Marigantum Narasimha Chari , Bangalore V. Deputy Commissioner of Income Tax, Circle-2(2)(1), Bangalore

MA 47/BANG/2024

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 0235 (ITAT-BANGALORE)
• Duration Of Justice: 4 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 11-08-2024
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 11-08-2024
• Assessment Year: misc
• Appeal Filed On: 07-08-2024
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V. PARITHIVEL
• Section: 254(2); 113; 48; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE “C” BENCH, BANGALORE Before Shri Chandra Poojari, Accountant Member and Shri Keshav Dubey, Judicial Member MA No. 47/Bang/2024 (Arising out of ITA No. 276/Bang/2024) (Assessment Year: 2019-20) Marigantum Narasimha Chari 302, Samhitha Regency 1 Main Road, Pai Layout Old Madras Rd., Benaganahalli Bangalore 560016 PAN – ACAPC9124D vs. The Income Tax Officer Circle - 2(2)(1) Bangalore (Applicant) (Respondent) Applicant by: Smt. Sheetal, Advocate Respondent by: Shri V. Parithivel, JCIT-DR Date of hearing: 09.08.2024, 12.08.2024 Date of pronouncement: 12.08.2024 O R D E R Per: Keshav Dubey, J.M. This Second Miscellaneous Application (MA) u/s. 254(2) of the Income Tax Act, 1961 (the Act) is filed by the assessee again seeking rectification of the order of the Tribunal dated 27.06.2024 in ITA No. 276/Bang/2024 for Assessment Year (AY) 2019-20 as follows: - “The order of the Hon'ble Tribunal dated 27.06.2024 in the above appeal was received by the Petitioner's counsel on 27.06.2024 hence the miscellaneous petition is on time. A copy of the order of the Tribunal is enclosed as ANNEXURE-A to this Miscellaneous Petition. On perusal of the order, it is found that the Hon'ble ITAT has wrongly relied on the case laws, which was not the matter in hand as per the grounds filed before the hon'ble Tribunal, the grounds are extracted below for ready reference. 1. The learned CIT(A) erred in passing the order in the manner he did. MA No. 47/Bang/2024 Marigantum Narasimha Chari 2 2. The learned CIT (A) ought to have appreciated that the amount of Employee's share to ESI and PF was paid within the due date as per EPF and ESI act. Hence disallowance as made is bad in law. 3. The learned CIT(A) ought to have appreciated that as per clause 38 of Employees provident fund scheme 1952, payment of contribution of employees share should be made within 15 days from the end of the month during which disbursement of salary. 4. Without prejudice, the impugned additions are excessively arbitrary and unreasonable and liable to be deleted in full. 5. For these and such other grounds that may be urged at the time of hearing the appellant prays that the appeal may be allowed. During the argument, the bench agreed to remit the matter back to the Assessing Officer, considering that some payments were made before the 15th day of the month in which salaries were paid. This decision was based on a similar issue previously referenced to the bench, which was also remitted back to the Assessing Officer. However, it has come to our attention that the ITAT erroneously followed the judgement in ITA No. 577/BANG/2023 and dismissed the case, without appreciating that a more recent ITAT case, ITA No. 806/BANG/2023, had remitted a similar matter back to the Assessing Officer for consideration of the assessee's provided details. In contrast, the main order of the honourable ITAT states that some payments were made on time, contradicting the bench's initial agreement to remit the case. Accordingly, there is a mistake crypt in the above order of honourable Tribunal and to the extent mentioned above, the order of honourable Tribunal Date 27/6/2024 requires rectification. Accordingly for personal opportunity in the above matter.” 2. Before us, the learned A.R. of the assessee vehemently submitted that the assessee has paid certain amounts of ESI and EPF within the due dates of payment as stipulated in the respective Acts. Further she brought to our attention that even after applying the Original order of the Tribunal in ITA No.276/Bang/2024 which relied upon the case of Manikandan Vazhukkapara Kumaran in ITA No. 577/Bang/2023 dated 29.11.2023, certain payments of epf & esi are still to be allowed as paid within the due dates as stipulated in the respective Acts. As such the issue may be remanded for the limited purpose of verifying the challans submitted at the time of hearing of the appeal on 17.04.2024 so as to render substantial justice. MA No. 47/Bang/2024 Marigantum Narasimha Chari 3 3. The learned D.R., on the other hand, submitted that the second Misc. Application on same grounds is not maintainable and hence to be dismissed in limine. Further the learned D.R. vehemently submitted that as the grounds of the Misc. Application filed by the Assessee are same as that of first Misc. Application, the Tribunal has no jurisdiction to entertain the same again once the Tribunal has already disposed off the miscellaneous application in MA No. 31/Bang/2024 dated 30.07.2024 after application of mind. 4. We have heard the rival contentions and perused the material on record. Admittedly the assessee has filed the first miscellaneous application in MA No. 31/Bang/2024 which was disposed off by the Tribunal vide order dated 30.07.2024 by taking a conscious decision that conclusion in the original order was not based on erroneous facts or non- appreciation of facts on record & the assessee cannot seek a review of the order passed by the Tribunal through a miscellaneous application u/s.254(2) of the Act. We also find that the second Misc. Application filed by the assessee are on the similar grounds which have already been dealt with while disposing off the miscellaneous application in MA No. 31/Bang/2024 dated 30.07.2024. 5. In the present case the assessee has filed this M.A. not seeking rectification of the order in MA No. 31/Bang/2024 dated 30.07.2024. However, it has been filed to rectify the original order of the Tribunal in ITA No.276/Bang/2024 dated 27.06.2024. During the course of hearing the learned A.R. of the assessee vehemently contended that the assessee had submitted the challans for the payment of ESI and EPF at the time of hearing in ITA No. No.276/Bang/2024 but we found that except 3CB & 3CD Report & Salary Paid Ledger nothing is available on record & therefore the plea of the AR of the Assessee that the issue may be remanded for the limited purpose of MA No. 47/Bang/2024 Marigantum Narasimha Chari 4 verifying the challans submitted at the time of hearing of the appeal on 17.04.2024 so as to render substantial justice cannot be accepted. We also found that this Misc. Application although filed within 6 months from the end of the month in which the order was passed but the assessee has raised the same ground as that of the first Misc Application. Since we have already adjudicated the same while passing Order in MA No. 31/Bang/2024 dated 20.07.2024, the grounds once again raised in the present M.A is not maintainable. We relied on the decision of the Hon’ble Gujrat High Court in the case of CIT v. Smt. Vasantben H. Sheth (GUJ-HC) 2014 ITL 840 (2015) 273 CTR 48 [2015] 372 ITR 536 ; 113 DTR 244 wherein held as under- “12. The short question which is posed for the consideration of this court is, whether learned Appellate Tribunal is right in law in entertaining the assessee's miscellaneous application again when once the MA has been considered and rejected by the same authority, the Appellate Tribunal ? 13. At the out-set, it is required to be noted that it is not in dispute that after the judgment and order was passed by the learned Tribunal dated 6-6-1995 in ITA No. 2944/Ahd/1988, the assessee did submit an application in M.A. No. 34/Ahd/1995 for rectification of the alleged mistake in the order of the Tribunal, more particularly, the observations made in para-8 and 9 about the seized material i.e. diary by submitting that certain material facts could not be considered. It is not in dispute that the said rectification application came to be rejected by the learned Tribunal vide order dated 11-4-1996 by observing that the attempt on the part of the assessee is to get the review of the order of the Tribunal which is beyond the scope of section 254(2) of the Act. At this juncture, it is required to be noted that such rectification application (first rectification application) was decided by the same members, who have, earlier decided and disposed of the appeal. It appears that, thereafter, assessee preferred second rectification application for rectification of the order passed by the learned Tribunal on the same ground on which the earlier rectification application preferred which was rejected by the learned Tribunal, and by impugned order, not only the Tribunal has entertained the second rectification application on the same ground MA No. 47/Bang/2024 Marigantum Narasimha Chari 5 on which the earlier first application was made but has also allowed the same and has re-called/renewed its earlier order passed in appeal. Therefore, the question is whether the learned Tribunal was justified in entertaining the second rectification application on the same ground. 14. The identical question came to be considered by the Punjab & Haryana High Court in the case of Pearl Woolen Mills (supra). The question before the Punjab & Haryana High Court was, whether it was open to the Tribunal to readjudicate the matter, and that too, when an earlier application under section 254(2) had been dismissed on the same issue. Answering the aforesaid question, the Punjab & Haryana High Court has held that the Tribunal could not have readjudicated the matter under section 254(2). While so holding, in para-11 to 13, it is observed and held as under: "11. It is well settled that a statutory authority cannot exercise power of review unless such power is expressly conferred. Reference may be made to the judgment of the Hon'ble Supreme Court in Patel NarshiThakershi v. Shri Pradyumansinghji Arjunsinghji (1971) 3 SCC 844, wherein it was observed as under: 4''.It is well settled that the power to review is not an inherent power. It must be conferred by law either specifically or by necessary implication." The above view has been reiterated in Kapra Mazdoor Ekta Union v. Birla Cotton Spinning and Weaving Mills Limited (2005) 13 SCC 777. There is no express power of review conferred on the Tribunal. Even otherwise, the scope of review does not extend to rehearing a case on the merits.(Aribam Tuleshwar Sharma v. Aribam Pishak Sharma (1979) 4 SCC 389, Smt. Meera Bhanja v. Smt. Nirmala Kumari Choudhury (1995)1 SCC 170). The finality of these order of the Tribunal cannot be disturbed by a different Bench beyond the statutory power available to it. The Tribunal has referred to the principle of inherent power and incidental power and also the principle that act of court cannot prejudice anyone. The scope of the principle actus curiae neminem gravabit, i.e., nobody will be prejudiced by act of court, extends to correcting an error from an accidental slip or omission. Such power is available under section 254(2) of the Act, which is akin to section 152 of the Civil Procedure Code. In Niyamat Ali Molla v.Sonagram Housing Co-op. Society Ltd. (2007) 13 SCC 421, after referring to earlier MA No. 47/Bang/2024 Marigantum Narasimha Chari 6 judgments, the scope of such power was considered and it was observed that the said power was neither akin to power of review nor could clothe the court to modify judgment on the merits. The scope of power of rectification has been repeatedly considered, inter alia, in T.S Balaram ITO v. Volkart Bros. (1971) 82 ITR 50 (SC), Deva Metal (2007) 10 VST 751; (2008)2 SCC 439 Asstt. CIT v. Saurashtra Kutch Stock Exchange Ltd.(2008) 305 ITR 227 (SC) and such power is limited to correcting an error apparent on the face of record and not to an error to be discovered by long drawn process of reasoning. Thus, neither by invoking the inherent power nor the principle of mistake of court not prejudicing a litigant nor by invoking the doctrine of incidental power, the Tribunal could reverse a decision on the merits. Power available to a court of record, ex debito justitiae, or power to be invoked where an order may be nullity, on account of having been passed without service on a party, stand on a different footing." 15. In the case of Panchu Arunachalam (supra), the Madras High Court has held that once the powers for rectification of the earlier order is invoked/exercised and an order is passed and such order merges with the earlier order of the Tribunal on the ground that a mistake apparent from the record had occurred, another application for rectification of the original order passed in the appeal may not lie. While holding so, in para-9, the Madras High Court has observed and held as under: "9. When once the power for rectification of the earlier order is invoked/exercised and an order is passed and such order merges with the earlier order of the Tribunal, in our opinion, on the ground that a mistake apparent from the record had occurred, another application for rectification of the original order passed in the appeal may not lie. We are inclined to take the above view keeping in mind that whatever power conferred on the authorities must be exercised and orders passed thereon should have a finality attached to it, as otherwise, the parties aggrieved by such orders would be entitled to file any number of such applications seeking for rectification and the same would amount to reviewing of the earlier order, which power does not vest in the Tribunal under section 254 of the Act. Once an application seeking for rectification is disposed of, be it the Revenue or the assessee, if aggrieved, should have the recourse to the provisions of appeal before this Court and either of them cannot invoke the provisions of section 254(2) by filing another application for MA No. 47/Bang/2024 Marigantum Narasimha Chari 7 rectification which, in our view, cannot be entertained under that section." 16. The identical question came to be considered by the Kerala High Court in the case of Aiswarya Trading Co. (supra). The Kerala High Court in the aforesaid decision has observed and held that once the rectification application filed by one of the parties is considered and decided by the Tribunal rightly or wrongly, another rectification application on the same issue is not maintainable against the order issued by the Tribunal under section 254(2) of the Income-tax Act, 1961. It is further observed that the second rectification application by either party is maintainable only on issues not decided by the Tribunal in any other rectification application filed by either of the parties. 17. Considering the aforesaid decision of the Punjab & Haryana High Court, Madras High Court and Kerala High Court, and applying the same to the facts of the present case on hand, when the first rectification application was rejected by the Tribunal, the second rectification application on the same issue was not maintainable at all. Under the circumstances, the learned Tribunal has materially erred in entertaining the second rectification application and passing the impugned order of re-calling its earlier order in exercise of powers under section 254(2) of the Act. Once the second rectification application on the same issue was not maintainable, the learned Tribunal erred in entertaining the application and allowing the same. 18. Once it is held that the second rectification application on the same issue was not maintainable, and therefore, was not required to be entertained, thereafter, a further question, whether in the facts and circumstances of the case, the Tribunal is justified in allowing the second rectification application on merits and re-calling the order passed in an appeal is as such not required to be considered. However, when the submissions have been made, we are considering whether even on merits the Tribunal was justified in re-calling the order passed in appeal on merits or not. Considering the impugned order passed by the Tribunal, we are of the view that while passing the impugned order, the Tribunal has gone beyond the scope and ambit of section 254(2) of the Act. The order passed by the Tribunal in appeal, it appears that the issue is with respect to the panchnama of the seized article i.e. pocket diary and the income should be considered in the hands of the assessee and not what specifically dealt with and considered by the Tribunal extenso, and therefore, when the MA No. 47/Bang/2024 Marigantum Narasimha Chari 8 decision of the Tribunal on facts was against the assessee, and thereafter, the learned Tribunal could not have considered the second rectification application, on merits. Only when it is found that there was an error apparent on the face of the record, then and then only powers under section 254(2) of the Act can be invoked. In the case of T.S. Balaram, ITO (supra), while considering the scope and ambit of powers of review/rectification of mistake, the Hon'ble Supreme Court has observed that a mistake apparent on the record must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning. From the impugned order passed by the learned Tribunal in second rectification application, it appears that the learned Tribunal has tried to consider the issue on merits which was already considered by the learned Tribunal earlier while deciding the appeal. Under the circumstances, even on merits also, the learned Tribunal has materially erred in exercise of powers under section 254(2) of the Act by passing the impugned order and the learned Tribunal has gone beyond the scope and ambit of the powers of section 254(2) of the Act. Under the circumstances, on merits, the order passed in second rectification application, cannot be sustained.” 6. We respectfully follow the above decision of the Hon’ble Gujrat High Court and hold that we cannot entertain the second Misc. Application again on the same Grounds when once the First Misc. Application has been considered & rejected by us. We reiterate that the AO shall pass the consequential Order in compliance with Para 10.7 & 10.8 of the Order of the Tribunal in the case of Manikandan Vazhukkapara Kumaran in ITA No.577/Bang/2023 dated 29/11/2023. 7. In the result, the MA filed by the assessee is dismissed. Order pronounced in the open Court on 12 th August, 2024. Sd/- Sd/- (Chandra Poojari) (Keshav Dubey) Accountant Member Judicial Member Bengaluru, Dated: 12 th August, 2024 n.p. MA No. 47/Bang/2024 Marigantum Narasimha Chari 9 Copy to: 1. The Applicant 2. The Respondent 3. The CIT, concerned 4. The DR, ITAT, Bangalore 5. Guard File By Order //True Copy// Assistant Registrar ITAT, Bangalore S.No. Details Date Initials Designation 1 Draft dictated on 09.08.2024 Sr. PS/PS 2 Draft placed before author 09.08.2024 Sr. PS/PS 3 Draft proposed & placed before the Second Member JM/AM 4 Draft discussed/approved by Second Member AM/AM 5 Approved Draft comes to the Sr. PS/PS Sr. PS/PS 6 Kept for pronouncement Sr. PS/PS 7 File sent to Bench Clerk Sr. PS/PS 8 Date on which the file goes to Head Clerk 9 Date on which file goes to A.R. 10 Date of Dispatch of order