INDIAN ALUMINIUM CO. LTD, V. DCIT CIR 8,

MA 394/MUM/2014

• Counselvise Citation: [2015] 124 COUNSELVISE.COM (IT) 2691 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 20 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 30-01-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: I
• Assessment Year: 1999-2000
• Appeal Filed On: 10-10-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: J PREMANAND
• Keywords: Revision of order; Rectification of order; Opportunity of being heard; Reassessment proceedings
• Section: 143(3); 147; 246; 148; 263; 11; 139

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL I BE NCH, MUMBAI , BEFORE SHRI VIJAY PAL RAO, JM, AND SHRI D. KARUNA KARA RAO, AM / !'#$%&'(&)*+% ,-.-/0 ''1 '2 3 4 ./ 56 !'.#*7+&'(&)**$ ( / ASSESSMENT YEAR : 1999-2000) M/S. INDIAN ALUMINIUM CO.LTD. (SINCE MERGED WITH HINDALCO INDUSTRIES LTD.) CENTURY BHAVAN DR. A.B. ROAD, WORLI MUMBAI-400 025. / VS. DY. COMMISSIONER OF INCOME - TAX , CIRCLE-8 MUMBAI. 8 4 ./ 9 4 ./PAN/GIR NO. : AAACH 1201 R ( APPLICANT / ) .. ( :;8< / RESPONDENT ) = > / APPLICANT BY : SHRI NARESH JAIN (AR) :;8< = > / RESPONDENT BY : SHRI J. PREMANAND - (DR) ? = @ / DATE OF HEARING : 02/01/2015 ABC = @ / DATE OF PRONOUNCEMENT : 30/01/2015 D / O R D E R PER VIJAY PAL RAO, JM : BY WAY OF THIS MISCELLANEOUS APPLICATION THE ASSESS EE IS SEEKING RECTIFICATION OF ORDER DATED 20/1/2012 PASSED BY THIS TRIBUNAL. 2 MA NO./394/M/14 2. WE HAVE HEARD THE LD. AR AS WELL AS THE LD. DR A ND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE LD. AR OF THE ASSESSEE HAS SUBMITTED THAT THE APPEAL OF THE ASSESSEE WAS DISMISSED BY THIS TRIBUNAL BY REJECTIN G THE CONTENTION OF THE ASSESSEE THAT THE ORDER PASSED UNDER SECTION 263 IS BARRED B Y LIMITATION AS THE ISSUES ON WHICH THE PROVISIONS OF SECTION 263 WERE INVOKED WERE NOT INVOLVED IN THE REASSESSMENT ORDER PASSED UNDER SECTION 147 R.W.S. 143(3). THE LD. AR HAS FURTHER CONTENDED THAT WHILE REJECTING THE CONTENTION OF THE ASSESSEE THE TRIBUN AL OBSERVED THAT THE INTIMATION/ACKNOWLEDGEMENT ISSUED UNDER SECTION 143 (1) CANNOT BE TREATED AS ORDER OF ASSESSMENT AND THEREFORE, THE LIMITATION FOR THE PU RPOSE OF SECTION 263 WILL RECKON FROM THE DATE OF ASSESSMENT ORDER PASSED UNDER SECTION 1 47 R.W.S. 143(3). THE LD. AR HAS SUBMITTED THAT THE VIEW TAKEN BY THE TRIBUNAL IS CO NTRARY TO THE VIEW TAKEN BY THE HON'BLE JURISDICTIONAL HIGH COURT IN THE RECENT JUD GMENT IN THE CASE OF CIT VS. M/S. LARK CHEMICAL LTD. IT APPEAL NO.2426 OF 2011 ALONG WITH IT APPEAL NO.2427 OF 2011 AND IT APPEAL NO.2440 OF 2011 DATED 06/08/2013. THE LD. AR HAS RELIED UPON THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF ACIT VS. SAURA SHTRA KUTCH STOCK EXCHANGE LTD. (305 ITR 227) AND SUBMITTED THAT HON'BLE SUPREME C OURT HAS HELD THAT NON CONSIDERATION OF THE DECISION OF HON'BLE JURISDICTI ONAL HIGH COURT OR HON'BLE SUPREME COURT IS A MISTAKE APPARENT FROM RECORD AND IS RECT IFIABLE UNDER SECTION 254(2) OF THE ACT. THUS, THE LD. AR HAS SUBMITTED THAT IN VIEW OF THE LATEST DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN CASE OF M/S. LARK CH EMICALS LTD. SUPRA, THERE IS A MISTAKE APPARENT IN THE IMPUGNED ORDER OF THE TRIBUNAL AND THE SAME SHOULD BE RECTIFIED. 3. ON THE OTHER HAND THE LD. DR HAS SUBMITTED THAT THE ORDER OF THE TRIBUNAL IS NOT BASED ON ONLY ONE POINT WHETHER INTIMATION UNDER SE CTION 143(1) CAN BE SUBJECT TO REVISION UNDER SECTION 263 OR NOT BUT THE TRIBUNAL HAS GIVEN A FINDING BY RELYING UPON THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE O F ACIT VS. RAJESH JHAVERI STOCK BROKERS PVT. LTD. (291 ITR 500). HE HAS FURTHER SUB MITTED THAT THE TRIBUNAL HAS ALSO FOLLOWED THE FULL BENCH DECISION OF HONBLE KERALA HIGH COURT IN THE CASE OF CIT VS. BEST WOOD INDUSTRIES & SAW MILL (331 ITR 63)(KER.) AS W ELL AS THE SPECIAL BENCH DECISION OF THE TRIBUNAL IN THE CASE OF SIMBHAOLI INDUSTRIES PV T. LTD. VS. DCIT (251 ITR 35 (AT) 3 MA NO./394/M/14 (DEL.)(SB) . HE HAS FURTHER CONTENDED THAT JURISD ICTION OF THE TRIBUNAL UNDER SECTION 254(2) IS VERY LIMITED AND ONLY APPARENT MISTAKES C AN BE RECTIFIED. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THE ASSESSEE HAS FILED THIS MISCELLANEOUS APPLICATI ON BASED ON THE JUDGMENT OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. M/ S. LARK CHEMICAL LTD. (SUPRA), AND THEREBY CONTENDED THAT NON CONSIDERATION OF THE JUD GMENT OF HON'BLE JURISDICTIONAL HIGH COURT IS A MISTAKE APPARENT FROM RECORD. IT IS PERTINENT TO NOTE THAT THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. LA RK CHEMICALS LTD. HAS NOT LAID DOWN A NEW PROPOSITION ON THE POINT BUT THE HON'BLE HIGH C OURT HAS FOLLOWED THE EARLIER JUDGMENT IN CASE OF CIT VS. ANDERSON MARINE & SONS P. LTD. (266 ITR 694) WHICH WAS CONSIDERED BY THIS TRIBUNAL WHILE PASSING THE IMPUG NED ORDER DATED 20/1/2012 . IT IS PERTINENT TO NOTE THAT AFTER CONSIDERING VARIOUS DE CISIONS RELIED UPON BY EITHER PARTIES INCLUDING THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF RAJESH JHAVERI STOCK BROKERS PVT. LTD. (SUPRA) AND THE JUDGMENT OF HON'B LE JURISDICTIONAL HIGH COURT IN THE CASE OF ANDERSON MARINE & SONS P. LTD. (SUPRA) JUDG MENT OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF KARTAR SINGH AND ANR. (3 00 ITR 440) AS WELL AS THE JUDGMENT OF FULL BENCH OF HONBLE KERALA HIGH COURT IN THE CASE OF CIT VS. BEST WOOD INDUSTRIES & SAW MILL (331 ITR 63)(KER.) (SUPRA), THE TRIBUNAL HAS DECIDED THE MATTER IN THE IMPUGNED ORDER DT. 20/1/2012 IN PARA 7 TO 14 .1 AS UNDER :- 7 WE HAVE CONSIDERED THE RIVAL CONTENTION AS WELL AS THE RELEVANT MATERIAL ON RECORD. SECTION 263 STIPULATES THE POWER OF THE CIT TO REVISE THE ORDER PASSED BY TAXING AUTHORITIES UNDER THE PROVISIONS OF THE ACT. FOR READY REFERENCE, WE QUOTE THE SECTION 263: 263. (1) THE COMMISSIONER MAY CALL FOR AND EXAMINE THE RECORD OF ANY PROCEEDING UNDER THIS ACT, AND IF HE CONSIDE RS THAT ANY ORDER PASSED THEREIN BY THE [ASSESSING] OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, HE MAY, AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD AND AFTER MAKING OR CAUSING TO BE MADE SUCH INQUIRY AS HE DEEMS NECESSARY, PASS SUCH ORDER THEREON AS THE CIRCUMSTA NCES OF THE CASE JUSTIFY, INCLUDING AN ORDER ENHANCING OR MODIFYING THE ASSES SMENT, OR CANCELLING THE ASSESSMENT AND DIRECTING A FRESH ASSESSMENT. 4 MA NO./394/M/14 7.1 SUB.SEC. 2 OF SEC. 263 PRESCRIBE THE LIMITATIO N FOR INVOKING THE POWERS AND JURISDICTIONS BY THE CIT. IT IS MANIFEST FROM THE PROVISIONS OF SEC. 263 THAT THE CIT CAN EXERCISE REVISION POWER AGAINST THE ORDER PASSE D BY THE ASSESSING OFFICER, IF THE TWO CONDITIONS AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE ARE SATISFIED. THE LIMITATION PROVIDED UNDER SUB.SEC. 2 OF SEC. 26 3 FOR EXERCISING THE JURISDICTION UNDER SUB.SEC.(1) OF SEC. 263 RECKONED FROM THE END OF THE FINANCIAL YEAR IN WHICH THE ORDER WAS PASSED BY THE ASSESSING OFFICER. THU S, FOR INVOKING THE POWERS AND JURISDICTIONAL U/S 263 THERE SHOULD BE AN ORDER PAS SED BY THE ASSESSING OFFICER. 7.2 NOW, THE QUESTION ARISES WHETHER THE RETURN OF INCOME PROCESSED U/S 143(1) AND INTIMATION U/S 143(1)(A) AMOUNTS TO AN O RDER PASSED BY THE ASSESSING OFFICER OR NOT AND WHETHER IT IS SUBJECTED TO REVIS ION U/S 263. THE HONBLE SUPREME COURT IN THE CASE OF ASSISTANT COMMISSIONER OF INCO ME-TAX V. RAJESH JHAVERI STOCK BROKERS P. LTD. HAS HELD AS UNDER: ONE THING FURTHER TO BE NOTICED IS THAT INTIMATION UNDER SECTION 143(1)(A) IS GIVEN WITHOUT PREJUDICE TO THE PROVISIONS OF SECTIO N 143(2). THOUGH TECHNICALLY THE INTIMATION ISSUED WAS DEEMED TO BE A DEMAND NOTICE ISSUED UNDER SECTION 156, THAT DID NOT PER SE PRECLUDE THE RIGHT OF THE ASSESSING OFFICER TO PROCEED UNDER SECTION 143(2). THAT RIGHT IS PRESERVED AND IS NOT TAKEN AWAY. BETWEEN THE PERIOD FROM APRIL 1, 1989, AND MARCH 31, 1998, THE SECOND PROVISO TO SECTION 143(1)(A), REQUIRED THAT WHERE ADJUSTMENTS WERE MADE UNDER THE FIRST PROVISO TO SECTION 143(1)(A), AN INTIMATION HAD TO BE SENT TO THE ASSESSEE NOTWITHSTANDING THAT NO TAX O R REFUND WAS DUE FROM HIM AFTER MAKING SUCH ADJUSTMENTS. WITH EFFECT FROM APR IL 1, 1998, THE SECOND PROVISO TO SECTION 143(1)(A) WAS SUBSTITUTED BY TH E FINANCE ACT, 1997, WHICH WAS OPERATIVE TILL JUNE 1, 1999. THE REQUIREMENT W AS THAT AN INTIMATION WAS TO BE SENT TO THE ASSESSEE WHETHER OR NOT ANY ADJU STMENT HAD BEEN MADE UNDER THE FIRST PROVISO TO SECTION 143(1) AND NOTW ITHSTANDING THAT NO TAX OR INTEREST WAS FOUND DUE FROM THE ASSESSEE CONCERNED . BETWEEN APRIL 1, 1998, AND MAY 31, 1999, SENDING OF AN INTIMATION UNDER S ECTION 143(1)(A) WAS MANDATORY. THUS, THE LEGISLATIVE INTENT IS VERY CL EAR FROM THE USE OF THE WORD INTIMATION AS SUBSTITUTED FOR ASSESSMENT THAT TWO DIFFERENT CONCEPTS EMERGED. WHILE MAKING AN ASSESSMENT, THE ASSESSING OFFICER IS FREE TO MAKE ANY ADDITION AFTER GRANT OF OPPORTUNITY TO THE ASS ESSEE. BY MAKING ADJUSTMENTS UNDER THE FIRST PROVISO TO SECTION 143 (1)(A), NO ADDITION WHICH IS IMPERMISSIBLE BY THE INFORMATION GIVEN IN THE RETUR N COULD BE MADE BY THE ASSESSING OFFICER. THE REASON IS THAT UNDER SECTIO N 143(1)(A) NO OPPORTUNITY IS GRANTED TO THE ASSESSEE AND THE ASSESSING OFFIC ER PROCEEDS ON HIS OPINION ON THE BASIS OF THE RETURN FILED BY THE ASSESSEE. T HE VERY FACT THAT NO OPPORTUNITY OF BEING HEARD IS GIVEN UNDER SECTION 1 43(1)(A) INDICATES THAT THE ASSESSING OFFICER HAS TO PROCEED ACCEPTING THE RETU RN AND MAKING THE PERMISSIBLE ADJUSTMENTS ONLY. AS A RESULT OF INSERT ION OF THE EXPLANATION TO SECTION 143 BY THE FINANCE (NO. 2) ACT OF 1991 WITH EFFECT FROM OCTOBER 1, 5 MA NO./394/M/14 1991, AND SUBSEQUENTLY WITH EFFECT FROM JUNE 1, 199 4, BY THE FINANCE ACT, 1994, AND ULTIMATELY OMITTED WITH EFFECT FROM JUNE 1, 1999, BY THE EXPLANATION AS INTRODUCED BY THE FINANCE (NO. 2) ACT OF 1991 AN INTIMATION SENT TO THE ASSESSEE UNDER SECTION 143(1)(A) WAS D EEMED TO BE AN ORDER FOR THE PURPOSES OF SECTION 246 BETWEEN JUNE 1, 1994 A ND MAY 31, 1999, AND UNDER SECTION 264 BETWEEN OCTOBER 1, 1991, AND MAY 31, 1999. IT IS TO BE NOTED THAT THE EXPRESSIONS INTIMATION AND ASSESS MENT ORDER HAVE BEEN USED AT DIFFERENT PLACES. THE CONTEXTUAL DIFFERENCE BETWEEN THE TWO EXPRESSIONS HAS TO BE UNDERSTOOD IN THE CONTEXT THE EXPRESSIONS ARE USED. ASSESSMENT IS USED AS MEANING SOMETIMES THE COMPUT ATION OF INCOME, SOMETIMES THE DETERMINATION OF THE AMOUNT OF TAX P AYABLE AND SOMETIMES THE WHOLE PROCEDURE LAID DOWN IN THE ACT FOR IMPOS ING LIABILITY UPON THE TAX PAYER. IN THE SCHEME OF THINGS, AS NOTED ABOVE, TH E INTIMATION UNDER SECTION 143(1)(A) CANNOT BE TREATED TO BE AN ORDER OF ASSES SMENT. 7.3 IT IS CLEAR FROM THE DECISION OF THE HONBLE S UPREME COURT THAT AN INTIMATION/ACKNOWLEDGEMENT U/S 143(1) CANNOT BE TRE ATED TO BE AN ORDER OF ASSESSMENT. THUS, THE RETURN PROCESSED U/S 143(1) I S NOT AN ORDER AS STIPULATED U/S 263. THE ASSESSEE HAS RELIED UPON THE DECISION OF T HE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF ANDERSON MARINE &SONS P LTD (S UPRA) ON THIS ISSUE. IT IS TO BE NOTED THAT THE DECISION OF THE HONBLE JURISDICTION AL HIGH COURT IS MUCH PRIOR TO THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F RAJESH JHAVERI STOCK BROKERS P. LTD (SUPRA) AND THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF KARTAR SINGH & CO P LTD (SUPRA) AFTER CONSIDERING THE DECI SION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF ANDERSON MARINE &SONS P L TD (SUPRA) AND BY FOLLOWING THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F RAJESH JHAVERI STOCK BROKERS P. LTD (SUPRA) HAS HELD IN PARA 7 AS UNDER: WE HAVE THOUGHTFULLY CONSIDERED THE SUBMISSIONS MA DE BY LEARNED COUNSEL FOR THE PARTIES AND ARE OF THE VIEW THAT THE QUESTI ON OF LAW REFERRED TO FOR OUR OPINION HAS TO BE ANSWERED IN FAVOUR OF THE ASSESSE E AND AGAINST THE REVENUE. WE ARE OF THE CONSIDERED VIEW THAT THE OMI SSION OF THE EXPRESSION INTIMATION FROM SECTION 263 OF THE ACT ESTABLISHE S THE INTENTION OF PARLIAMENT TO LIMIT THE POWER OF REVISION OF A COMMISSIONER OF INCOME-TAX ONLY TO CASES WHERE AN ORDER HAS BEEN PASSED. A PLAIN READING OF SECTION 263 OF THE ACT WOULD ALONE BE SUFFICIENT TO REACH THE AFOREMENTION ED CONCLUSION. A PERUSAL OF SECTION 263 OF THE ACT BRINGS OUT THAT THE LEGISLAT URE NEVER INTENDED TO CLOTHE THE COMMISSIONER WITH THE POWERS OF REVISION IN SUM MARY CASES WHERE INTIMATION AND ACKNOWLEDGMENT HAD BEEN SENT TO THE ASSESSEE AFTER FILING OF THE RETURN. IN THAT REGARD RELIANCE MAY BE PLACED O N A RECENT JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF ASSISTANT CIT V. RAJESH JHAVERI STOCK BROKERS P. LTD. [2007] 291 ITR 500. TWO EXPRESSIONS ASSESSMENT AND 6 MA NO./394/M/14 INTIMATION HAVE BEEN INTER-PRETED BY THEIR LORDSH IPS AS USED IN SECTION 143(1)(A) OF THE ACT. THE AFORE-MENTIONED EXPOSITIO N OF LAW HAS FLOWED FROM THE AMENDMENT SUBSTITUTING THE WORD INTIMATION FO R ASSESSMENT WITH EFFECT FROM JUNE 1, 1999. THE VIEW OF THE HONBLE S UPREME COURT IN THAT REGARD READS AS UNDER (PAGE 508) 7.4 FURTHER, THE AHMEDABAD BENCH OF THE TRIBUNAL I N THE CASE OF VIJAY KUMAR GUPTA (SUPRA) BY FOLLOWING THE DECISION OF THE SPEC IAL BENCH OF THE TRIBUNAL IN THE CASE OF SIMBHAOLI INDUSTRIES PVT. LTD. V. DEPUTY CO MMISSIONER OF INCOME-TAX (ASSESSMENT) REPORTED IN 251 ITR 35 (DEL)(SB) (AT) AS WELL AS THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF COMMISSIO NER OF INCOME-TAX V. VIKRANT CRIMPERS REPORTED IN 282 ITR 503 HELD AS UNDER: 8. HOWEVER, CONSIDERING THE FACTS OF THE CASE IN T HE LIGHT OF THE ABOVE DISCUSSIONS IT IS CLEAR THAT IN THE PRESENT CASE TH E ORIGINAL INTIMATION/ASSESSMENT ORDER ISSUED UNDER SECTION 143(1) OF THE IT ACT ON WHICH THE ASSESSING OFFICER HAS NOT APPLIED HIS MIND AT ALL AND RETURN WAS PROC ESSED AS IT IS ACCEPTING THE RETURNED INCOME. THE HON'BLE JURISDICTIONAL HIGH CO URT IN THE CASE OF VIKRANT CRIMPERS (SUPRA) HELD THAT THE ORDER UNDER SECTION 143(1) OF THE IT ACT (SUMMARY ASSESSMENT) CANNOT BE REVISED UNDER SECTIO N 263 OF THE IT ACT. THEREFORE, THE DECISIONS RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE ARE CLEARLY DISTINGUISHABLE AND CANNOT BE APPLIED TO TH E FACTS OF THE PRESENT CASE. THE DECISIONS OF THE HON'BLE BOMBAY HIGH COURT AND THE HON'BLE MADRAS HIGH COURT CITED BY THE LEARNED COUNSEL FOR THE ASSESSEE IN THE CASE OF ANDERSON MARINE & SONS (P.) LTD. (SUPRA) AND IN THE CASE OF CHIDAMBARAM CONSTRUCTION CO. (SUPRA) CANNOT BE GIVEN PREFERENCE AS AGAINST T HE DECISION OF THE HON'BLE JURISDICTIONAL GUJARAT HIGH COURT IN THE CASE OF VI KRANT CRIMPERS (SUPRA). SINCE, THE LEARNED COMMISSIONER OF INCOME-TAX PASSED THE I MPUGNED ORDER UNDER SECTION 263 OF THE IT ACT AGAINST THE REGULAR ASSES SMENT ORDER PASSED UNDER SECTION 143(3)/147 OF THE IT ACT DATED 28-12-2007, THEREFORE, THE IMPUGNED ORDER IS CLEARLY PASSED WITHIN THE PERIOD OF LIMITA TION AS PROVIDED UNDER SECTION 263(2) OF THE IT ACT. THE LEARNED COMMISSIONER OF I NCOME-TAX CANNOT REVISE THE SUMMARY ASSESSMENT UNDER SECTION 143(1) OF THE IT A CT AS PER THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE O F VIKRANT CRIMPERS (SUPRA). THEREFORE, THE CONTENTION OF THE LEARNED COUNSEL FO R THE ASSESSEE THAT LIMITATION IS TO BE COUNTED FROM 2-5-2001 WHEN THE RETURN WAS PROCESSED UNDER SECTION 143(1) OF THE IT ACT HAS NO FORCE AND IS REJECTED. 8 IN VIEW OF THE DECISIONS AND AS THE ISSUE UNDERS TOOD BY THE HONBLE PUNJAB & HARYNA HIGH COURT AFTER CONSIDERING THE D ECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF ANDERSON M ARINE &SONS P LTD (SUPRA) AS WELL AS THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF RAJESH JHAVERI STOCK 7 MA NO./394/M/14 BROKERS P. LTD (SUPRA), IT IS CLEAR THAT THE RETURN PROCESSES U/S 143(1) IS NOT SUBJECTED TO REVISION. 9 NOW, WE TURN TO THE QUESTION WHETHER THE ORDER U /S 147 R.W.S 143(3) IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENU E AS THE ASSESSING OFFICER HAS NOT MADE ANY ENQUIRY OR EXAMINED AND ADJUDICATED THE IS SUES WHICH ARE SUBJECT MATTER OF IMPUGNED REVISION ORDER AND CONSEQUENTLY, WHETHE R THE IMPUGNED REVISION ORDER IS BARRED BY LIMITATION SO FAR AS ON THE ISSUES WHI CH ARE NOT RELATED TO THE GROUNDS OF REASSESSMENT AND REASSESSMENT. SINCE THERE IS NO O RIGINAL ASSESSMENT IN THE CASE IN HAND AND THE REASSESSMENT IS THE FIRST ORDER OF ASSESSMENT BY THE ASSESSING OFFICER; THEREFORE, THE ASSESSING OFFICER WAS EXPEC TED TO APPLY HIS MIND ON ALL THE ISSUES TO SEE WHETHER THE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. THE ASSESSING OFFICER OUGHT TO HAVE EXERCISED DUE DILIG ENCE AND MINIMUM ENQUIRY AS EXPECTED FROM ORDINARY PRUDENT PERSON ACTING AS A Q UASI JUDICIAL AUTHORITY BEING AN ASSESSING OFFICER. ONCE THE ASSESSMENT HAS BEEN R EOPENED, THE ASSESSING OFFICER WAS EXPECTED TO FOLLOW ALL THE RELEVANT GENERAL PRO VISIONS FOR FRAMING THE ASSESSING AS IN THE CASE OF REGULAR ASSESSMENT AND FIND OUT WHETHER ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT OR NOT. 10 IN THE CASE IN HAND, THE ASSESSEE HAS NOT CHALL ENGED THE DISALLOWANCE AS PROPOSED IN THE REVISION ORDER BY THE CIT ON MERITS BUT HAS CHALLENGED THE REVISION ORDER ONLY ON TECHNICAL/LEGAL GROUNDS. THEREFORE, WHEN THE CLAIM, WHICH WAS ALLOWED BY THE ASSESSING OFFICER WITH OUT ANY EXAMI NATION AND ADJUDICATION, BUT ARE NOT ALLOWABLE, THEN THE QUESTION OF TAKING A POSSIB LE VIEW DOES NOT ARISE IN THE CASE IN HAND. 10.1 IN A CASE WHERE THE ASSESSING OFFICER ALLOWED A CLAIM WITHOUT EXAMINING THE RECORDS BUT THERE IS POSSIBILITY OF TAKING A VI EW IN FAVOUR OF THE ASSESSEE, THEN IT MAY BE SAID THAT THE ASSESSING OFFICER HAS TAKEN A POSSIBLE VIEW. BUT WHEN THE CLAIM OF THE ASSESSEE IS NOT ALLOWABLE AND THERE I S NO POSSIBILITY OF TWO VIEWS, THEN ALLOWING THE CLAIM BY THE ASSESSING OFFICER WITHOUT EXAMINING AND APPLICATION OF MIND WOULD DEFINITELY RENDER THE ASSESSMENT ORDER ERRONEOUS SO FAR AS PREJUDICIAL TO THE INTEREST OF REVENUE AND COMMISSIONER HAS THE POWER TO EXERCISE THE JURISDICTIONAL U/S 263. 11 THE FULL BENCH OF THE HONBLE KERALA HIGH COURT IN THE CASE OF BEST WOOD INDUSTRIES & SAW MILLS (SUPRA) HAS HELD AS UNDER: WHAT IS CLEAR FROM THE ABOVE PROVISION IS THAT ONC E ASSESSMENT IS REOPENED FOR BRINGING TO TAX ANY INCOME THAT ESCAPED ASSESSM ENT IN TERMS OF SECTIONS 148 TO 153, THEN THE ASSESSING OFFICER HAS TO ASSES S OR REASSESS SUCH INCOME AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH H AS ESCAPED ASSESSMENT. 8 MA NO./394/M/14 THE PURPOSE OF THIS PROVISION IS THAT IF IN THE COU RSE OF REASSESSMENT INITIATED UNDER SECTION 147 TO BRING TO TAX ANY ITEM OF ESCAP ED INCOME, IT COMES TO THE NOTICE OF THE ASSESSING OFFICER THAT ANY OTHER INCO ME ALSO HAS ESCAPED INCOME, THEN THE ASSESSING OFFICER SHOULD BRING TO TAX SUCH INCOME ALSO. THE PROCEDURE FOR INCOME ESCAPING ASSESSMENT UNDER SECT ION 147 IS CONTAINED IN SECTION 148 WHERE UNDER SUB-SECTION (2) MAKES IT MA NDATORY FOR THE ASSESSING OFFICER TO RECORD REASONS BEFORE PROCEEDING TO ISSU E NOTICE. HOWEVER, ONCE ASSESSMENT IS REOPENED AFTER RECORDING REASONS, THE ASSESSING OFFICER HAS TO COMPLETE THE INCOME ESCAPING ASSESSMENT BY FOLLOWIN G THE PROVISIONS OF THE ACT AS IF THE RETURN FURNISHED AGAINST NOTICE UNDER SECTION 148 AS ONE FILED UNDER SECTION 139 OF THE ACT. THIS OBVIOUSLY MEANS THAT SO FAR AS PROCEDURE TO BE FOLLOWED IS CONCERNED, THERE IS NO DIFFERENCE BE TWEEN INCOME ESCAPING ASSESSMENT AND REGULAR ASSESSMENT BECAUSE THE PROVI SIONS GENERALLY PROVIDE FOR ISSUE OF NOTICE, HEARING OF THE ASSESSEE AND TA KING OF EVIDENCE, ETC., WHICH ARE THE SAME FOR REGULAR ASSESSMENT AND INCOME ESCA PING ASSESSMENT. THEREFORE IN THE COURSE OF INCOME ESCAPING, ASSESSM ENT, IF IT COMES TO THE NOTICE OF THE ASSESSING OFFICER THAT ANY OTHER ITEM OR ITEMS OF INCOME OTHER THAN THE ITEM OF ESCAPED INCOME FOR THE ASSESSMENT OF WHICH, ASSESSMENT ORIGINALLY COMPLETED WAS REOPENED, ALSO HAVE ESCAPE D FROM ORIGINAL ASSESSMENT, HE IS BOUND TO ASSESS SUCH ITEM OR ITEM S OF INCOME ALSO IN THE COURSE OF REASSESSMENT UNDER SECTION 147. IN VIEW O F THE SPECIFIC PROVISION PROVIDING FOR ASSESSMENT OF OTHER ITEMS OF INCOME T HAT HAVE ESCAPED ASSESSMENT, AND THAT COMES TO THE NOTICE OF THE ASS ESSING OFFICER IN THE COURSE OF INCOME ESCAPING ASSESSMENT, THE REASSESSM ENTS MADE ARE VALID AND THE ORDERS OF THE TRIBUNAL TO THE CONTRARY ARE NOT SUSTAINABLE. STANDING COUNSEL FOR THE REVENUE HAS BROUGHT TO OUR NOTICE THE DECISION OF THE SUPREME COURT IN ASST. CIT V. RAJESH JHAVERI ST OCK BROKERS P. LTD.[2007] 291 ITR 500 WHEREIN THE SUPREME COURT HAS HELD THAT AT THE STAGE OF ISSUE OF NOTICE UNDER SECTION 148 WHAT IS REQUIRED IS ONLY R EASON TO BELIEVE BUT NOT THE ESTABLISHED FACT OF ESCAPEMENT OF INCOME. IT IS SPE CIFICALLY HELD BY THE SUPREME COURT AS FOLLOWS (HEAD NOTE) : AT THE STAGE OF ISSUE OF NOTICE, THE ONLY QUESTION IS WHETHER THERE WAS RELEVANT MATERIAL ON WHICH A REASONABLE PERSON COUL D HAVE FORMED THE REQUISITE BELIEF. WHETHER MATERIAL WOULD CONCLUSIVE LY PROVE ESCAPEMENT OF INCOME IS NOT THE CONCERN AT THAT STAGE. THIS IS SO BECAUSE THE FORMATION OF THE BELIEF IS WITHIN THE REALM OF THE SUBJECTIVE SA TISFACTION OF THE ASSESSING OFFICER. THE PROPOSITION LAID DOWN BY THE SUPREME COURT CLE ARLY GOES TO ESTABLISH THAT THE ASSESSING OFFICER IS NOT CONFINED TO THE GROUND S OR REASONS STATED BY HIM TO REOPEN THE ASSESSMENT AND HE CAN MAKE ASSESSMENT AFTER DETAILED ENQUIRY. 9 MA NO./394/M/14 SO MUCH SO, ONCE THE ASSESSMENT IS REOPENED FOR ANY VALID REASON RECORDED UNDER SECTION 148(2), THEN THE ENTIRE ASSESSMENT IS OPEN FOR THE ASSESSING OFFICER TO BRING TO TAX ANY ITEM OF ESCAPED INCOME WHICH COMES TO HIS NOTICE IN THE COURSE OF SUCH REASSESSMENT. WE THEREFORE OV ERRULE THE DECISION OF THIS COURT IN TRAVANCORE CEMENTS LTD. V. ASST. CIT (2008 ) 219 CTR (KER) 359; [2006] 4 KLT 344; AND ALLOW THE APPEALS BY REVERSIN G THE ORDERS OF THE TRIBUNAL AND THAT OF THE FIRST APPELLATE AUTHORITY AND REMAND THE MATTER TO THE FIRST APPELLATE AUTHORITY TO CONSIDER THE APPEALS O N THE MERITS, THAT IS WITH REGARD TO THE ADDITIONS MADE IN THE REASSESSMENTS A FTER ISSUING NOTICE TO BOTH SIDES. 11.1 THE FULL BENCH OF THE HONBLE KERALA HIGH COUR T HAS HELD THAT THERE IS NO DIFFERENCE BETWEEN THE INCOME ESCAPING ASSESSMENT A ND REGULAR ASSESSMENT SO FAR AS THE PROCEEDINGS TO BE FOLLOWED BY THE ASSESSING OFFICER. IT IS OBSERVED BY THE FULL BENCH OF THE HONBLE HIGH COURT THAT TAKING ALL EVI DENCES ETC., WHICH ARE THE SAME FOR THE REGULAR ASSESSMENT AND THE INCOME ESCAPING ASSESSMENT. THE HONBLE HIGH COURT HAS THUS, OVERRULED THE DECISION IN THE CASE OF TRAVANCORE CEMENTS LTD. (SUPRA). 12 IN THE CASE IN HAND UNDISPUTEDLY THE CLAIM OF THE ASSESSEE ARE NOT ALLOWABLE BUT THE SAME WERE ALLOWED BY THE ASSESSIN G OFFICER WITHOUT ADDRESSING THE SAME; THEREFORE, NON ADDRESS OF THE ISSUE RESUL TING ALLOWANCE OF IMPOSSIBLE CLAIM ESTABLISHES THE NON APPLICATION OF MIND ON TH E PART OF THE ASSESSING OFFICER DURING THE REASSESSMENT PROCEEDINGS AND CONSEQUENTL Y RENDER THE ORDER PASSED U/S 147 R.W.S 143(3) AS ERRONEOUS AND PREJUDICIAL TO TH E INTEREST OF REVENUE. 13 NOW COMING TO THE QUESTION OF LIMITATION AS PRO VIDED UNDER SUB.SEC. (2) OF SEC. 263. 13.1 THE ASSESSEE HAS CONTENDED THAT THE LIMITATION WOULD RECKONED FROM THE ORIGINAL ORDER {IN THIS CASE, PROCESSED U/S 143( 1)} - FOR EXERCISING THE JURISDICTION U/S 263 IN RESPECT OF THE ISSUES WHICH ARE NOT SUB JECT MATTER OF THE REASSESSMENT U/S 147. 13.1 IT IS SETTLED PROPOSITION OF LAW THAT THE LIM ITATION FOR EXERCISING THE JURISDICTIONAL U/S 263 ON SUCH ISSUES WHICH ARE NOT SUBJECT MATTER OF REASSESSMENT ORDER WOULD BE COUNTED FROM THE ORIGINAL ASSESSMENT AS HELD BY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS ALAGENDRAN FINA NCE LTD REPORTED IN 211 CTR 69(SC). 14 THERE IS NO ORIGINAL ASSESSMENT IN THIS CASE AN D AS WE HAVE ALREADY HELD THAT THE ASSESSING OFFICER WAS EXPECTED TO EXERCISE DUE DILIGENCE AS EXPECTED FROM A PERSON OF COMMON PRUDENT ACTING AS A QUASI JUDICI AL AUTHORITY BEING THE ASSESSING 10 MA NO./394/M/14 OFFICER. THEREFORE, IN THE ABSENCE OF ANY ORDER BY THE ASSESSING OFFICER PRIOR TO REASSESSMENT, THE LIMITATION FOR EXERCISING OF JURI SDICTIONAL U/S 263 ON SUCH ISSUES CANNOT BE COUNTED FROM THE DATE WHEN THE RETURN OF INCOME WAS PROCESSED U/S 143(1). 14.1 SINCE THE ASSESSING OFFICER HAS PATENTLY FAIL ED TO APPLY HIS MIND TO FIND OUT THE INCOME ASSESSABLE TO TAX AS ESCAPED ASSESSM ENT IN RESPECT OF THE ISSUES WHICH ARE SUBJECT MATTER OF REVISION ORDER, THEN TH E REASSESSMENT IS CERTAINLY ERRONEOUS DUE LACK OF APPLICATION OF MIND SO FAR AS PREJUDICIAL TO THE INTEREST OF REVENUE. HENCE, LIMITATION AS STIPULATED UNDER SUB SEC. (2) OF SEC. 263 WOULD BE COUNTED FROM THE REASSESSMENT ORDER PASSED U/S 143( 3) R.W.S 147BEING THE FIRST REGULAR ASSESSMENT. 4.1 AS IT IS CLEAR FROM THE IMPUGNED ORDER OF THE T RIBUNAL THAT THE ISSUE INVOLVED IN THE APPEAL OF THE ASSESSEE WAS DECIDED IN A DETAILE D AND REASONED ORDER AND AFTER DISCUSSING VARIOUS JUDGMENT OF HON'BLE SUPREME COUR T AS WELL AS VARIOUS HIGH COURTS. IN PARA 7.3 OF THE IMPUGNED ORDER THE TRIBUNAL HAS SPECIFICALLY DISCUSSED THE JUDGMENT OF HON'BLE JURISDICTIONAL HIGH COURT IN CASE OF AND ERSON MARINE & SONS P. LTD. (SUPRA). THE TRIBUNAL HAS TAKEN A VIEW AFTER CONSIDERING THE VARIOUS PRECEDENTS AS WELL AS FACTS AND CIRCUMSTANCES OF THE CASE IN PARTICULAR. THEREF ORE, IT MAY BE AT THE MOST AN ERROR OF JUDGMENT BUT CANNOT BE AN APPARENT ERROR FROM RE CORD WHICH CAN BE RECTIFIED UNDER SECTION 254(2). 4.2 THE JURISDICTION OF THE TRIBUNAL UNDER SECTION 254(2) IS VERY LIMITED AND CIRCUMSCRIBED. IT IS SETTLED PROPOSITION OF LAW THA T ONLY THE MISTAKE APPARENT ON RECORD CAN BE RECTIFIED AND NOT THE POINT OF DISPUTE REQUI RES A LONG DRAWN REASONING AND ARGUMENT. A DECISION ON MERITS AFTER CONSIDERING TH E FACTS AND RELEVANT LAW AS WELL AS THE CONTENTIONS OF PARTIES GIVEN BY THE TRIBUNAL CA NNOT BE REVIEWED OR REVISED IN THE GARB OF RECTIFICATION OF ERROR UNDER SECTION 264(2) . THEREFORE, THE TRIBUNAL HAS NO JURISDICTION TO REVIEW OR REVISE ITS OWN ORDER PASS ED ON THE MERITS OF THE CASE AND BASED ON DETAILED REASONING. THE CONTENTIONS RAISED IN THE M.A. HAVE ALREADY BEEN CONSIDERED BY THE TRIBUNAL WHILE PASSING THE IMPUGN ED ORDER. THE FACTS CONSIDERED AND APPRECIATED IN THE ORDER CANNOT BE REAPPRECIATE D UNDER SECTION 254(2). ACCORDINGLY, IN VIEW OF THE ABOVE DISCUSSION WE DO NOT FIND ANY SUBSTANCE IN THE 11 MA NO./394/M/14 MISCELLANEOUS APPLICATION SEEKING REVIEW OF ORDER A ND THE SAME DESERVES TO BE DISMISSED. 5. IN THE RESULT THE MISCELLANEOUS APPLICATION IS D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30/01/2015 . D = ABC ? E F4G 30/01/2015 B = H SD/- SD/- ( D.KARUNAKARA RAO ) ( VIJAY PAL RAO ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER ?4I MUMBAI; F4 DATED 30/ 01 /2015 . . ./ JV, SR. PS / COPY OF THE ORDER FORWARDED TO : 1. 3 8< / THE APPELLANT 2. :;8< / THE RESPONDENT. 3. ?J ( 3 ) / THE CIT(A)- 4. ?J / CIT 5. KH :@ , 3 3 , ?4I / DR, ITAT, MUMBAI 6. HL M / GUARD FILE. ! ! ! ! / BY ORDER, ;@ :@ //TRUE COPY// ' '' ' / !# !# !# !# $ $ $ $ (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI