Dated:- 16/03/2023 *Ganesh Kr. vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: 1. vihykFkhZ@The Appellant- Sh. Mohan Kumar, Churu 2. izR;FkhZ@ The Respondent- DCIT, International Taxation, Jaipur 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur. 6. xkMZ QkbZy@ Guard File {MA No. 03/JP/2022} vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar