NARESH JAYANTILAL SHAH, MUMBAI V. DCIT 14(2), MUMBAI

MA 480/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 3510 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 24-08-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 23-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MICHAEL JERALD
• Section: 254(2); 142(2A); 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH B, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER MA NO.480/M/2019 (ARISING OUT OF ITA NO.6208/M/2013) ASSESSMENT YEAR: 2009-10 SHRI NARESH JAYANTILAL SHAH, 167, RADHA GULLY, SWADESHI MARKET, KALBADEVI ROAD, MUMBAI - 40002 PAN: AADPS 0903R VS. DCIT 14(2), MUMBAI (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI VIJAY MEHTA, A.R. SHRI ANUJ KISHNADWALA, A.R. REVENUE BY : SHRI MICHAEL JERALD, D.R. DATE OF HEARING : 21.08.2020 DATE OF PRONOUNCEMENT : 24.08.2020 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: BY WAY OF THIS MISCELLANEOUS APPLICATION, THE ASSESSEE SEEKS THE RECALLING OF THE ORDER PASSED BY THE TRIBUNAL IN ITA NO.6208/M/2013 A.Y. 2009-10 DATED 24.06.2019 ON THE GROUND THAT THE SAID ORDER CONTAINS SOME APPARENT AND PRIMA-FACIE MISTAKES AS THE SUBMISSIONS OF THE ASSESSEE AS MADE DURING THE COURSE OF HEARING BEFORE THE BENCH WERE NOT CONSIDERED WHILE PASSING THE ORDER. 2. THE LD. A.R. SUBMITTED THAT THE ABOVE APPEAL WAS HEARD BY THE TRIBUNAL ON 06.05.2019 AND THE SAME WAS DISPOSED OFF BY THE ORDER DATED 24.06.2019. IT IS SUBMITTED THAT CERTAIN MA NO.480/M/2019 (ARISING OUT OF ITA NO.6208/M/2013) SHRI NARESH JAYANTILAL SHAH 2 MISTAKES HAVE CREPT IN THE ORDER OF THE TRIBUNAL AND HENCE THE ASSESSEE IS SEEKING RECTIFICATION OF THE SAID MISTAKES AND HAS MOVED THE PRESENT MISCELLANEOUS APPLICATION U/S. 254(2) OF THE ACT. THE LD. AR SUBMITTED THAT THE ASSESSEE VIDE ADDITIONAL GROUND OF APPEAL DATED 06.09.2018 CHALLENGED THE DIRECTION GIVEN BY THE ASSESSING OFFICER FOR SPECIAL AUDIT U/S 142(2A) OF THE ACT. THE SAID GROUND WAS ADMITTED AND ADJUDICATED BY THE HONBLE TRIBUNAL. IT IS SUBMITTED THAT WHILE ADJUDICATING THE ADDITIONAL GROUND, CERTAIN MISTAKES HAVE CREPT IN THE ORDER OF THE TRIBUNAL. THE LD AR SUBMITTED THAT THE ENTIRE CASE OF THE ASSESSEE, AS SUBMITTED DURING THE COURSE OF HEARING, WAS THAT THE ASSESSING OFFICER NEVER GAVE THE BREAK-UP OF AIR INFORMATION AND HENCE, THE ASSESSEE WAS NOT ABLE TO RECONCILE THE SAME. IT WAS FURTHER SUBMITTED THAT SINCE ALLEGED FAILURE OF ASSESSEE IN RECONCILING THE AIR INFORMATION WAS SOLE REASON FOR ORDERING SPECIAL AUDIT, THE SAID ORDER WAS ILLEGAL. THIS WAS THE MAIN CASE OF THE ASSESSEE AND THE ENTIRE ARGUMENTS WERE BASED ON THAT. THESE ARGUMENTS WERE ALSO MENTIONED IN THE PROPOSITION NO. 1 OF THE CHART SUBMITTED DURING THE COURSE OF HEARING. HOWEVER, THE SAID ARGUMENTS WERE NEVER CONSIDERED BY THE TRIBUNAL. IT WAS ALSO SUBMITTED THAT THE BOOKS WERE NEVER CALLED FOR OR EXAMINED BY ASSESSING OFFICER AND HENCE THE ASSESSING OFFICER COULD NOT GIVE ANY FINDING REGARDING COMPLEXITY OF BOOKS. THIS WAS POINTED OUT THROUGH PROPOSITION NO. 2 TO 4 OF THE ABOVE REFERRED CHART. IT WAS SUBMITTED THAT THE DIRECTION GIVEN BY ASSESSING OFFICER U/S 142(2A) OF THE ACT IS BAD IN LAW AND CONSEQUENTLY THE RESULTANT ASSESSMENT ORDER WAS TIME BARRED. THE LD. COUNSEL FURTHER SUBMITTED THAT DURING THE COURSE OF HEARING, REFERENCE WAS MADE TO THE INFORMATION PROVIDED BY THE MA NO.480/M/2019 (ARISING OUT OF ITA NO.6208/M/2013) SHRI NARESH JAYANTILAL SHAH 3 ASSESSING OFFICER AND THE INADEQUACY IN THE SAID INFORMATION PROVIDED WAS ALSO EXPLAINED. IT WAS FURTHER SUBMITTED THAT IN THE LETTER DATED 08.12.2011 (PG NO 13 OF P.B.) THE ASSESSEE REFERRED TO ITS EARLIER LETTER DATED 25.11.2011 (PG NO 21 OF P.B.) WHEREIN THE ASSESSEE SPECIFICALLY POINTED OUT THAT THE INFORMATION WAS INADEQUATE. FURTHER, VIDE THE SAME LETTER, THE DISCREPANCIES IN THE INFORMATION PROVIDED BY THE ASSESSING OFFICER WERE ALSO BROUGHT TO HIS NOTICE. IT WAS FURTHER CLARIFIED TO THE ASSESSING OFFICER VIDE LETTER DATED 19.12.2011 THAT IN THE EARLIER LETTER DATED 08.12.2011, THE ASSESSEE WAS SEEKING COMPLETE DATA OF AIR FOR RECONCILIATION PURPOSE AND IT WAS NOT THE CASE THAT THE ASSESSEE HAD REFUSED TO EXPLAIN THE TRANSACTIONS. THE LETTER DATED 19.12.2011 CLARIFYING THE FACT THAT THE ASSESSEE NEVER REFUSED TO EXPLAIN THE TRANSACTION WAS PLACED IN THE PAPER BOOK ON PG NO 23-24 AND WAS SPECIFICALLY BROUGHT TO THE NOTICE OF THE HONBLE TRIBUNAL DURING THE COURSE OF HEARING. HOWEVER, THE SAME HAS NOT BEEN CONSIDERED BY THE TRIBUNAL, WHICH HAS LED THE TRIBUNAL TO CONTRARY CONCLUSION. 3. THE LD. AR SUBMITTED THAT ON PG NO 16 OF THE ORDER, IT HAS BEEN STATED BY THE TRIBUNAL THAT THE JUDGMENTS CITED BY ASSESSEE IN THE CASE OF WEST BENGAL STATE CO-OPERATIVE BANK LTD., VS. JCIT (267 ITR 345), DELHI DEVELOPMENT AUTHORITY AND ANOTHER VS. UNION OF INDIA AND ANOTHER (350 ITR 432) AND RPS ASSOCIATES VS. DIT (IT) (280 CTR 582) ARE NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE AS ASSESSING OFFICER HAD GRANTED PROPER OPPORTUNITY BEFORE DIRECTING SPECIAL AUDIT. IN THIS REGARD, IT IS SUBMITTED THAT THE PROPOSITION THAT THE ASSESSEE WAS SEEKING TO ARGUE BY RELYING ON THE ABOVE JUDGEMENTS WAS THAT COMPLEXITY OF ACCOUNTS WHICH CANNOT BE JUDGED WITHOUT LOOKING AT BOOKS OF MA NO.480/M/2019 (ARISING OUT OF ITA NO.6208/M/2013) SHRI NARESH JAYANTILAL SHAH 4 ACCOUNTS. (PROPOSITION NO. 4 OF THE CHART SUBMITTED DURING THE COURSE OF HEARING). IT WAS SUBMITTED THAT THE A.O. NEVER ASKED FOR THE BOOKS OF ACCOUNTS OF THE ASSESSEE. IT IS SUBMITTED THAT THIS IMPORTANT PROPOSITION, DULY SUPPORTED BY ORDERS OF HIGH COURTS, WAS NOT CONSIDERED AT ALL BY THE TRIBUNAL AND HENCE IT AMOUNTS TO MISTAKE APPARENT FROM RECORD. 4. THE LD. AR SUBMITTED THAT NON-CONSIDERATION OF THE MAIN ARGUMENTS OF THE ASSESSEE WOULD AMOUNT TO MISTAKE APPARENT FROM RECORD AND HENCE CAN BE RECTIFIED U/S 254(2) OF THE ACT. IN ORDER TO SUPPORT THE SAID CONTENTION, RELIANCE IS PLACED ON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN CASE OF SONY PICTURES NETWORKS INDIA PVT. LTD. V. ITO (WRIT PETITION NO 3508 OF 2018) DATED 03.01.2019 (COPY ALREADY ON RECORD) WHEREIN THE HONBLE BOMBAY HIGH COURT HELD THAT NOT DEALING WITH THE FUNDAMENTAL SUBMISSIONS OF THE ASSESSEE WOULD AMOUNT TO MISTAKE APPARENT FROM RECORD. THE LD AR FINALLY PRAYED THAT THE ORDER OF TRIBUNAL DATED 24.06.2019 MAY BE RECTIFIED OR RECALLED. 5. THE LD. D.R., ON THE OTHER HAND, STRONGLY OPPOSED THE ARGUMENTS OF THE LD. A.R. BY SUBMITTING THAT THE TRIBUNAL HAS CORRECTLY PASSED THE ORDER AFTER CONSIDERING ALL THE SUBMISSIONS OF THE LD. A.R. AND THEREFORE THE MISCELLANEOUS APPLICATION OF THE ASSESSEE MAY KINDLY BE DISMISSED. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD INCLUDING OUR NOTINGS IN THE LOG BOOK. AFTER CAREFULLY EXAMINING THE RECORDS AS PLACED BEFORE US AND OUR NOTINGS IN THE LOG BOOK, WE FIND THAT FUNDAMENTAL PLEAS/ARGUMENTS OF THE LD. A.R MADE DURING THE COURSE OF MA NO.480/M/2019 (ARISING OUT OF ITA NO.6208/M/2013) SHRI NARESH JAYANTILAL SHAH 5 HEARING WERE INADVERTENTLY NOT CONSIDERED WHILE PASSING THE ORDER. WE ALSO NOTE THAT THE LD. A.R. HAD SUBMITTED BEFORE THE BENCH THAT THE AO NEVER GAVE THE BREAK UP OF AIR INFORMATION AND THEREFORE ASSESSEE WAS NOT ABLE TO RECONCILE THE SAME WHICH WAS THE SOLE REASON FOR ORDERING SPECIAL AUDIT BY THE LD AO. SIMILARLY ,THE BOOKS OF ACCOUNTS WERE NEVER CALLED AND EXAMINED BY THE AO DURING THE ASSESSMENT PROCEEDINGS AND AS TO HOW THE AO FORMED THE BELIEF THAT THERE WERE COMPLEXITIES IN THE BOOKS OF ACCOUNTS WITHOUT EXAMINING THE BOOKS OF ACCOUNTS IS DIFFICULT TO UNDERSTAND. THUS ,WE FIND FROM THE PERUSAL OF THE ORDER OF THE BENCH THAT THESE ISSUES WERE NOT CONSIDERED AND DECIDED AND THERE ARE PRIMA FACIE MISTAKES CREPT IN THE SAID ORDER OWING TO NON CONSIDERATION OF THE ARGUMENTS OF THE ASSESSEE. MOREOVER, THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF SONY PICTURES NETWORK INDIA PVT. LTD. VS. ITO (SUPRA) WHEREIN THE HONBLE BOMBAY HIGH COURT HAS HELD THAT NOT DEALING WITH THE FUNDAMENTAL SUBMISSIONS/ARGUMENTS OF THE ASSESSEE WOULD AMOUNT TO MISTAKE APPARENT. IN VIEW OF THESE FACTS AND LEGAL POSITION, WE ARE INCLINED TO RECALL THE ORDER DATED 24.06.2019 WITH THE DIRECTION TO REGISTRY TO LIST THE SAME BEFORE THE REGULAR BENCH FOR HEARING TO BE DECIDED AFRESH. 7. IN THE RESULT, THE MISCELLANEOUS APPLICATION OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24.08.2020. SD/- SD/- (VIKAS AWASTHY) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 24.08.2020. * KISHORE, SR. P.S. MA NO.480/M/2019 (ARISING OUT OF ITA NO.6208/M/2013) SHRI NARESH JAYANTILAL SHAH 6 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.