PIRAMAL CORPORATE SERVICES P. LTD., MUMBAI V. DY CIT, RANGE-7(1), MUMBAI

MA 373/MUM/2022

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The case involves Piramal Corporate Services Pvt. Ltd., which filed a Miscellaneous Application seeking recall/rectification of an earlier Tribunal order concerning disallowances made under Rule 8D(2)(iii) of the Income-tax Rules. The Tribunal had previously disallowed certain expenses related to investments yielding exempt income under section 14A of the Income-tax Act. The assessee argued that the Tribunal had inadvertently noted that no appeal was preferred against the disallowance under Rule 8D(2)(iii), which was incorrect as the issue was indeed raised and needed adjudication. The Departmental Representative objected to the application on grounds of limitation, which was countered by the assessee citing a relevant High Court decision. However, the Tribunal found that the application did not meet the criteria for a mistake apparent from the record and thus dismissed the application.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 123253 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 14 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 18-06-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 27-04-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 04-12-2022
• Other Referred Cases: Shetkari Sahkari Ginning and Pressing Factory v. ACIT [2021] 123 taxmann.com 301 (Bombay)
• Laws Referred To: Income-tax Act, Income-tax Rules
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Period of limitation; Rule 8D
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “C” MUMBAI BEFORE SHRI KULDIP SINGH (JUDICIAL MEMBER) AND SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) M.A. No. 373/MUM/2022 (Arising out of ITA No. 475/MUM/2021) Assessment Year: 2011-2012 Piramal Corporate Services Pvt. Ltd., (as successor to Piramal Corporate Services Limited), Piramal Tower Annexe, Peninsula Corporate Park, Ganpatrao Kadam Marg, Lower Parel, Mumbai-400013. Vs. Dy. CIT- Range 7(1), Room No. 624, Aayakar Bhavan, M.K. Road, Mumbai-400020. PAN No. AAACJ 5669 H Appellant Respondent Assessee by : Mr. Ronak Doshi a/w Priyanka Gandhi, AR Revenue by : Mrs. Mahita Nair, DR Date of Hearing : 28/04/2023 Date of pronouncement : 19/06/2023 ORDER PER OM PRAKASH KANT, AM By way of this Miscellaneous Application, the assessee is seeking recall/rectification of the order of the Tribunal dated 27.04.2022 passed in ITA No. 475/Mum/2021for AY 2010-11. 2. The Ld. Departmental Representative (DR) objected the application on the ground that same is barred by limitation. The Ld. Counsel of the assessee on the other hand submitted that in view of decision of the Hon’ble Bombay High Court in the case of Shetkari Sahkari Ginning and Pressing Factory v. ACIT [2021] 123 taxmann.com 301 (Bombay) months for filing the Miscellaneous Application commence from the date of obtaining knowledge of the order of the assessee was on 02.07.2022 and therefore six month on 31.07.2023 and thus the Miscellaneous Application filed on 05.12.2022 is well within the period of the expiry of limitation. 2.1 We have heard rival submission of the parties on the issue of limitation. In view of the Shetkari Sahkari Ginning and Pressing Factory (supra Miscellaneous Application is treated as received limitation period and accordingly adjudication. 3. The assessee is seeking rectification grounds. Firstly, it is submitted that ground related to disallowance of Rs.34,11,029/- under Rule 8D(2)(iii) has not been adjudicated. It was submitted that the Tribunal has noted the fact in para 7 that no appeal has been preferred by the assesse disallowance under Rule 8D(2)(iii) of the Rules. According to the Ld. Piramal Corporate Services Pvt. Ltd. (as successor to Piramal Corporate Services Ltd.) The Ld. Departmental Representative (DR) objected the the ground that same is barred by limitation. The Ld. Counsel of the assessee on the other hand submitted that in view of decision of the Hon’ble Bombay High Court in the case of Shetkari Sahkari Ginning and Pressing Factory v. ACIT [2021] mann.com 301 (Bombay), the period of limitation of six for filing the Miscellaneous Application commence from the date of obtaining knowledge of the order, which in the case of the assessee was on 02.07.2022 and therefore six month 31.07.2023 and thus the Miscellaneous Application filed on 05.12.2022 is well within the period of the expiry of limitation. We have heard rival submission of the parties on the issue of limitation. In view of the binding precedent in the case Shetkari Sahkari Ginning and Pressing Factory (supra Miscellaneous Application is treated as received limitation period and accordingly, we admitted The assessee is seeking rectification/recall only grounds. Firstly, it is submitted that ground related to disallowance under Rule 8D(2)(iii) has not been adjudicated. It was submitted that the Tribunal has noted the fact in para 7 that no appeal has been preferred by the assesse disallowance under Rule 8D(2)(iii) of the Rules. According to the Ld. Piramal Corporate Services Pvt. Ltd. (as successor to Piramal Corporate Services Ltd.) 2 M.A No. 373/Mum/2022 The Ld. Departmental Representative (DR) objected the the ground that same is barred by limitation. The Ld. Counsel of the assessee on the other hand submitted that in view of decision of the Hon’ble Bombay High Court in the case of Daryapur Shetkari Sahkari Ginning and Pressing Factory v. ACIT [2021] he period of limitation of six for filing the Miscellaneous Application commences only which in the case of the assessee was on 02.07.2022 and therefore six months expire 31.07.2023 and thus the Miscellaneous Application filed on 05.12.2022 is well within the period of the expiry of limitation. We have heard rival submission of the parties on the issue of binding precedent in the case of Daryapur Shetkari Sahkari Ginning and Pressing Factory (supra), the Miscellaneous Application is treated as received within in the we admitted the same for /recall only on two grounds. Firstly, it is submitted that ground related to disallowance under Rule 8D(2)(iii) has not been adjudicated. It was submitted that the Tribunal has noted the fact in para 7 that no appeal has been preferred by the assessee against the disallowance under Rule 8D(2)(iii) of the Rules. According to the Ld. Counsel of the assessee, this is an inadvertent observation assessee has duly raised the ground challenging the disallowance under Rule 8D(2)(iii) of the Income adjudicated and thus order of the Tribunal this issue. 4. We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. We find that the assessee has utilized borrowed funds for investments eligible motudisallowance of exempted income. The Assessing Officer however disallowed entire interest against borrowed funds of Rs.3,54,90,304/ section 14A and made disallowance of 0.5% of average investment of Rs.68,22,05,808/- exempted income, which was computed to made addition under Rule 8D(2)(iii) of the Rules. relation to disallowance u/s 14A of the Act, impugned order dated 27.04.2022 has followed the finding of the Tribunal in ITA No. 4137 & 6645/Mum/2012 for AY 2008 restored the matter back to the file of the Assessing Officer. Since, the disallowance under Rule 8D(2)(iii) of the Income part of the disallowance u/s 14A of the Act and that issue has been restored back to the file of the Assessing Officer contention of the assessee Piramal Corporate Services Pvt. Ltd. (as successor to Piramal Corporate Services Ltd.) Counsel of the assessee, this is an inadvertent observation duly raised the ground challenging the disallowance under Rule 8D(2)(iii) of the Income-tax Rules, which has not been adjudicated and thus order of the Tribunal needs to be recalled on We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. We find that the assessee has utilized borrowed funds for for yielding exempted income and made allowance of interest of Rs.3,00,14,446/ . The Assessing Officer however disallowed entire borrowed funds of Rs.3,54,90,304/ section 14A and made disallowance of 0.5% of average investment - forinvestingin investments eligible for yielding which was computed to Rs.34,18,029/ made addition under Rule 8D(2)(iii) of the Rules. We note that relation to disallowance u/s 14A of the Act, the Tribunal in its dated 27.04.2022 has followed the finding of the o. 4137 & 6645/Mum/2012 for AY 2008 restored the matter back to the file of the Assessing Officer. Since, the disallowance under Rule 8D(2)(iii) of the Income f the disallowance u/s 14A of the Act and that issue has been restored back to the file of the Assessing Officer contention of the assessee that the issue has not been adjudicated Piramal Corporate Services Pvt. Ltd. (as successor to Piramal Corporate Services Ltd.) 3 M.A No. 373/Mum/2022 Counsel of the assessee, this is an inadvertent observation and the duly raised the ground challenging the disallowance , which has not been to be recalled on We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. We find that the assessee has utilized borrowed funds for investing in for yielding exempted income and made suo 00,14,446/- for earning . The Assessing Officer however disallowed entire borrowed funds of Rs.3,54,90,304/- invoking section 14A and made disallowance of 0.5% of average investment eligible for yielding s.34,18,029/- and We note that in he Tribunal in its dated 27.04.2022 has followed the finding of the o. 4137 & 6645/Mum/2012 for AY 2008-09and restored the matter back to the file of the Assessing Officer. Since, the disallowance under Rule 8D(2)(iii) of the Income-tax Rules is f the disallowance u/s 14A of the Act and that issue has been restored back to the file of the Assessing Officer, therefore the has not been adjudicated by the Tribunal, is contention of the assessee. 4.1 The second ground which has been taken by the assessee for seeking recall/rectification of direction for allowing the balance 57(iii) of the Act has been issued by the Tribunal. 5. We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. contention of the assessee that in earlier year such a deduction has been allowed by the Tribunal. of the impugned order directed the Assessing Officer for allowing the interest after verification to the extent of taxable income relatable to earning income prescribes this condition. prescribed in provisions of the Act. mistake apparent from record on the issue in dispute further direction as sought by the assessee the order, which we are not permitted. Th recalling of the impugned order is also rejected. In view of the above, Miscellaneous Application filed by the assessee is dismissed. Piramal Corporate Services Pvt. Ltd. (as successor to Piramal Corporate Services Ltd.) by the Tribunal, is not correct. Accordingly, we reject this contention of the assessee. The second ground which has been taken by the assessee /rectification of the order is that no specific direction for allowing the balance interest of Rs.54,75,858/ of the Act has been issued by the Tribunal. We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. contention of the assessee that in earlier year such a deduction has he Tribunal. We find that the Tribunal of the impugned order directed the Assessing Officer for allowing the interest after verification to the extent of taxable income relatable to earning income. The section 57(iii) of the Act actually ibes this condition. Thus, Tribunal has directed what is prescribed in provisions of the Act. In our opinion mistake apparent from record on the issue in dispute as sought by the assessee will amount to review of which we are not permitted. Thus, this recalling of the impugned order is also rejected. In view of the above, Miscellaneous Application filed by the assessee Piramal Corporate Services Pvt. Ltd. (as successor to Piramal Corporate Services Ltd.) 4 M.A No. 373/Mum/2022 not correct. Accordingly, we reject this The second ground which has been taken by the assessee,is the order is that no specific interest of Rs.54,75,858/- u/s We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. It is contention of the assessee that in earlier year such a deduction has We find that the Tribunal in para 8.2 of the impugned order directed the Assessing Officer for allowing the interest after verification to the extent of taxable income The section 57(iii) of the Act actually has directed what is In our opinion, there is no mistake apparent from record on the issue in dispute and issuing will amount to review of us, this ground for In view of the above, Miscellaneous Application filed by the assessee 6. In the result, the Miscellaneous Application filed by t assessee is dismissed. Order pronounced in the open Court on Sd/ (KULDIP SINGH JUDICIAL MEMBER Mumbai; Dated: 19/06/2023 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Piramal Corporate Services Pvt. Ltd. (as successor to Piramal Corporate Services Ltd.) In the result, the Miscellaneous Application filed by t assessee is dismissed. nounced in the open Court on 19/06/2023. Sd/- KULDIP SINGH) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Piramal Corporate Services Pvt. Ltd. (as successor to Piramal Corporate Services Ltd.) 5 M.A No. 373/Mum/2022 In the result, the Miscellaneous Application filed by the /06/2023. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai