POCHIRAJU INDUSTRIES LIMITED, HOSUR V. ACIT CIRCLE 1, HOSUR

MA 38/CHNY/2023

AI Insights

The case involves M/s. Pochiraju Industries Limited, which filed a Miscellaneous Application against the order of the Income Tax Appellate Tribunal (ITAT) dated 14.10.2022 for the assessment year 2013-14. The original appeal was dismissed, and the assessee sought to challenge the dismissal, claiming that the Tribunal had not addressed a specific ground related to the disallowance of expenditure incurred in the BioPharma division. The Tribunal's earlier decision had upheld the PCIT's revision order, which disallowed certain expenditures on the grounds that the business activities had not commenced. The assessee argued that commercial activities had indeed started and that the Tribunal had not considered this in their previous ruling. However, the Tribunal found no apparent mistake in their earlier order that warranted a recall or revision under section 254(2) of the Act.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 134893 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 7 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 14-09-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 21-09-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 06-02-2023
• Other Referred Cases: CIT vs Reliance Telecom Limited
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Revision of order; Audit objection; Assessment record; Set aside
• Section: 263; 254(2)

Judgement Text

आयकर अपीलीय अिधकरण, ‘डी’ ᭠यायपीठ, चे᳖ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH, CHENNAI ᮰ी वी दुगाᭅ राव, ᭠याियक सद᭭य एवं ᮰ी मंजुनाथ. जी, लेखा सद᭭य के समᭃ BEFORE SHRI V. DURGA RAO, HON’BLE JUDICIAL MEMBER AND SHRI MANJUNATHA. G, HON’BLE ACCOUNTANT MEMBER Misc. Application No. 38/Chny/2023 [In ITA No. 1719/Chny/2018] (िनधाŊरणवषŊ / Assessment Year: 2013-14) M/s. Pochiraju Industries Limited, C/o. Shri. T.S. Lakshmi Venkataraman, Chartered Accountant, Door No. 135/55, Rajaji Road, Salem – 636 007. [PAN: AAACP-3640-A] v. Assistant Commissioner of Income Tax, Circle -1, Hosur. (ᮧाथᭅक /Petitioner) (ᮧ᭜यथᱮ/Respondent) ᮧाथᭅक कᳱ ओरसे/ Petitioner by : Shri. T.S. Lakshmi Venkataraman, FCA ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : Shri. D. Hema Bhupal, JCIT सुनवाई कᳱ तारीख/Date of Hearing : 22.09.2023 घोषणा कᳱ तारीख/Date of Pronouncement : 22.09.2023 आदेश /O R D E R PER MANJUNATHA. G, ACCOUNTANT MEMBER: The assessee has filed present Miscellaneous Application u/s. 254(2) of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) against order of the Tribunal in ITA No. 1719/Chny/2018, dated 14.10.2022 for assessment year 2013-14. :-2-: MA. No: 38/Chny/2023 2. The assessee has narrated facts of its case and mistakes stated to be apparent on record from the order of the tribunal dated 14.10.2022 and relevant contents of Miscellaneous Application filed by the assessee for assessment year 2013-14 are reproduced as under: “The appeal filed by the petitioner for the A.Y.2013-14 against the order passed u/s 263 of the Income Tax Act, 1961 has been dismissed by ITAT by order dated 14.10.2022. The order dated 08.03.2018 passed by Principal Commissioner of Income Tax, Salem was challenged before ITAT which has been dismissed by the order dated 14.10.2022 . The above appellate order was received by the petitioner on 20.10.2022 . The Assessment order sought to be revised by PCIT was passed on 31.03.2016 by Assistant Commissioner of Income Tax ,Circle 1, Hosur . The Honorable Tribunal has not adjudicated ground no.4 in the grounds of appeal which reads as under: "On the facts and circumstances of the case the learned PCIT is not justified in giving a direction to the AO to disallow the expenditure of Rs 10,70,08,883/- claimed by the appellant which has been incurred in BioPharma division, on the ground that no commercial activity is shown by the division in the FY 2012-13 and the expenditure is in the nature of Pre- operative expenses." The Written submissions filed in the course of hearing on 30.05.2022 in para 3 ,the following issue was raised on which The Honorable Tribunal has not given a finding. "The PCIT has invoked his jurisdiction u/s 263 on the basis of audit objection. Invoking the powers u/s 263 on the basis of audit objections is not legally valid since there should be independent application of mind for invoking the above section." To render justice the petitioner prays that The Honorable Tribunal may call for the assessment records to adjudicate on the above issue. :-3-: MA. No: 38/Chny/2023 In para 9 of the ITAT order The Honorable Tribunal has given a finding that the PCIT has rightly invoked his jurisdictional and set aside the assessment order passed by the AO, on the issue of deduction claimed toward R&D expenditure incurred for Bio- Pharma division . The appeal of the Petitioner before The Honorable Tribunal was on the ground that the expenditure incurred to an extent of Rs.10,70,08,833/- was incurred in Bio Pharma division in which commercial activity has commenced in the FY:2012-13 . The Petitioner is a listed company and audited financials are filed with NSE, BSE, Stock Exchange and Registrar of Companies . In the above financials the petitioner has clearly demonstrated that commercial activity has been commenced in the year ended 31.03.2013 by submitting annual report for the FY:2012-13. Even assuming for a moment but not conceding that the action of the PCIT is correct, it can cover only an amount of Rs.2,11,15,074/- which has been disallowed by the AO in the total amount of Rs.4,22,30,14 7 /claimed by the Petitioner u/s 35(1)(i) of the Act instead of disallowing the entire expenditure of Rs.10,70,08,833/-. The petitioner humbly prays that the above miscellaneous application may be admitted, adjudicated to render justice. “ 3. We have heard both the parties and considered relevant contents of Miscellaneous Application filed by the appellant, against the order of the Tribunal dated 14.10.2022 in ITA No. 1719/Chny/2018 and we find that the crux of the finding given by the Tribunal in Para 9 of their order dated 14.10.2022, is ground no. 4 of appeal filed by the assessee. Further, the revision order passed by the PCIT has been upheld on the basis of facts brought on record by the PCIT that the appellant :-4-: MA. No: 38/Chny/2023 has claimed various expenditure even though, the business activities has not been commenced in the year under consideration. The appellant seeks to recall the decision rendered by the Tribunal in the given facts and circumstances of the case, without specifying how and why the order of the Tribunal dated 14.10.2022, is not addressed ground no. 4 of appeal filed by the assessee. In our considered view, the appellant seeks to recall the decision rendered by the Tribunal without specifying prima facie mistake apparent on record from the order of the tribunal which can be rectified u/s. 254(2) of the Act, which is not permissible under law. The scope and powers of the Tribunal u/s. 254(2) of the Act is limited, to the extent to correct and/or rectify the mistake apparent from the order and not beyond that, as held by the Hon’ble Supreme Court in the case of CIT vs Reliance Telecom Limited, in Civil Appeal No. 7110/2021 dated 03.12.2021. Since, the appellant failed to make out a case for rectification u/s. 254(2) of the Act, in our considered view Miscellaneous Application filed by the appellant deserves to be dismissed and thus, we dismissed Miscellaneous Application filed by the appellant. :-5-: MA. No: 38/Chny/2023 4. In the result, Miscellaneous Application filed by the assessee is dismissed. Order pronounced in the court on 22 nd September, 2023 at Chennai. Sd/- (वी दुगाᭅ राव) (V. DURGA RAO) ᭠याियकसद᭭य/Judicial Member Sd/- (मंजुनाथ. जी) (MANJUNATHA. G) लेखासद᭭य/Accountant Member चे᳖ई/Chennai, ᳰदनांक/Dated: 22 nd September, 2023 JPV आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy to: 1. अपीलाथᱮ/Appellant 2. ᮧ᭜यथᱮ/Respondent 3. आयकर आयुᲦ/CIT 4. िवभागीय ᮧितिनिध/DR 5. गाडᭅ फाईल/GF