Income Tax Officer, Ward-6(4), Hyderabad V. P Prasen Kumar, Hyderabad

MA 35/Hyd/2017

• Counselvise Citation: [2017] 123 COUNSELVISE.COM (IT) 5621 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s) 21 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 22-12-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 01-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N SWAPNA
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Tax effect
• Section: 43B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B, HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER M.A. NO. 35/HYD/2017 (IN M.A. NO. 63/HYD/2016) (ARISING OUT OF ITA NO. 418/HYD/2014) ASSESSMENT YEAR: 2009-10 THE INCOME TAX OFFICER, WARD-6(4), HYDERABAD VS SRI P. PRASEN KUMAR, HYDERABAD [PAN: AGWPP0903H] (APPLICANT) (RESPONDENT) FOR REVENUE : SMT. N. SWAPNA, DR FOR ASSESSEE : SHRI P. MURALI MOHAN RAO, AR DATE OF HEARING : 01-12-2017 DATE OF PRONOUNCEMENT : 22-12-2017 O R D E R PER B. RAMAKOTAIAH, A.M. : THIS IS A MISCELLANEOUS APPLICATION, PREFERRED ON ANOTHER MISCELLANEOUS APPLICATION NO. 63/HYD/2016, WHEREIN REVENUES MISCELLANEOUS APPLICATION STATING THAT THE TAX EFFECT EXC EEDS RS. 10 LAKHS BY INCLUDING SURCHARGE AND EDUCATION CE SS WAS NOT ACCEPTED, WHEN THE APPEAL IN ITA NO. 418/HYD/2014 WA S DISMISSED ON TAX EFFECT VIDE ORDER DT. 22-12-2015. 2. REVENUE HAS PREFERRED AN APPEAL IN ASSESSEES CA SE IN ITA NO. 418/HYD/2014, WHICH WAS DISMISSED CONSEQUENT TO C BDT 2 M.A. NO. 35/HYD/2017 CIRCULAR NO. 21/2015 DT. 10-12-2015, AS MANDATORY LIM IT FOR PREFERRING APPEAL OF RS. 10 LAKHS WAS NOT FULFILLED IN THIS CASE. VIDE MISCELLANEOUS APPLICATION FILED BY THE REVENUE I N MA NO. 63/HYD/2016 FILED ON 05-10-2016 THAT THE MANDATORY LIMI T EXCEEDS RS. 10 LAKHS PRESCRIBED, THIS BENCH VIDE THE IMPUGNED ORDER DT. 07-12-2016 HAD DISMISSED THE MISCELLANEOUS APPLICATION. IT WAS NOTED THAT THE TAX EFFECT OF RS. 90 ,000/- AND EDUCATION CESS OF RS. 29,700/- DO NOT FORM PART OF INC OME TAX. VIDE PARA 6 OF THE ORDER, THIS BENCH HAS CONSIDERED TH E DEFINITION OF TAX AND RELIED ON CO-ORDINATE BENCH DECISIONS PARTI CULARLY IN THE CASE OF DCIT VS. DOME BELL ELECTRONICS IN ITA NO. 2480/MUM/2012 DT. 22-07-2016 TO CONCLUDE THAT SURCHARGE AND EDUCATION CESS SHOULD NOT BE INCLUDED, WHILE CALCULAT ING THE TAX EFFECT. SINCE THE TAX THEREON WAS RS. 9 LAKHS ONLY, WH ICH IS LESS THAN RS. 10 LAKHS LIMIT PRESCRIBED, THE BENCH WAS OF THE OPINION THAT THERE WAS NO MERIT IN THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE. 3. ON THIS ORDER, THE REVENUE AGAIN PREFERRED THE PRE SENT MISCELLANEOUS APPLICATION IN WHICH THERE IS A REFERE NCE TO THE HON'BLE SUPREME COURT JUDGEMENT IN THE CASE OF CIT VS. SRINIVASAN [83 ITR 346 (S)] TO CONTEND THAT SURCHARGE A ND EDUCATION CESS SHOULD ALSO BE INCLUDED WHILE CALCULA TING THE TAX EFFECT. 4. AFTER HEARING THE LD.DR AND LD.AR, WE ARE OF THE OP INION THAT THE SECOND MISCELLANEOUS APPLICATION PREFERRED BY THE REVENUE IS NOT MAINTAINABLE. IT IS TRUE THAT SUB-SECTION ( 2) OF SECTION 254 CAN BE INVOKED ONLY IN A SITUATION, IF TH ERE IS A MISTAKE IN THE ORDER PASSED BY THE TRIBUNAL UNDER SUB- SECTION (1) 3 M.A. NO. 35/HYD/2017 OF SECTION 254. IN THE IMPUGNED MISCELLANEOUS APPLIC ATION FILED BY THE REVENUE, IT IS AGAINST THE ORDER PASSED ON 07-1 2-2016 WHICH IS AN ORDER PASSED U/S. 254(2) OF THE ACT ITSEL F. THEREFORE, PRINCIPALLY, APPLICATION FILED BY THE REVENUE HAS TO B E REJECTED ON THIS GROUND ALONE AND FOR THIS PURPOSE, RELIANCE CAN BE PLACED ON THE FOLLOWING DECISIONS: (I) CIT V. PRESIDENT, ITAT[1992] 196 ITR 838/63 TAXMAN 3 38 (ORI.) WHEREIN IT HAS BEEN HELD THAT TO ATTRACT APPLICABI LITY OF SECTION 254(2), A MISTAKE WHICH IS SOUGHT TO BE RECTI FIED MUST BE APPARENT FROM RECORD AND THE SAME MUST BE IN ANY ORDER PASSED UNDER SUB-SECTION (1) OF SECTION 254 . THE ORDER REFERRED TO IN SECTION 254(1) IS ONE RELATIN G TO AN APPEAL FILED EITHER BY THE ASSESSEE OR BY THE REVEN UE. THE 'APPEAL' REFERRED TO IN THE PROVISION IS ONE FILED UNDER SECTION 253. THEREFORE, THE ORDER WHICH CAN BE RECTIFI ED MUST BE ONE WHICH HAS BEEN PASSED BY THE TRIBUNAL IN AN APPEAL FILED UNDER SECTION 253. AN ORDER REJECTING AN APPLICATION FOR RECTIFICATION UNDER SECTION 254(2) CAN NOT BE RECTIFIED UNDER SECTION 254(2). THE SAME MAY RELAT E TO AN APPEAL BUT IS NOT AN ORDER PASSED BY THE TRIBUNAL UNDER SUB-SECTION (1) OF SECTION 254 AND THUS, IT WAS H ELD THAT SUBSEQUENT APPLICATION FILED BY THE ASSESSEE WAS RIGHTLY REJECTED BY THE TRIBUNAL. (II) IN THE CASE OF MENTHA & ALLIED PRODUCTS CO. (P.) LTD V. ITAT[2000] 244 ITR 470/[2001] 116 TAXMAN 180 (DELHI ), AFTER REFERRING TO THE PROVISIONS OF SECTION 254(1) A ND (2), IT WAS HELD AS UNDER: 4 M.A. NO. 35/HYD/2017 7. THE RELEVANT PROVISIONS OF SECTION 254 READ AS UN DER: 254. ORDERS OF APPELLATE TRIBUNAL. - (1) THE APPEL LATE TRIBUNAL MAY, AFTER GIVING BOTH THE PARTIES TO THE APPEAL AN OPPORTUNIT Y OF BEING HEARD, PASS SUCH ORDERS THEREON AS IT THINKS FIT. (2) THE APPELLATE TRIBUNAL MAY, AT ANY TIME WITHIN FOUR YEARS FROM THE DATE OF THE ORDER, WITH A VIEW TO RECTIFYING ANY MISTAKE APPARENT FROM THE RECORD, AMEND ANY ORDER PASSED BY IT UNDER SUB-SECTION (1), AND SHALL MAKE SUCH AMENDMENT IF THE MISTAKE IS BROUGHT TO ITS NOTICE B Y THE ASSESSEE OR THE ASSESSING OFFICER; .. THE AFORENOTED PROVISIONS OF LAW ARE CLEAR AND UNAMBIGUOUS. A BARE READING WHEREOF LEAVES NO DOUBT IN OUR MIND THAT THE TRIBUNAL IS COMPETENT TO RECTIFY A MISTAKE APPARENT FROM THE RECORD AND AMEND ANY ORDER WHICH HAS BEEN PASSED UNDER SUB-SECTION (1). ADMITTEDL Y, BY THE IMPUGNED ORDER, THE TRIBUNAL HAS SOUGHT TO RECTIF Y THE ORDER PASSED BY IT UNDER SECTION 256(1) OF THE ACT AND NOT AN ORDER PASSED UNDER SECTION 254(1). WE HAVE NO HESITATION IN HOLDING THAT THE TRIBUNAL IS NOT CLOTHED W ITH AN INHERENT POWER TO RECTIFY / RECALL AN ORDER PASSED UNDER SECTION 256(1) OF THE ACT BY TAKING RECOURSE TO SECTION 254(2) OF THE ACT AND, THEREFORE, THE IMPUGNED ORDER IS ILLEGAL AND INVALID. THE VIEW TAKEN BY US F INDS SUPPORT FROM A DECISION OF THIS COURT IN CIT V. KABIR DAS INVESTMENT LTD [1995] 124 CTR (DELHI) 259: (1994) 210 ITR 898 (DELHI): TC 55R.777.' (III) IN THE CASE OF CIT V. AISWARYA TRADING CO. [2010] 19 2 TAXMAN 385 (KER.), IT WAS HELD THAT THE TRIBUNAL WAS JUSTIFIED IN REFUSING TO ENTERTAIN AN APPLICATION FILED BY THE REVENUE UNDER SECTION 254(2) TO RECTIFY THE ORDER ISSUED BY THE TRIBUNAL IN AN EARLIER RECTIFICATION 5 M.A. NO. 35/HYD/2017 APPLICATION FILED BY THE ASSESSEE, SECOND APPLICATION ON THE VERY SAME ISSUE IS NOT MAINTAINABLE BEFORE THE TRIBUNAL. (IV) IN THE CASE OF DR. S. PANNEERSELVAM V. ASSTT. CIT[2009 ] 319 ITR 135 (MAD.) IT WAS HELD THAT THE TRIBUNAL HAVING ALLOWED FIRST RECTIFICATION PETITION, SECOND PETITION WAS NOT MAINTAINABLE; REMEDY BY WAY OF APPEAL WAS THE ONLY COURSE OPEN. (V) IN THE CASE OF SHRI PADAM PRAKASH (HUF) VS. ITO [131 ITD 121] (DELHI) (SB), IT WAS HELD THAT THE RELIEF WHIC H IS BEING SOUGHT BY ASSESSEE BY WAY OF IMPUGNED RECTIFICATION APPLICATION WAS NOT LEGALLY TENABLE FOR THE REASON THAT THE TRIBUNAL HAS NO POWER TO ADJUDICATE UPON CONSEQUENT APPLICATION FILED U/S. 254(2). IN VIEW OF THE ABOVE DISCUSSION, WE FIND NO FORCE IN THE MISCELLANE OUS APPLICATION FILED AGAINST ANOTHER MISCELLANEOUS APPLICATION BY THE REVENUE AND ACCORDINGLY, THE SAME IS REJECTED. 5. EVEN OTHERWISE ON MERITS, IF ONE WERE TO CONSIDER TH AT SURCHARGE IS PART OF TAX EFFECT [IN FACT THE ENTIRE DISC USSION ON THE EARLIER MISCELLANEOUS APPLICATION ORDER DT. 07-12-20 16 IS ON THIS ISSUE ALONE], THEN THE AMOUNT OF SURCHARGE IS ONLY RS. 90,000/- STILL THE TAX EFFECT IS LESS THAN RS. 10 LAKHS. AS FAR AS INCLUSION OF EDUCATION CESS IS CONCERNED, THE SAME CANNOT BE CONSID ERED AS PART OF TAX, IN VIEW OF THE HON JURISDICTIONAL HIGH C OURT DECISION IN THE CASE OF SRIKAKOLLU SUBBA RAO & CO., VS. UNION OF INDIA & ORS. [173 ITR 708], WHEREIN THE HONBLE JURISDICTION AL HIGH COURT 6 M.A. NO. 35/HYD/2017 HELD THAT MARKET CESS WAS NOT A TAX AND THAT THE PROVISION S OF SECTION 43B HAD NO APPLICATION TO MARKET CESS. THIS PRI NCIPLE WILL ALSO APPLY TO THE EDUCATION CESS LEVIED, WHICH IS SPEC IFICALLY CONSIDERED BY THE HONBLE DELHI HIGH COURT IN THE CASE OF DALMIA CEMENT (BHARAT) LTD., VS. CIT [357 ITR 419] (DELHI), THE PRINCIPLE OF WHICH WAS RELIED IN THE ORIGINAL ORDER DISMISSING THE APPEAL DT. 22-12-2015. BOTH ON FACTS AND ON LAW, THERE IS NO MER IT IN THE SECOND MISCELLANEOUS APPLICATION PREFERRED BY THE REV ENUE. REVENUE SHOULD HAVE GONE IN APPEAL TO HONBLE HIGH COURT, IF IT IS AGGRIEVED ON THE ORDER U/S. 254(1) OR ON THE FIRST MISCELLANEOUS APPLICATION PASSED U/S. 254(2). WE ARE NOT SURE WHY AO REPEATEDLY FILES MISCELLANEOUS APPLICATIONS STATED TO BE WITH APPROVAL OF THE CIT. WE ADVISE THE REVENUE TO BE CARE FUL IN FUTURE, OTHERWISE THERE WILL BE COSTS ATTRACTED FOR THIS U N- NECESSARY AND INFRUCTUOUS PETITIONS. SINCE AN ADVISE IS GIVEN IN THIS ORDER, WE ARE NOT CONSIDERING LEVY OF COSTS IN TH IS CASE. ANY FURTHER INFRUCTUOUS PETITIONS IN THIS CASE OR ANY OTHER CASE WILL CALL FOR LEVY OF COSTS, WHICH THE OFFICERS OF REVENU E SHOULD KEEP IN MIND HEREIN AFTER. 6. IN THE RESULT, MISCELLANEOUS APPLICATION IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND DECEMBER, 2017 SD/- SD/- (D. MANMOHAN) (B. RAMAKOTAIAH) VICE PRESIDENT ACCOUNTANT MEMBE R HYDERABAD, DATED 22 ND DECEMBER, 2017 TNMM 7 M.A. NO. 35/HYD/2017 COPY TO : 1. INCOME TAX OFFICER, WARD-6(4), HYDERABAD. 2.SRI P. PRASEN KUMAR, 8-3-1027/2/D, PLOT NO. 153, SRINAGAR COLONY, HYDERABAD. 3. CIT (APPEALS)-VIJAYAWADA. 4. CIT-II, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.