ORIENTAL FREIGHT SERVICES, V. ITO WD. 13(2)(4),

MA 310/MUM/2010

• Counselvise Citation: [2011] 123 COUNSELVISE.COM (IT) 6449 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 13-05-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: misc
• Appeal Filed On: 10-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K V SAMPATHKUMAR
• Assessee Lawyers: S M JAIN
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI, J. SUDHAKAR REDDY, ACCOUNTANT MEMBER M.A. NO.310/MUM./2010 (ARISING OUT OF ITA NO.1731 & 1732/MUM./2007 ) (ASSESSMENT YEARS : 2002-03 AND 2003-04 ) DATE OF HEARING: 29.4.2011 M/S. ORIENTAL FREIGHT SERVICES B-106, GREAT EASTERN SUMMIT CBD BELAPUR, NAVI MUMBAI PAN AAAFO5787C .. APPLICANT V/S INCOME TAX OFFICER WARD-13(2)(4), MUMBAI .... RESPONDENT ASSESSEE BY : MR. S.M. JAIN REVENUE BY : MR. K.V. SAMPATH KUMAR O R D E R PER J. SUDHAKAR REDDY, A.M. THE ASSESSEE HAS FILED THIS MISCELLANEOUS APPLICATI ON UNDER SECTION 254(2) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT ) ON THE GROUND THAT THERE IS A MISTAKE APPARENT ON RECORD, THE ORDER OF THE TRIBUNAL DATED 14 TH JANUARY 2010. 2. LEARNED COUNSEL, MR. S.M. JAIN, APPEARING ON BEHALF OF THE ASSESSEE, SUBMITS THAT THE ASSESSING OFFICER ISSUED NOTICE US / 154 OF THE ACT DATED 27 TH DECEMBER 2004, AND IT WAS RESPONDED TO BY THE ASSES SEE ON 11 TH , 19 TH AND 24 TH JANUARY 2005. THE ASSESSING OFFICER, IN THE MEANWH ILE, ISSUED NOTICE UNDER SECTION 148 OF THE ACT, ON 19 TH JANUARY 2005, AND IT IS ALSO STATED THAT THE ASSESSING OFFICER HAS NOT FURNISHED THE REASONS RECORDED FOR RE-OPENING, ORIENTAL FREIGHT SERVICES MA NO.310/MUM./2010 2 IN SPITE OF ORAL AND WRITTEN REMINDERS. LEARNED COU NSEL SUBMITS THAT THE A.R. CITED THE DECISION OF MUMBAI BENCH OF THE TRIBUNAL IN JETHALAL K. MORBIA, 30 SOT 27 (MUM.), BUT THE TRIBUNAL ON THE GROUND THAT THERE WOULD BE A PRESUMPTION THAT NOTICE UNDER SECTION 154 MIGHT HAV E BEEN DROPPED AND THEREAFTER, THE PROCEEDINGS UNDER SECTION 147 MAY H AVE BEEN INITIATED REJECTING THE CONTENTIONS OF THE ASSESSEE. HIS CASE IS THAT, THE TRIBUNAL HAS PASSED THE IMPUGNED ORDER ON THE BASIS OF ASSUMPTIO N, PRESUMPTION, CONJECTURE AND SURMISES AND, HENCE, BAD IN LAW. 3. REGARDING GROUNDS NO.4 AND 5 IN THE APPEAL FOR ASSE SSMENT YEAR 2002- 03 AND GROUNDS NO.3 AND 4 IN THE APPEAL FOR ASSESS MENT YEAR 2003-04, LEARNED COUNSEL SUBMITS THAT THE TRIBUNAL RELIED ON THE DECISION OF HON'BLE BOMBAY HIGH COURT IN GODAVERI (MANNAR) SAHAKAR SAKA R KARKHANA LTD., 298 ITR 149, AND THAT THE SAME HAS BEEN REVERSED BY THE HON'BLE SUPREME COURT IN ALOM EXTRUSIONS LTD., 319 ITR 306, AND HEN CE, THERE IS A MISTAKE APPARENT ON RECORD. HE ALSO RELIED ON THE DECISION OF THE TRIBUNAL IN PINK PEN PVT. LTD. V/S ITO. 4. LEARNED DEPARTMENTAL REPRESENTATIVE, MR. K.V. SAMPA TH KUMAR, SUBMITTED THAT THE PROCEEDINGS UNDER SECTION 154, H AVE BEEN DROPPED AS NO FURTHER ACTION HAS BEEN TAKEN BY THE ASSESSING OFFI CER. IT IS HIS CASE THAT ON DROPPING OF 154 PROCEEDINGS, THE ASSESSING OFFICER RE-OPENED THE ASSESSMENTS UNDER SECTION 147. 5. ON THE ISSUE OF DEDUCTION OF PROVIDENT FUND DUES, H E AGREED THAT THE JUDGMENT OF HON'BLE BOMBAY HIGH COURT HAS BEEN REVE RSED BY THE HON'BLE SUPREME COURT. 6. RIVAL CONTENTIONS WERE HEARD. ON CAREFUL CONSIDERAT ION OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND ON PERUSAL OF THE PAP ERS ON RECORD AND THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE CASE LAWS RELIED UPON, WE HOLD AS FOLLOWS. ORIENTAL FREIGHT SERVICES MA NO.310/MUM./2010 3 7. AS FAR AS THE FIRST ISSUE I.E., PRESUMPTION THAT TH E NOTICE UNDER SECTION 154 MIGHT HAVE BEEN DROPPED BEFORE THE PROCEEDINGS UNDER SECTION 147, BEING INITIATED, THE ALLEGATION OF THE ASSESSEE IS EXTRACTED AS FOLLOWS:- 2.3 . IT CAN THUS, BE SEEN THAT THE HONBLE TRI BUNAL HAS PASSED THE IMPUGNED ORDER ON THE BASIS OF ASSUMPTIONS, PRESUMP TIONS, CONJECTURES AND SURMISES; VARIOUS HIGH COURTS INCLUDING THE APEX CO URT IN THE CASE OF DHIRAJLAL GIRDHARILAL V/S CIT (1954) 26 ITR 736 (SC ), DHAKESWARI COTTON MILLS LT.D V/S CIT (1954) 26 ITR 775 (SC), LALCHAND BHAGA T AMBICA RAM V/S CIT (1959) 37 ITR 288 (SC), UMACHAND SHAW & BROS V/S CI T (1959) 37 ITR 271 (SC) AND OMAR SALAY MOHAMED SAIT V/S CIT (1959) 37 ITR 151 (SC) HAVE HELD THAT AN ORDER PASSED ON CONJECTURES AND SURMIS ES IS BAD IN LAW. HONBLE TRIBUNAL, BEING FINAL FACT FINDING AUTHORITY OUGHT TO HAVE ASCERTAINED THE FACTS AND DECIDED THE ISSUE ON HAND ON THE BASIS OF FACTS . FROM THE ABOVE, IT CAN BE SEEN THAT THE ASSESSEES ALLEGATION IS THAT THE ORDER OF THE TRIBUNAL IS WRONG. IT IS NOT THE C ASE OF THE ASSESSEE THAT THERE IS A MISTAKE APPARENT FROM RECORD. HENCE, THE REMEDY LIES ELSEWHERE. IN ANY EVENT, THE CONCLUSION OF THE TRIBUNAL THAT T HE PROCEEDINGS UNDER SECTION 154, MIGHT HAVE BEEN DROPPED, CANNOT BE REC TIFIED ON THE GROUND THAT THERE IS A MISTAKE APPARENT ON RECORD. THUS, T HIS ISSUE IS DECIDED AGAINST THE ASSESSEE. 8. NOW, COMING TO THE DEDUCTION OF DELAYED PAYMENT OF PROVIDENT FUND DUES, THE TRIBUNAL FOLLOWED THE JUDGMENT OF HON'BLE BOMBAY HIGH COURT WHICH IS ULTIMATELY REVERSED BY THE HON'BLE SUPREME COURT IN ALOM EXTRUSIONS LTD. (SUPRA). THUS, THERE IS A MISTAKE A PPARENT ON RECORD WHICH NEEDS TO BE RECTIFIED. A CO-ORDINATE BENCH OF THE T RIBUNAL IN PINK PEN PVT. LTD. (SUPRA) HAS HELD THAT THE DECISION APPLIES TO EMPLOYEES CONTRIBUTION TO PROVIDENT FUND ALSO. RESPECTFULLY FOLLOWING THE SAM E, WE RECTIFY THE MISTAKE AND DIRECT THE ASSESSING OFFICER TO ALLOW DEDUCTION OF PROVIDENT FUND PAYMENTS MADE IF THE SAME ARE PRIOR TO FILING OF TH E RETURN OF INCOME. 9. IN THE RESULT, ASSESSEES MISC. APPLICATION IS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 13.5.2011 SD/- D. MANMOHAN VICE PRESIDENT SD/- J. SUDHAKAR REDDY ACCOUNTANT MEMBER MUMBAI, DATED: 13.5.2011 ORIENTAL FREIGHT SERVICES MA NO.310/MUM./2010 4 COPY TO : (1) THE ASSESSEE (2) THE RESPONDENT (3) THE CIT(A), MUMBAI, CONCERNED (4) THE CIT, MUMBAI CITY CONCERNED (5) THE DR, A BENCH, ITAT, MUMBAI TRUE COPY BY ORDER PRADEEP J. CHOWDHURY ASSISTANT REGISTRAR SR. PRIVATE SECRETARY ITAT, MUMBAI BENCHES, MUMBAI DATE INITIAL 1. DRAFT DICTATED ON 9.5.2011 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 9.5.2011 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 9.5.2011 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 9.5.2011 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 9.5.2011 SR.PS/PS 6. DATE OF PRONOUNCEMENT 13.5.2011 SR.PS 7. FILE SENT TO THE BENCH CLERK 13.5.2011 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER