PIGAMENTS LAKES AND CHEMICALS MFG CO. LTD, V. ITO WD 2(2)(4),

MA 423/MUM/2014

• Counselvise Citation: [2015] 124 COUNSELVISE.COM (IT) 2828 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 13-02-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 26-11-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: PRADIP N KAPASI
• Keywords: Sale consideration of property below Jantri Value; Opportunity of being heard
• Section: 50C

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE HONBLE S/SHRI VIJAY PAL RAO (JM) , AND N. K. BILLAIYA (AM) , . . , MISCELLANEOUS APPLICATION NO.423 & 424/MUM/2014 (ARISING OUT OF % & ' ./I.T.A. NOS.4774/MUM/2009 & 5436/MUM/2012) ( () * +) / ASSESSMENT YEAR:2006-07) PIGMENTS LAKES & CHEMICALS MFG. CO.LTD., MAHEN MERCHANTILE CORPORATION, . GOOL MANSION, 2ND FLOOR, HAMJI STREET, FORT, MUMBAI 400 001 / VS. INCOME TAX OFFICER,, WARD 2(2)(4), AAYAKAR BHAVAN, MUMBAI-400020. ( &,- / APPELLANT) .. ( ./,- / RESPONDENT) , ' ./ %0% ' ./PAN/GIR NO. : AAACP 3376M &,- 1 /:APPLICANT BY: SHRI PRADIP N KAPASI ./,- 2 1 /RESPONDENT BY: SHRI LOVE KUMAR 3 4 2 5 6 / DATE OF HEARING : 6.2.2015 78+* 2 5 6 /DATE OF PRONOUNCEMENT : 13. 2.2015 / O R D E R PER N. K. BILLAIYA, ACCOUNTANT MEMBER: THESE TWO MISCELLANEOUS APPLICATIONS BY THE ASSESSE E ARE ARISING OUT OF THE ORDER OF THE TRIBUNAL IN I.T.A.N OS. 4774/MUM/2009 & 5436/MUM/2012). ISSUES RAISED IN BOTH THESE MAS ARE IDENTICAL, THEREFORE, THEY WERE HEARD TOGETHER AND ARE BEING D ISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. MA 423 AND 424/M/2014 2 2. THE ASSESSEE HAS SOUGHT THE ATTENTION OF THE TR IBUNAL TO TWO ISSUES BY WHICH THE ASSESSEE CLAIMS THAT THERE IS A MISTAKE APPARENT FROM RECORD WHICH NEEDS TO BE RECTIFIED U/S 254(2) OF THE INCOME TAX ACT, 1961 (THE ACT.). 3. THE FIRST ISSUE IS THAT WHILE DECIDING THE GROUN D NO.1 OF THE APPEAL, THE TRIBUNAL DID NOT FOLLOW THE RATIO LAID DOWN BY THE CHENNAI BENCH OF THE TRIBUNAL IN THE CASE OF GEMINI COMMUN ICATION IN ITA NO.1252/MDS/2012 = 19 ITR(T)1 (CHENNAI). IT IS CLA IMED THAT THE TRIBUNAL OUGHT TO HAVE FOLLOWED THE RATIO OF CHEN NAI BENCH AND IN THE ALTERNATIVE THE MATTER SHOULD HAVE BEEN REFERRE D TO THE SPECIAL BENCH OF THE TRIBUNAL. THE SECOND ISSUE IS THAT W HILE, THE TRIBUNAL VIDE PARA 14 IN ITA NO.4774/MUM/2009 ACCEPTED THE P LEA OF THE ASSESSEE THAT SECTION 50C IS NOT APPLICABLE TO THE TRANSACTION EFFECTED BY THE COMPANY. IT IS CLAIMED THAT THE TR IBUNAL HAS NOT FOLLOWED ANY LAW IN DIRECTING THE AO TO REFER THE MATTER TO THE VALUATION OFFICER U/S 55A OF THE ACT AND DECIDE THE ISSUE AFRESH. 4. DUE TO THE AFORESAID ERROR, IT IS CLAIMED BY THE ASSESSEE THAT THERE IS A MISTAKE APPARENT FROM RECORD WHICH NEEDS TO BE RECTIFIED. 5. THE LD. COUNSEL FOR THE ASSESSEE READOUT THE MIS CELLANEOUS APPLICATION AND REITERATED THE CLAIM AS MADE IN TH E MAS. PER CONTRA, MA 423 AND 424/M/2014 3 THE LD. DR STATED THAT THERE IS NO ERROR IN THE O RDER OF THE TRIBUNAL WHICH CAN BE SAID TO BE A MISTAKE APPARENT FROM REC ORD WHICH CAN BE RECTIFIED. 6. AFTER HEARING REPRESENTATIVES OF BOTH SIDES, WE HAVE GIVEN THOUGHTFUL CONSIDERATION TO THE ISSUES RAISED IN TH ESE MAS VIS-A-VIS, THE ORDER OF THE TRIBUNAL. WE DO NOT FIND ANY MERI T IN THE CONTENTION RAISED BY THE LD. COUNSEL OF THE ASSESSEE. IN SO F AR AS THE DECISION OF THE CHENNAI BENCH IS CONCERNED, THE TRIBUNAL I N ITS ORDER IN PARAS 6 AND 7 HAS NOT ONLY CONSIDERED THE DECISION OF THE CHENNAI BENCH BUT ALSO GIVEN CATEGORICAL REASONS FOR NOT FOLLOWIN G THE DECISION OF THE CHENNAI BENCH, AND FURTHER AFTER CONSIDERING THE F ACTS IN ISSUES BEFORE THE BENCH, THE BENCH DID NOT THINK IT THAT IT IS A FIT CASE TO BE REFERRED TO SPECIAL BENCH OF THE TRIBUNAL. THE HO NBLE BOMBAY HIGH COURT (FULL BENCH) IN THE CASE OF AHMEDABAD ELECTRICITY CO. LTD. V/S CIT [1991] 190 ITR 413 (BOM.) HAS HELD AS UNDER : THE BASIC PURPOSE OF AN APPEAL PROCEDURE IN AN INC OME-TAX MATTER IS TO ASCERTAIN THE CORRECT TAX LIABILITY OF THE ASSESSEE IN ACCORDANCE WITH LAW. THEREFORE, AT BOTH THE STAGES, EITHER BEFORE THE APPELLATE ASSISTANT COMMISSIONER OR BEFO RE THE APPELLATE TRIBUNAL, THE APPELLATE AUTHORITY CAN CON SIDER THE PROCEEDINGS BEFORE IT AND THE MATERIAL ON RECORD BE FORE IT FOR THE PURPOSE OF DETERMINING THE CORRECT TAX LIABILIT Y OF THE ASSESSEE. THE APPELLATE AUTHORITIES OF COURSE, CANN OT TRAVEL BEYOND THE PROCEEDINGS AND EXAMINE NEW SOURCES OF I NCOME. FOR THIS PURPOSE, OTHER SEPARATE REMEDIES ARE PROVI DED TO THE DEPARTMENT UNDER THE INCOME-TAX ACT. BUT, APART FRO M THIS, MA 423 AND 424/M/2014 4 THERE IS NOTHING IN SECTION 254 OR SECTION 251 WHIC H WOULD INDICATE THAT THE APPELLATE AUTHORITIES ARE CONFINE D TO CONSIDERING ONLY THE OBJECTIONS RAISED BEFORE THEM OR ALLOWED TO BE RAISED BEFORE THEM EITHER BY THE ASSESSEE OR BY THE DEPARTMENT, AS THE CASE MAY BE. THEY CAN CONSIDER T HE ENTIRE PROCEEDING TO DETERMINE THE TAX LIABILITY OF THE AS SESSEE. UNDER S. 254(1) THE APPELLATE TRIBUNAL MAY, AFTER GIVING BOTH THE PARTIES TO THE APPEAL AN OPPORTUNITY OF BEING HEARD , 'PASS SUCH ORDERS THEREON AS IT THINKS FIT'. THIS GIVES A VERY WIDE POWER TO THE APPELLATE TRIBUNAL TO PASS, ON THE APPEAL SUCH ORDERS AS IT MAY THINK FIT. THE DEPARTMENT ALSO HAS A RIGHT T O FILE AN APPEAL OR CROSS-OBJECTIONS, AS THE CASE MAY BE, IF IT IS A GGRIEVED Y ANY PART OF THE ORDER OF THE APPELLATE ASSISTANT COMMIS SIONER. THE WORD `THEREON' IN SECTION 254 DOES NOT, IN ANY MA NNER, RESTRICT THE JURISDICTION OF APPELLATE TRIBUNAL. THE WORD ` THEREON' MERELY REFERS TO THE APPEAL. IT DOES NOT REFER TO THE SCOPE OF JURISDICTION AT ALL. THE WORDS WHICH PRESCRIBE THE EXTENT OF JURISDICTION OF THE TRIBUNAL 'UNDER SECTION 254 AR E THE WORDS 'MAY PASS SUCH ORDERS . . . AS IT THINKS FIT '. LOO KED AT FROM A SLIGHTLY DIFFERENT POINT OF VIEW, IF THE WORD 'THER EON CAN BE SAID TO REFER TO THE SUBJECT-MATTER OF THE APPEAL, THEN, THE SUBJECT- MATTER OF THE APPEAL IS THE ENTIRE TAX PROCEEDING OF THE ASSESSEE WHICH IS BEFORE THE TRIBUNAL FOR CONSIDER ATION; AND THIS WILL COVER THE PROCEEDINGS BEFORE INCOME TAX OFFICER, BEFORE THE APPELLATE ASSISTANT COMMISSIONER AS WELL AS BEFORE THE TRIBUNAL - INCLUDING THE GROUNDS RAISED BEFORE THE TRIBUNAL ANY, ADDITIONAL GROUNDS WHICH MAY BE ALLOWED TO BE RAISED BEFORE THE TRIBUNAL AS ALSO CROSS-OBJECTIONS, IF AN Y, BEFORE THE TRIBUNAL. 7. THE HONBLE SUPREME COURT IN THE CASE OF ACIT V /S SAURASHTRA KUTCH STOCK EXCHANGE LTD. [2008] 173 TAXMAN 322 (SC) HAS HELD AS UNDER : RECTIFICATION OF AN ORDER STEMS FROM THE FUNDAMEN TAL PRINCIPLE THAT JUSTICE IS ABOVE ALL. IT IS EXERCISED TO REMOV E THE ERROR AND TO DISTURB THE FINALITY. A PATENT, MANIFEST AND SELF-EVIDENT ERROR WHICH DOE S NOT REQUIRE ELABORATE DISCUSSION OF EVIDENCE OR ARGUMENT TO EST ABLISH IT, CAN BE SAID TO BE AN ERROR APPARENT ON THE FACE OF THE RECORD MA 423 AND 424/M/2014 5 AND CAN BE CORRECTED WHILE EXERCISING CERTIORARI JURISDICTION. AN ERROR CANNOT BE SAID TO BE APPARENT ON THE FACE OF THE RECORD IF ONE HAS TO TRAVEL BEYOND THE RECORD TO SEE WHETHER THE JUDGMENT IS CORRECT OR NOT. AN ERROR APPARENT ON TH E FACE OF THE RECORD MEANS AN ERROR WHICH STRIKES ON MERE LOOKING AND DOES NOT NEED LONG-DRAWN-OUT PROCESS OF REASONING ON POI NTS WHERE THERE MAY CONCEIVABLY BE TWO OPINIONS. SUCH ERROR S HOULD NOT REQUIRE ANY EXTRANEOUS MATTER TO SHOW ITS INCORRECT NESS. TO PUT IT DIFFERENTLY, IT SHOULD BE SO MANIFEST AND CLEAR THAT NO COURT WOULD PERMIT IT TO REMAIN ON RECORD. IF THE VIEW AC CEPTED BY THE COURT IN THE ORIGINAL JUDGMENT IS ONE OF THE POSSIB LE VIEWS, THE CASE CANNOT BE SAID TO BE COVERED BY AN ERROR APPAR ENT ON THE FACE OF THE RECORD. 8. CONSIDERING THE FACTS AND ISSUE RAISED BY THE A SSESSEE IN THE LIGHT OF THE DECISION CITED HEREINABOVE, GROUND NO. 1 IS DISMISSED. 9. THE SECOND ISSUE IS THAT THE TRIBUNAL HAS NO AUT HORITY IN LAW IN DIRECTING THE AO TO REFER THE MATTER TO THE VALUAT ION OFFICER U/S 55A OF THE ACT. THIS ISSUE ALSO DOES NOT GIVE RISE TO AN Y ERROR IN THE ORDER OF THE TRIBUNAL AS DISCUSSED IN THE JUDICIAL DECISIONS DISCUSSED HEREINABOVE AS HELD BY THE HONBLE BOMBAY HIGH COUR T IN THE CASE OF AHMEDABAD ELECTRICITY CO.LTD. (SUPRA) U/S 254 ( 1), THE APPELLATE TRIBUNAL MAY, AFTER GIVING BOTH THE PARTIES TO THE APPEAL AN OPPORTUNITY OF BEING HEARD, PASS SUCH AN ORDER THER EON AS IT THINK FIT. IT IS FURTHER OBSERVED BY THE HONBLE HIGH COURT T HIS GIVE VERY WIDE POWERS TO THE APPELLATE TRIBUNAL TO PASS, ON THE AP PEAL, SUCH AN ORDER AS IT MAY THINK FIT. MA 423 AND 424/M/2014 6 10. CONSIDERING THE ISSUE RAISED BY THE ASSESSEE IN THE LIGHT OF OBSERVATIONS OF THE HONBLE JURISDICTIONAL HIGH COU RT AS CITED HEREINABOVE, WE DO NOT FIND ANY MERIT IN THIS GROUN D RAISED BY THE ASSESSEE WHICH WE DISMISS. 11. IN THE RESULT, THE MAS FILED BY THE ASSESSEE AR E DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 13TH FEB, 2015. 78+* 3 9: ;'< 13TH FEB, 2015 8 2 =4 > SD SD ( / VIJAY PAL RAO ) ( . . ,/ N. K. BILLAIYA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER 9 3 '4 MUMBAI: 13TH FEB,2015. . . ./ SRL , SR. PS !'#$% &%'# / COPY OF THE ORDER FORWARDED TO : 1. &,- / THE APPELLANT 2. ./,- / THE RESPONDENT. 3. % % 3 @5 ( & ) / THE CIT(A)- CONCERNED 4. % % 3 @5 / CIT CONCERNED 5. 6. A= . 5 B( , % &6 &B( * , 9 3 '4 / DR, ITAT, MUMBAI CONCERNED =C) D4 / GUARD FILE. %E 3 / BY ORDER, TRUE COPY F ' (ASSTT. REGISTRAR) % &6 &B( * , 9 3 '4 /ITAT, MUMBAI