Shanti Enterprise, Surat V. Deputy Commissioner of Income tax (HQ) -1 , Surat

MA 42/SRT/2022

• Counselvise Citation: [2022] 103 COUNSELVISE.COM (IT) 8909 (ITAT-SURAT)
• Duration Of Justice: 2 month(s) 13 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 03-11-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 22-09-2022
• Assessment Year: 2010-2011
• Appeal Filed On: 21-08-2022
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Condonation of delay
• Section: 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JM & DR. A. L. SAINI, AM MA No.42/SRT/2022 [Arising out of ITA No.271/SRT/2018] Assessment Year: (2010-11) (Physical Court Hearing) Shanti Enterprises, Millenium Textile Market, Shop No. 1013-14, Umarwada, Kamela Darwaja, Ring Road, Surat-395002. Vs. The DCIT (HQ)-1, Surat. (Appellant) (Respondent) èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AALFS5217L Assessee by Shri Hiren Vepari, CA Respondent by Shri Vinod Kumar, Sr. DR Date of Hearing 23/09/2022 Date of Pronouncement 04/11/2022 आदेश / O R D E R PER DR. A. L. SAINI, AM: By way of captioned application, the assessee has sought to point out that a mistake apparent from record within the meaning of section 254(2) of the Income Tax Act, 1961(in short ‘the Act’) has crept in the order of the Tribunal dated 03.05.2021. 2. At the outset, Ld. Counsel for the assessee informs the Bench that Miscellaneous Application filed by the assessee is barred by limitation by two hundred ninety two (292) days. That is the said Miscellaneous Application is barred by limitation by 9.7 months (approx.). The Ld. Counsel for the assessee submitted the petition for condonation of delay which is reproduced below: “(1) The Miscellaneous Application is delayed by 292 days. (2) Primary reason for delay in the Miscellaneous Application is that the assessee remained under the bona fide belief that direction of the Tribunal in paragraph 12 of its order only aimed at disallowance of expense out of Page | 2 MA.42/SRT/2022/AY.2010-11 Shanti Enterprises administrative and other expenses of Rs.15,72,114, selling and distribution of Rs.1,50,000 and financial charges of Rs.25,154 as a proportion of disclosure made by the assessee of Rs.7,25,03,689 to the total income of the assessee. Given the insignificance, the assessee opted not to get into the rectification mode and have round No.2 of Tribunal. (3) However, with a very recent notice issued by the ACIT, Circle 1(1)(1), Surat vide DIN & Letter No. ITBA/AST/F/17/2022-23/1044797720(1) dated 18.08.2022, it appears that the department intends to interprets the decision of the Tribunal as through cost of construction amounting to Rs.21,88,50,070 would also need to be included in taking proportionate disallowance. Copy of notice is attached (Annexure A). The confusion with the officer has arisen only as a result of order of the Tribunal. In that sense of the matter and to provide clarity, the delay needs to be condoned and clarity provided to the assessing officer. (4) Question of disallowance of proportionate expenses was never there before Tribunal, and that now the department intends to take a position by enhancing the income of the assessee based on such finding of the Tribunal which would result in enhancement of income from what was assessed u/s. 143(3), it is necessary for the Tribunal to intervene by recalling the order. (5)As the Hon'ble members are aware that in view of decision of the Hon'ble Supreme Court in case of M Corp Global Pvt. Ltd.)309-ITR-434), it is simply not permissible for the Tribunal deciding an issue never raised before it, particularly when it is resulting into enhancement of the assessee’s income. It is also understood that Tribunal would never have intended to exceed what is prescribed by the Supreme Court from the point of view of judicial propriety. (6) An affidavit supporting the condonation of delay is attached (Annexure B) (7) Therefore, the assessee prays to condone the delay and rectify/recall the order.” 3. Based on the reason mentioned in the petition for condonation of delay, the Ld. Counsel prayed the Bench that delay should be condoned and the Miscellaneous Application should be admitted for hearing. 4. However, Learned Departmental Representative (Ld. DR) for the Revenue submitted that delay can be condoned in case of an appeal or cross objection filed by the assessee, and there is no provision to condone the delay in case of Miscellaneous Application. Therefore, Miscellaneous Application, filed by the assessee, is in violation of provision of sub-section 5 of section 253 of the Act, which is reproduced below: “Section 253 (1) ...... Page | 3 MA.42/SRT/2022/AY.2010-11 Shanti Enterprises (2) ..... (3) ..... (4) ..... (5) The Appellate Tribunal may admit an appeal or permit the filing of a memorandum of cross-objections after the expiry of the relevant period referred to in sub-section (3) or sub-section (4), if it is satisfied that there was sufficient cause for not presenting it within that period.” 5. The Ld. DR also contended that there is no provision in the Income Tax Act to entertain the Miscellaneous Application after the period of six months. That is, Miscellaneous Application should be filed within the period of six months and this has been mandated by the provisions of sub-section 2 of Section 254 of the Act, which reads as follows: “Section 254 (2) The Appellate Tribunal may, at any time within six months from the end of the month in which the order was passed, with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub- section (1), and shall make such amendment if the mistake is brought to its notice by the assessee or the Assessing Officer: Provided that an amendment which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee, shall not be made under this sub-section unless the Appellate Tribunal has given notice to the assessee of its intention to do so and has allowed the assessee a reasonable opportunity of being heard: Provided further that any application filed by the assessee in this sub-section on or after the 1st day of October, 1998, shall be accompanied by a fee of fifty rupees.” 6. We have heard both the parties and perused the material available on record. We note that this Miscellaneous Application is barred by limitation by two hundred ninety two days. We have gone through the reasons for condonation of delay mentioned in the affidavit and noted that these reasons are not convincing in nature. The Ld. Counsel for the assessee stated that the assessee woke up to file this Miscellaneous Application only when the notice of the Assessing Officer to give the appeal effect has been received by him. In order to give appeal effect, the Assessing Officer, asked the assessee to file relevant details and documents and it was seemed to the assessee that the appeal effect which would be given by the Assessing Officer would be against him (assessee), and that is why he (assessee) filed this Miscellaneous Page | 4 MA.42/SRT/2022/AY.2010-11 Shanti Enterprises Application very late. Hence, this is the reason, the assessee stated in the miscellaneous application that order of the Tribunal contains mistake apparent from record. It means prior to appeal effect, the order passed by the Tribunal was correct, however at the time of giving appeal effect, as per assessee, the order of the Tribunal becomes erroneous. This shows mala fide intention of the assessee and we note that this type of arbitrary approach of the assessee cannot be considered a sufficient cause to condone the delay. If the order of Tribunal was erroneous, the assesse would have filed the Miscellaneous Application on time. In order to give appeal effect when the Assessing Officer asked details and documents and assessee felt difficulty to submit these details and documents, as the AO wanted to disallow proportionate expenses, therefore assessee approached this Tribunal to get modify the order of the Tribunal as per her wish, which is not accepted. Therefore in order to get the undue advantage and in order to take favourable modification in the order of Tribunal, the assessee has filed this Miscellaneous Application, which is barred by limitation by two hundred ninety two (292) days. The Ld. Counsel at the time of hearing has submitted the combined profit and loss account which includes combined income and expenses, therefore the Tribunal has directed the Assessing Officer to exclude the proportionate expenses which relates to the disclosure amount made by the assessee during survey. Hence, there is no mistake apparent from record also. However, we do not adjudicate this miscellaneous application, on merit. We are of the view that assessee has not explained the sufficient cause for delay, as noted by us above. We note that in assessee`s case the delay is on account of dilatory tactics, want of bona fides, deliberate inaction or negligence on the part of the assessee. Therefore, we do not condone the delay and Miscellaneous Application filed by the assessee is hereby dismissed. 7. In the result, Miscellaneous Application filed by the assessee is dismissed. Page | 5 MA.42/SRT/2022/AY.2010-11 Shanti Enterprises Order is pronounced on 04/11/2022 by placing the result on the Notice Board. Sd/- Sd/- (PAWAN SINGH) (Dr. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER lwjr /Surat Ǒदनांक/ Date: 04/11/2022 SAMANTA Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // TRUE COPY // Assistant Registrar/Sr. PS/PS ITAT, Surat