RM Autoparts India Private Limited, Hyderabad V. Income Tax Officer, Ward-3(2), Hyderabad

MA 39/Hyd/2022

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 4087 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 11 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 30-05-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB-A
• Assessment Year: 2013-2014
• Appeal Filed On: 17-02-2022
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Additional evidence; Set aside
• Section: 131; 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD ‘A’ BENCH, HYDERABAD. BEFORE SHRI RAMA KANTA PANDA, ACCOUNTANT MEMBER AND SHRI LALIET KUMAR, JUDICIAL MEMBER M.A. Nos.39 & 40/Hyd/2022 (In ITA Nos.2202/Hyd/2017 & 210/Hyd/2018) (Assessment Year : 2013-14) M/s. R M Autoparts India Pvt. Ltd., Hyderabad. PAN AAGCR 0774H .....Appellant. Vs. Income Tax Officer, Ward 3(2), Hyderabad. .....Respondent. Appellant By : Shri K.C. Devdas, C.A. Respondent By : Shri T. Sunil Goutam. (D.R.) Date of Hearing : 20.05.2022. Date of Pronouncement : 31.05.2022. O R D E R Per Shri Rama Kanta Panda, A.M. : The assessee through these M.As requests the Tribunal to recall the orders passed by it since certain apparent mistakes have crept in the orders of the Tribunal. 2. First we take up M.A. No.39/Hyd/2022. 2 MA Nos.39 &40/Hyd/2022 3. The learned counsel for the assessee referring to the contentions of the M.A. drew the attention of the Bench to the same which reads as under : “ The Department preferred appeals for the AY 2013-14 in ITA No. 2202/Hyd/2017 raising the following grounds- i. The Ld. CIT(A) has erred in deleting addition made by the Ld. AO amounting to Rs. 3,58,10,000/- u/s. 68 of the Act relying on the additional evidence filed by the assessee without calling for remand report from the AO. ii. The Ld. CIT (A) has erred in deleting the addition made by the Ld. Assessing Officer for Rs. 34,66,340/- who had estimated the income of the assessee, which was agreed by the assessee, at the time of assessment proceedings. 1. The Tribunal at para 7 of the order on the ground relating to the addition of Rs. 3,58,10,000/- U/s. 68 of the Act held as under. “7. We have heard the rival submissions and carefully perused the materials available on record. Neither by reading the order of the Ld. AO nor by examining the paper book filed by the assessee, we find any evidence to establish that the assessee has filed the confirmation statements and other requisite documents before the Ld. AO which was filed before the Ld. CIT (A). Moreover, it is evident from the paper-book filed before us that the income tax return of the creditors were not filed before the Ld.AO which was filed before the Ld. CIT(A). Further from the 4 Order of the Ld. CIT(A) We find that he has not stated proper reasons with cogent evidence to substantiate that the transactions of creditors are genuine. Moreover, only the conformation statements of the creditors will not suffice to establish the genuineness of the creditors. The onus is on the assessee to prove the genuineness of the creditors with cogent evidence. However, the Ld.AO has also powers to examine the creditors U/s.131 or U/s.133(6) of the Act which it appears he has not exercised, probably he might not have had proper details of the creditors at the time of assessment proceedings. In this situation, We are of the view that the entire matter is required to be revisited by the Ld. AO for fresh consideration. Therefore, in the interest of justice, we hereby remit this issue back to the file of the Ld. AO for de-novo consideration, granting liberty to the assessee to file any fresh evidence before him to substantiate its stand. " 2. The respondent submits that the entire additions relating to loan creditors in respect of which complete confirmation letters and Income Tax PAN and other 3 MA Nos.39 &40/Hyd/2022 details relating to the creditors were filed which were brought out at pages 39 to 44 of the paper book filed on 27/07/2018. 3. The Authorised Representative for the respondent specifically drew the attention of the Hon'ble Tribunal letter dated to 11/3/2016 which finds a place at pages 49 to 50 of the paper book on the same day when the assessment was completed. Para 4 of the letter reads as under: “The confirmations of a total sum of Rs. 3,58,10,000/being unsecured loans along with income tax particulars of unsecured loan creditors who lent the above amounts to us and the bank accounts of them through which they have given the loan amounts to us with complete details are separately filed. " 4. During the course of hearing, the records of the respondent company were examined by the Hon' ble members and it was found as a matter of fact no additional evidence was filed by the respondent. The respondent also drew the attention of the Hon'ble Tribunal to para VIII of the CIT (A) order (page 23 of the CIT (A) order) wherein the CIT (A) held as under: "The submissions of the appellant which have been extracted in the preceding paragraphs have been perused. It is seen that the appellant had filed the details called for in the show cause notice including books of account, confirmation letters and the vouchers. The appellant had again produced the following documents in respect of unsecured loan creditors such as confirmation letters from loan creditors, account copy in their books of account, bank statements of the loan creditors evidencing the loan payment. " 5. Thus, confirmation letters were again filed before the Ld. CIT (A). It clearly shows that the entire evidences were filed before the Assessing Officer who did not take a pragmatic view of the evidences filed as all the conditions relating to the identity of the loan creditors, genuineness of the transactions and creditworthiness of the loan creditors (all assessed in Hyderabad), and whose PAN copies were filed before the assessing officer. Therefore, the first ground of appeal filed by the Appellant i.e. the Department stating that additional evidence were filed would be contrary to the finding that no additional evidence was filed on an examination of records by the Hon'ble Members. Therefore, the first ground of appeal ought to have been dismissed. 6. The respondent submits that the complete details of the loan creditors who have all assessed to Income Tax in Hyderabad itself was available to the Assessing Officer and therefore to state proper details were not available would be contrary to the facts and evidence on record. Further, the Hon'ble Tribunal at Para 7 of its order, held ....... 4 MA Nos.39 &40/Hyd/2022 “... However, the Ld.AO has also powers to examine the creditors U/ s.131 or U/ s.133(6) of the Act which it appears he has not exercised, probably he might not have had proper details of the creditors at the time of assessment proceedings. In this situation, We are of the view that the entire matter is required to be revisited by the Ld. AO for fresh consideration. Therefore, in the interest of justice, we hereby remit this issue back to the file of the Ld. AO for de-novo consideration, granting liberty to the assessee to file any fresh evidence before him to substantiate its stand. " 6.1 The Respondent submits that the question of probability of not having proper details of the creditors does not arise as the complete details were submitted before the Ld. AO. This is clearly brought out in the third para of the assessment order - 6.2 "Para'3. In response to the notice issued Sri Ram Dev, an ITP has appeared and furnished certain information and confirmations and the same are required to be verified with the concerned circles and Assessing Officers, it is proved that the unsecured loans are not correct as some of the returns are verified but not found. During the year the Assessee has shown an amount of Rs. 3,58,10,000 as unsecured loans with a view to verify the same a show cause notice was issued and asked to furnish the relevant income tax particulars and bank statements but nothing is filed except letters, no income tax returns and no bank statements are furnished hence it is treated as unexplained and added to the income of the assessee." 6.3 The Respondent submits that a perusal of the above finding of the Ld. AO is clear to show that complete details of loan creditors were filed to invoke the provisions of Section 131 of the I.T.Act,1961 and therefore to state that the Ld. AO might not have proper details of the creditors at the time of assessment proceedings would be contrary to the facts and evidence on record. 6.4 Further, the submissions made in letter dt. 11/03/2016 Le on the date of passing of the assessment order seems to have not been considered by the Hon'ble Tribunal due to oversight. 6.5 Para 4 of letter dt. 11/03/2016 which finds a place at Pg. 49 of the Paper Book reads as under - “.... .. the confirmations of a total sum of Rs. 3,58,10,000/- being unsecured loans along with the Income Tax particulars of unsecured loan creditors who lent the above amounts to us and the bank accounts of them through which they have given the loan amounts to us with complete details are separately filed. " 5 MA Nos.39 &40/Hyd/2022 6.6 The Appellant submits that complete details of loan creditors who are all assessed to Income Tax in Hyderabad itself was available to the Ld. AO and therefore to state to the contrary would be against the facts and evidences on record. 7. As regards the addition of Rs.34,82,514 on estimate basis the respondent submits that the Assessing Officer having called for books of account which were filed by the respondent on 11.3.2016 which finds a place at pages 49 to 50 of the paper book which reads as under: "Books of the accounts maintained by the company for the A. Y.2013-14 are produced herewith. Cash Book and Ledger are also produced herewith." 8. At para 7 of the letter dated 11/3/2016 which was filed on the date of completion of the assessment, the respondent's letter reads as under:- “ 7. All the vouchers of the expenses claimed and debited to Profit and Loss Account suggest Rs. 9,38,208 being the payment towards rent and taxes, Rs. 21,68,275 being the discount allowed and Rs. 8,54,042/ - being business promotion expenditure are produced herewith." 8.1 The respondent further stated that any further information required by the Officer in this regard they would call to furnish the same on hearing from the Officer. 8.2 Therefore, the respondent submits the books of account had not been rejected and therefore the estimate of profit @ 8% would not be correct on the basis of the facts and evidence on record. Further the respondent submits that a separate paper book on precedents was also filed on 19/01/2021 before the ITAT comprising of 16 case laws and also a copy of the judgment in the case of DCIT vs. Godrej Property Limited, Mumbai Tribunal were filed on 25/01/2021 which seems to have escaped due to sheer oversight and inadvertence of the Tribunal. 8.3 The respondent on 21/5/2021 also filed the brief synopsis of the Grounds of Appeal in a tabular form referencing the necessary paras in the order(s) passed by the Ld. AO and Ld. CIT(A). This has not been considered. 9. Therefore, the respondent submits that in the light of the facts stated above, the Hon'ble Tribunal may kindly recall the order in both the Quantum and Penalty appeals.” 6 MA Nos.39 &40/Hyd/2022 4. The learned counsel for the assessee submitted that great injustice has been caused to the assessee due to the erroneous order passed by the Tribunal since no additional evidence was considered without calling for remand report from the Assessing Officer as per the grounds raised by the revenue and therefore a mistake apparent from record has crept in the order of the Tribunal which requires recalling of the order. He also relied on the following decisions : i) Honda Siel Power Products Ltd. Vs. CIT 295 ITR 466 (SC) ii) Perfetti Van Melle India (P) Ltd. Vs. CIT 334 ITR 259 (SC) iii) Federal Mogul Goetze (India) Ltd. Vs. ACIT 439 ITR 204 (Del) iv) Lachman Dass Bhatia Hingwala (P) Ltd. Vs. ACIT 330 ITR 243 (Del) 5. The learned Departmental Representative, on the other hand, submitted that the Tribunal has passed a detailed order and the assessee has filed the present M.A. requesting the Tribunal to recall the order which amounts to review of its own order by the Tribunal which is not permissible in law. Referring to the decision of Hon'ble Supreme Court in the case of CIT (IT-4) Vs. Reliance Telecom Ltd. 440 ITR 1 7 MA Nos.39 &40/Hyd/2022 (SC) he submitted that the Hon'ble Supreme Court has already held that when a detailed order has been passed by the Tribunal, the said order could not have been recalled by the tribunal in exercise of the powers u/s. 254(2) of the Income Tax Act, 1961 (in short ‘the Act’). If the assessee believes that the order passed by the Tribunal was erroneous either on facts or in law, the only remedy available was to prefer an appeal before the Hon'ble High Court. He also relied on various other decisions. 6. The learned counsel for the assessee in his rejoinder submitted that the decision of Hon'ble Supreme Court relied on by ld. DR is not applicable to the facts of the present case. Referring to the decision of Hon’ble Delhi High Court (full Bench) in the case of Lachman Dass Bhatia Hingwala (P) Ltd. Vs. ACIT 330 ITR 243 wherein the decision of Hon'ble Supreme Court (3 judges) in the case of S. Nagaraj Vs. State of Karnataka (1993) Supp 4 SCC 595, 618 has been extracted, drew the attention of the Bench to the same which reads as under : 8 MA Nos.39 &40/Hyd/2022 "Justice is a virtue which transcends all barriers. Neither the rules of procedure nor technicalities of law can stand in its way. The order of the court should not be prejudicial to anyone. Rule of stare decisis is adhered for consistency but it is not as inflexible in Administrative Law as in Public Law. Even the law bends before justice. Entire concept of writ jurisdiction exercised by the higher courts is founded on equity and fairness. If the court finds that the order was passed under a mistake and it would not have exercised the jurisdiction but for the erroneous assumption which in fact did not exist and its perpetration shall result in miscarriage of justice then it cannot on any principle be precluded from rectifying the error. Mistake is accepted as valid reason to recall an order. Difference lies in the nature of mistake and scope of rectification, depending on if it is of fact or law. But the root from which the power flows is the anxiety to avoid injustice. It is either statutory or inherent. The latter is available where the mistake is of the court. In Administrative Law, the scope is still wider. Technicalities apart if the court is satisfied of the injustice then it is its constitutional and legal obligation to set it right by recalling its order." He submitted that since the assessee has filed all the relevant details during the course of assessment proceedings and no additional evidences were filed before CIT (Appeals), therefore, the Tribunal was not justified in restoring back the issue to the file of Assessing Officer for fresh adjudication. 7. We have considered the rival arguments made by both the sides and perused the material available on record. We find in the instant case, the Tribunal has discussed the issue in detail and has restored the issue to the file of Assessing Officer for de novo consideration by granting an opportunity to the assessee to file fresh evidences before the 9 MA Nos.39 &40/Hyd/2022 Assessing Officer to substantiate its stand. On a pointed querry raised by the Bench as to whether the assessee has raised any objection at the time of hearing before the Tribunal challenging the ground raised by the revenue on the issue of additional evidences filed by the assessee, the learned counsel for the assessee fairly submitted that no written submission was filed and the assessee has only relied on the order of the learned CIT (Appeals). Since the Assessing Officer in the instant case, has given a categorical finding that the assessee was afforded fair and reasonable opportunity during the assessment proceedings and was also provided ample opportunity to lead evidence to prove the claims made in respect of creditors in the books of accounts but the assessee failed to substantiate the same therefore we do not find any substance in the contents of the M.A. filed by the assessee. Further the Tribunal in the instant case, has also given a finding that the learned CIT (Appeals) while deleting the addition has not stated proper reason with cogent evidence to substantiate that the transactions of creditors are genuine. Therefore, in absence 10 MA Nos.39 &40/Hyd/2022 of any contrary material brought to our notice we do not find any apparent mistake in the order of the Tribunal to recall the same in terms of provisions of section 254(2) of the Act. The assessee in the instant case, in our opinion requests the Tribunal to recall the order passed by it which amounts to review of its own order by the Tribunal, which is not permissible in law. 8. We find the Hon'ble Supreme Court in the case of CIT Vs. Reliance Telecom Ltd. (supra) at para 4 of the order has held as under : “ 4. In the present case, a detailed order was passed by the ITAT when it passed an order on 06.09.2013, by which the ITAT held in favour of the Revenue. Therefore, the said order could not have been recalled by the Appellate Tribunal in exercise of powers under Section 254(2) of the Act. If the Assessee was of the opinion that the order passed by the ITAT was erroneous, either on facts or in law, in that case, the only remedy available to the Assessee was to prefer the appeal before the High Court, which as such was already filed by the Assessee before the High Court, which the Assessee withdrew after the order passed by the ITAT dated 18.11.2016 recalling its earlier order dated 06.09.2013. Therefore, as such, the order passed by the ITAT recalling its earlier order dated 06.09.2013 which has been passed in exercise of powers under Section 254(2) of the Act is beyond the scope and ambit of the powers of the Appellate Tribunal conferred under Section 254 (2) of the Act. Therefore, the order passed by the ITAT dated 18.11.2016 recalling its earlier order dated 06.09.2013 is unsustainable, which ought to have been set aside by the High Court.” 8.1 In view of the above discussion and in absence of any apparent error pointed out by the learned counsel for the assessee in the order of the Tribunal, the M.A. filed by the assessee for recalling of the order deserves to be dismissed. 11 MA Nos.39 &40/Hyd/2022 Accordingly, the M.A. No.39/Hyd/2022 filed by the assessee is dismissed. M A No.40/Hyd/2022 9. Since we have already held that there is no apparent error in the order passed by the Tribunal in the quantum appeal in ITA 2202/Hyd/2017, therefore there is no error in the order of the Tribunal in setting aside the penalty matter to the file of Assessing Officer for passing appropriate order. We therefore, do not find any substance in the present M.A. filed by the assessee. Accordingly, the M.A. is dismissed. 10. In the result, both the M.As filed by the assessee are dismissed. Order pronounced in the open court on 31st May, 2022. Sd/- Sd/- (LALIET KUMAR) (RAMA KANTA PANDA) Judicial Member Accountant Member Hyderabad, Dt.31.05.2022. * Reddy gp 12 MA Nos.39 &40/Hyd/2022 Copy to : 1. M/s. RM Autoparts India Pvt. Ltd., 11-6-27/14-15, Sunsip Godown, Opp. IDPL Factory, Balanagar, Hyderabad-500 037 2. ITO, Ward 3(2), Hyderabad. 3. Pr. C I T-3, Hyderabad. 4. CIT(Appeals)-3, Hyderabad. 5. DR, ITAT, Hyderabad. 6. Guard File. By Order Sr. Pvt. Secretary, ITAT, Hyderabad.