PRINCIPAL CIT-CENTRAL, Jaipur V. ADINATH BUILDCON PVT. LTD., Jaipur

MA 43/JPR/2018

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 6798 (ITAT-JAIPUR)
• Duration Of Justice: 2 month(s) 16 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 06-06-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 21-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SEEMA MEENA
• Assessee Lawyers: S R SHARMA C A DHK
• Keywords: Opportunity of being heard
• Section: 260A; 263

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES , JAIPUR JH FOT; IKY JKO ] U;KF;D LNL; ,O JH HKKXPUN] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, AM MISC. APPLICATION NO. 43/JP/2018 (ARISING OUT OF VK;DJ VIHY LA-@ ITA NO. 373/JP/2016) FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2007-08 PR. COMMISSIONER OF INCOME TAX (CENTRAL) JAIPUR CUKE VS. M/S. ADINATH BUILDCON PVT. LTD JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AADCA 2574 P VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY:SMT. SEEMA MEENA, JCIT- DR FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI S.R. SHARMA, CA LQUOKBZ DH RKJH[K@ DATE OF HEARING : 01/06/2018 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 06/06/2018 VKNS'K@ ORDER PER BHAGCHAND, AM THE REVENUE HAS FILED A MISC. APPLICATION AGAINST ITAT ORDER DATED 17-04- 2017 U/S 254(2) OF THE ACT PRAYING AS UNDER:- AGGRIEVED WITH ORDER U/S 263, THE ASSESSEE FILED APPEAL BEFORE THE HON'BLE ITAT JAIPUR WHICH VIDE ITS ORDER DATED 17-04-2017 IN ITA NO. 373/JP/2016 SET ASIDE THE ORDER U/S 263 PASSED BY CIT AND RESTORED THE ASSESSMENT ORDER DATED 30-09-2016. THE ITAT HELD MERELY BECAUSE THE ORDER WAS ERRONEOUS WOULD NOT ME ET THE REQUIREMENT OF LAW FOR INVOKING THE PROVISION OF SE CTION 263. FURTHER THE PAYEE HAD INCLUDED THE INTEREST INCOME IN THE R ETURN OF INCOME AND PAID TAX THEREON. THIS FACT WAS NOT CONTROVERTED BY THE REVENUE BY PLACING ANY CONTRARY MATERIAL ON RECORD. MA NO. 43/JP/2018 PR. CIT (CE NTRAL), JAIPUR VS M/S. ADINATH BUILDCON PVT. LTD. , JAIPUR 2 THE ORDER OF ITAT, JAIPUR WAS NOT ACCEPTED ON MERIT AND APPEAL U/S 260A WAS FILED BEFORE THE HIGH COURT RAI SING FOLLOWING SQL:- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE HON'BLE ITAT WAS JUSTIFIED IN SET ASIDE THE ORDER PASSED U/S 263 AND IN DELETING THE DISALLOWANCE MADE U/S 40(A) (IA) OF RS. 39,65,510/- WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE COMPANY FAILED TO DISCHARGE ITS STATUTORY LIABILITY TO DEDU CT TDS ON INTEREST PAYMENT AS PER INCOME TAX ACT, 1961. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW THE HON'BLE ITAT WAS JUSTIFIED IN SET ASIDE THE ORDER PASSED U/S 263 AND IN DELETING THE DISALLOWANCE MADE U/S 40(A) (IA) OF RS. 39,65,510/- WITHOUT APPRECIATING THE FACT THAT THE SECOND PROVISO TO THIS SECTION WAS INSERTED W.E.F. 01-04-2013 AND WAS APPL ICABLE IN RELATION TO THE ASSESSMENT YEAR 2013-14. 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW THE HON'BLE ITAT WAS JUSTIFIED IN SET ASIDE THE ORDER PASSED U/S 263 AND IN DELETING THE DISALLOWANCE MADE U/S 40(A) (IA) OF RS. 39,65,510/- WITHOUT APPRECIATING THE FACT THAT CIT HAS RIGHTLY INVOKED THE PROVISION OF SECTION 263 AS THE AO HAS NOT MADE VERIFICATION OF INTEREST EXPENSES AS PER PROVISION OF SECTION 40(A) (IA) OF THE I.T. ACT, 1961 AND THEREFORE, THE ORDER PASSED BY THE AO WAS ERRONEOUS INSOFAR AS IT WAS PREJUDICIAL TO THE INTEREST OF REVENUE. THE HIGH COURT VIDE ITS ORDER DATED 5-10-2017 DISMI SSED AS WITHDRAWN THE APPEAL OF THE REVENUE BY STATING THAT THE STANDING COUNSEL WANTS TO FILE REVIEW APPLICATIONS BEFORE TH E TRIBUNAL. IT APPEARS THAT AT ADMISSION STAGE, THE APPEAL OF T HE DEPARTMENT HAS BEEN DISMISSED FOR THE REASON THAT THE DEPARTME NT MAY FILE REVIEW APPLICATION/ MISC. APPLICATION, WHICH IF FILED, WIL L BE CONSIDERED BY THE ITAT. THE HIGH COURT WAS OF THE VIEW THAT THE ITAT OUGHT TO HAVE DECIDED THE ISSUE OF PROSPECTIVE APPLICABILITY OF T HE 2 ND PROVISO TO SECTION 40(A)(IA) ON MERIT (SQL NO. 2 RAISED BEFORE HC) ALSO AND SINCE, NO FINDING ON MERITS RELATING TO THE PROSPEC TIVE APPLICABILITY OF THE 2 ND PROVISO TO SECTION 40(A)(IA) HAS BEEN GIVEN, THE R EVIEW APPLICATION MAY BE FILED. IF REVIEW APPLICATION IS FILED, THE TRIBUNAL WILL CONSIDER THE SAME IN ACCORDANCE WITH LAW. THEREFORE, M.A. IN THIS CASE IS SUBMITTED BEFORE YO U FOR CONSIDERATION. MA NO. 43/JP/2018 PR. CIT (CE NTRAL), JAIPUR VS M/S. ADINATH BUILDCON PVT. LTD. , JAIPUR 3 DURING THE COURSE OF HEARING, THE LD. DR FILED THE JUDGEMENT COPY OF HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF PRINCIPAL COMMI SSIONER OF INCOME TAX, JAIPUR-2, JAIPUR VS M/S. ADINATH BUILDCON PVT. LTD. (DBIT NO. 268/2017 DATE OF ORDER 5-10-2017) , THE RELEVANT CONTENTS OF THE JUDGEMENT ARE AS UNDER:- LEARNED COUNSEL FOR THE APPELLANT STATES THAT HE WANTS TO FILE REVIEW APPLICATION BEFORE THE TRIBUNAL. IN THAT VIEW OF THE MATTER, THE APPEAL IS DISMISSED AS WITHDRAWN. IF REVIEW APPLICATION IS FILED, THE TRIB UNAL WILL CONSIDER THE SAME IN ACCORDANCE WITH LAW. 2.1 ON THE OTHER HAND, THE LD.AR OF THE ASSESSEE OP POSED THE MISC. APPLICATION FILED BY THE REVENUE PRAYING THAT THE MISC. APPLICA TION FILED BY THE DEPARTMENT IS BARRED BY LIMITATION AND FURTHER FILED A HON'BLE SU PREME COURT DECISION IN THE CASE OF THE CIT, KOLKTA VS CALCUTTA EXPORT COMPANY [2018] 93 TAXMANN. COM 51 (SC) WHEREIN THE HON'BLE COURT HAS HELD AS UNDER:- AMENDMENT MADE BY FINANCE ACT, 2010, TO PROVISION S OF SECTION 40(A)(IA) IS CURATIVE IN NATURE AND IT SHOU LD BE GIVEN RETROSPECTIVE OPERATION FROM DATE OF INSERTION OF S AID PROVISION I.E. WITH EFFECT FROM ASSESSMENT YEAR 2005-06. THE LD.AR OF THE ASSESSEE FURTHER SUBMITTED THAT TE CHNICALLY THE MISC. APPLICATION FILED BY THE REVENUE HAS NO RELEVANCE IN VIEW OF TH E DECISION OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS CALCUTTA EXPORT COMPAN Y ( SUPRA) AND THE SAME DOES NOT REQUIRE ANY RECTIFICATION IN THE TRIBUNAL ORDER. 2.2 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT WOULD BE RELEVANT TO REFER TO THE PROVIS IONS OF SECTION 254(2) OF THE ACT AS UNDER:- MA NO. 43/JP/2018 PR. CIT (CE NTRAL), JAIPUR VS M/S. ADINATH BUILDCON PVT. LTD. , JAIPUR 4 (2) THE APPELLATE TRIBUNAL MAY, AT ANY TIME WITHI N 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 LI ABILITY OF THE ASSESSEE, SHALL NOT BE MADE UNDER THIS SUB-SECTION UNLESS THE APPELLATE TR IBUNAL 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 SUBSECTION ON OR AFTER THE 1ST DAY OF OCTOBER, 1998, SHALL BE ACC OMPANIED BY A FEE OF FIFTY RUPEES.' THE PROVISIONS OF SECTION 254(2) ARE VERY CLEAR AND UNAMBIGUOUS. IT PROVIDES THAT THE TRIBUNAL MAY AMEND ANY ORDER PASSED BY IT UNDER SUB-SECTION (1) AND SHALL MAKE SUCH AMENDMENT IF THE MISTAKE IS BROUGHT TO IT S NOTICE BY THE ASSESSEE OR THE ASSESSING OFFICER. THE POWERS OF THE TRIBUNAL ARE T HEREFORE LIMITED TO THE EXTENT OF MAKING NECESSARY AMENDMENT TO AN ORDER PASSED BY TH E TRIBUNAL WITH A VIEW TO RECTIFYING ANY MISTAKE APPARENT FROM THE RECORD. NO POWER OR FOR THAT MATTER, ANY DISCRETION HAS BEEN CONFERRED STATUTORILY ON THE TR IBUNAL TO CONDONE ANY DELAY AND ADMIT APPLICATION U/S 254(2) OF THE ACT UNLIKE THE PROVISIONS OF SECTION 253(5) OF THE ACT. UNDER THE PROVISIONS OF SECTION 253(5) OF THE ACT, THE TRIBUNAL MAY ADMIT AN APPEAL OR PERMIT THE FILING OF A MEMORANDUM OF C ROSS-OBJECTIONS AFTER THE EXPIRY OF THE RELEVANT PERIOD REFERRED TO IN SUBSECTION (3 ) OR SUB-SECTION (4), IF IT IS SATISFIED THAT THERE WAS SUFFICIENT CAUSE FOR NOT PRESENTING IT WITHIN THAT PERIOD. GIVEN THAT THE STATUTORY TIME PERIOD OF FILING THE MISC. APPLICATI ON HAS NOW BEEN REDUCED BY THE FINANCE ACT 2016 TO SIX MONTHS FROM EARLIER FOUR YE ARS PERIOD, THERE SEEMS TO BE A CASE FOR PROVIDING SUITABLE PROVISIONS, ON THE LINE S OF SECTION 253(5) OF THE ACT, MA NO. 43/JP/2018 PR. CIT (CE NTRAL), JAIPUR VS M/S. ADINATH BUILDCON PVT. LTD. , JAIPUR 5 WHEREBY THE DELAY IN FILING THE MISC. APPLICATION M AY BE CONDONED IN CASES SHOWING SUFFICIENT CAUSE TO THE SATISFACTION OF THE TRIBUNAL. HOWEVER, TILL SUCH TIME, THE LEGISLATURE DOESN'T BRING IN APPROPRIATE AMENDMENT TO THE STATUTE, WE ARE GUIDED BY THE EXPRESS WORDINGS OF THE STATUTE AS CO NTAINED IN SECTION 254(2) OF THE ACT. IN THE INSTANT CASE, THE ORDER OF THE TRIBUNAL WAS PASSED ON 17.04.2017 AND THE MISC. APPLICATION HAS BEEN FILED BY THE REVENUE ON 21.03.2018. AS PER THE ADMITTED POSITION OF THE REVENUE, THERE IS CLEARLY A DELAY IN FILING THE MISC. APPLICATION WHICH HAS BEEN FILED BEYOND SIX MONTHS OF PASSING THE ORDER. IT IS ALSO NOTED THAT THE HON'BLE RAJASTHAN HIGH COURT PA SSED THE ORDER ON 5-10-2017 BUT IT DID NOT GIVE ANY DIRECTION TO THE TRIBUNAL T O ADMIT THE MISC. APPLICATION OF THE REVENUE EXCEPT FOLLOWING FINDINGS. LEARNED COUNSEL FOR THE APPELLANT STATES THAT HE WANTS TO FILE REVIEW APPLICATION BEFORE THE TRIBUNAL. IN THAT VIEW OF THE MATTER, THE APPEAL IS DISMISSED AS WITHDRAWN. IF REVIEW APPLICATION IS FILED, THE TRIB UNAL WILL CONSIDER THE SAME IN ACCORDANCE WITH LAW. THE BENCH NOTED THAT IT HAS NO POWER TO REVIEW ITS ORDER EXCEPT RECTIFYING ANY MISTAKE OCCURRED THEREIN U/S 254(2) OF THE ACT. SIN CE THE MISC. APPLICATION FILED BY THE REVENUE IS BARRED BY LIMITATION, THEREFORE, THE SAME IS DISMISSED AS INDICATED ABOVE. IN LIGHT OF ABOVE DISCUSSION, WITH OUT GETTING INTO THE MERITS, THE PRESENT MISC. APPLICATION FILED BY THE REVENUE BEYO ND THE PRESCRIBED PERIOD CANNOT BE ENTERTAINED AND IS HEREBY DISMISSED. MA NO. 43/JP/2018 PR. CIT (CE NTRAL), JAIPUR VS M/S. ADINATH BUILDCON PVT. LTD. , JAIPUR 6 3.0. IN THE RESULT, THE MISC. APPLICATION OF THE RE VENUE IS DISMISSED SD/- SD/- FOT; IKY JKO HKKXPUN (VIJAY PAL RAO) ( BHAGCHAND) U;KF;D LNL; / JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 06 /06/ 2018 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE PR. CIT (CENTRAL), JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- M/S. ADINATH BUILDCON PVT. LTD.JA IPUR , 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (MA NO. 43/JP/2018) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR