M/s Madhav Soni, GONDA V. Income Tax Officer, GONDA

MA 30/LKW/2013

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 2105 (ITAT-LUCKNOW)
• Duration Of Justice: 5 month(s) 25 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 13-06-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 16-05-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 19-12-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AJAI KUMAR
• Keywords: Reopening of assessment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B , LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI. A. K. GARODIA , ACCOUNTANT MEMBER M.A. NO.30/LKW/2013 [ IN ITA NO. 36/LKW/2011] ASSESSMENT YEAR: 2003 - 04 SHRI. MADHAV SONI PROP . M/S SONI JEWELLERS GONDA V. INCOME TAX OFFICER GONDA PAN: AYZPS2459L (APP LIC ANT) (RESPONDENT) APP LIC ANT BY: SHRI. RAKESH GARG, ADVOCATE RESPONDENT BY: SHRI. AJAI KUMAR, D.R. DATE OF HEARING: 30 0 5 2014 DATE OF PRONOUNCEMENT: 13 0 6 2014 O R D E R PER SUNIL KUMAR YADAV: THIS MISCELLANEOUS APPLICATION IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE TRIBUNAL DATED 22.8.2012 IN ITA NO.36/LKW/2011 WITH THE SUBMISSION THAT THE TRIBUNAL HAS NOT CONSIDERED THE ASPECT OF AFFORDING OPPORTUNITY T O THE ASSESSEE BY THE LD. CIT(A) WHILE ENHANCING THE INCOME OF THE ASSESSEE IN THE LIGHT OF JUDGMENT REFERRED TO ON BEHALF OF THE ASSESSEE DURING THE COURSE OF HEARING OF THE APPEAL. THE TRIBUNAL HAS ALSO NOT PROPERLY APPRECIATED THE FACTS RELATING TO FOR MATION OF BELIEF FOR REOPENING OF ASSESSMENT BY THE ASSESSING OFFICER IN THE LIGHT OF VARIOUS JUDICIAL PRONOUNCEMENTS REFERRED TO BY THE ASSESSEE AND THE TRIBUNAL HAS MADE REFERENCE TO THE JUDGMENT OF THE HON'BLE HIGH COURT , WHICH WAS NOT ON THE ISSUE IN D ISPUTE. THEREFORE, AN ERROR IS CREPT IN THE ORDER OF THE TRIBUNAL WHICH CALLS FOR RECTIFICATION. THE LD. COUNSEL FOR THE ASSESSEE PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 2 - : FURTHER CONTENDED THAT THE TRIBUNAL HAS NOT CONSIDERED THE ARGUMENTS RAISED BY THE LD. COUNSEL FOR THE ASSESSEE WITH REGARD TO THE VALIDITY OF REOPENING OF ASSESSMENT AND HAS DISTINGUISHED THE JUDGMENTS REFERRED TO ON BEHALF OF THE ASSESSEE BY MAKING REFERENCE TO CERTAIN CASES , WHICH WERE NOT REFERRED DURING THE COURSE OF HEARING OF THE APPEAL. 2 . THE LD. D.R., ON THE OTHER HAND, HAS SUBMITTED THAT THE TRIBUNAL HAS GIVEN A SPECIFIC FINDING WITH REGARD TO THE VALIDITY OF REOPENING OF ASSESSMENT AND THE INCOME ENHANCED BY THE LD. CIT(A). THE FINDING OF THE TRIBUNAL WAS ON THE BASIS OF MATERIAL PLACED BEFORE THE TRIBUNAL AND THE ARG UMENTS RAISED BY THE PARTIES. THEREFORE, THE FINDING OF THE TRIBUNAL CANNOT BE REVIEWED UNDER THE GARB OF RECTIFICATION UNDER SECTION 254(2) OF THE INCOME - TAX ACT, 1961 (HEREINAFTER CALLED IN SHORT THE ACT'). 3 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALSO CAREFULLY PERUSED THE ORDER OF THE TRIBUNAL DATED 22.8.2012 IN ITA NO.36/LKW/2011 VIS - - VIS THE MISCELLANEOUS APPLICATION AND THE JUDGMENTS REFERRED TO BY THE PARTIES AND WE FIND THAT THE TRIBUNAL HAS TAKEN INTO ACCOUNT ALL THE RELEVANT FACTS AND THE JUDGMENTS REFERRED TO WHILE UPHOLDING THE VALIDITY OF REOPENING OF THE ASSESSMENT. 4 . SO FAR AS THE OPPORTUNITY TO BE AFFORDED BY THE LD. CIT(A) WHILE MAKING ENHANCEMENT OF INCOME IS CONCERNED, THE TRIBUNAL HAS TAKEN INTO ACCOUNT THE FACT THAT TOTAL INCOME OF THE ASSESSEE WAS NOT ENHANCED , AS CERTAIN ADDITIONS WERE DELETED BY THE LD. CIT(A). THE TRIBUNAL HAS ALSO CONSIDERED THE JUDGMENTS REFERRED TO BY THE PARTIES WHILE ADJUDICATING THE IMPUGNED ISSUE. THEREFORE, IT CANNOT BE SAID THAT THE TRIBUNAL HAS NOT T AKEN INTO ACCOUNT THE CASE LAWS REFERRED TO ON BEHALF OF THE ASSESSEE AND HAS GIVEN A FINDING CONTRARY TO THE JUDICIAL PRONOUNCEMENTS. THE TRIBUNAL HAS TAKEN INTO ACCOUNT ALL THE RELEVANT FACTS AND THE LEGAL POSITION WHILE GIVING A SPECIFIC FINDING ON THE CONTROVERSY INVOLVED WITH REGARD TO THE VALIDITY OF REOPENING OF ASSESSMENT AND ENHANCEMENT OF INCOME. PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 3 - : THEREFORE, THE FINDING OF THE TRIBUNAL CANNOT BE REVIEWED UNDER THE GARB OF RECTIFICATION UNDER SECTION 254(2) OF THE ACT. 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 JU RISDICTION 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. 6 . 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 PO WERS 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 B E INTERFERED WITH ON THE BASIS OF 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 A NY 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 MISTAK E 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. 7 . IN THE CASE OF CIT VS. SUMAN TE A AND PLYWOOD INDUSTRIES (P) LTD., 226 ITR 34 THEIR LORDSHIPS OF CALCUTTA HIGH COURT HAVE EXPRESSED PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 4 - : 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 MO MENT 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 RECO RD 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 C HAND 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 M ISTAKE RECTIFIABLE UNDER SECTION 254(2). THIS MIGHT, AT THE WORST, LEAD TO 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 O F REVIEW IS A CREATURE OF THE STATUTE AND UNLESS CLOTHED WITH SUCH POWER BY THE STATUTE, NO AUTHORITY CAN EXERCISE THE POWER. 8 . 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 CONFE RS 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 AN Y MISTAKE APPARENT FROM THE RECORD. THE POWER OF THE TRIBUNAL CONFERRED BY SUB - SECTION (2) OF SECTION 254 FOR RECTIFYING ANY PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 5 - : MISTAKE APPARENT FROM THE RECORD CANNOT BE EXERCISED BY THE TRIBUNAL TO RECALL ANY ORDER PASSED BY IT UNDER SECTION 254(2). FURTH ER, 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 RECALL ED 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 T HE INCOME - TAX ACT IS VERY LIMITED AND IT IS ONLY THE APPARENT ERROR WHICH CAN BE RECTIFIED. 9 . 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 OB VIOUS 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 LORDSHI PS HAVE FURTHER HELD THAT IF A STATEMENT OF ANY PERSON HAS BEEN 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 T HE 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 MAK ING 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 PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 6 - : GLARING MISTAKE OF FACT OR LAW COMMITTED BY THE OFFICER PASSIN G 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. HOW EVER, 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. 10 . IN THE CASE OF MS. DEEKSHA SURI VS. ITAT; 232 ITR 395 THEIR LORD SHIPS 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 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 I NCOME - 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 O BVIOUS 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 PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 7 - : DECISION ON A DEBATABLE POINT OF LAW IS NOT A MISTAKE APPARENT ON THE RECORD. 11 . SIMILAR VI EWS 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. 12 . SINCE NO ERROR APPARENT FROM THE ORDER OF THE TRIBUNAL HAS BEEN NOTICED, WE FIND NO MERIT IN THE MISCELLANEOUS APPLICATION OF THE ASSESSEE. ACCORDINGLY WE DISMISS THE SAME. 13 . IN THE RESULT, THE MISCELLANEOUS APPLICATION IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13.6.2014. SD/ - SD/ - [ A. K. GARODIA ] [ S UNIL KUMAR Y ADAV ] ACCOUNTANT MEMBER JUDICIAL ME MBER DATED: 13 TH JUNE , 2014 JJ: 1006 PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 8 - : COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ )