OBEROI CONSTRUCTION LTD., MUMBAI V. DCIT CENT. CIR. 4(1), MUMBAI

MA 47/MUM/2016

• Counselvise Citation: [2016] 124 COUNSELVISE.COM (IT) 4573 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 24-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 23-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VINITA MENON
• Assessee Lawyers: R MURALIDHAR
• Keywords: Rectification of order; Principle of natural justice
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL,MUMB AI BENCH C, MUMBAI BEFORE SHRI R.C.SHARMA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER M.A. NO.47/MUM/2016 (ARISING OUT OF ITA NO.1010/MUM /2013) ASSESSMENT YEAR: 2009-10 OBEROI CONSTRUCTIONS LTD. (FORMERLY KNOWN AS OBEROI CONSTRUCTIONS PVT. LTD.) 3 RD FLOOR, COMMERZ, INTERNATIONAL BUSINESS PARK, OBEROI GARDEN CITY, OFF WESTERN EXPRESS HIGHWAY, GOREGAON (EAST), MUMBAI-400063. PAN: AAACO1805E VS. DCIT CENTRAL CIRCLE-4(1), ROOM NO. 1916, AIR INDIA BUILDING, NARIMAN POINT, MUMBAI-400021. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI R. MURALIDHAR (AR) REVENUE BY : SMT. VINITA MENON (DR) DATE OF HEARING : 17.06.2016 DATE OF PRONOUNCEMENT : 24.06.2016 O R D E R PER PAWAN SINGH, JM: 1. THE PRESENT MISCELLANEOUS APPLICATION (MA) FILED BY THE ASSESSEE FOR RECTIFICATION OF ORDER DATED 04.11.2015. IN THE APPLICATION, THE ASS ESSEE HAS PLEADED THAT PARA 7 OF PAGE 3 IS FACTUALLY ERRONEOUS AND NEEDS TO BE RECTIFIED. IN T HE APPLICATION THE ASSESSEE PLEADED THAT THE ORDER HAS BEEN PASSED BY THE BENCH ON THE GROUN D THAT AR FOR ASSESSEE HAS NOT BROUGHT ANY MATERIAL BEFORE THE BENCH AS TO WHY DI SALLOWANCE MADE UNDER SECTION 14 A READ WITH RULE 8D IS WRONG. IT IS FURTHER PLEADED I N THE APPLICATION THAT DURING THE COURSE OF HEARING AUTHORISED REPRESENTATIVE (AR) OF THE ASSES SEE MADE THE SUBMISSION DOES NOT REQUIRE ANY SUBSTANTIAL MANPOWER OR COST TO MAKE IN VESTMENT AND EARNED SUCH INCOME. AS FAR AS INDIRECT EXPENSES RELATED TO THE ATTEMPT INC OME IT WAS NEGLIGIBLE THAT IS NOT EVEN ACCIDENT RS. 10,000/-IN FULLY. BROKER AND MUTUAL FU NDS HOUSES ARE SENDING THEIR MARKETING REPRESENTATIVE FOR FILING OF THE FORMS. F URTHER THE ENCASEMENT IS ALSO CREDITED ELECTRONICALLY. THE ASSESSEE DOESNT INCUR ANY EXPE NDITURE FOR DEPOSIT OF DIVIDEND ETC. IT IS FURTHER PLEADED THAT THE DECISION CITED BY THE REPR ESENTATIVE OF ASSESSEE WAS NOT CONSIDERED WHILE PASSING THE ORDER IN THE PRESENT MATTER. 2 MA NO. 47/M/2016 OBEROI CONSTRUCTIONS LTD. 2. WE HAVE HEARD LD AR FOR ASSESSEE AND LD DR FOR REVE NUE AND PERUSED THE CONTENTS OF THE ORDER AND THE MATERIAL AVAILABLE ON RECORD. AR OF ASSESSEE ARGUED THAT DURING THE COURSE OF HEARING, HE REFERRED A NUMBER OF DECISIONS WHICH WERE NOT REFERRED WHILE PASSING THE JUDGMENT, LD. AR OF THE ASSESSEE FURTHER ARGUED THA T HE HAD SUBMITTED ANALYSIS OF DISALLOWANCE WORKED OUT U/S. 14A AS PER RULE 8D OF THE ACT. AR FURTHER RELIED UPON THE DECISION OF BOMBAY HIGH COURT AND THE JUDGMENT OF H ONBLE APEX COURT IN DSP INVESTMENT PVT. LTD. VS. ACIT IN ITA NO. 2342/2013 DATED 08.03.2016) AND HONDA SIEL POWER PRODUCTS LTD. VS. CIT IN CIVIL APPEAL NO. 541 2/2007 DATED 26.11.2007. LD AR FOR ASSESSEE ARGUED THAT THE ASSESSEE WOULD SUFFER PREJ UDICE IF THE ORDER WITH REGARD TO THE FINDING OF DISALLOWANCE UNDER SECTION 14A IS NOT RE CTIFIED. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENUE SU PPORTED THE ORDER AND ARGUED THAT THERE IS NO APPARENT ERROR ON THE FACE OF THE ORDER AND THE ORDER DOES NOT REQUIRE ANY FURTHER INTERFERENCE AT OUR END. 3. WE HAVE CONSIDERED THE RIVAL CONTENTION OF THE PART IES AND CONSIDERED VARIOUS CITATIONS REFERRED BY AR OF THE ASSESSEE. IN DSP INVESTMENT PVT. LTD. (SUPRA), IT WAS HELD AS UNDER: IN FACT THE IMPUGNED ORDER OF THE TRIBUNAL IN PARA GRAPH 6 THEREOF DOES RECORD THE APPELLANTS RELIANCE UPON THE DECISION OF THE COURT OF ITS CO-ORDINATE BENCH IN J.K. INVESTORS (SUPRA). HOWEVER, THEREAFTER THE IMPUGNED ORDER DOES NOT DEAL WITH THE APPELLANTS RELIANCE UPON THE DECISION OF THE TRIBU NAL IN J.K. INVESTORS (SUPRA) WHILE DISMISSING THE APPELLANT-ASSESSEES APPEAL BEFORE I T. IN FACT THAT IMPUGNED ORDER OF THE TRIBUNAL OUGHT TO HAVE DEALT WITH ITS DECISION IN J.K. INVESTORS (SUPRA) AND CONSIDERED ITS APPLICABILITY TO THE PRESENT FACTS. FURTHER THE HONBLE APEX COURT IN HONDA SIEL POWER PRODUCTS LTD.(SUPRA) HELD AS UNDER: THE PURPOSE BEHIND ENACTMENT OF S. 254(2) IS BASED ON THE FUNDAMENTAL PRINCIPLE THAT NO PARTY APPEARING BEFORE THE TRIBUNAL, BE IT AN ASSESSEE OR THE DEPARTMENT, SHOULD SUFFER ON ACCOUNT OF ANY MISTAKE COMMITTED B Y THE TRIBUNAL. THIS FUNDAMENTAL PRINCIPLE HAS NOTHING TO DO WITH THE IN HERENT POWERS OF THE TRIBUNAL. ONE OF THE IMPORTANT REASONS FOR GIVING THE POWER O F RECTIFICATION TO THE TRIBUNAL IS TO SEE THAT NO PREJUDICE IS CAUSED TO EITHER OF THE PARTIES APPEARING BEFORE IT BY ITS DECISION BASED ON A MISTAKE APPARENT FROM THE RECOR D. 'RULE OF PRECEDENT' IS AN IMPORTANT ASPECT OF LEGAL CERTAINTY IN RULE OF LAW. THAT PRINCIPLE IS NOT OBLITERATED BY S. 254(2). WHEN PREJUDICE RESULTS FROM AN ORDER ATT RIBUTABLE TO THE TRIBUNAL'S MISTAKE, ERROR OR OMISSION, THEN IT IS THE DUTY OF THE TRIBUNAL TO SET IT RIGHT. ATONEMENT TO THE WRONGED PARTY BY THE COURT OR TRIB UNAL FOR THE WRONG COMMITTED BY IT HAS NOTHING TO DO WITH THE CONCEPT OF INHEREN T POWER TO REVIEW. IN THE PRESENT CASE, THE TRIBUNAL WAS JUSTIFIED IN EXERCISING ITS POWERS UNDER S. 254(2) WHEN IT WAS POINTED OUT TO THE TRIBUNAL THAT THE DECISION OF TH E CO-ORDINATE BENCH WAS PLACED BEFORE THE TRIBUNAL WHEN THE ORIGINAL ORDER CAME TO BE PASSED BUT IT HAD COMMITTED A MISTAKE IN NOT CONSIDERING THE MATERIAL WHICH WAS ALREADY ON RECORD. THE TRIBUNAL HAS ACKNOWLEDGED ITS MISTAKE, IT HAS ACCORDINGLY RE CTIFIED ITS ORDER. THE HIGH COURT WAS NOT JUSTIFIED IN INTERFERING WITH THE SAID ORDE R. FOR THE AFORESTATED REASONS, THE IMPUGNED JUDGMENT OF THE HIGH COURT IS SET ASIDE AN D THE ORDER PASSED BY THE TRIBUNAL ALLOWING THE RECTIFICATION APPLICATION FIL ED BY THE ASSESSEE IS RESTORED. CIT VS. HONDA SIEL POWER PRODUCTS LTD. (2006) 206 C TR (DEL) 328 SET ASIDE. 3 MA NO. 47/M/2016 OBEROI CONSTRUCTIONS LTD. THOUGH THE ORDER DATED 4 TH NOV 2015 WAS PASSED AFTER CONSIDERING THE SUBMISSI ON MADE DURING THE ARGUMENT, YET KEEPING IN VIEW THE PRINCI PLE OF NATURAL JUSTICE AND THE CONTENTION RAISED IN THE PRESENT APPLICATION BY THE ASSESSEE AND KEEPING IN VIEW THE FACTS OF THE PRESENT CASE, WE ARE INCLINED TO CALL THE FI NDING WITH REGARD TO THE DISALLOWANCE OF SECTION 14A FROM THE ORDER DATED 04.11.2015. THUS T HE FINDINGS WITH REGARD TO SECTION 14 A IS REFERRED IN PARA 7 ORDER DATED 14 TH OF NOVEMBER 2015 ARE RECALLED. 4. WITH THESE OBSERVATIONS, M.A. IS DISPOSED OFF. SINC E THE ORDER IN PART IS RECALLED, HENCE, THE MATTER MAY BE LISTED FOR HEARING BY REGULAR BEN CH ONLY WITH REGARD TO THE GROUND U/S 14A OF THE ACT, RAISED IN THE APPEAL. 5. IN THE RESULT, M.A. FILED BY THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 24 TH JUNE, 2016. SD/- SD/- ( R.C.SHARMA ) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 24/06/2016 S.K.PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / (ASSTT.REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. !'# / GUARD FILE. $ //TRUE COPY/