PRINCIPAL CIT 3, THANE V. BEST OF GROUP COMPANIES, THANE

MA 385/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6047 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 6 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 14-02-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 08-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARSHAD VENGURLEKARLD
• Assessee Lawyers: PRAKASH JHUNJHUNWALA LD
• Keywords: Set aside
• Section: 271(1)(c); 254(2); 13

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI , , BEFORE SHRI PAWAN SINGH, JM AND SHRI MANOJ KUMAR AGGARWAL, AM N O. M A NO. A RI SING OUT OF ITA NO. APPE LLANT RESPONDENT AY 1. 385/M/19 7262/M/2016 PR.CIT-3, THANE BEST GROUP OF COMPANIES 2008-09 2. 386/M/19 7263/M/2016 PR.CIT-3, THANE BEST GROUP OF COMPANIES 2009-10 3. 387/M/19 7264/M/2016 PR.CIT-3, THANE BEST GROUP OF COMPANIES 2010-11 4. 388/M/19 7265/M/2016 PR.CIT-3, THANE BEST GROUP OF COMPANIES 2011-12 5. 389/M/19 7266/M/2016 PR.CIT-3, THANE BEST ENTERPRISES 2007-08 6. 390/M/19 7267/M/2016 PR.CIT-3, THANE BEST ENTERPRISES 2008-09 7. 391/M/19 7268/M/2016 PR.CIT-3, THANE BEST ENTERPRISES 2009-10 8. 392/M/19 7269/M/2016 PR.CIT-3, THANE BEST ENTERPRISES 2010-11 9. 393/M/19 7270/M/2016 PR.CIT-3, THANE BEST ENTERPRISES 2011-12 10 394/M/19 7257/M/2016 PR.CIT-3, THANE BEST DEVELOPERS 2007-08 11 395/M/19 7258/M/2016 PR.CIT-3, THANE BEST DEVELOPERS 2008-09 12 396/M/19 7256/M/2016 PR.CIT-3, THANE BEST DEVELOPERS 2009-10 13 397/M/19 7260/M/2016 PR.CIT-3, THANE BEST DEVELOPERS 2010-11 14 398/M/19 7261/M/2016 PR.CIT-3, THANE BEST DEVELOPERS 2012-13 REVEN UE BY : SHRI HARSHAD VENGURLEKAR- LD. DR ASSESSEE BY : SHRI PRAKASH JHUNJHUNWALA- LD.AR / DATE OF HEARING : 29/11/2019 / DATE OF PRONOUNCEMENT : 14/02/2020 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER): - 1. BY WAY OF THESE MISCELLANEOUS APPLICATIONS, THE REVENUE SEEKS RECALL OF TRIBUNAL ORDER DATED 10/01/2019 PASSED IN CAPTIO NED APPEALS IN CASE OF 2 3 DIFFERENT ASSESSEES. THE TRIBUNAL, BY WAY OF COMM ON ORDER, ALLOWED ASSESSEES APPEAL BY DELETING PENALTY U/S 271(1)(C) FOR VARIOUS YEARS AS LEVIED AS WELL AS CONFIRMED BY LOWER AUTHORITIES. 2. SINCE THE GRIEVANCE OF REVENUE IN ALL THE APPLIC ATIONS IS COMMON, WE TAKE UP MA NO.385/MUM/2019 WHICH IS WITH RESPECT TO ASSESSEE NAMELY BEST GROUP OF COMPANIES FOR AY 2008-09. IN THE APPLICATION, IT HAS BEEN SUBMITTED THAT THE CASE HAS BEEN DECIDED IN ASSESSE ES FAVOR ON LEGAL ISSUE SINCE IT WAS OBSERVED THAT LD. AO INITIATED P ENALTY FOR CONCEALMENT OF INCOME , BY TAKING SUPPORT FROM EXPLANATION-3 TO SECTION 2 71(1)(C). HOWEVER, LD. AO LEVIED PENALTY FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THEREFORE, IT WAS CONCLUDED THAT PENALTY WAS INITI ATED ON ONE LIMB BUT ULTIMATELY LEVIED ON ANOTHER LIMB AND THEREFORE , THE IMPUGNED ORDER WAS SET ASIDE AND THE PENALTY WAS DIRECTED TO BE DELETE D. IN THE GROUNDS OF APPLICATION, IT HAS BEEN PROPOSED THAT THE ASSESSEE FILED RETURN OF INCOME AND PAID DUE TAXES ONLY AFTER THE SURVEY ACTION WAS CONDUCTED AND THEREFORE, EXPLANATION-3 TO SECTION 271(1)(C) WAS A PPLICABLE TO THE ASSESSEE WHO HAD NOT FILED RETURN OF INCOME VOLUNTA RILY. IT HAS FURTHER BEEN SUBMITTED THAT LD. AO HAD INITIATED THE PENALTY FOR CONCEALMENT OF INCOME AND FOR FURNISHING OF INACCURATE PARTICULARS OF INC OME AND IN PENALTY ORDER, CONCEALMENT WORD WAS EXPLICITLY MENTIONED AT RELEVA NT PLACES. LASTLY, IT HAS BEEN SUBMITTED THAT HONBLE BENCH HAS NOT APPRECIAT ED THE FACTS THAT THE ASSESSEE DID NOT OFFER ANY EXPLANATION FOR CONCEALM ENT OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN THE ABOVE BACKGROUND, LD. DR SOUGHT RECALL OF THE STATED ORDER PASSED BY THE TRIBUNAL. THE PROPOSED GROUND IN THE APPLICATION READ AS UNDER: - 3 (A) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE HONBLE ITAT HAS NOT APPRECIATED THE FACT THAT THE ASSESSEE HAS FILED RO I AND PAID DUE TAXES ONLY AFTER THE SURVEY ACTION WAS CONDUCTED AND RIGHTLY INITIATED E XPLANATION-3 TO SECTION 271(1)(C) IS APPLICABLE TO THE ASSESSEE WHO HAD NOT FILED RETURN OF INCOME VOLUNTARILY. (B) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE HONBLE ITAT HAS NOT APPRECIATED THE FACTS THAT THE AO HAD INITIATED THE PENALTY FOR CONCEALMENT OF INCOME AND FOR FURNISHING INACCURATE PARTICULARS OF INCOME AT THE TIME OF ASSESSMENT PROCEEDINGS AND IN PENALTY ORDER CONCEALMENT WORD H AS BEEN EXPLICITLY MENTIONED IN THE PRECEDING PARAS OF THE ORDER AS WELL AS IN THE CALCULATION DONE FOR LEVYING THE PENALTY. (C) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE HONBLE ITAT HAS NOT APPRECIATED THE FACTS THAT THE QUESTION IS WHETHER THE ASSESSEE HAS OFFERED ANY EXPLANATION FOR CONCEALMENT OF PARTICULARS OF INCOM E OR FURNISHING INACCURATE PARTICULARS OF INCOME, AND IN THE INSTANT CASE THE ASSESSEE HAS NOT OFFERED ANY EXPLANATION FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. (D) IT IS HUMBLY REQUESTED THAT THE ORDER OF ITAT M AY BE RECALLED AND THAT OF THE LD. CIT(A) ORDER MAY BE RESTORED. AU CONTRAIRE, LD. AUTHORIZED REPRESENTATIVE FOR ASSESSEE (AR) SUB MITTED THAT REVIEW OF THE ORDER IS OUTSIDE THE AMBIT OF SE CTION 254(2) AND THE BENCH HAS PASSED A REASONABLE ORDER WHICH DO NOT CO NTAIN ANY MISTAKE APPARENT FROM RECORD. 3.1 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND AL SO GONE THROUGH THE CONTENTS OF THE STATED ORDER PASSED BY HONBLE BENC H. UPON PERUSAL OF THE SAID ORDER, WE FIND THAT FROM PARAS-1 TO 11 OF THE SAID ORDER, THE FACTUAL MATRIX AS WELL AS SUBMISSIONS MADE BY BOTH THE REPR ESENTATIVES HAS BEEN ELABORATED. IN PARA-6(A), IT WAS STATED BY LD. COUN SEL FOR ASSESSEE THAT IN RESPECT OF INCOME DECLARED BY THE ASSESSEE IN THE R ETURNS OF INCOME, LD. AO HAD INITIATED PENALTY PROCEEDINGS FOR CONCEALMENT OF INCOME WHEREAS THE PENALTY WAS ULTIMATELY LEVIED FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME AND THEREFORE THE PENALTY WAS LIABLE TO BE QUASHED. AT PARA-6(B), IT WAS STATED THAT ADDITIONS MADE BY LD. AO OVER AND A BOVE THE RETURNED INCOME, WOULD FALL UNDER THE CATEGORY OF CONCEALMEN T OF INCOME SINCE THE 4 ASSESSEE DID NOT DISCLOSE THE SAME IN THE RETURN OF INCOME. HOWEVER, THE PENALTY WAS LEVIED FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME AND THEREFORE, PENALTY WAS LIABLE TO BE QUASHED SINCE T HE SAME WAS LEVIED ON AN INAPPROPRIATE CHARGE. IN PARA-6(C), THE ATTENTIO N WAS DRAWN TO THE FACT THE LD. AO DID NOT STRIKE DOWN THE INAPPROPRIATE PO RTION IN THE PENALTY NOTICE ISSUED BY HIM AND THEREFORE, PENALTY WAS LIA BLE TO BE QUASHED IN TERMS OF BINDING JUDICIAL PRONOUNCEMENTS. 3.2 THE PARA-12 OF THE ORDER DEAL WITH PENALTY LEVI ED ON INCOME DISCLOSED BY THE ASSESSEE IN THE RETURN OF INCOME. IT WAS NOT ED THAT LD. AO HAS INITIATED PENALTY PROCEEDINGS FOR CONCEALMENT OF INCOME BUT LEVIED PENALTY FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THEREFORE, A CONCLUSION WAS DRAWN THAT PENALTY WAS INITIATED ON ONE LIMB BU T ULTIMATELY LEVIED ON ANOTHER LIMB. IN PARA-13, THE DECISION OF HONBLE B OMBAY HIGH COURT RENDERED IN SHRI SAMSON PERINCHERY WAS CONSIDERED AND THE RATIO OF THAT CASE LAW WAS NOTED. FINALLY, IN VIEW OF CONTRADICTO RY APPROACH ADOPTED BY LD.AO, THE IMPUGNED ORDER WAS SET ASIDE AND PENALTY WAS DIRECTED TO BE DELETED. 3.3 THE PARAS-15 & 16 OF THE ORDER DEALS WITH PENAL TY ON ADDITIONS MADE BY LD. AO OVER AND ABOVE THE INCOME DISCLOSED IN TH E RETURN OF INCOME. IT WAS NOTED THAT PENALTY WAS LEVIED FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME WHEREAS THE ADDITION WOULD FALL UNDER THE CATEGORY OF CONCEALMENT OF INCOME. THEREFORE, PENALTY LEVIED ON INAPPROPRIATE CHARGE W OULD VITIATE THE PENALTY ORDER. TO SUPPORT THE SAME, THE RATIO O F DECISION OF THIRD MEMBER IN THE CASE OF HPCL MITTAL ENERGY LTD. WAS CONSIDERED AND AT PARA-17, IT WAS HELD THAT LD. AO WAS NOT RIGHT IN L EVYING PENALTY FOR 5 FURNISHING OF INACCURATE PARTICULARS OF INCOME IN RESPECT OF ADDITIONS WHICH FALL UNDER THE CATEGORY OF CONCEALMENT OF INCOME . ACCORDINGLY, THE IMPUGNED ORDER WAS SET ASIDE AND THE PENALTY WAS DI RECTED TO BE DELETED. AT PARA-18, SINCE THE PENALTY WAS DELETED ON LEGAL GROUNDS, IT WAS THOUGHT FIT NOT TO ADJUDICATE THE CONTENTIONS ON MERITS. 3.4 UPON PERUSAL OF THE ORDER, WE FIND THAT ISSUE O F PENALTY HAS ELABORATELY BEEN CONSIDERED BY THE HONBLE BENCH AN D PENALTY LEVIED ON INCOME DECLARED IN THE RETURN OF INCOME AS WELL AS PENALTY LEVIED ON ADDITIONS MADE BY LD. AO OVER AND ABOVE THE RETURNE D INCOME HAS SEPARATELY BEEN CONSIDERED BY THE HONBLE BENCH. TH EREFORE, IN OUR CONSIDERED OPINION, THERE IS NO MISTAKE APPARENT FR OM RECORD AS ENVISAGED BY THE PROVISIONS OF SECTION 254(2) OF THE ACT AND WHAT THE REVENUE IS SEEKING IS NOTHING MORE THAN A REVIEW OF THE ORDER WHICH IS IMPERMISSIBLE. THE SAID CONCLUSION FIND SUPPORT FROM THE ORDER OF HONBLE BOMBAY HIGH COURT IN CIT V/S EARNEST EXPORTS LTD. (323 ITR 577) WHEREIN IT WAS OBSERVED THAT POWER U/S 254(2) IS CONFINED TO RECTI FICATION OF MISTAKE APPARENT ON RECORD AND SECTION 254(2) IS NOT A CARTE BLANCHE FOR THE TRIBUNAL TO CHANGE ITS OWN VIEW BY SUBSTITUTING A V IEW WHICH IT BELIEVES SHOULD HAVE BEEN TAKEN IN THE FIRST INSTANCE. FURTH ER SEC. 254(2) IS NOT A MANDATE TO UNSETTLE DECISIONS TAKEN AFTER DUE REFLE CTION. THESE PROVISIONS EMPOWER THE TRIBUNAL TO CORRECT THE MISTAKES, ERROR S AND OMISSIONS APPARENT ON THE FACE AND THE SAID PROVISION IS NOT AN AVENUE TO REVIVE A PROCEEDING BY RECOURSE TO A DISTINGUISHED ARGUMENT NOR DOES IT CONTEMPLATE A FRESH LOOK AT A DECISION RECORDED ON MERITS. SIMILARLY, HONBLE HIGH COURT OF PUNJAB & HARYANA IN THE CASE OF CIT V/S PEARL 6 WOOLLEN MILLS (330 ITR 164) HELD THAT TRIBUNAL COULD NOT HAVE RE- ADJUDICATED THE MATTER U/S 254(2). IT IS WELL SETTL ED THAT A STATUTORY AUTHORITY CANNOT EXERCISE POWER OF REVIEW UNLESS SUCH POWER I S EXPRESSLY CONFERRED. THERE IS NO EXPRESS POWER OF REVIEW CONFERRED ON TH E TRIBUNAL. LASTLY HONBLE HIGH COURT OF CALCUTTA IN CIT V/S BHAGWATI DEVELOPERS P. LTD. (261 ITR 658) OBSERVED THAT A MISTAKE APPARENT FROM THE RECORD MU ST BE AN OBVIOUS AND PATENT MISTAKE AND NOT SOMETHING WHICH COULD BE ESTABLISHED BY A LONG-DRAWN PROCESS OF REASONING ON POINTS ON W HICH THERE MAY BE CONCEIVABLY TWO OPINIONS. A DECISION ON A DEBATABLE POINT IS NOT MISTAKE APPARENT FROM RECORD. A MISTAKE APPARENT FROM RECOR D IS ONE FOR WHICH NO ELABORATE ARGUMENT IS REQUIRED. IT MUST BE GLARING, OBVIOUS OR SELF- EVIDENCED MISTAKE. IF IT IS A MISTAKE WHICH REQUIRE S TO BE ESTABLISH BY COMPLICATED PROCESS OF INVESTIGATION, ARGUMENT OR P ROOF, IT CANNOT BE HELD TO BE MISTAKE APPARENT FROM RECORD. A DEBATABLE ISSUE DOES NOT COME WITH THE SCOPE OF PROVISIONS OF SEC. 254(2). RESPECTFULLY FOLLOWING THE RATIO OF THESE DECISIONS, WE ARE OF THE CONSIDERED OPINION THAT TH E PLEAS URGED BY THE REVENUE ARE BEYOND THE SCOPE OF SEC. 254(2) AND THE REFORE, WE ARE NOT INCLINED TO ACCEPT THE SAME. RESULTANTLY, THE APPLI CATION STAND REJECTED. 4. THE PLEA URGED IN ALL THE OTHER APPLICATIONS ARE , MORE OR LESS, SIMILAR. SIMILAR GROUNDS HAVE BEEN PROPOSED IN ALL THE OTHER APPLICATIONS. THE ORDER OF THE TRIBUNAL IS COMMON FOR ALL THE ASSESSEES FOR DIFFERENT ASSESSMENT YEARS. THEREFORE, TAKING THE SAME VIEW AS TAKEN IN MA NO. 385/MUM/2019, WE REJECT ALL THE OTHER MISCELLANEOUS APPLICATIONS FILED BY THE REVENUE. 7 5. RESULTANTLY, ALL THE APPLICATIONS STAND DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH FEBRUARY, 2020. SD/- SD/- (PAWAN SINGH) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 14/02/2020 SR.PS:-JAISY VARGHESE / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. ! / THE RESPONDENT 3. ' ' # ( ) / THE CIT(A) 4. ' ' # / CIT CONCERNED 5. $ % &' , ' ' , / DR, ITAT, MUMBAI 6. % )*+ / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.