ACIT, Bareilly V. M/s. Dheer Foods Company Pvt. Ltd., Bareilly

MA 4/LKW/2010

• Counselvise Citation: [2010] 123 COUNSELVISE.COM (IT) 4939 (ITAT-LUCKNOW)
• Duration Of Justice: 7 month(s) 20 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 17-09-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 17-09-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 28-01-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: ALOK MITRA
• Keywords: Rectification of order; Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, LUCKNOW BENCH, LUCKNOW. BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT AND SHRI N.K.SAINI, ACCOUNTANT MEMBER M.A.NO.4(LUC.)/2010 (IN I.T.A.NO.811(LUC.)/2008) A.Y. : 2003-04 THE ACIT, CIR. I, VS. M/S. DHEER FOODS COMPANY PV T. LTD., BAREILLY. 614-JANAKPURI, BAREILLY PAN AABCD7422M (APPLICANT) (RESPONDENT) APPLICANT BY : SHRI ALOK MITRA, D.R. RESPONDENT BY : NONE O R D E R PER N.K.SAINI, ACCOUNTANT MEMBER THIS MISCELLANEOUS APPLICATION FILED BY THE DEPART MENT IS ARISING OUT OF THE ORDER OF THE I.T.A.T.,B-BENCH, LUCKNOW IN I TA NO.811(LUC.)/2008 DATED 31.3.2009 FOR THE ASSESSMENT YEAR 2003-04. 2. IN THIS MISCELLANEOUS APPLICATION, THE DEPARTME NT HAS CONTENDED AS UNDER : THE FACTS OF THE CASE ARE THAT PENALTY OF RS.2,39, 379/- U/S 271(L)(C) OF THE INCOME TAX ACT,1961 FOR THE ASSESSMENT YEAR 2003-04 WAS IMPOSED FOR FOLLOWING ADDITIONS :- 1. RS.5,00,000/- FOR LOW PRODUCTION :- THE ASSESSEE CARRIED ON BUSINESS OF MANUFACTURING OF BREAD AND HAD DISCLOSED YIELD O F BREAD AT 122.21% AS AGAINST 124.74% SHOWN IN THE IMMEDIATELY PRECEDING YEAR. REGARDING REDUCTION IN YIELD THE ASSESSEE STA TED THAT DUE TO EXTRA 2 MALTOSE IN MAIDA, THE CHEMICAL PROCESS OF FERTILIZA TION OF YEAST WAS AFFECTED AND BREAD COULD NOT BE MADE TO THE REQUIRE D STANDARD AND WHOLE LOT OF PRODUCTION WAS WASTED. THE ASSESSEE 'H AD NOT MAINTAINED ANY DAY-TO-DAY PRODUCTION REGISTER AND ALSO COULD N OT SUBSTANTIATE ITS CONTENTION WITH SUPPORTING DOCUMENTARY EVIDENCE. TH US IT WAS CONCLUDED THAT THE ASSESSEE SUPPRESSED THE PRODUCTI ON OF BREAD. TO COVER THIS SHORTAGE, AN ADDITION OF RS.5,00,000/- W AS MADE. 2. RS. 1,83,938/-, DISALLOWANCE OF INTEREST U/S. 40 A(2)(B) OF THE I.T. ACT,1961 :- THE ASSESSEE HAD PAID INTEREST ON UNSECURED LOAN S FROM DIRECTORS AND THEIR RELATIVES, @ 15% WHEREAS THE OTHER COMPANIES WERE PAYING INTEREST @ 10% TO 12%. THEREFORE, THE A O CONSIDERED THE RATE OF INTEREST AT 12% AS REASONABLE AND THUS EXCESS INTEREST PAID TO THE DIRECTORS AND THEIR RELATIVES AMOUNTING RS.1 ,83,938/- WAS ADDED TO THE INCOME OF THE ASSESSEE. THE LEARNED CIT(APPEALS), BAREILLY HAS CANCELLED TH E PENALTY WITH THE OBSERVATIONS THAT THERE IS NO CONCEALMENT OF FACTS AS THE DISALLOWANCE MADE TO THE INCOME OF THE ASSESSEE WERE NOT OF NATU RE OF CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF I NCOME. THE APPEAL OF THE REVENUE HAS BEEN DISMISSED VIDE O RDER DATED 31-3- 2009 IN ITA NO. 811(LUC)/08 AND IT HAS BEEN HELD TH AT THE LEARNED CIT (APPEALS) WAS JUSTIFIED IN CANCELING THE PENALT Y. THE ORDER OF THE AO IMPOSING PENALTY WAS JUSTIFIED IN VIEW OF THE CI TATIONS AND GIST OF CASES ENCLOSED AS PER ANNEXURE-'A' ( 7 PAGES ). CONSIDERING THE ABOVE CITATIONS, THE ORDER DATED 31-03-2009 DISMISSING RE VENUE'S APPEAL MAY KINDLY BE RECONSIDERED. THEREFORE, IT IS PRAYED THA T THE ORDER MAY KINDLY BE RECTIFIED U/S 254(2) OF THE I. T. ACT, 19 61. 3. AT THE TIME OF HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE- RESPONDENT. WE, THEREFORE, PROCEED TO DECIDE THE MI SCELLANEOUS APPLICATION AFTER HEARING THE LD.D.R. AND GOING THROUGH THE MAT ERIAL ON RECORD. 3 4. DURING THE COURSE OF HEARING, THE LD.D.R. REITER ATED THE CONTENTS OF THE AFORESAID APPLICATION AND REQUESTED TO RECALL THE A PPEAL IN I.T.A.NO.811(LUC..)/2008 FOR RECONSIDERATION. 5. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD.D.R . AND CAREFULLY GONE THROUGH THE MATERIAL ON RECORD. IT IS SETTLED LAW THAT UNDER SECTION 254(2) OF THE INCOME-TAX ACT,1961 ONLY ERROR APPAR ENT ON THE FACE OF RECORD CAN BE RECTIFIED AND SINCE IN THE MISCELLANE OUS APPLICATION, THE DEPARTMENT HAS REQUESTED TO RECONSIDER THE ORDER D ATED 31.3.2009 IN THE GARB OF SECTION 254(2) OF THE ACT. IN OUR OPINION, THIS MISCELLANEOUS APPLICATION IS NOT MAINTAINABLE BECAUSE THE ORDER CANNOT BE RECONSIDERED UNDER SECTION 254 OF THE ACT. THE HON'BLE DELHI H IGH COURT IN THE CASE OF J.N.SAHNI VS. INCOME TAX APPELLATE TRIBUNAL AND OTH ERS (2002) 257 ITR 16(DEL.) HAS HELD AS UNDER : THE POWER OF THE TRIBUNAL TO AMEND AN ORDER PASSED BY IT UNDER SUB- SECTION (1) OF SECTION 254 OF THE INCOME-TAX ACT, 1 961, IS LIMITED. SUCH POWER OF AMENDMENT IS CONFINED TO RECTIFICATIO N OF MISTAKES APPARENT FROM THE RECORD. THE POWER OF REVIEW MUST BE CONFERRED EXPRESSLY OR BY NECESSARY IMPLICATION UPON THE STAT UTORY OR QUASI- JUDICIAL AUTHORITIES. THE TRIBUNAL HAS NO INHERENT POWER OF REVIEW. IT IS THUS AXIOMATIC THAT WHILE EXERCISING ITS JURISDI CTION TO AMEND ITS ORDER ON THE GROUND OF RECTIFICATION OF MISTAKES IT CANNOT RECALL ITS ORDER PASSED ON THE MERITS. THE TRIBUNAL IN THE ABS ENCE OF ANY EXPRESS POWER CANNOT BE SAID TO HAVE A POWER OF SUBSTANTIVE REVIEW. THE TRIBUNAL HAS MERELY THE POWER TO AMEND ITS ORDER. W HILE EXERCISING THE SAID POWER IT CANNOT RECALL ITS ORDER. THE EXPR ESSION AMENDMENT MUST BE ASSIGNED ITS TRUE MEANING. WHILE AN ORDER O F AMENDMENT IS PASSED, THE ORDER REMAINS BUT WHEN AN ORDER IS RECA LLED IT STANDS OBLITERATED. WHAT CANNOT BE DONE DIRECTLY, CANNOT B E DONE INDIRECTLY. REVIEW OF ITS OWN ORDER BY THE TRIBUNAL IS FORBIDDE N IN LAW, AND THE TRIBUNAL CANNOT BE PERMITTED TO ACHIEVE THE SAME OB JECT BY EXERCISING ITS POWER UNDER SECTION (2) OF SECTION 254. 4 5(I) SIMILARLY, THE HON'BLE MADHYA PRADESH HIGH COURT-INDORE BENCH IN THE CASE OF CIT VS. KEDIA LEATHER AND LIQ UOR LTD. (2007) 293 ITR 95(MP) HAS HELD AS UNDER : SUB-SECTION (2) OF SECTION 254 CLEARLY EMPOWERS TH E TRIBUNAL AT ANY TIME WITHIN FOUR YEARS FROM THE DATE OF THE ORDER T O RECTIFY ANY MISTAKE APPARENT FROM THE RECORD AND AMEND ANY ORDE R PASSED BY IT UNDER SUB-SECTION (1) AND TO MAKE SUCH AMENDMENT IF A MISTAKE IS BROUGHT TO ITS NOTICE BY THE ASSESSEE OR THE ASSESS ING OFFICER. HOWEVER, THE TRIBUNAL CANNOT REVIEW ITS ORDER. 5(II) ON A SIMILAR ISSUE, THE HON'BLE DELHI HIGH C OURT IN THE CASE OF CIT VS. HONDA SIEL POWER PRODUCTS LTD.(2007) 293 IT R 132(DEL.) HAS HELD AS UNDER : A PLAIN READING OF THE PROVISION INDICATES THAT IN ORDER TO EXERCISE THE POWER VESTED IN IT UNDER SECTION 254(2) OF THE INCO ME-TAX ACT, 1961, THE TRIBUNAL HAS TO ENSURE THAT THE FOLLOWING FACTO RS ARE PRESENT : (A) THE APPLICATION IS MADE WITHIN 4 YEARS FROM THE DAT E OF THE ORDER SOUGHT TO BE RECTIFIED. (B) THERE IS A MISTAKE APPA RENT FROM THE RECORD WHICH IS BROUGHT TO ITS NOTICE BY EITHER THE ASSESS EE OR THE ASSESSING OFFICER. AS REGARDS THE PROCEDURE TO BE FOLLOWED, I F THE AMENDMENT SOUGHT HAS THE EFFECT OF ENHANCING THE ASSESSMENT O R REDUCING A REFUND OR INCREASING THE LIABILITY OF THE ASSESSEE, THE TR IBUNAL HAS TO GIVE PRIOR NOTICE TO THE ASSESSEE AND ALSO ALLOW THE ASS ESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. IT IS PLAIN THAT THE PO WER TO RECTIFY A MISTAKE IS NOT EQUIVALENT TO A POWER TO REVIEW OR R ECALL THE ORDER SOUGHT TO BE RECTIFIED. RECTIFICATION IS A SPECIES OF THE LARGER CONCEPT OF REVIEW. ALTHOUGH IT IS POSSIBLE THAT THE PREREQU ISITE FOR EXERCISE OF EITHER POWER MAY BE SIMILAR (A MISTAKE APPARENT FRO M THE RECORD), BY ITS VERY NATURE THE POWER TO RECTIFY A MISTAKE CANN OT RESULT IN THE RECALL AND REVIEW OF THE ORDER SOUGHT TO BE RECTIFIED. OTH ERWISE, WHAT CANNOT BE DONE DIRECTLY BY SEEKING A REVIEW OF AN ORDER CA N BE ACHIEVED INDIRECTLY, BY SEEKING A RECTIFICATION OF THAT ORDE R. THIS IS EVEN MORE SIGNIFICANT IN THE LIGHT OF THE FACT THAT UNDER THE ACT THERE IS NO EXPRESS POWER GIVEN TO THE TRIBUNAL TO REVIEW. 5 5.1 FROM THE RATIO LAID DOWN BY THE VARIOUS HON'BLE HIGH COURTS IN THE AFORESAID REFERRED TO CASES, IT IS CLEAR THAT THE TRIBUNAL HAS NO INHERENT POWER TO REVIEW ITS OWN ORDER. THE ONLY MISTAKE APP ARENT FROM RECORD CAN BE RECTIFIED UNDER SECTION 254(2) OF THE I.T.ACT. I N THE PRESENT CASE, SINCE NO APPARENT MISTAKE IN THE ORDER OF THE TRIBUNAL PASSE D ON 31.3.2009 HAS BEEN POINTED OUT AND A REQUEST HAS BEEN MADE TO RECALL T HE ORDER FOR RE- CONSIDERATION, THEREFORE, WE ARE OF THE CONFIRMED V IEW THAT THIS MISCELLANEOUS APPLICATION OF THE DEPARTMENT IS MISC ONCEIVED AND NOT MAINTAINABLE. HENCE, THE MISCELLANEOUS APPLICATION IS DISMISSED. 6. IN THE RESULT, THE MISCELLANEOUS APPLICATION IS DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 17.9.20 10. SD. SD, (H.L.KARWA) (N.K.SAINI) VICE PRESIDENT ACCOUNTANT MEMBER SEPTEMBER 17TH ,2010. COPY TO THE : 1. APPLICANT 2. RESPONDENT 3. CIT(A) (4) CIT 5.DR. A.R.,ITAT, LUCKNOW. SRIVASTAVA.