M/s. Team Ferro Alloys Pvt.Ltd., Vapi V. The ACIT., Vapi Circle, Vapi

MA 36/SRT/2018

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 1784 (ITAT-SURAT)
• Duration Of Justice: 3 year(s) 8 month(s) 8 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 03-08-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 28-06-2022
• Assessment Year: 2008-2009
• Appeal Filed On: 25-11-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ANUPAMA SINGLA
• Keywords: Opportunity of being heard
• Section: 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JM & DR. A.L.SAINI, AM Miscellaneous Application No.36/SRT/2018 (Arising out of ITA No.618/AHD/2012) (िनधाᭅरणवषᭅ / Assessment Year: (2008-09) (Virtual Court Hearing) M/s Team Ferro Alloys Pvt. Ltd., Survey No.357/ 2/2 /1 & 357/2/32, B/h Dadra Garden Village Dadra-396 230,U.T. of Dadra & Nagar Haveli Vs. Deputy Commissioner of Income-Tax Vapi Circle, Fortune Square-II, 7 th Floor, Room No.704, Daman Road, Chala,Vapi-396191 ̾थायीलेखासं./जीआइआरसं./PAN/GIR No.: AAACT 8925 A (Applicant) (Respondent) Assessee by : Shri A. Gopalakrishnan, CA Respondent by : Ms. Anupama Singla – Sr. D.R सुनवाई कᳱ तारीख/ Date of Hearing : 29/06/2022 घोषणा कᳱ तारीख/Date of Pronouncement : 04/08/2022 आदेश / O R D E R PER DR. A. L. SAINI, ACCOUNTANT MEMBER: By way of this Miscellaneous Application (MA), the assessee has sought to point out that a mistake apparent from the record within the meaning of section 254(2) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) has crept in the order of the Tribunal dated 26.04.2018 in ITA No.618/AHD/2012 for assessment year 2008-09. 2. Learned Counsel for the assessee pleaded that contention of the assessee in this miscellaneous application is that there was an independent agreement between the assessee- company and M/s. Ispat Industries Limited and the income from Calcium Management Services cannot be held as income derived from industrial undertaking of Daman & Nagar Haveli. However, Page | 2 MA No.36/SRT/2018 (a/o ITA No.618/AHD/2012 M/s Team Ferro Alloys Pvt. Ltd. Tribunal has passed the order without considering real facts. Therefore, Tribunal order may be recalled. The ld Counsel also invited our attention towards para no.13 of the MA, which is reproduced below: “13. It is respectfully submitted that the Hon'ble Tribunal has failed to consider the essential fact that the assessee company had manufactured Cored Wire in its own factory premises and sold the same to M/s Ispat Industries Ltd., at an agreed price. What was ascertained at the premises of M/s Ispat Industries Limited was merely the quality of the product manufactured by M/s Ispat Industries Limited after using the Cored Wire in the manufacture process, as the better quality products of M/s Ispat Industries Limited would entitled higher price of the Cored Wire supplied by the assessee company. Therefore, merely activity of monitoring the calcium content in the products of M/s Ispat Industries Limited using the Cored Wire supplied by the assessee company had taken place at the premises of M/s Ispat Industries Ltd. Therefore, it is submitted that the following are the mistakes apparent from the records in the order of the Hon. Tribunal which requires rectification of the order of the Hon. Tribunal.” i) There was an independent agreement between the assessee company and M/s. Ispat Industreis Limited. There was no separate agreement between the assessee company and M/s. Ispat Industries Limited for ‘Calcium Management Services. It was the understanding between the two parties which was recorded in the Purchase order of M/s Ispat Industries Ltd., that, for better quality of products manufactured by M/s Ispat Industries Limited using the Cored Wire supplied, the assessee company would be entitled for a higher price for the said supply of Cored Wire. ii) The calcium recovery process was carried by the customer at his own place using its own infrastructure, labours and outside Daman & Nagar Haveli Region, therefore the income from Calcium Management Services cannot be held as income derived from industrial undertaking of Daman & Nagar Haveli. 3. Thus, Ld. Counsel submitted that Tribunal was right in its observation that calcium recovery process was carried by the customer (i.e. M/s. Ispat Industries Limited) at its own place using its own infrastructure, labour and outside Daman & Nagar Haveli Region. However, the Tribunal erred in coming to the conclusion that “therefore the income Calcium Management Services could not be held to be as income derived from industrial undertaking at Daman & Nagar Haveli, as the manufacture of Page | 3 MA No.36/SRT/2018 (a/o ITA No.618/AHD/2012 M/s Team Ferro Alloys Pvt. Ltd. the Cored Wires had already taken place at the premises of the assessee company at Dadra and the sale had also taken place from assessee’s premises at Dadra itself. The only activity remaining thereafter was ascertaining the quality of the products manufactured by M/s. Ispat Industries Limited at Bombay as that would determine the higher price to be paid to the assessee company for supply of Cored Wires which was recorded by the assessee company under the head “Calcium Management Services”. In other words, the amount of Calcium Management Services was nothing but the sale price of the Cored Wire supplied by it. The assessee-company, therefore, respectfully submits that as there is a mistake apparent from the record in the order of the Hon'ble Appellate Tribunal in the form of not considering the facts brought on record by the assessee company and therefore, the order of the Hon'ble Appellate Tribunal deciding the appeal of the assessee company suffers from the mistakes apparent from the record and the same should be rectified. 4. The Ld. Departmental Representative (Ld. DR) for the Revenue submits that Tribunal has considered the factual position of the assessee and delivered the order by passing a speaking order in both appeals of ITA No.618/AHD/2012 and 2126/AHD/2013 respectively. Therefore, the order passed by the Tribunal does not contain any mistake apparent from record and hence order should not be re-called. 5. We have heard both the parties and perused the materials available on record. We note that Tribunal after taking into account the facts as narrated in the assessee’s case in para no.8 of Tribunal order and then adjudicated the issue by passing a speaking order, vide para no.14 of the order of Tribunal. At this juncture, let us, consult the provisions of section 254(2) of the Act, which reads as follows: Page | 4 MA No.36/SRT/2018 (a/o ITA No.618/AHD/2012 M/s Team Ferro Alloys Pvt. Ltd. “Orders of Appellate Tribunal. “254. (2) The Appellate Tribunal may, at any time within [six months from the end of the month in which the order was passed], 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 by the assessee or the [Assessing] Officer. Provided that an amendment which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee, shall not be made under this sub-section unless the Appellate Tribunal has given notice to the assessee of its intention to do so and has allowed the assessee a reasonable opportunity of being heard : [Provided further that any application filed by the assessee in this sub-section on or after the 1st day of October, 1998, shall be accompanied by a fee of fifty rupees.]” 6. Having gone through sub-section 2 of section 254 of the Act, as noted above, we observed that “any mistake apparent from the record” can be rectified. The plain meaning of the word 'apparent' is that it must be something which appears to be ex-facie and incapable of argument and debate. Thus, section 254(2) of the Act does not cover any mistake which may be discovered by a complicated process of investigation, argument or proof. Therefore, amendment of an order under section 254(2) of the Act, does not mean entire obliteration of order originally passed by the Tribunal and its substitution by a new order of Tribunal, this is not permissible under section 254(2) of the Act. Power to rectify an order, under section 254(2) of the Act is extremely limited and it does not extend to correcting errors of law, or re-appreciating factual findings. 7. Our view is also fortified by the recent judgment of Hon'ble Supreme Court in the case of Commissioner of Income Tax (IT-4) Mumbai vs. M/s Reliance Telecom Ltd. Civil Appeal No.7110 of 2021 dated 12.03.2021, wherein the Apex Court held as follows:- “3.1 We have considered the order dated 18.11.2016 passed by the IATT allowing the miscellaneous application in exercise of powers under section 254(2) of the Act and recalling its earlier order dated 06.09.2013 as well as the original order passed by the ITAT dated 06.09.2013. Page | 5 MA No.36/SRT/2018 (a/o ITA No.618/AHD/2012 M/s Team Ferro Alloys Pvt. Ltd. 3.2 Having gone through both the orders passed by the ITAT, we are of the opinion that the order passed by the ITAT dated 18.11.2016 recalling its earlier order dated 06.09.2013 is beyond the scope and ambit of the powers under Section 254(2) of the Act and recalling its earlier order dated 06.09.2013, it appears that ITAT has re-heard the entre appeal on merits as if the ITAT was deciding the appeal against the order passed by the C.I.T. In exercise of powers under section 254(2) of the Act, the Appellate Tribunal may amend any order passed by it under sub-section (1) of Section 254 of the Act with a view to rectifying any mistake apparent from the record only. Therefore, the powers under Section 254(2) of the Act are akin to order XLVII Rule 1 CPC. While considering the application under Section 254(2) of the Act, the Appellate Tribunal is not required to re-visit its earlier order and to go into detail on merits. The powers under Section 254(2) of the Act are only to rectify/correct any mistake apparent from the record.” 8. Respectfully following the judgement of Hon'ble Supreme Court in the case of M/s Reliance Telecom Ltd. (supra) we dismiss the assessee’s Miscellaneous Application, as there is no mistake apparent from the record. 9.In the result, Miscellaneous Application filed by the assessee is dismissed. Order pronounced on 04/08/2022 by placing the result on the Notice Board as per Rule 34(5) of the income-tax (Appellate Tribunal) Rule 1963. Sd/- Sd/- (PAWAN SINGH) (Dr. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER Surat/ᳰदनांक/ Date: 04/08/2022 Dkp outsourcing Sr.P.S Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. Pr.CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // True Copy // Assistant Registrar/Sr. PS/PS ITAT, Surat