M/s. Varia Pratik Engineering, Ahmedabad V. The Income tax Officer,Ward-6(4), Ahmedabad

MA 325/AHD/2008

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 7907 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 2 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 20-04-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2002-2003
• Appeal Filed On: 18-12-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: A C SHAH
• Keywords: Gross profit estimation; Rejection of books of accounts; Retrospective amendment; Validity of assessment
• Section: 143(3); 142(1); 154; 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD (BEFORE SHRI D.K. TYAGI, JM AND SHRI A. MOHAN ALANK AMONY, AM) M. A. NO. 325/AHD/2008 AND 326/AHD/2008 ((IN ITA NO.1226/AHD/2007 AND 104/AHD/2008 AY: 2002 -03) M/S. VARIA PRATIK ENGINEERING, PLOT NO.614, PHASE IV, GIDC ESTATE, VATVA, AHMEDABAD 382 445 PA NO. AACFV 8089 Q VS THE INCOME TAX OFFICER, WARD -6 (4), C. U. SHAH BUILDING, ASHRAM ROAD, AHMEDABAD (APPLICANT) (RESPONDENT) APPLICANT BY SHRI A. C. SHAH, AR RESPONDENT BY SHRI VINOD TANWANI, DR DATE OF HEARING: 30-03-2012 DATE OF PRONOUNCEMENT: 20-04-2012 ORDER PER A. MOHAN ALANKAMONY : THESE MISC. APPLICATIONS ARE FILED BY THE ASSESSEE IN ORDER TO RECTIFY CERTAIN A PPARENT MISTAKES ARISING FROM THE ORDER OF THE TRIBUNAL IN ITA NO.12 26/AHD/2007 AND 104/AHD/2008 FOR AY 2002-03 DATED 30-09-2008. THE A SSESSEE HAS MADE AN ELABORATE SUBMISSION AS FOLLOWS: WITH RESPECT TO ITA NO.1226/AHD/2007 1. WE ARE IN RECEIPT OF THE APPELLATE ORDER DATED 30-09-2008 PM 05-11-2008. THIS PETITION IS MADE SINCE THERE ARE A PPARENT MISTAKES IN THE ORDER, WHICH ARE AS UNDER. 2. THE HON'BLE TRIBUNAL RECORDED THE CONTENTIONS OF TH E AR IN PARA- 19 ON PAGE NO. 10 OF THE TRIBUNAL ORDER THAT THE APPELLANT CAN RAISE THE CONTENTION UNDER RULE 27 THOUGH THE APPEA L OR CROSS OBJECTIONS ARE NOT FILED. THE HON'BLE TRIBUNAL ALSO RECORDS THE MA NO.325/AHD/2008 AND 326/AHD/2008: (IN ITA NO.1226/AHD/2007 AND 104/AHD/2008 AY: 2002- 03) M/S. VARIA PRATIK ENGINEERING VS ITO, W-6(4), AHMED ABAD 2 CONTENTION OF THE DR IN PARA- 22 ON PAGE NO.13 OF T HE ORDER THAT HE IS OPPOSED TO APPLICABILITY OF RULE 27. WHEREAS TRIBUNAL HAS NOT GIVEN EXPLICIT FINDING TO THE EFFECT THAT RULE 27 IS APPLICABLE THOUGH THE HONBLE TRIBUNAL A DMITTED IMPLIEDLY THE CONTENTION BY GIVING FINDING ON WHETH ER SECTION 292BB IS APPLICABLE PROSPECTIVELY IN AS MUCH AS THE HON'B LE TRIBUNAL DISCUSSES THE SAME ISSUE FROM PARA- 24 ONWARDS. 3. THE HON'BLE TRIBUNAL HAS PRESUMED THAT NOTICE UN DER SEC. 143(2)(II) WAS SERVED ON 19-01-2005 AS CAN BE SEEN FROM PARAS IN TRIBUNAL ORDER AS UNDER: PARA NO. PAGE NO. INCORRECT CORRECT 11 4 TH LINE FROM BOTTOM 5 IT WAS POINTED OUT THAT THE NOTICE UNDER SEC. 143(2)(II) WAS ACTUALLY ISSUED ON 19-01-2005. IT WAS POINTED OUT THAT THE NOTICE U/S. 143(2)(II) WAS NEVER SERVED AND THAT NOTICE U/S. 142 WAS SERVED ON 19-01- 2005 [PLEASE REFER PAGE NO. 4 O F PAPER BOOK DATED 16-08-2007]. 12 5 TH LINE FROM TOP 6 VALIDITY OF NOTICE ISSUED BY AO U/S. 143(2)(II) VALIDITY OF NOTICE ISSUED BY AO U/S. 142(1) 12 10 TH LINE FROM TOP 6 UPHOLDING THE VALIDITY OF THE NOTICE ISSUED BY AO U/S. 143(2)(II) UPHOLDING THE VALIDITY OF THE NOTICE ISSUED BY AO U/S. 142(1) 12 14H LINE FROM TOP 6 THE ISSUE REGARDING VALI DITY OF ASSESSMENT ORDER ON ACCOUNT OF NON- TIMELY OR IMPROPER SERVICE OF NOTICE U/S. 143(2)(II) DATED 19-01- 2005 IS NOT AT ALL A SUBJECT MATTER OF APPEAL BEFORE THIS TRIBUNAL THE ISSUE REGA RDING VALIDITY OF ASSESSMENT ORDER ON ACCOUNT OF NON- TIMELY OR IMPROPER SERVICE OF NOTICE U/S. 142(1) DATED 19-01- 2005 IS NOT AT ALL A SUBJECT MATTER OF APPEAL BEFORE THIS TRIBUNAL. MA NO.325/AHD/2008 AND 326/AHD/2008: (IN ITA NO.1226/AHD/2007 AND 104/AHD/2008 AY: 2002- 03) M/S. VARIA PRATIK ENGINEERING VS ITO, W-6(4), AHMED ABAD 3 13 LAST LINE 6 & 7 NON- TIMELY SERVICE OF NOTICE AS PER TIME PROVISION OF SEC. 143(2)(II) OF THE ACT. NON- TIMELY SERVICE OF NOTICE AS PER TIME PROVISION OF SEC. 142(1) OF THE ACT. 19 4 TH LINE FROM TOP 10 TIME PROVISION OF SEC. 143(2)(II) OF THE ACT. TIME PROVISION OF SEC. 142(1) OF THE ACT. 19 16 TH L INE FROM TOP 10 TIME PROVISION OF SEC. 143(2)(II) OF THE ACT. TIME PROVISION OF SEC. 142(1) OF THE ACT. 19 25 TH LINE FROM TOP 10 TIME PROVISION OF SEC. 143(2)(II) OF THE ACT WAS NECESSARY TO INQUIRE INTO OTHER ISS UES AND AREAS INCLUDING THE AREAS OF SALES AND LOW GP. ISSUE OF NOTICE U/S. 142(1) DATED19-01-2005 W ITHOUT ISSUE OF NOTICE U/S. 143(2)(II) IS NOT SUFFICIENT TO INQUIRE INTO OTHER ISSUES AND AREAS INCLUDING THE AREAS OF SALES AND LOW GP. WHEREAS THE NOTICE UNDER SEC. 143(2)(II) WAS NEVER SERVED AND THAT NOTICE UNDER SEC. 142(1) WAS SERVED ON 19-01-2 005 AND THAT THE XEROX COPY OF THE SAID NOTICE IS ALSO GIVEN IN THE PAPER BOOK DATED 16-08-2007 ON PAGE NO.4. AND WHEREAS IT WAS ALSO CONTENDED THAT NOTICE UNDER SEC. 142(1) CANNOT BE EQUATED WITH BY PLACING RELIANCE IN THE C ASE OF ITO V/S. SMT. SUKHINI P. MODI 112 ITD 1 (AHD) [PLEASE REFER PARA NO. 21 ON PAGE NO. 13 OF THE TRIBUNAL ORDER]. 4. THE HON'BLE TRIBUNAL REPRODUCES IN PARA 20 ON PA GE NO. L1 OF THE TRIBUNAL ORDER THAT THE SUBMISSION GIVEN IN WRI TING BY THE AR TO THE EFFECT THAT SECTION 292BB IS WITH PROSPECTIVE E FFECT AND NOT WITH RETROSPECTIVE EFFECT. IT WAS ALSO STATED IN PARA-3( B) ON PAGE NO. 12 OF THE ORDER IN THE SUBMISSION THAT THE LEGAL FICTION CAN BE APPLIED WITH PROSPECTIVE EFFECT AND NOT WITH RETROSPECTIVE EFFEC T. WHEREAS THE HON'BLE TRIBUNAL DID NOT CONSIDER THE S UBMISSION IN WRITING THOUGH REPRODUCED IN PARA-20 ON PAGE NO. L1 OF THE TRIBUNAL ORDER. AND WHEREAS THE HON'BLE TRIBUNAL ACCEPTS THAT SECTI ON 292BB CREATES LEGAL FICTION [PARA- 26 ON PAGE NO. 16 OF T HE ORDER] BUT THE HON'BLE TRIBUNAL DID NOT GIVE ANY REASONS WHY SC DE CISION IN THE MA NO.325/AHD/2008 AND 326/AHD/2008: (IN ITA NO.1226/AHD/2007 AND 104/AHD/2008 AY: 2002- 03) M/S. VARIA PRATIK ENGINEERING VS ITO, W-6(4), AHMED ABAD 4 CASE OF BHAVNAGAR UNIVERSITY V/S. PALITANA SUGAR MI LLS P. LTD. 2 SCC 11 [2003] IS NOT APPLICABLE. IN FACT IT IS HELD BY THE SC THAT THE LEGAL FICTION ALWAYS OPERATES PROSPECTIVELY. 5. THE HON'BLE TRIBUNAL OBSERVED IN PARA- 42(II) ON PAGE NO.31 AS UNDER: 'THE AO HAS SUPPLIED COPIES OF CONTRA ACCOUNTS OBTA INED BY HIM FROM CERTAIN PARTIES TOGETHER WITH A SHOW CAUSE NOT ICE CALLING UPON THE ASSESSEE TO EXPLAIN THE VARIATIONS. THE ASSESSE E HOWEVER DID NOT COMPLY WITH THE SHOW CAUSE NOTICE. THIS ASPECT OF THE MATTER ALSO SEEMS TO HAVE ESCAPED THE ATTENTION OF THE LEA RNED CIT(A). HE HAS DELETED THE ADDITION WITHOUT GIVING ANY OPPORTU NITY TO THE AO TO VERIFY AS TO WHETHER THE ASSESSEE HAS SATISFACTORIL Y RECONCILED THE DISCREPANCY NOTICED FROM THE CONTRA ACCOUNTS OBTAIN ED BY HIM.' WHEREAS THE AO STATED IN THE ASSESSMENT ORDER ON PA GE NO.7 IN THE BEGINNING THAT THE ASSESSEE WAS SUPPLIED WITH T HE COPY OF ACCOUNTS PROCURED UNDER SEC. 133(6). IN FACT, IT WA S NEVER SUPPLIED AND IT WAS STATED SO IN PARA NO. 7 OF THE WRITTEN S UBMISSION DATED 19-10-2005 TO CIT(A). PLEASE REFER PAGE NO.2 OF PAP ER BOOK DATED 16-08-2007 AND ALSO PLEASE REFER RECONCILIATION STA TEMENT WITH CONTRA ACCOUNT OF EACH OF THE PARTIES GIVEN FROM PA GE NO. 15 TO 45 OF THE PAPER BOOK DATED 16-08-2007. AND WHEREAS THE LEARNED CIT(A) HAS GIVEN OPPORTUNIT Y TO THE AO TO VERIFY AS TO WHETHER THE ASSESSEE HAS SATISFACTO RILY RECONCILED THE DISCREPANCY NOTICED FROM THE CONTRA ACCOUNTS OBTAIN ED BY AO. PLEASE REFER REPLY TO REMAND REPORT DATED 04-01-200 6 ON PAGE NO. 14 OF THE PAPER BOOK DATED 03-10-2007 AND ALSO LETT ERS BY C.P. UDHYOG TO CUSTOMERS WITH A REQUEST TO MAKE PAYMENT TO THE ASSESSEE [PAGE NO.22 TO 29 OF PAPER BOOK DATED 03-1 0-2007]. WITH RESPECT TO ITA NO.104/AHD/2008 1. WE ARE IN RECEIPT OF THE APPELLATE ORDER DATED 3 0-09-2008 ON 05-11-2008. THIS PETITION IS MADE SINCE THERE ARE A PPARENT MISTAKES IN THE ORDER, WHICH ARE AS UNDER: 2. THE ORDER IS NOT BASED ON MATERIAL AND SUBMISSIO N ON RECORD. 3. THE GROUND NO. L OF THE APPEAL FILED BY THE REVE NUE IS NOT DEALT WITH AT ALL. MA NO.325/AHD/2008 AND 326/AHD/2008: (IN ITA NO.1226/AHD/2007 AND 104/AHD/2008 AY: 2002- 03) M/S. VARIA PRATIK ENGINEERING VS ITO, W-6(4), AHMED ABAD 5 4. THE HON'BLE TRIBUNAL IN PARA- 42(III) ON PAGE NO . 32 OBSERVED AS UNDER: THE AO HAD MADE ADDITION OF RS.64,73,337 TOWARDS S UPPRESSED PROFITS AND ALSO REJECTED THE BOOKS OF ACCOUNTS AND ACCORDINGLY WORKED OUT FURTHER ADDITION OF RS. 32,89,882 ON ACCOUNT OF LOW GROSS PROFIT. HOWEVER, HE TELESCOPED THE ADDITION ON ACCOUNT OF LOW GROSS PROFITS AGAINST THE LARGER ADDITION AND CONSEQUENTL Y DID NOT MAKE ANY ADDITION SEPARATELY FOR LOW GROSS PROFIT. THUS THE ADDITION OF RS. 64,73,337 MADE BY THE AO INCLUDED THE OTHER ADDITION OF RS. 32,89,882 AND IT WAS FOR THIS REASON THAT THE AO HAD NOT MADE ANY SEPARATE ADDITION FOR LOW GROSS PROFIT. THE LEARNED CIT(A) OUGHT TO HAVE CONSIDERED THIS ASPECT OF THE MATTER WHILE ADJ UDICATING UPON AND DELETING THE ADDITIONS OF RS.64.73.337. 4.1 THE HON'BLE TRIBUNAL ALSO OBSERVED IN PARA- 43 LAST TWO LINES ON PAGE NO. 32 AS UNDER: 'SINCE WE HAVE ALREADY DIRECTED THE LEARNED CIT(A) TO CONSIDER AND ADJUDICATE UPON THE ENTIRE ADDITION OF RS.64,73,337 INCLUSIVE OF RS.32,89,882 AFRESH, THE ISSUE RAISED IN THE OTHER APPEAL NAMELY ITA NO. 104/AHD/2008 IS ALSO RESTORED TO HIS FILE FOR A FRESH DECISION DEPENDING UPON HIS ORDER IN THE AFORE SAID APPEAL.' 5. WHEREAS THE HON'BLE TRIBUNAL STATES IN PARA-18 O N PAGE NO. 10 THAT THE AR REITERATED THE SUBMISSIONS MADE IN B OTH THE APPEALS BEFORE CIT(A). 5.1 AND WHEREAS THE HON'BLE TRIBUNAL DID NOT CONSID ER THE SUBMISSION MADE ORALLY AS WELL AS STATED IN THE GIS T OF SUBMISSION AND THE CHART WITH JUDICIAL DECISION IN WRITING. 5.2 AND WHEREAS THE HON'BLE TRIBUNAL IGNORED THE FACT THAT THE APPELLANT DID NOT RAISE ANY GROUND REGARDING DISCUS SION ON GROSS PROFIT [GP] AND THEREFORE THE CIT(A) CANNOT DEAL WI TH THE SAID GROUND. IT WAS SUBMITTED THAT THE GROUND CAN BE RAISED ONLY IF THE ASSESSEE IS AGGRIEVED AND THAT THE ASSESSEE WAS NOT AGGRIEVE D SINCE THERE WAS NO TAX LIABILITY AS THERE WAS NO ADDITION ON AC COUNT OF LOW GP. THE AR ALSO RELIED UPON THE DECISIONS IN THE FOLLOW ING TWO CASES IN SUPPORT OF HIS CONTENTION: CIT V/S. HINDUSTAN STEEL LTD. 179ITR 213 (CAL) MICO EMPLOYEES ASSOCIATION V/S. ACIT 292 ITR 567 (K ARN) MA NO.325/AHD/2008 AND 326/AHD/2008: (IN ITA NO.1226/AHD/2007 AND 104/AHD/2008 AY: 2002- 03) M/S. VARIA PRATIK ENGINEERING VS ITO, W-6(4), AHMED ABAD 6 5.3 AND WHEREAS THE HON'BLE TRIBUNAL FAILED T O CONSIDER THAT THE APPELLANT FILED THE APPEAL TO CIT(A) AGAINST TH E ORDER UNDER SEC. 154 RECTIFYING THE ORDER UNDER SEC.250. THE CIT(A) ALLOWED THE APPEAL ON THE GROUND THAT THERE IS NO MISTAKE APPAR ENT FROM RECORD. THE REVENUE HAS COME-UP IN APPEAL NO. 104 AGAINST T HE FINDING OF THE CIT(A) THAT THERE IS NO APPARENT MISTAKE ON REC ORD. THE TRIBUNAL HAS NOT GIVEN ANY FINDING WHETHER THERE IS A MISTAK E APPARENT FROM RECORD OR NOT. 6. THE REVENUE HAS RAISED THE GROUND AS REPR ODUCED IN PARA-3 ON PAGE NO.2 OF THE TRIBUNAL ORDER AS UNDER: 'THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS I N HOLDING THAT THERE IS NO APPARENT MISTAKE IN THE APPEAL EFFECT O RDER DATED 06-02- 2007 PASSED BY THE ASSESSING OFFICER.' 6.1 WHEREAS THE HON'BLE TRIBUNAL OUGHT TO HAVE DECI DED THE SUBJECT MATTER OF THE GROUND RAISED. INSTEAD HON'BL E TRIBUNAL HAS GONE BEYOND THE SUBJECT MATTER AND HELD IN PARA- 42 (III) ON PAGE NO.32 LAST THREE LINES THAT THE LEARNED CIT(A) OUGH T TO HAVE CONSIDERED THE GROUND REGARDING DISCUSSION ON GP. 6.2 AND WHEREAS THE HON'BLE TRIBUNAL HAS GONE BE YOND SUBJECT MATTER OF THE APPEAL. SCOPE OF THE APPEAL BEFORE IT AT IS CIRCUMSCRIBED BY THE NATURE OF THE ORDER APPEAL AGA INST AND THE MATTER RAISED BY THE APPELLANT IN HIS GROUND OF APP EAL AS HELD IN THE FOLLOWING CASES: POKHRAJ HIRACHAND 49 ITR 293 (BOM) INDIRA BALKRISHNA V/S. CIT 30 ITR 320 (BOM) AFFIRME D IN 39 ITR 546 (SC) R.L. RAJDHARIA V/S. ITO 107 ITR 347 SINGLE JUDGE (C AL) AFFIRMED BY DIVISION BENCH IN ITO V/S. R.L. RAJDHARIA 119 ITR 8 72 (CAL) 6.3 IT IS NECESSARY THAT EVERY FACT FOR AGAINS T THE ASSESSEE MUST HAVE BEEN CONSIDERED WITH DUE CARE BY THE TRIBUNAL AND IT MUST HAVE GIVEN THE FINDINGS IN A MANNER WHICH WOULD CLE ARLY INDICATE WHAT WERE THE QUESTIONS WHICH AROSE FOR DETERMINATI ON, WHAT WAS THE EVIDENCE PRO AND CONTRA IN REGARD TO EACH ONE O F THEM AND WHAT WERE THE FINDINGS WHICH ON THE EVIDENCE ON RECORD B EFORE IT - RAMESHCHANDRA M. LUTHRA V/S. ACIT 257 ITR 460 (GUJ) . 6.4 THE CONCLUSION REACHED BY THE TRIBUNAL SHO ULD NOT BE COLORED BY ANY IRRELEVANT CONSIDERATIONS OR MATTERS OF PREJ UDICE AND IF THERE ARE ANY CIRCUMSTANCES WHICH REQUIRED TO BE EXPLAINE D BY THE ASSESSEE, THE ASSESSEE SHOULD BE GIVEN AN OPPORTUNI TY OF DOING SO. ON NO ACCOUNT WHATEVER SHOULD THE TRIBUNAL BASE ITS FINDINGS ON MA NO.325/AHD/2008 AND 326/AHD/2008: (IN ITA NO.1226/AHD/2007 AND 104/AHD/2008 AY: 2002- 03) M/S. VARIA PRATIK ENGINEERING VS ITO, W-6(4), AHMED ABAD 7 SUSPICIOUS, CONJUNCTURES OR SURMISES NOR SHOULD IT ACT ON NO EVIDENCE AT ALL OR IMPROPER REJECTIONS OF MATERIAL AND RELEVANT EVIDENCE OR PARTLY ON EVIDENCE AND PARTLY ON SUSPIC IOUS, CONJUNCTURES OR SURMISES- OMAR SALAY MOHAMED SAIT V /S. CIT 37 ITR 151-170 (SC). 6.5 THE PROCEDURE REQUIRED TO BE ADOPTED BY TH E TRIBUNAL SO AS TO ENSURE THAT THE ORDER IS AN APPEALABLE ORDER, MUST BE ONE WHICH REFLECTS NOT ONLY ITS CONCLUSION, BUT THE DECISION MAKING PROCESS ALSO. REASONS, HOWEVER BRIEF ARE THE SOUL AND BACKBONE OF AN ORDER -SJ. & S.P. FAMILY TRUST V/S. DCIT 277 ITR 557 (GUJ). 6.6 EVERY JUDICIAL / QUASI-JUDICIAL BODY / AUT HORITY MUST PASS A REASONED ORDER WHICH SHOULD REFLECT THE APPLICATION OF MIND OF THE CONCERNED AUTHORITY TO THE ISSUES / POINTS RAISED B EFORE IT. THE REQUIREMENT OF RECORDING REASONS IN AN IMPORTANT SA FEGUARD TO ENSURE OBSERVANCE OF THE RULE OF LAW. IT INTRODUCES CLARITY, CHECKS THE INTRODUCTION OF EXTRANEOUS OR IRRELEVANT CONSIDERAT IONS AND MINIMIZES ARBITRARINESS IN THE DECISION MAKING PROC ESS - CIT V/S. PALWAL CO.OP. SUGAR MILLS LTD. 284 ITR 153 (P&H). 6.7 WHEN PREJUDICE RESULT FROM AN ORDER ATTRIB UTABLE TO TRIBUNAL'S MISTAKE, ERROR OR OMISSION, THEN IT IS DUTY OF TRIB UNAL TO SET IT RIGHT [HONDA SIEL POWER PRODUCTS LTD. V/S. CIT 295 ITR 46 6 SC]. 6.8 NON CONSIDERATION OF MATERIAL ON RECORD IS APPARENT MISTAKE ON RECORD [CIT V/S. MITHALAL 158 ITR 755 (MP) AND A CIT V/S. SAURASHTRA KUTCH STOCK EXCHANGE LTD. 262 ITR 146 (G UJ)]. AFFIRM BY SUPREME COURT 173 TAXMAN 322. 7. YOUR HONOURS ARE THEREFORE PRAYED TO MODI FY / RECALL THE ORDER. 2. THE LEARNED AR VEHEMENTLY ARGUED REFERRING TO TH E WRITTEN SUBMISSION OF THE ASSESSEE THAT THE ORDER OF THE TR IBUNAL MAY BE RECALLED IN ORDER TO CURE THE DEFECTS POINTED OUT. THE LEARNED AR RELIED UPON THE CASE S. J. AND S. P. FAMILY TRUST, 227 ITR 557 (GUJ.) WHEREIN IT WAS HELD THAT IT WAS THE DUTY OF THE TRI BUNAL TO GIVE REASONS FOR DECISION AND ANY ORDER WITHOUT REASONS FOR DECI SION BY MERELY REPRODUCING THE ARGUMENTS OF THE COUNSELS IS NOT VA LID. THE LEARNED MA NO.325/AHD/2008 AND 326/AHD/2008: (IN ITA NO.1226/AHD/2007 AND 104/AHD/2008 AY: 2002- 03) M/S. VARIA PRATIK ENGINEERING VS ITO, W-6(4), AHMED ABAD 8 AR SUBMITTED THAT THE TRIBUNAL HAS NOT GIVEN EXPLIC IT FINDINGS ON THE APPLICABILITY OF RULE 27 AND ALSO WHETHER SECTION 2 92 BB IS APPLICABLE PROSPECTIVELY OR RETROSPECTIVELY. FURTHER, IT WAS C ONTENDED THAT THE TRIBUNAL HAS PRESUMED THAT THE NOTICE U/S 143(2) (I I) WAS SERVED ON 19-01-2005 ON THE CONTRARY NOTICE U/S 143(2) (II) W AS NEVER SERVED AND THE CORRECT FACT WAS THAT THE NOTICE U/S 142(1) WAS SERVED ON 19-01-2005 AS POINTED OUT IN PAGE NO.4 OF THE PAPER BOOK DATED 16-08-2007. HE SUBMITTED THAT GROUND NO.1 OF THE APPEAL FILED BY THE REVENUE IN ITA NO.104/AHD/2008 WAS NOT DEALT WI TH AT ALL IN THE ORDER OF THE TRIBUNAL. THE LEARNED AR FURTHER SUBMI TTED THAT THE BENCH DID NOT TAKE INTO CONSIDERATION OF THE GIST O F SUBMISSION AND CHART AND CASE LAWS RELIED UPON BY THE ASSESSEE AND FURTHER THE BENCH IGNORED THE FACT THAT THE ASSESSEE DID NOT RA ISE ANY GROUND REGARDING DISCUSSION ON GROSS PROFIT BASED ON WHICH THE LEARNED CIT(A) HAD DEALT WITH THE MATTER. FURTHER, THE TRIB UNAL HAD GONE BEYOND THE SUBJECT MATTER OF THE APPEAL AND FINALLY SET ASIDE THE ORDER OF THE LEARNED CIT(A) AND RESTORED THE SAME B EFORE HIM. IT WAS ALSO CONTENDED BY THE LEARNED AR THAT THE TRIBUNAL HAD NOT CONSIDERED ALL MATERIALS BROUGHT BEFORE THEM WHICH IS A MISTAKE APPARENT ON RECORD AND PRAYED THAT THE ORDER OF THE TRIBUNAL MAY BE RECALLED. 2.1 ON THE OTHER HAND LEARNED DR STOUTLY OBJECTED W ITH THE SUBMISSION THAT ANY AMENDMENT OF THE ORDER OF THE T RIBUNAL WILL AMOUNT TO REVIEW OF THE ORDER WHICH IS NOT PERMISSI BLE AS PER THE PROVISIONS OF THE ACT. THE LEARNED AR RELIED UPON T HE ORDER OF THE ITAT CHENNAI B BENCH IN M. P. NOS. 319 AND 320/MD S/2009 FOR AY MA NO.325/AHD/2008 AND 326/AHD/2008: (IN ITA NO.1226/AHD/2007 AND 104/AHD/2008 AY: 2002- 03) M/S. VARIA PRATIK ENGINEERING VS ITO, W-6(4), AHMED ABAD 9 1997-98 AND 1996-97 IN THE CASE OF K. R. S. A. KARU PAN CHETTIAR (FIRM) DATED 11-02-2011. FURTHER, ON THE REJOINDER BY THE LEARNED DR THE REVENUE CAME OUT WITH THE FOLLOWING SUBMISSIONS : REJOINDER BY RESPONDENT (ASSESSEE) CONTENTION BY DR (1) THERE IS A MISTAKE APPARENT FROM RECORD IN AS MUCH AS GR. NO.1 & 2 OF ITA NO.104 ARE NOT DEALT WITH AT ALL (2) THE ITAT FAILED TO CONSIDER THE MATERIAL ON RECORD. NON CONSIDERATION OF MATERIAL ON RECORD IS A MISTAKE APPARENT FROM RECORD. [ACIT VS/. SAURASHTRA KUTCH STOCK EXCHANGE LTD. 262 ITR 146 (GUJ)]. AFFIRM BY SUPREME COURT 305 ITR 227] ITAT CANNOT REVIEW THE ORDER AND FAILURE TO CONSIDER THE ARGUMENTS IS NOT A MISTAKE APPARENT FROM RECORD IN THE PRESENT CASE, CIT(A) ORDER IS REVERSED MEANING BY TRIBUNAL HAS NOT AGREED WITH THE REASONS GIVEN BY CIT(A). THEREFORE IT IS IMPERATIVE ON THE PART OF THE TRIBUNAL TO GIVE REASONS FOR NO AGREEING. THE GUJARAT HIGH COURT IN THE CASE OF RAMESHCHANDRA M. LUTHRA V/S. ACIT 257 ITR 460 462 HELD AS UNDER: IT WAS INCUMBENT ON THE TRIBUNAL BEFORE UPSETTING THE ORDER OF CIT(A) TO CONSIDER THE REASON GIVEN BY THAT AUTHORITY FOR ITS DECISION. THE GUJARAT HIGH COURT IN THE CASE OF RAJESH BABUBHAI DAMANIA V/S. CIT 251 ITR 541 0545 HELD AS UNDER: THE TRIBUNAL TOTALLY OVERLOOKED THE ASSESSMENT OF EVIDENCE DONE BY THE CIT(A) AND DEALT WITH THE MATTER AS IF IT WAS ENTERTAINING AND APPEAL AGAINST THE ORDER OF AO. THERE WAS NOT QUESTIONS OF GIVING ONE MORE INNINGS TO THE AO. THE APPEALS ARE NOT TO BE DECIDED WAS GIVING ONE MORE INNINGS TO THE LOWER AUTHORITIES. IN THE APPELLATE JURISDICTION THE APPELLATE COURT HAS TO CONSIDER WHETHER THERE IS JUSTIFICATION FOR UPSETTING THE ORDER AGAINST WHICH THE APPEAL IS FILED. NO SEPARATE OR ADDITIONAL REASONS NEED TO BE GIVEN, IF TRIBUNAL IS IN AGREEMENT WITH REASONS GIVEN BY LOWER AUTHORITIES MA NO.325/AHD/2008 AND 326/AHD/2008: (IN ITA NO.1226/AHD/2007 AND 104/AHD/2008 AY: 2002- 03) M/S. VARIA PRATIK ENGINEERING VS ITO, W-6(4), AHMED ABAD 10 3. WE HAVE HEARD THE RIVAL SUBMISSION AND CAREFULLY PERUSED THE MATERIAL ON RECORD BEFORE US. BOTH THE APPEALS IN I TA NO.1226/AHD/2007 AND ITA NO.104/AHD/2008 WERE FILED BY THE DEPARTMENT RELATING TO THE ASSESSMENT YEAR 2002-03 WHEREIN ITA NO.1226/AHD/2007 WAS DIRECTED AGAINST THE ORDER PA SSED BY THE LEARNED CIT(A) ON 29-12-2006 DELETING THE ADDITION OF RS.64,73,337/- MADE BY THE LEARNED ASSESSING OFFICER VIDE HIS ORDE R PASSED U/S 143(3) OF THE ACT ON ACCOUNT OF SUPPRESSED SALES AN D THE OTHER APPEAL IN ITA NO.104/AHD/2008 WAS DIRECTED AGAINST THE ORDER PASSED BY THE LEARNED CIT(A) ON 24-10-2007 DELETING THE ADDITION OF RS.32,89,882/- MADE BY THE LEARNED ASSESSING OFFICE R U/S 154 OF THE ACT AND THUS, BOTH THE APPEALS AND THE ISSUES THERE ON ARE INTERLINKED. ON EXAMINING THE GROUNDS RAISED BY THE REVENUE IN ITA NO.104/AHD/2008 IT IS APPARENT THAT THE FOLLOWING T HREE GROUNDS WERE BEFORE THE TRIBUNAL FOR ADJUDICATION: L. THE LD. COMMISSIONER OF INCOME TAX (A)- XI, AH MEDABAD HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT THER E IS NO APPARENT MISTAKE IN THE APPEAL EFFECT ORDER DATED 06/02/2007 PASSED BY THE ASSESSING OFFICER. 2. THE LD. COMMISSIONER OF INCOME TAX (A) - XI, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION MADE OF RS.32,89,882/- ON ACCOUNT OF LOW GROSS PROFIT AS WAS PROPOSED TO BE MADE IN THE ASSESSMENT ORDER DATED 24/03/2005 AND WAS NOT MADE AS AN ADDITION OF RS.64,73,337/- WAS MADE ON ACCOUNT OF SUPPRESSED SA LES. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. COMMISSIONER OF INCOME TAX (A) - XI, AHMEDABAD OUGH T TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER.' MA NO.325/AHD/2008 AND 326/AHD/2008: (IN ITA NO.1226/AHD/2007 AND 104/AHD/2008 AY: 2002- 03) M/S. VARIA PRATIK ENGINEERING VS ITO, W-6(4), AHMED ABAD 11 3.1 ON EXAMINING THE GROUNDS RAISED BY THE REVENUE IN ITA NO.1226/AHD/2007 IT IS APPARENT THAT THE FOLLOWING TWO GROUNDS WERE BEFORE THE TRIBUNAL FOR ADJUDICATION: L. THE LD. COMMISSIONER OF INCOME TAX (A)- XII, AH MEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDI TION MADE OF RS.64,73,337/- ON ACCOUNT OF SUPPRESSED SALES. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. COMMISSIONER OF INCOME TAX (A) - XII, AHMEDABAD OUG HT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER.' 4. CONSIDERING VARIOUS ISSUES CROPPING OUT OF THE A BOVE GROUNDS AND THE ARGUMENTS TAKEN UP BY BOTH THE PARTIES THE TRIBUNAL CAME UP WITH AN ELABORATE FINDING THAT SECTION 292 BB OF TH E ACT CAN BE INVOKED IN THE PRESENT CASE TO CURE THE DEFECTS OF ISSUANCE OF NOTICE IN PARA 24 TO 41 OF THE ORDER AND THEREAFTER REST ORED THE MATTER TO THE FILE OF THE LEARNED CIT(A) FOR FRESH ADJUDICATI ON IN ACCORDANCE WITH LAW AND KEEPING IN VIEW OF THE OBSERVATIONS MADE BY THE BENCH. THE RELEVANT PARA IN THE ORDER IS REPRODUCED HEREIN BEL OW: (VIII) APPLICABILITY OF SECTION 292BB TO MATTERS PENDING IN APPEAL 39. IT WAS ALSO CONTENDED THAT SECTION 292BB WAS NO T ON THE STATUTE AS ON THE FIRST DAY OF THE RELEVANT ASSESSM ENT, YEAR UNDER APPEAL AND HENCE CANNOT BE APPLIED TO THAT YE AR. WE ARE UNABLE TO AGREE WITH THE AFORESAID SUBMISSIONS ALSO . IT IS TRUE THAT IN THE ORDINARY WAY AN APPELLATE COURT/TRIBUNA L CANNOT TAKE INTO ACCOUNT A STATUTE WHICH HAS BEEN PASSED IN THE INTERVAL SINCE THE MATTER DECIDED AT FIRST INSTANCE, BECAUSE THE RIGHTS AND OBLIGATIONS OF AN ASSESSEE ARE TO BE DETERMINED , ACCORDING TO THE LAW IN FORCE AS AT THE FIRST DAY OF THE ASSE SSMENT YEAR IN THE INCOME-TAX ASSESSMENTS. BUT THE POSITION IS DIF FERENT WHEN THE STATUTE IS RETROACTIVE OR CURATIVE OR VALIDATIN G OR DECLARATORY OR DEALS WITH MATTERS OF PROCEDURE, FOR THEN THE LEGISLATURE HAS MA NO.325/AHD/2008 AND 326/AHD/2008: (IN ITA NO.1226/AHD/2007 AND 104/AHD/2008 AY: 2002- 03) M/S. VARIA PRATIK ENGINEERING VS ITO, W-6(4), AHMED ABAD 12 SHOWN AN INTENTION THAT THE STATUTE OPERATE ON PEND ING PROCEEDINGS, AND THE APPELLATE FORUM IS ENTITLED TO GIVE EFFECT TO SUCH A LEGISLATIVE INTENT AS WELL AS A COURT OF FIRST INSTANCE. FOR SIMILAR REASONS, WHERE AN ASSESSEE BY AN AUTHOR ITY LACKING JURISDICTION BUT IF THE RELEVANT LAW IS AMENDED AFT ERWARDS BY INSERTING A RETROSPECTIVE OR RETROACTIVE OR VALIDAT ING OR CURATIVE OR DECLARATORY PROVISION WITH THE OBJECT OF CONFERR ING UPON THAT AUTHORITY PROPER JURISDICTION, WHICH IT ORIGINALLY LACKED, THE APPELLATE COURT/TRIBUNAL SHOULD, IN OUR CONSIDERED OPINION, NOT TAKE THAT AMENDMENT INTO ACCOUNT BUT ALSO HOLD THAT THE AUTHORITY HAD THE JURISDICTION WHEN IT MADE THE ASS ESSMENT. WE THEREFORE HOLD THAT THE PROVISIONS OF SECTION 292BB WILL HAVE TO BE INVOKED IN ALL THE PENDING PROCEEDINGS INCLUDING APPELLATE PROCEEDINGS AFTER 31.3.2008 OTHERWISE THE VERY PURP OSE OF DISABLING AN ASSESSEE FROM TAKING ANY OBJECTION AS TO THE SERVICE OF NOTICE WOULD BE DEFEATED. 40. IN WHATEVER MANNER THE PROVISIONS OF SECTION 29 2BB ARE LOOKED AT AND WHATEVER TOOLS OF INTERPRETATION ARE APPLIED TO GATHER THE LEGISLATIVE INTENT BEHIND ENACTING SECTION 292BB, THE IRRESISTIBLE CONCLUSION IS THAT IT CURES THE NOTICE S OF THEIR DEFICIENCIES AFTER 31.3.2008 AND THEREFORE AN ASSES SEE CANNOT BE PERMITTED TO RAISE ANY OF THE OBJECTIONS ENUMERA TED IN THE SAID SECTION AFTER 31.3.2008 ONCE IT IS SHOWN THAT AN ASSESSEE HAS APPEARED IN ANY PROCEEDING OR COOPERATED IN AN Y INQUIRY RELATED TO AN ASSESSMENT. 41. THE ASSESSEE HAS FAIRLY CONCEDED BEFORE THE CIT (A) AS ALSO BEFORE US THAT HE HAS FULLY PARTICIPATED IN TH E ENQUIRY AND THE SAID PROCEEDINGS RELATED TO THE ASSESSMENT FOR THE YEAR UNDER APPEAL. NO MATERIAL HAS BEEN PLACED BEFORE US TO SHOW THAT ANY OBJECTION WAS RAISED BEFORE THE AO IN TERM S OF THE PROVISO TO SECTION 292BB. IN VIEW OF THIS MATTER, I T SHALL NOW BE DEEMED IN TERMS OF SECTION 292BB THAT THE NOTICE WH ICH WAS REQUIRED TO BE SERVED AS PER THE TIME PREVISION OF SECTION 143(2) HAS BEEN DULY SERVED UPON THE ASSESSEE IN TI ME IN ACCORDANCE WITH THE RELEVANT PROVISIONS OF THE ACT AND THEREFORE THE ASSESSEE STANDS STATUTORILY PRECLUDED FROM TAKI NG ANY OBJECTION AT THIS STAGE THAT THE NOTICE WAS NOT SER VES UPON HIM, OR WAS NOT SERVED UPON HIM IN TIME, OR WAS SERVED U PON HIM IN MA NO.325/AHD/2008 AND 326/AHD/2008: (IN ITA NO.1226/AHD/2007 AND 104/AHD/2008 AY: 2002- 03) M/S. VARIA PRATIK ENGINEERING VS ITO, W-6(4), AHMED ABAD 13 AN IMPROPER MANNER. ALL HIS SUBMISSIONS IN THIS BEH ALF ARE THEREFORE REJECTED. DECISION ON THE ISSUES INVOLVED IN BOTH THE APPEALS 42. WE SHALL NOW CONSIDER THE MERITS OF ADDITION MA DE BY THE AO AND DELETED BY THE LEARNED CIT(A). IT IS NOT IN DISPUTE THAT THE ASSESSEE HAS RECORDED A SUM OF RS.64,73,337/- I N HIS BOOKS OF ACCOUNT FOR THE YEAR UNDER APPEAL. IT IS W ELL ESTABLISHED THAT THE RECEIPTS RECORDED IN THE BOOKS OF ACCOUNTS ARE PRESUMED TO BE OF ASSESSABLE NATURE UNLESS THE ASSESSEE ESTABLISHES OTHERWISE. IT IS THE CASE OF THE ASSESS EE THAT THE SALES WERE MADE BY C P UDYOG BUT THE SALES PROCEEDS THEREOF: WERE RECEIVED BY THE ASSESSEE AS THE BANK ACCOUNT O F C P UDYOG WAS INOPERATIVE DUE TO DISPUTES BETWEEN THE P ARTNERS. IN. SUPPORT OF HIS CLAIM, THE ASSESSEE RELIED UPON THE ENTRIES MADE IN ITS BOOKS OF ACCOUNT AND ALSO IN THE BOOKS OF C P UDYOG, BEFORE THE LEARNED CIT(A). THE LEARNED CIT ( APPEALS) HAS STRAIGHTAWAY CONCLUDED, ON THE BASIS OF THE ENT RIES IN THE BOOKS OF ACCOUNT, THAT THE IMPUGNED RECEIPTS RECORD ED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE REPRESENTED SALE, PROCEEDS OF C P UDYOG. IN OUR VIEW THE AFORESAID APPROACH AD OPTED BY THE CIT(APPEALS) IS COMPLETELY UNTENABLE MAINLY FOR THREE REASONS: (I) SINCE IT WAS THE CASE OF THE ASSESSEE THAT THE SALES IN RESPECT OF WHICH THE PROCEEDS WERE RECEIVED BY THE ASSESSEE AND RECORDED BY HIM IN HIS BOOKS WERE MADE BY C P U DYOG, THE BURDEN WAS SQUARELY ON THE ASSESSEE TO ESTABLIS H WITH COGENT EVIDENCE THAT THE SALES WERE ACTUALLY MADE B Y C P UDYOG AND NOT CY THE ASSESSEE BUT THE PROCEEDS IN R ESPECT THEREOF WERE RECEIVED BY THE ASSESSEE. HE OUGHT TO HAVE FURNISHED ALL THE PRIMARY EVIDENCE, E.G., SALES VOU CHERS, STOCK REGISTER. DISPATCH VOUCHERS, DETAILS OF SALES TAX R EALIZED/PAID, TRANSPORT BILLS, LORRY RECEIPTS, ETC. TO ESTABLISH THAT THE SALES WERE ACTUALLY MADE BY C P UDYOG BUT: THE PROCEEDS T HEREOF WERE NOT RECEIVED BY C P UOYOG BUT BY THE ASSESSEE. BOOKS OF ACCOUNT, ARE MERE RECORD OF THE TRANSACTIONS. TH EY BY THEMSELVES ARE NOT DECISIVE OF THE GENUINENESS OF T HE MA NO.325/AHD/2008 AND 326/AHD/2008: (IN ITA NO.1226/AHD/2007 AND 104/AHD/2008 AY: 2002- 03) M/S. VARIA PRATIK ENGINEERING VS ITO, W-6(4), AHMED ABAD 14 TRANSACTIONS. THE GENUINENESS OF THE SALE TRANSACTI ONS RECORDED THERE IN HAS TO BE PROVED BY ADDUCING SATISFACTORY, EVIDENCE TO ESTABLISH THAT IT WAS C P UDYOG WHICH H AD ACTUALLY MADE THE IMPUGNED SALES AND THAT THE GOODS, UPON SUCH SA LES, HAD MOVED FROM ITS PREMISES TO THE PREMISES OF THE PURCHASERS. THERE IS NO INDICATION IN THE ASSESSMENT ORDER AS T O WHETHER THE AFORESAID PIECES OF EVIDENCE WERE PLACED BY THE ASSESSEE BEFORE THE AO. IN THE ABSENCE OF RELEVANT EVIDENCE SUPPORTING THE CLAIM OF THE ASSESSEE THAT THE SALES WERE ACTUALLY M ADE BY C P UDYOG, IT WAS NOT OPEN TO THE LEARNED CIT(A) TO COME TO THE CONCLUSION THAT THE SALES WERE MADE BY C P UDYO G AND PAYMENT IN RESPECT THEREOF WERE RECEIVED BY THE ASS ESSEE. IT IS THE ASSESSEE, WHO HAS RECORDED THE IMPUGNED SUM IN THE BOOKS OF ACCOUNT, AND THEREFORE THE PRESUMPTION IS THAT THE SUM CREDITED IN THE BOOKS OF THE ASSESSEE REPRESENT S INCOME OF ASSESSABLE NATURE IN HIS HANDS. IT WAS FOR THE A SSESSEE TO REBUT THE SAME BY LEADING COGENT EVIDENCE TO ESTABL ISH THAT THE SALES WERE ACTUALLY MADE BY C P UDYOG AND BY NONE E LSE AND THE PROCEEDS THEREOF WERE RECEIVED BY THE ASSESSEE AND NOT BY C P UDYOG. THESE FACTS WERE WITHIN THE SPECIAL K NOWLEDGE OF THE ASSESSEE AND THEREFORE IT WAS THE ASSESSEE ALONE WHO OUGHT TO HAVE FILED NECESSARY EVIDENCE TO SUPPORT H IS CASE. THE LEARNED CIT(A) SEEMS TO HAVE MISSED THIS ASPECT OF THE CASE WHILE DELETING THE IMPUGNED ADDITION. (II) THE AO HAD SUPPLIED COPIES OF CONTRA-ACCOUNTS OBTAINED BY HIM FROM CERTAIN PARTIES TOGETHER WITH A SHOW CA USE NOTICE CALLING UPON THE ASSESSEE TO EXPLAIN THE VARIATIONS . THE ASSESSEE HOWEVER DID NOT COMPLY WITH THE SHOW CAUSE NOTICE. THIS ASPECT OF THE MATTER ALSO SEEMS TO HAVE ESCAPE D THE ATTENTION OF THE LEARNED CIT(A). HE HAS DELETED THE ADDITION WITHOUT GIVING ANY OPPORTUNITY TO THE AO TO VERIFY AS TO WH ETHER THE ASSESSEE HAS SATISFACTORILY RECONCILED THE DISC REPANCY NOTICED FROM THE CONTRA ACCOUNTS OBTAINED BY AIM. (III) THE AO HAD MADE ADDITION OF RS.64,73,337/ - TOWARDS SUPPRESSED PROFITS ARID ALSO REJECTED THE BOOKS OF ACCOUNT AND ACCORDINGLY WORKED OUT FURTHER ADDITION OF RS.32,89 ,832/- ON ACCOUNT OF LOW GROSS PROFIT. HOWEVER, HE TELESCOPED THE ADDITION ON ACCOUNT OF LOW GROSS PROFITS AGAINST TH E LARGER MA NO.325/AHD/2008 AND 326/AHD/2008: (IN ITA NO.1226/AHD/2007 AND 104/AHD/2008 AY: 2002- 03) M/S. VARIA PRATIK ENGINEERING VS ITO, W-6(4), AHMED ABAD 15 ADDITION AND CONSEQUENTLY DID NOT MAKE ANY ADDITION SEPARATELY FOR LOW GROSS PROFIT. THUS THE ADDITION OF RS.64,73 ,337/- MADE BY THE AO INCLUDED THE OTHER ADDITION OF RS.32,89,8 82/- AND IT WAS FOR THIS REASON THAT THE AO HAD NOT MADE ANY SE PARATE ADDITION FOR LOW GROSS PROFIT. THE LEARNED CIT(A) O UGHT TO HAVE CONSIDERED THIS ASPECT OF THE MATTER WHILE ADJUDICA TING UPON AND DELETING THE ADDITION OF RS.64,73,337/- 43. IN VIEW OF THE AFORESAID, THE ORDER PASSED BY T HE LEARNED CIT(A) ON 29.12.2005 DELETING THE ADDITION OF RS.64 ,73,337/ - IS SET: ASIDE AND THE MATTER IS RESTORED TO HIS FILE F OR A FRESH DECISION IN' ACCORDANCE WITH JAW KEEPING IN VIEW TH E OBSERVATIONS MADE ABOVE. SINCE WE HAVE ALREADY DIRE CTED THE LEARNED CIT(A) TO CONSIDER AND ADJUDICATE UPON THE ENTIRE ADDITION OF RS.64,73,337/- INCLUSIVE OF RS.32,89,88 2/- AFRESH, THE ISSUE RAISED IN THE OTHER APPEAL, NAMELY, ITA N O. 104/A/2008 IS ALSO RESTORED TO HIS FILE FOR A FRESH DECISION DEPENDING UPON HIS ORDER IN THE AFORESAID APPEAL. 4.1 ON CLOSE EXAMINATION OF THE TRIBUNAL ORDER IT I S APPARENT THAT THE BENCH HAD DISPOSED OF ALL THE TWO GROUNDS RAISE D BY THE REVENUE IN ITA NO.1226/AHD/2007 AND THE THREE GROUNDS RAISE D BY THE REVENUE IN ITS APPEAL IN ITA NO.104/AHD/2008 RESPEC TIVELY CONSIDERING ALL THE ISSUES AND ARGUMENTS ADVANCED B Y EITHER PARTIES. FROM THE VARIOUS DECISIONS OF THE HONBLE APEX COUR T AND HIGH COURTS IT IS CLEAR THAT THE TRIBUNAL DOES NOT HAVE ANY POWER U/S 254(2) TO REVIEW ITS ORDER BUT ONLY TO AMEND IT WIT H A VIEW TO RECTIFY ANY MISTAKE APPARENT FROM THE RECORD. AMENDMENT OF THE ORDER DOES TO MEAN OBLITERATION OF THE ORDER ORIGINALLY PASSED AND SUBSTITUTED BY A NEW ORDER. THE MISTAKE IN THE ORDER HAS TO BE APP ARENT AND VISIBLE AND ONLY SUCH MISTAKE CAN BE RECTIFIED. THIS IS NOT A CASE WHERE THE TRIBUNAL HAD OMITTED TO DEAL WITH ANY IMPORTANT CON TENTION AFFECTING THE MAINTAINABILITY/MERITS OF THE APPEAL. ALL THE A RGUMENTS WHICH ARE MA NO.325/AHD/2008 AND 326/AHD/2008: (IN ITA NO.1226/AHD/2007 AND 104/AHD/2008 AY: 2002- 03) M/S. VARIA PRATIK ENGINEERING VS ITO, W-6(4), AHMED ABAD 16 IMPORTANT AFFECTING THE ISSUES IN THE APPEAL WERE C ONSIDERED BY THE TRIBUNAL. KEEPING IN VIEW OF THE LIMITED SCOPE IN R ECALLING THE ORDER OF THE TRIBUNAL, WE ARE OF THE CONSIDERED VIEW THAT BO TH THE MISC. APPLICATIONS FILED BY THE ASSESSEE ARE NOT MAINTAIN ABLE. WE DRAW STRENGTH FROM THE DECISION OF THE HONBLE APEX COUR T IN THE CASE OF CIT VS KARAM CHAND THAPAR AND BR. P. LTD., 176 ITR 535 IN WHICH IT WAS HELD AS UNDER: APPELLATE TRIBUNAL - DUTY TO CONSIDER CUMULATIVE EFFECT OF CIRCUMSTANCES AND TOTALITY OF FACTS - NO NEED TO STATE SO IN APPELLATE ORDER SPECIFICALLY - INCOME TAX ACT, 1961, SEC. 254 FURTHER IT WAS HELD AS UNDER: 'IT IS EQUALLY WELL SETTLED THAT THE DECISION OF TH E TRIBUNAL HAS NOT TO BE SCRUTINIZED SENTENCE BY SENTENCE MERELY TO FIND OUT WHETHER ALL FACTS HAVE BEEN SET OUT IN DETAIL BY THE TRIBUNAL O R WHETHER SOME INCIDENTAL FACT WHICH APPEARS ON THE RECORD HAS NOT BEEN NOTICED BY THE TRIBUNAL IN ITS JUDGMENT. IF THE COURT, ON A FA IR READING OF THE JUDGMENT OF THE TRIBUNAL, FINDS THAT IT HAS TAKEN I NTO ACCOUNT ALL RELEVANT MATERIAL AND HAS NOT TAKEN INTO ACCOUNT AN Y IRRELEVANT MATERIAL IN BASING ITS CONCLUSIONS, THE DECISION OF THE TRIBUNAL IS NOT LIABLE TO BE INTERFERED WITH, UNLESS, OF COURSE, TH E CONCLUSIONS ARRIVED AT BY THE TRIBUNAL ARE PERVERSE. IT IS NOT NECESSARY FOR THE TRIBUNAL TO STATE IN IT S JUDGEMENT SPECIFICALLY OR IN EXPRESS WORDS THAT IT HAS TAKEN INTO ACCOUNT THE CUMULATIVE EFFECT OF THE CIRCUMSTANCES OR HAS CONSI DERED THE TOTALITY OF THE FACTS, AS IF THAT WERE A MAGIC FORMULA; IF T HE JUDGMENT OF THE TRIBUNAL SHOWS THAT IT HAS, IN FACT, DONE SO, THERE IS NO REASON TO INTERFERE WITH THE DECISION OF THE TRIBUNAL. SIMILARLY THE BOMBAY HIGH COURT IN THE CASE OF CIT -VS- RAMESH ELECTRIC AND TRADING CO. (203 ITR 497) .............IT IS AN ACCEPTED POSITION THAT THE AP PELLATE TRIBUNAL DOES NOT HAVE ANY POWER TO REVIEW ITS OWN ORDERS UNDER T HE PROVISIONS OF THE ACT. THE ONLY POWER WHICH THE TRIBUNAL POSSESSE S IS TO RECTIFY ANY MISTAKE IN ITS OWN ORDER WHICH IS APPARENT FROM THE MA NO.325/AHD/2008 AND 326/AHD/2008: (IN ITA NO.1226/AHD/2007 AND 104/AHD/2008 AY: 2002- 03) M/S. VARIA PRATIK ENGINEERING VS ITO, W-6(4), AHMED ABAD 17 RECORD........ THE POWER OF RECTIFICATION UNDER S ECTION 254(2) CAN BE EXERCISED ONLY WHEN THE MISTAKE WHICH IS SOUGHT TO BE RECTIFIED S AN OBVIOUS AND PATENT MISTAKE WHICH IS APPARENT FROM T HE RECORD AND NOT A MISTAKE WHICH REQUIRED TO BE ESTABLISHED BY A RGUMENTS AND A LONG DRAWN PROCESS OF REASONING ON POINTS ON WHICH THERE MAY CONCEIVABLY BE TWO OPINION. FAILURE OF THE TRIBUNAL TO CONSIDER AN ARGUMENT ADVANCED BY EITHER PARTY FOR ARRIVING AT A CONCLUSION IS NOT AN ERROR APPARENT ON THE RECORD, ALTHOUGH IT MAY BE AN ERROR OF JUDGMENTS........................ ' 5. IN THE RESULT, BOTH THE MISC. APPLICATIONS FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20-04-2012. SD/- SD/- (D. K. TYAGI) JUDICIAL MEMBER (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/- -- - COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD