Appeal details
Counselvise Citation
[2024] 100 COUNSELVISE.COM (IT) 3353 (ITAT-RAJKOT)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 month(s) 12 day(s)
Appellant
Respondent
Appeal Type
Miscellaneous Application
Pronouncement Date
19-03-2024
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
DB
Next Hearing Date
18-01-2024
Assessment Year
2007-2008
Appeal Filed On
07-12-2023
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT (Conducted Through Virtual Court) Before: Shri Waseem Ahmed, Accountant Member And Shri T.R. Senthil Kumar, Judicial Member Asstt. Commissioner of Income Tax, Central Circle-1, Rajkot (Appellant) Vs Shri Rajeshkumar Govindlal Patel, 4 th Floor, Sita Apartment, Nr. Pradyuman Police Station, Sadar Bazar, Rajkot PAN: ABPPB7559M (Respondent) Revenue Represented: Shri Shramdeep Sinha, CIT-DR Assessee Represented: Shri S. N. Soparkar, A.R. Date of hearing : 19-01-2024 Date of pronouncement : 20-03-2024 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- These two Miscellaneous Applications are filed by the Revenue as against common order dated 12.04.2023 passed in ITA Nos. 25 & 26/Rjt/2021 passed by this Bench. The Grounds of Appeal raised by the Revenue is as follows: “1. Information was available with the Income tax department about foreign bank account held by Shri Rajeshkumar G. Patel in HSBC, Geneva when an action of Search and Seizure u/s 132 of the IT Act was conducted in the premises of the assessee on 08.09.2011. M.A. Nos: 20 & 49/RJT/2023 (in ITA Nos: 25 & 26/RJT/2021) Assessment Year 2007-08) M.A. Nos. 20 & 49/Rjt/2023 A.Y. 2007-08 Page No ACIT Vs. Rajeshkumar G. patel 2 2. During the course of S&S proceedings, information available with the department including other documents were confronted to the assessee and he was required under oath (u/s 132(4) of the Income Tax Act) to give statement. 3. in the course of statement, was confronted with the documents detailing Bank account in HSBC wherein details of Rajeshkumar G Patel, address, etc. were mentioned, the assessee while stating that he was not able to recall the specifies, also made a voluntary disclosure of an amount of Rs. 39.60 Crores and informed that he has informed accordingly by a letter to the Addl. Director (Investigation). Thereafter, in the subsequent question he was informed about the value of holding in bank account whereupon Shri Patel stated that his disclosure covers the amount of investment in foreign bank account. 4 Then, after 29 months of such admission, Shri Rajeshkumar G Patel filed a statement of retraction of his disclosure to Department. The amount was also not shown in his raven of income tiled in response to notice issued under sec. 153A of the Act. 5. The Assessing Officer in her assessment order has corroborated the 'admission of Shri Rajeshkumar G Patel with independent corroborative evidences. The assessment order also discusses the reasons advanced by the assessee regarding his retraction. It mentions that the assessee has been demanding certified copies of documents from authorities/banks from the department. 6. During the course of assessment, after retraction, the assessee was required to provide a consent waiver', as per procedure, to enable the department to proceed ahead with independent enquires. It mentions that the assessee has refused to provide even the consent waiver. 7. Thereafter, on the strength of the findings in the Search, especially the admission by the assessee when confronted with the details of Bank- deposit in HSBC, Geneva and other corroborating and circumstances indicating that the amount 'held' by assessee has not been disclosed in the Return of Income for AY 2006-07 and AY 2007-08, the assessing officer has added the amount of deposits (converted into Indian rupees) to taxable income of the assessee in respective years. 8 Ld. CIT (A) deleted the addition on technical/legal grounds without going into the merits of the case, quashing the assessment order for breach of time limits, and also, holding that no incriminating documents were found/seized during the course of Search and seizure action. 9. Thereafter, the Department preferred an appeal before Hon'ble ITAT on multiple grounds of appeal. M.A. Nos. 20 & 49/Rjt/2023 A.Y. 2007-08 Page No ACIT Vs. Rajeshkumar G. patel 3 10. Before hon'ble ITAT, the CIT-DR invited attention of Hon. ITAT on applicability of the provisions of Evidence Act on the 'admission' by the assessee, in response to the specific query confronting documents pertaining to the investment in the Foreign HSBC-Geneva bank accounts held by the assessee. It was also argued by the CIT(DR) as to how the case in hand is different from case like Saumya Construction (Gujarat HC); Kabul Chawla (Delhi HC) by pointing out that that the assessment order has a direct connection with the findings of Search and seizure action. The intent of judicial interpretation has been to see a perceptible link between the Search and Seizure proceedings and the additions in assessment order. In this case, the link is established by the 'admission' in the statement, the confrontation of the information available with the department to the assessee leading to voluntary disclosure by the assessee of Rs.39.60 Crores. It was further argued that the disclosure is not 1 crores or 100 crores, or even a round figure. A disclosure like 39.60 is a well thought of figure. The disclosure vide letter to Additional Director and in response to the confrontation of an information about the foreign bank deposit of the assessee, is material fact and is directly borne out 'search and seizure proceedings 12. The assessee has not refuted that the investment in Bank account belongs to him. Only the authenticity of the document is being doubted. The CIT(DR) has requested for a time to collect details from investigation wing and CBDT. 13. Hon. ITAT has pronounced its order on 12.04.2023. In the order it can be seen that despite the request for further arguments by the CIT(DR), despite seeking time to obtain documents from CBDT/Investigation wing seeking information on the basis of which department held that the assessee was having foreign bank accounts, despite the fact that hearings on all grounds of appeal had not taken place, the order has been issued on 12-04-2023. 14 Furthermore, the fact that the Federal Department of Finance, Swiss Federal Tax Administration have confirmed vide their letter dated 11th Dec, 2019 to FT & TR Division, CBDT that the bank account in question belongs to the assessee, renders the order of Ld. ITAT erroneous and mistaken on the face of record. 15. In view of above, the undersigned is approaching the Hon'ble Tribunal once again by way of this miscellaneous application(MA) with a prayer to grand relief in the matter as sought in the ITA No. 25 & 26/RJT/2021.” 2. The Ld. CIT-DR Shri Sharamdeep Sinha appearing for the Revenue in support of the M.A. requested to recall the common order passed by this Tribunal and pass fresh orders and also filed a M.A. Nos. 20 & 49/Rjt/2023 A.Y. 2007-08 Page No ACIT Vs. Rajeshkumar G. patel 4 detailed submissions vide its letter dated 20.12.2023 and 18.01.2024. 3. Per contra Ld. Senior Counsel Shri S.N. Soparkar appearing for the assessee drawn our attention to Paragraph Nos. 6 & 6.1 of our order and also submitted the Revenue has challenged this common order of the Tribunal before the Hon’ble High Court of Gujarat in Tax Appeal No. 781 of 2023 raising the following Questions of Law: (a) Whether in the facts and circumstances of the case and in law, the learned ITAT has erred in deleting the addition of Rs. 26,33,23,482/- made on account of deposit/investment in HSBC Geneva Bank held by the assessee and his cousin jointly? (b) Whether in the facts and circumstances of the case and in law, the order of the learned ITAT is ex-facie, erroneous, illegal and perverse because the learned ITAT held that the papers on the basis of which addition of unaccounted investment amounting to Rs.26,33,23,482/- in HSBC Bank has been made in this case are devoid of any merit as same are unverified sheet of paper which is indicative of a bank statement and AO has failed to prove the truthfulness of the same, without appreciating the fact that the Federal Department of Finance, Swiss Federal Tax Administration have confirmed vide letter dated 11.12.2019 to FT & TR Division, CBDT that the bank account in question belongs to the assessee? (c) Whether in the facts and circumstances of the case and in law, the order of the learned ITAT is contrary to the law inasmuch as the learned ITAT has failed to appreciate that the addition made on account of undisclosed foreign bank account has been made on the basis of incriminating documents duly confronted to the assessee during the course of search? (d) Whether in the facts and circumstances of the case and in law, the learned ITAT has erred in holding that the assessment order was not completed within the time-limit specified as per clause (ix) of Explanation to section u/s 153B(1) of IT Act and the same was passed by the AO beyond the time barring date? 3.1. Thus Ld. Senior Counsel further submitted that under the guise of Miscellaneous Application, the Revenue is requiring this M.A. Nos. 20 & 49/Rjt/2023 A.Y. 2007-08 Page No ACIT Vs. Rajeshkumar G. patel 5 Hon’ble Tribunal to review its own order, which is not permissible u/s. 254(2) of the Act and relied upon various case laws. 4. We have heard rival parties extensively and perused the materials available on record. Originally, the Revenue filed one Miscellaneous Application namely M.A. No. 20/Rjt/2023 as against the common order passed by this Tribunal, seeking a prayer to modify the common order passed by this Tribunal. In the first hearing of the M.A. namely 01.09.2023 when the Revenue was questioned how the relief as prayed by Revenue in both ITA Nos. 25 & 26/Rjt/2021 by filing single Miscellaneous Application. It is thereafter the Revenue filed the second M.A. No. 49/Rjt/2023 on 08.12.2023 (which is time barred) after taking five adjournments. Thus Revenue is not serious enough in handling the above case right from the beginning by committing mistakes and non- application of mind. 5. Now the contention raised by the Revenue in the present applications are amounting to re-arguing the above case, since the entire submissions of the both parties were considered by us and relevant portion of our order in ITA Nos. 25 & 26/Rjt/2021 reads as follows: “6. During the course of hearing of the above Revenue Appeals Ld. CIT DR Shri. Shramdeep Sinha requested for 60 days time to get the details of chain of custody of information regarding foreign investment holding in HSBC, Geneva by the assessee and he is trying to obtain a confirmation in this regard from CBDT/Investigation Wing. This request of the Ld DR was stoutly opposed by the Ld Senior Counsel Shri S.N. Sorparkar on the ground that the Administrative Commissioner, CIT [Central II] vide his letter dated 01- 01-2013 requested to get details of foreign bank accounts alleged to be held by the assessee with HSBC Geneva, from Under Secretary, [FT&TR-III][2]. Thereafter the Ld.CIT, Central-II has forwarded a copy of letter bearing no. 504/0300/2012–FTD–1 dated 22-01-2013 received from the Under Secretary M.A. Nos. 20 & 49/Rjt/2023 A.Y. 2007-08 Page No ACIT Vs. Rajeshkumar G. patel 6 [FT&TR-III][2]. As per paragraph 2 of the said letter, a reference for Administrative Assistance has been made to the Competent Authority under the provisions of “Exchange of information” under Indo-Switzerland Double Taxation Avoidance Agreement [DTAA]. However no information was received from the Competent Authority before completion of the assessment orders by the A.O. as well as during the pendency of the above appeals by Ld CIT[Appeals] in January 2021, that is almost nine years after the so called reference made by the Department. Again two years after filing of the above appeals by the Revenue, in the above circumstances the Ld DR is seeking further time to get the details is highly unjustifiable and against the Principle of Natural Justice and therefore requested not to grant further time of 60 days. 6.1. We have carefully considered the submissions of the rival parties and granted time to the Ld DR to submit his written arguments within 15 days of the conclusion of the hearings of the appeals. Since the question of getting the details of foreign bank account from CBDT/Investigation Wing after a period of 10 years is not justifiable. Further the Administrative Commissioner namely PCIT, Central has filed the present appeals for the Revenue, it is the very same office who had sought for information from the Under Secretary [FT& TR-III][2] and no information received before completion of assessment by the assessing officer. It is further stated in the Written/Reply Arguments that the assessee gathered information after inspecting the departmental records that the Ld CIT[A], Ahmedabad before finalizing the appellate orders, had once again called for a report from the AO, as to whether any information was received from the CBDT [FT&TR], post assessment order. Since the reply of the AO was not in affirmative, the Ld CIT[A] proceeded to finalize the appeals. Therefore the Ld CIT DR’s request is reject and however directed to submit his Written Arguments within 15 days of completion of the hearings. 6.2. Thus the Ld. CIT DR submitted his Notes on Arguments by email on 14-02-2023 the same is reproduced as follows:” 5.1. Thus the present Miscellaneous Applications filed by the Revenue requiring this Tribunal to modify the impugned order which is nothing but re-arguing the same issue is not permissible u/s. 254(2) of the Act. Thus in the present M.A., the Revenue by bringing some new documents after the conclusion of the appeal hearings were filed by the Office of the CIT-DR vide its letter dated 20.12.2023, whereas the appeals were disposed of by this Tribunal M.A. Nos. 20 & 49/Rjt/2023 A.Y. 2007-08 Page No ACIT Vs. Rajeshkumar G. patel 7 and orders pronounced on 12.04.2023 itself. Therefore the above new documents filed in the M.A. proceedings are hereby rejected. Further this Tribunal considered the technical ground on the part of limitation of assessment, as well as merits of the case and passed a detailed order. 5.2. It is appropriate to quote at this juncture, the Hon’ble Supreme Court judgment in the case of CIT vs. Reliance Telecom Ltd. reported in [2021] 133 taxman.com 41 (SC), has considered the powers of the Tribunal u/s. 254(2) and held as follows: “..3.2 Having gone through both the orders passed by the ITAT, we are of the opinion that the order passed by the ITAT dated 18-11-2016 recalling its earlier order dated 6-9-2013 is beyond the scope and ambit of the powers under section 254(2) of the Act. While allowing the application under section 254(2) of the Act and recalling its earlier order dated 6-9- 2013, it appears that the ITAT has re-heard the entire appeal on merits as if the ITAT was deciding the appeal against the order passed by the C.I.T. In exercise of powers under section 254(2) of the Act, the Appellate Tribunal may amend any order passed by it under sub-section (1) of section 254 of the Act with a view to rectifying any mistake apparent from the record only. Therefore, the powers under section 254(2) of the Act are akin to Order XLVII Rule 1 CPC. While considering the application under section 254(2) of the Act, the Appellate Tribunal is not required to re-visit its earlier order and to go into detail on merits. (The powers under section 254(2) of the Act are only to rectify/correct any mistake apparent from the record.) ....................... As observed hereinabove, the powers under section 254(2) of the mistake apparent from the record and not beyond that. Even the observations that the merits might have been decided erroneously and the ITAT had jurisdiction and within its powers it may pass an order recalling its earlier order which is an erroneous order, cannot be accepted. As observed hereinabove, if the order passed by the ITAT was erroneous on merits, in that case, the remedy available to the Assessee was to prefer an appeal before the High Court, which in fact was filed by the Assessee before the High Court, but later on the Assessee withdrew the same in the instant case.” 5.3. The Hon’ble Jurisdictional Gujarat High Court in the case of Vrundava Ginning and Oil Mill vs. Assistant Registrar reported in [2021] 126 taxmann.com 227 after considering elaborately the M.A. Nos. 20 & 49/Rjt/2023 A.Y. 2007-08 Page No ACIT Vs. Rajeshkumar G. patel 8 powers u/s. 254(2) which has examined by the Delhi High Court judgment in the case of CIT vs. ITAT held as follows: “......13. The contours of the jurisdiction under section 254 (2) were examined by the Delhi High Court in CIT v Income-tax Appellate Tribunal [2005] 204 CTR 349. It was held that: “6. It is evident from the above that the power available to the Tribunal is not in the nature of a review as is understood in legal parlance. The power is limited to correction of mistakes apparent from the record What is significant is that the section envisages amendment of the original order of the Tribunal and not a total substitution thereof. That position is fairly well-settled by two decisions of this Court in Ms. Deeksha Suri v. ITAT and Karan and Co. v. ITAT [2002] 253 1TB 131. This Court has in both these decisions held that the foundation for the exercise of the jurisdiction lies in the rectification of a mistake apparent from the record which object is ensued by amending the order passed by the Tribunal. The said power does not however, contemplate a re-hearing of the appeal for a fresh disposal. Doing so would obliterate the distinction between the power to rectify mistakes and the power to review the order made by the Tribunal. The following passage from the decision of this Court in Karan and Co.'s case (supra) elucidates the difference between review and rectification of an order made by the Tribunal: "The scope and ambit of application of Section 254(2) is very limited. The same is restricted to rectification of mistakes apparent from the record. We shall first deal with the question of the power of the Tribunal to recall an order in its entirety. Recalling the entire order obviously would mean passing of a fresh order. That does not appear to be the legislative intent. The order passed by the Tribunal under section 254(1) is the effective order so far as the appeal is concerned. Any order passed under section 254(2) either allowing the amendment or refusing to amend gets merged with the original order passed. The order as amended or remaining unamended is the effective order for all practical purposes. The same continues to be an order under section 254(1). That is the final order in the appeal. An order under section 254(2) does not have existence de hors the order under section 254(1). Recalling of the order is not permissible under section 254(2). Recalling of an order automatically necessitates re-hearing and re-adjudication of the entire subject-matter of appeal. The dispute no longer remains restricted to any mistake sought to be rectified. Power to recall an order is prescribed in terms or Rule 24 of the Income- tax (Appellate Tribunal) Rules, 1963, and that too only in cases where the assessee shows that it had a reasonable cause for being absent at a time when the appeal was taken up and was decided ex parte. This position was highlighted by one of us (Justice Arijit Pasayat, Chief Justice) in CIT v. ITAT. Judged in the above background the order passed by the Tribunal is indefensible." ............................... 19. Having regard to the materials on record, we find it difficult to take the view that the ground No. 3, which the writ applicant is talking about, has not been dealt with at all by the Appellate Tribunal. The Appellate Tribunal, in its own way, has discussed the said issue and recorded a particular finding. If the writ applicant is dissatisfied, then it is always open for him to prefer an appeal under section 260A of the Act before this High Court and in the course of the appeal, it can be pointed out to the Court as regards the ground No. 3 and if the Court is convinced, then it may remit the matter to the Tribunal for fresh consideration of the ground No. 3 which the writ applicant is talking about. The power to rectify an order under section 254(2) of the Act is M.A. Nos. 20 & 49/Rjt/2023 A.Y. 2007-08 Page No ACIT Vs. Rajeshkumar G. patel 9 extremely limited, as observed by the Delhi High Court in the case of CIT v. Maruti Insurance Distribution Services Ltd. [2012] 26 taxmann.com 68/[2013] 212 Taxman 123. It does not extend to correcting the error of law or re-appreciating the factual findings. Those properly fall within the appellate review of an order of Court of first instance. What legitimately falls for consideration are errors (mistakes) apparent from the record. 6. Respectfully following the above judicial precedents of Hon’ble Supreme Court and Jurisdictional High Court, we are of the considered opinion, the present Misc. Applications filed by the Revenue are to review the earlier order/decision passed by this Tribunal, which is not permissible u/s. 254(2) of the Act. Thus the Tribunal has not committed any mistake or error in passing the impugned orders. Therefore the present M.As. filed by the Revenue are devoid of merits and the same is liable to be dismissed. 7. Further it is an undisputed fact that the Revenue has challenged the present impugned orders before the Hon’ble High Court of Gujarat in Tax Appeal No. 781 of 2023 and the matter is now seized before Hon’ble Jurisdictional High Court. Therefore the Revenue having filed statutory appeal u/s. 260A of the Act and also filing parallel Miscellaneous Applications are not maintainable in law. 7.1. Since the power of the Tribunal under section 254 is very limited and Hon’ble Gujarat High Court in the case of CIT vs Muni Seva Ashram reported in (2013) 38 taxmann.com 110 held that when appeal has been filed before the Hon’ble High Court and the appeal is admitted by framing Substantial Questions of Law in the said appeal, then the Tribunal cannot recall its order in the M.A. Nos. 20 & 49/Rjt/2023 A.Y. 2007-08 Page No ACIT Vs. Rajeshkumar G. patel 10 Miscellaneous Application. The relevant portion of the Jurisdictional High Court Judgment reads as follows: “.....6. In view of the above stand taken by the learned counsel appearing on behalf of the respondent-assessee recorded hereinabove, more particularly when against the impugned Judgment and order dtd. 11/7/2008 passed in ITA No.633/Ahd/2008, which has been recalled subsequently by the ITAT, Tax Appeal No. 1231 of 2008, was already admitted on the substantial questions of law framed in the said appeal, Impugned orders cannot be sustained. 7. In view of the above stand taken by the learned counsel appearing on behalf of respondent assessee, recorded hereinabove, we are not passing any further reasoned order.” 7.2. Similar view was taken by the Delhi High Court in the case of R.C. Sabharwal vs CIT reported in (2010) 2 taxmann.com 289 (Delhi) observing as follows: “.....3. The Tribunal, application of appellants under section 254 of the Income Tax Act, has inter alia observed that it is not open to go into merits of case again and come to a finding different from the one already arrived at and if view taken by, Tribunal erroneous, remedy lies in filing an appeal against impugned orders passed by the Tribunal and those orders are already subject matter of appeal, as mentioned above. 4. In these circumstances, while reserving the right of the appellants to urge the grounds pointing out the purported errors apparent on face of record in impugned orders while arguing those appeals, these appeals are disposed of. 7.3. The above two Judgments were followed by the Jurisdictional High Court in a very recent batch of 68 appeals filed by the Revenue in the case of PCIT vs Hitesh Ashok Vaswani reported in (2023) 459 ITR 610 (Guj) wherein it is held as follows: “... 15. In the light of the decisions in the case of R.C. Sabharwal vs CIT reported in (2010) 2 taxmann.com 289 (Delhi) and in the case of CIT vs Muni Seva Ashram reported in (2013) 221 taxmann.com 27 (Guj.), in such petitions where tax appeals are filed by the Revenue in the respective categories, the petition so filed are not entertained, while reserving the right of the Revenue to urge the grounds in these petitions while arguing the appeals. The following petitions in which the Revenue has filed Tax. Appeals and are pending are not entertained reserving the liberty to urge M.A. Nos. 20 & 49/Rjt/2023 A.Y. 2007-08 Page No ACIT Vs. Rajeshkumar G. patel 11 the grounds raised in the respective tax case appeal. These petitions are accordingly disposed of without assigning any further reasons”. 8. Respectfully following the above judicial precedents by the Jurisdictional High Court and Delhi High Court, the present Miscellaneous Applications filed by the Revenue are not maintainable, since the Revenue had already filed Tax Appeals u/s. 260A before the Jurisdictional High Court and Substantial Questions of Law already admitted and pending adjudication before the Jurisdictional High Court of Gujarat. Needless to say, it is always open to the Revenue to argue all its grievances by raising appropriate Questions of Law before the Jurisdictional High Court in the manner known to law. 9. Therefore the above Miscellaneous Applications filed by the Revenue are hereby dismissed. Order pronounced in the open court on 20-03-2024 Sd/- Sd/- (WASEEM AHMED) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER True Copy JUDICIAL MEMBER Ahmedabad : Dated 20/03/2024 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलȣय अͬधकरण, राजकोट
