The Pr CIT-1, Bhopal V. Shri Arvind Kumar Singh , Bhopal

MA 36/Ind/2023

• Counselvise Citation: [2023] 100 COUNSELVISE.COM (IT) 6616 (ITAT-INDORE)
• Duration Of Justice: 1 month(s) 19 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 10-10-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 21-09-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 21-08-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revision of order
• Section: 147; 54; 263; 143(3); 54F; 250; 254(2); 119

Judgement Text

Page 1 of 7 आयकर अपीलȣय अͬधकरण, इंदौर Ûयायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI B.M. BIYANI, ACCOUNTANT MEMBER MA Nos. 35 to 38/Ind/2023 (Arising out of ITA Nos. 132 to135/Ind/2021) Assessment Years: 2012-13 to 2015-16 The Pr. CIT-1, Bhopal बनाम/ Vs. Shri Arvind Kumar Singh, 5, Nafees Complex, 210, Zone-1, MP Nagar, Bhopal (Revenue /Applicant) (Assessee / Respondent) PAN: BGQPS2705D Assessee by Shri S.S. Deshpande, C.A. Revenue by Shri Ashish Porwal, Sr. DR Date of Hearing 22.09.2023 Date of Pronouncement 11.10.2023 आदेश / O R D E R Per B.M. Biyani, A.M.: These four Misc. Applications [“M/As”] have been filed by the Revenue seeking recall of the consolidated-order dated 10.11.2022 in ITA No. 132 to 135/Ind/2021 of ITAT, Indore Bench [“impugned order”]. 2. The Registry has informed that the present M/As have been filed on 23.08.2023 after a delay of 82 days beyond the prescribe time and therefore time-barred. However, on perusal of case-file, we come across the letters exchanged between various offices, namely (i) Office order dated 05.07.2023 issued by PCIT-1, Bhopal authorizing ITO-1(2), Bhopal (“AO”) to file these Pr. CIT , Bhopal vs. Shri Arvind Kumar Singh, Bhopal M.A.Nos. 35 to 38/Ind/2023 – A.Ys.2012-13 to 2015-16 Page 2 of 7 M/As; (ii) Letter dated 13.07.2023 filed by AO to the office of ITAT for filing these M/As, and (iii) Lastly, letter dated 23.08.2023 filed by AO to the office of ITAT for filing of these M/As. After perusal, we and the learned Representatives of both sides are satisfied that these M/As were filed in time and there was no delay. Therefore, these matters are proceeded with for hearing. 3. Ld. DR for Revenue/Applicant submitted that the issue raised in all these four M/As is identical, therefore, any one M/A can be taken for adjudication. The grounds/issues raised by revenue in first M/A No. 35/Ind/2023 for AY 2012-13, are as under :- “1. On the facts and in the circumstances of the case, the Hon'ble ITAT has erred in allowing the appeal of the assessee as the issue pending before the CIT(A) is regarding disallowance of donations received for the temple in the individual capacity and not as trustee of public trust and PCIT’S order u/s 263 of the Income-tax Act, 1961, is regarding cash sales which are totaling different and not co-related with each other in any circumstances. 2. On the facts and in the circumstances of the case, the Hon'ble ITAT has erred in quashing the PCIT’S order u/s 263 of the Income-tax Act, 1961, on the plea of the assessee that the larger issue is pending before the CIT so the PCIT cannot invoke jurisdiction u/s 263 of the Act, as the issues involved in the case before both authorities are entirely different and not co-related with each other in any circumstances.” 4. Referring to the details of above grounds/issues and analyzing the same with reference to the impugned order as well as the relevant orders of lower authorities, Ld. DR for Revenue submitted that during scrutiny of AY 2012-13, the AO required assessee to explain the sources of cash deposit of Rs. 1,08,78,635/- made into Bank A/c for which the assessee explained two sources, namely, (i) Sale of books and (ii) Donations received for construction of temple. While completing assessment, the AO accepted sale of books at Rs. 43,91,275/- and made addition for remaining amount of Rs. Pr. CIT , Bhopal vs. Shri Arvind Kumar Singh, Bhopal M.A.Nos. 35 to 38/Ind/2023 – A.Ys.2012-13 to 2015-16 Page 3 of 7 64,87,360/- on account of donation receipts. Thereafter, the assessee carried matter in the first-appeal contesting the addition made by the AO. While the first appeal was pending (which is still pending as informed by Ld. AR for assessee standing at the Bar) before CIT(A), the PCIT passed revision- order u/s 263 terming the assessment-order as erroneous-cum-prejudicial to the interest of revenue qua the addition of Rs. 43,91,275/- not made by AO. Thereafter, when the assessee challenged revision-order before ITAT, Indore, the ITAT quashed revision-order by holding thus in the impugned order:- “9. The assessee in its reply dated 11.12.2019 submitted that during the course of assessment proceedings under section 147 r.w.s 143(3) various questions relating to the deposit of cash in the bank account were raised by the Department and it was submitted by the assessee that the cash deposit was partly out of proceeds of donation received from Mandir construction and partly for proceeds of sale of books and other documents whereupon the Ld.AO on 27.12.2017 finally made the addition of Rs. 64,87,360/- which was also appealed against and the same is still pending before the First Appellate Authority. 10. However, the 263 proceedings has been finalized on 15.12.2020 holding the assessment order under section 147 r.w.s 143(3) of the Act dated 27.12.2017 for the year under consideration passed by the ITO 1(2), Bhopal to be erroneous and prejudicial to the interest of Revenue. The Ld. AO has been directed to make fresh assessment after giving reasonable opportunity of being heard to the assessee. 11. At the time of hearing of the instant appeal the Ld. Counsel appearing for the assessee submitted before us that the order dated 27.12.2017 passed by the AO under Section 143 r.w.s 147 of the Act is pending before First Appellate Authority on the issue which is again been raised by the Ld. PCIT by and under notice under section 263 of the Act. Since the larger issue is pending before the Commissioner of Appeal the PCIT cannot invoke jurisdiction u/s 263 of the Act. Exercising power under section 263 is barred by Clause (c) of Explanation 1 of section 263 of the Act. Hence the order impugned proceeding is liable to be quashed as the ultimate argument advanced by the Ld. A.R. In support of his submission he has relied upon the following judgment. (i) CIT, Meerut vs. Vam Resorts & Hotels Ltd., reported in (2019) 418 ITR Taxmann.com 723(Allahabad). (ii) Smt. Renuka Philip Vs. ITO, Business Ward-XV(2), Madras High Court reported in (2019) 101 taxmann.com 119 (Madras) (iii) RNR Devcon Vs PCIT, Bhopal in ITA No.459/Ind/2018 Pr. CIT , Bhopal vs. Shri Arvind Kumar Singh, Bhopal M.A.Nos. 35 to 38/Ind/2023 – A.Ys.2012-13 to 2015-16 Page 4 of 7 12. We have heard the rival submissions made by the respective parties and we have perused the relevant materials available on record. We find that the issue is covered by the ratio laid down in the matter of CIT vs. Vam Resorts & Hotels Ltd. (supra), passed by the Hon’ble Allahabad High Court, and the judgment passed by the Madras High Court in the case of Smt. Renuka Philip (supra). In fact, the Co-ordinate Bench, in the case of Manishbhai Laljibhai Vekaria vs. PCIT, Rajkot in ITA No.107/Rjt/2022 in the identical situation has been pleased to quash the proceeding initiated under Section 263 of the Act with the following observation: “6. It appears from the records that Ld. AO has examined each and every aspect of the matter after analyzing the entire set of documents submitted by the assessee as demanded by Revenue which is reflecting in the order passed by the Ld. AO. In that view of the matter we do not justify the remand order to be sustainable particularly when the appeal has been preferred by the assessee against the said order passed by the Ld. AO. We further note that the Ld. CIT(A) is yet to decide the order either way and therefore, we do not find any reason to initiate and proceed against the said order passed by the Ld. AO under Section 147 of the Act taking recourse of the provision of law under Section 263 of the Act by holding the order passed by the Ld. AO erroneous and prejudicial to the interest of Revenue. In our considered opinion, the same is premature. We have carefully considered the judgment relied upon by the Ld. A.R. in the matter of Smt. Renuka Philip (supra). While dealing with the issue the Hon’ble Court was pleased to observe as follows: “22. The above explanation makes it clear that when the appeal is pending before the Commissioner, the exercise of jurisdiction under Section 263 of the Act is barred. The Commissioner in the order dated 14,03.2012 states that the appeal pertains to the claim made by the assessee under Section 54 of the Act and it has got nothing to do with the order passed by the Assessing Officer under Section 54F of the Act. The said finding rendered by the Commissioner is wholly unsustainable, since the assessee went on appeal against the reassessment order dated 31.12.2009 stating that his claim for deduction under Section 54 of the Act should be accepted. 23. Therefore, in the process of considering as to what relief the assessee is entitled to, the Assessing Officer held that the assessee is entitled to claim deduction under Section 54F of the Act and assigned certain reasons for that. Therefore, the larger issue was pending before the Commissioner of Appeals, and in such circumstances, the Commissioner could not exercise power under Section 263 of the Act on account of the statutory bar. Therefore, on this ground also, the assumption of jurisdiction under Section 263 of the Act was wholly erroneous.” Apart from that we have further considered the judgment passed by the Hon’ble Allahabad High Court in the case of Vam Resorts & Hotels Pvt. Ltd. (supra). We find that on the identical situation the Hon’ble Court was pleased to quash the order passed under Section 263 of the Act during the pendency of the appeal preferred by the assessee under Section 250 of the Act. While upholding the order passed by the Tribunal in holding the order exercising power under Section 263 was barred by Clause (c) of Explanation 1 of Section 263 of the Act was the Hon’ble Court observed as follows: Pr. CIT , Bhopal vs. Shri Arvind Kumar Singh, Bhopal M.A.Nos. 35 to 38/Ind/2023 – A.Ys.2012-13 to 2015-16 Page 5 of 7 “25. As, Clause (c) of Explanation 1 to Section 263 of the Act provides that when an appeal is pending before the Commissioner, the exercise of jurisdiction under Section 263 of the Act by CIT is barred. Thus, in the present case, the CIT wrongly exercised jurisdiction under Section 263 of the Act by remanding back the matter to assessing authority on 25.3.2013, while the appeal was decided by CIT (A) on 5.6.2013. Thus, the order passed by the ITAT does not suffer from any irregularity and needs no interference. 26. As far as the word "record" appearing in Clause (b) of Explanation- 1 to Section 263 is concerned, it means the record available at the time of examination by the Commissioner of Income Tax and not any material or record available subsequent to his examination or exercise of power under Section 263. Thus, any order passed by the AO in the assessment proceedings after the remand by the CIT cannot be looked upon and the argument made by the counsel for the revenue for relying upon the fresh assessment order made on 7.3.2004 under Section 263/143(3) of the Act cannot be accepted in view of the above provision of law. 27. In the present case, the Tribunal had recorded specific finding of fact that the assessing authority had examined each and every aspect of the case on which the remand order hinges, as such the remand order was not sustainable in the eyes of law. 28. Considering the facts and circumstances of the case, we are of the considered opinion, that the revenue has failed to make any case for interference in the order of the ITAT, as the CIT had proceeded to remand the matter back to the assessing authority while the appeal of the assessee was pending under Section 250 and the power of exercise under Section 263 was barred by Clause (c) to Explanation 1 of Section 263 of the Act. Further, the remand order by the CIT was based merely on suspicion and presumption. 29. The appeal is devoid of merit and is hereby dismissed. The question of law is, therefore, answered against the revenue and in favour of the assessee.” Hence, respectfully relying upon the same we do not find any reason/basis of the impugned proceeding under Section 263 of the Act when the appeal preferred by the assessee under Section 250 of the Act before the CIT(A) is pending against the order passed by the Ld. AO under Section 147 of the Act which has been sought to be revised by the Ld. PCIT in the garb of the provision of Clause (c) of Explanation 1 of Section 263 of the Act. The same is, thus, found to be unsustainable and therefore, quashed. Assessee’s appeal is, therefore, allowed. 13. Hence, respectfully relying upon the order passed by the Coordinate Bench, the proceeding imitated under section 263 of the Act is found to be not sustainable. The same is, thus, quashed. Assessee’s appeal is therefore, allowed. 14. In the result, the appeal filed by the assessee is allowed.” 5. Therefore, Ld. DR submitted, the ITAT has quashed revision-order on the premise that the larger issue relating to cash-deposit in Bank A/c, as Pr. CIT , Bhopal vs. Shri Arvind Kumar Singh, Bhopal M.A.Nos. 35 to 38/Ind/2023 – A.Ys.2012-13 to 2015-16 Page 6 of 7 raised by PCIT in revision proceeding, was already a subject-matter of appeal before CIT(A); hence the revision could not have been done by virtue of a bar imposed in Clause (c) of Explanation 1 to section 263. Ld. AR submitted that the fact, however, is that the PCIT made revision qua the portion of Rs. 43,91,275/- relatable to sale of books wrongly accepted by AO which was not at all pending before CIT(A). Therefore, according to Ld. DR, the ITAT has wrongly understood the case and quashed revision-order; the ITAT’s order needs to be re-called. 6. Replying to above, Ld. AR for assessee submitted that the issue of cash-deposit in bank a/c was before CIT(A) and the acceptance of sale of books by AO as part-source of such deposits does not mean that the issue was not subject-matter of appeal before CIT(A). Ld. AR submitted that the ITAT has correctly held that the larger issue of deposit in Bank A/c was a subject-matter of pending appeal before CIT(A). Therefore, there is no mistake in the order of ITAT. Ld. AR submitted that these M/As are devoid of any merit and must be dismissed. 7. We have considered rival submissions of both sides. After a mindful consideration, we find that the ITAT has adequately dealt the issue contested by both sides in the original appeal and given its well-thought out decision accepting the specific pleading made by counsel of assessee to the effect that the larger issue was pending before CIT(A). At the best, one may claim that there was an ‘error of decision’ on the part of ITAT but certainly there is no apparent mistake which can give rise to rectification u/s 254(2). Therefore, we are not convinced by the claim of revenue that there is any apparent mistake in the impugned order. Needless to mention that the scope and ambit of section 254(2) is very confined i.e. it only permits rectification of apparent mistake but certainly does not allow review of order so as to change earlier decision. Consequently, we do not find any merit in these M/As filed by revenue; the same are hereby dismissed. Pr. CIT , Bhopal vs. Shri Arvind Kumar Singh, Bhopal M.A.Nos. 35 to 38/Ind/2023 – A.Ys.2012-13 to 2015-16 Page 7 of 7 8. Resultantly, these M/As are dismissed. Order pronounced in the open court on 11.10.2023. Sd/- sd/- (VIJAY PAL RAO) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER Indore Ǒदनांक /Dated : 11.10.2023 CPU/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Sr. Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore