Income-Tax Officer, Jalna V. Ram Jagannath Singare, Jalna

MA 34/PUN/2020

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 5611 (ITAT-PUNE)
• Duration Of Justice: 1 month(s) 8 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 05-02-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 28-12-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VITTHAL BHOSALE
• Keywords: Bogus purchase; Rectification of order
• Section: 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE (THROUGH VIRTUAL COURT) BEFORE SHRI R.S.SYAL, VP AND SHRI PARTHA SARATHI CHAUDHURY , JM M.A. NO. 34 /PUN/ 2020 ( ARISING OUT OF ITA NO. 790 /PUN/ 2016 ) / ASSESSMENT YEAR : 2011 - 12 THE INCOME TAX OFFICER, WARD - 1, JALNA .. /APPLICANT / V/S. RAM JAGANNATH SINGARE, PROP. GANESH REFINERY & BALAJI OIL MILL, PLOT NO.A - 9/6/2, ADDL. MIDC, JALNA - 431203 PAN: AUWPS7900H / RESPONDENT A SSESSEE BY : SHRI S.N. PURANIK REVENUE BY : SHRI VITTHAL BHOSALE / DATE OF HEARING : 0 5 . 02 .202 1 / DATE OF PRONOUNCEMENT : 05 . 02 .2021 / ORDER PER PARTHA SARATHI CHAUDHU RY, JM : THIS MISCELLANEOUS APPLICATION HAS BEEN FILED BY THE REVENUE ARISING OUT OF ITA NO.790/PUN/2016 FOR ASSESSMENT YEAR 2011 - 12 U/S. 254(2) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) SEEKING RECTIFICATION IN THE ORDER OF TRIBUNAL DATED 03.01.2019. 2 M A NO. 34 /PUN/ 2020 A.Y. 2011 - 12 2. THE GRIEVANCE OF THE REVENUE IN THE MISCELLANEOUS APPLICATION AS PER THE RELEVANT PARAS EXTRACTED AS FOLLOWS: 5. BEING AGGRIEVED WITH THE ORDER PASSED BY THE LD. CIT(A), THE ASSESSEE HAD REFERRED AN APPEAL BEFORE THE HON'BLE ITAT, PUNE. THE HON'BLE ITAT, 'B' BENCH, PUNE VIDE ITS ORDER DATED 03/01/2019 HAD DISPOSED THE ASSESSEE'S APPEAL BY GRANTING THE RELIEF TO T HE ASSESSEE IN AS MUCH AS THAT THE ADDITION AT RS.17,41,834/ - , RS. 15,12 ,700/ - , RS.13,98,572/ - MADE ON ACCOUNT OF BOGUS PURCHASES, DISALLOWANCE OF D ALALI AND DISALLOWANCE OF INTEREST RESPECTIVELY WERE CONFIRMED TO THE EXTENT OF 20% INSTEAD OF 100%. THE HON'BLE ITAT WHILE GRANTING RELIEF TO THE ASSESSEE HAD NOT CONSIDERED THE ORDER OF THE LD. CIT(A). 6. IN VIEW OF THE ABOVE, THE HON'BLE ITAT DID NOT CONSIDER THE ENHANCED AMOUNTS IN RESPECT OF THE DISALLOWANCE M ADE BY THE AO AND CONF IRMED BY THE CIT(A). HOWEVER, THE HON'BLE ITAT RESTRICTED THE DISALLOWANCE TO 20% OF THE TOTAL EXPENSES WITHOUT CLARIFYING THE NA TURE OF EXPENSES. THEREFORE, A MISCELLANEOUS APPLICATION IS SUBMITTED FOR F AVOUR OF KIND CONSIDERATION OF THE HONOURABLE ITAT, PUNE BENCH, PUNE. IN VIEW OF THE ABOVE, IT IS HUMBLY SUBMITTED THAT IS A MISTAKE APPARENT FROM RECORD IN THE ORDER DATED 03.01.2019 IN ITA NO.790/PUN/2016 FOR AY 2011 - 12. IT IS THEREFORE REQUESTED THAT THE ORDER MAY BE RECALLED AND THE ABOVE MENTIONED A PPEALS MAY BE RE - ADJUDICATED ON MERITS. 3. THE LD. DR FOR THE REVENUE SUBMITTED THAT THE TRIBUNAL HAD RESTRICTED THE DISALLOWANCE ON EXPENSES TO THE EXTENT OF 20% OF THE TOTAL EXPENSES INSTEAD OF 100% AND WHAT THE REVENUE WANTS IS THAT DISALLOWANCE ON E XPENSES WHICH WAS CONFIRMED TO THE EXTENT OF 20%, IT SHOULD BE MADE 100%. THE LD. DR FURTHER SUBMITTED THAT THE TRIBUNAL DID NOT CONSIDER THE ENHANCED AMOUNTS IN RESPECT OF THE DISALLOWANCE M ADE BY THE A SSESSING O FFICER AND CONFIRMED BY THE CIT(A). 4. THE LD. AR OF THE ASSESSEE STRONGLY OPPOSED TO THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE AND SUBMITTED THAT THE ORDER OF THE TRIBUNAL DATED 03.01.2019 IS WELL REASONED AND THE SAME DOES NOT CALL FOR ANY REVIEW OR RECTIFICATION. THE LD. AR OF THE A SSESSEE FURTHER SUBMITTED THAT THE REVENUE HAS FAILED TO POINT OUT ANY APPARENT MISTAKE IN THE ORDER WARRANTING 3 M A NO. 34 /PUN/ 2020 A.Y. 2011 - 12 RECTIFICATION. THE REVENUE IS SEEKING REVIEW OF THE ENTIRE ORDER IN THE GRAB OF RECTIFICATION WHICH IS BASICALLY BEYOND THE SCOPE OF SECTION 254 (2) OF THE ACT. THE LD. AR PRAYED FOR DISMISSING THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE. 5 . WE HAVE PERUSED THE CASE RECORDS AND HEARD THE RIVAL CONTENTIONS. WE HAVE ALSO GIVEN CONSIDERABLE THOUGHT TO THE ORDER OF THE TRIBUNAL IN ITA NO.790/ PUN/2016 DATED 03.01.2019. THE TRIBUNAL AFTER ANALYZING ALL THE FACTS AND CIRCUMSTANCES INVOLVED IN THE PRESENT CASE HAS CONFIRMED 20% OF THE DISALLOWANCE ON THE TOTAL EXPENSES. IT IS ALSO OBSERVED THAT WHILE REACHING ITS DECISION IN ITA NO.790/PUN/2016 DA TED 03.01.2019, THE TRIBUNAL HAS ALSO CONSIDERED THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF RELIANCE UTILITIES & POWER PVT. LTD. REPORTED 313 ITR 340 AND IN THE CASE OF HDFC BANK LTD. REPORTED IN 383 ITR 529 AND CONFIRMED 20% OF THE DISAL LOWANCE ON THE TOTAL EXPENSES. THEREFORE, THROUGH THIS MISCELLANEOUS APPLICATION, THE REVENUE IS SEEKING REVIEW OF THE ORDER OF TRIBUNAL, WHICH IS BEYOND THE SCOPE OF POWERS AS ENVISAGED U/S. 254(2) OF THE ACT. 6 . WE ALSO FIND THAT T HERE ARE S ERIES OF DE CISIONS BY THE HON'BLE SUPREME COURT AS WELL AS HON'BLE HIGH COURT EXPOUNDING SCOPE OF EXERCISING POWERS UNDER SECTION 254(2) OF THE ACT. WE DO NOT DEEM IT NECESSARY TO RECITE AND RECAPITULATE ALL OF THEM, BUT SUFFICE TO SAY THAT CORE OF ALL THESE AUTHORITATIVE PRONOUNCEMENTS IS THAT POWER FOR RECTIFICATION UNDER SECTION 254(2) OF THE ACT CAN BE EXERCISED ONLY WHEN MISTAKE, WHICH IS SOUGHT TO BE RECTIFIED, IS AN OBVIOUS AND PATENT MISTAKE, WHICH IS APPARENT FROM THE RECORD AND NOT A MISTAKE, WHICH IS REQUIRED TO BE ESTABLISHED BY ARGUMENTS AND LONG DRAWN PROCESS OF REASONING ON POINTS, ON WHICH THERE MAY CONCEIVABLY BE TWO OPINIONS. FOR FORTIFYING THIS VIEW, WE MAKE REFERENCE TO THE DECISION OF THE 4 M A NO. 34 /PUN/ 2020 A.Y. 2011 - 12 HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF ACIT VS. SAURASHTRA KUTCH STOCK EXCHANGE LD., 262 ITR 146 WHICH HAS BEEN UPHELD BY THE HON'BLE SUPREME COURT REPORTED IN 305 ITR 227. 7 . THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. RAMESH ELECTRIC & TRADING COMPANY REPORTED AS 203 ITR 497 HAS HELD THAT THE SCOPE OF SECTION 254(2) IS LIMITED TO RECTIFICATION OF MISTAKE APPARENT FROM RECORD ITSELF AND NOT RECTIFICATION IN ERROR OF JUDGMENT. THE RELEVAN T OBSERVATIONS OF THE HON'BLE HIGH COURT ARE AS UNDER: THE TRIBUNAL CANNOT, IN EXERCISE OF ITS POWER OF RECTIFICATION, LOOK INTO SOME OTHER CIRCUMSTANCES WHICH WOULD SUPPORT OR NOT SUPPORT ITS CONCLUSION SO ARRIVED AT. THE MISTAKE WHICH THE TRIBUNAL IS ENTITLED TO CORRECT IS NOT AN ERROR OF JUDGMENT BUT A MISTAKE WHICH IS APPARENT FROM THE RECORD ITSELF. WE ARE OF CONSIDERED VIEW THAT IN THE GUISE OF RECTIFICATION, THE REVENUE IS SEEKING REVIEW OF THE ORDER OF TRIBUNAL, WHICH IS BEYOND THE SCOPE OF POW ERS AS ENVISAGED U/S. 254(2) OF THE ACT. 8 . IN VIEW OF THE ABOVE AND AS PER THE MISCELLANEOUS APPLICATION FILED BEFORE US, WE DO NOT FIND ANY MISTAKE, MUCH LESS ANY APPARENT MISTAKE THAT WARRANTS RECTIFICATION IN THE ORDER OF TRIBUNAL DATED 03.01.2019 . TH E TRIBUNAL IN ITS OWN WISDOM AFTER CONSIDERING THE DECISIONS OF THE HONBLE JURISDICTIONAL HIGH COURT HAD ADJUDICATED THE APPEAL OF THE ASSESSEE. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE TRIBUNAL HAS RIGHTLY ADJUDICATED THE ISSUE IN CONFIRMING 20% OF THE TOTAL EXPENSES AND THEREFORE , PRAYER FOR MAKING IT AS 100% OF SUCH EXPENSES IS NOT WARRANTED WITHIN THE SCOPE OF POWER AS ENVISAGED U/S.254(2) OF THE ACT WHEREIN ONLY MISTAKE APPARENT FROM RECORD 5 M A NO. 34 /PUN/ 2020 A.Y. 2011 - 12 COULD BE RECTIFIED . ACCORDINGLY, MISCELLANEOUS APPLI CATION FILED BY REVENUE IS DISMISSED BEING DEVOID OF ANY MERIT. 9 . IN THE RESULT, MISCELLANEOUS APPLICATION FILED BY REVENUE IS DISMISSED. ORDER PRO NOUNCED ON 05 TH DAY OF FEBRUARY , 20 2 1 . SD/ - SD/ - R.S.SYAL PARTHA SARATHI CHAUDHURY VICE PRESIDENT JUDICIAL MEMBER / PUNE; / DATED : 05 TH FEBRUARY , 202 1 . SB / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS) - 1, AURANGABAD. 4. THE PR. CIT - 1, AURANGABAD. 5 . , , , / DR, ITAT, B BENCH, PUNE. 6 . / GUARD FILE. / BY ORDER, // TRUE COPY // / PRIVATE SECRETARY , / ITAT, PUNE . 6 M A NO. 34 /PUN/ 2020 A.Y. 2011 - 12 DATE 1 DRAFT DICTATED ON 0 5.0 2 .2021 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 05.02 .2021 SR.PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 DATE OF UPLOADING OF ORDER SR.PS/PS 8 FILE SENT TO BENCH CLERK SR.PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R 11 DATE OF DISPATCH OF ORDER