ASHOK NAGRAJ MEHTA, MUMBAI V. THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE 19 (1), MUMBAI

MA 493/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 7792 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 1 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 31-07-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 30-08-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SAMATHA MULLAMUDI
• Assessee Lawyers: SANJIV M SHAH
• Keywords: Bogus purchase; Opportunity of being heard; Peak credit
• Section: 195; 264; 254(2); 13; 153

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B MUMBAI BEFORE SHRI AMARJIT SINGH (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) M.A. NO. 493/MUM/2019 (ITA NO. 2100/MUM/2016) ASSESSMENT YEAR: 2011 - 12 & M.A. NO. 494/MUM/2019 (ITA NO. 1645/MUM/2017) ASSESSMENT YEAR: 2012 - 13 ASHOK NAGRAJ MEHTA, 28/30 CP TANK ROAD, 1 ST FLOOR, 3 RD KUMBHARWADA, MUMBAI - 400004. VS. THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE 19(1), ROOM NO. 203, 2 ND FLOOR, MATRU MANDIR, TARDEO, MUMBAI - 400007. PAN NO. AADPM8885E APPELLANT RESPONDENT ASSESSEE BY : MR. SANJIV M. SHAH , AR REVENUE BY : MS. SAMATHA MULLAMUDI , DR DATE OF HEARING : 10/01/2020 DATE OF PRONOUNCEMENT : 31/07/2020 ORDER PER N.K. PRADHAN, A.M. BY MEANS OF THESE MISCELLANEOUS APPLICATION S (MA S ), THE APPLICANT SEEKS RECTIFICATION ON THE ORDER DATED 14.12.2018 PASSED BY THE ITAT B BENCH MUMBAI (ITA NO S . 2100/M/2016 FOR AY 2011 - 12 & 1645/M/2017 FOR AY 2012 - 13 ). ISSUES BEING IDEN TICAL, WE BEGIN WITH THE AY 2011 - 12. IN PART - I ,HERE - IN - BELOW, WE MENTION THE CONTENTIONS OF THE LD. COUNSEL FOR THE APPLICANT, IN PART - II, THE SUBMISSIONS OF THE LD. D EPARTMENTAL R EPRESENTATIVE (DR) AND IN PART - III, THE REASONS FOR OUR DECISION. ASHOK NAGRAJ MEHTA MA NO. 493 & 494/MUM/2019 2 I 2. BEFORE US, THE LD. COUNSEL FOR THE APPLICANT EXPLAINS, BY REFERRING TO THE WRITTEN SUBMISSION DATED 17.08.2019, THAT DURING THE COURSE OF HEARING, GROSS PROFIT AND NET PROFITS CHARTS WERE SUBMITTED A S RECORDED BY THE TRIBUNAL AT PARAGRAPH 13, PAGE OF 8 ITS ORDER, TO CONTEND, WITHOUT PREJUDICE, IN ACCORDANCE WITH GROUND NO. 4 OF MEMO OF APPEAL, THAT QUANTUM/PERCENTAGE OF GROSS PROFIT ALREADY OFFERED AND ASSESSED TO TAX PERTAINING TO ALLEGED BOGUS PURCHASES OUGHT TO BE DECREASED FROM QUANTUM/PERCENTAGE OF ADDITION, IF ANY, APPROVED BY THE TRIBUNAL VIS - A - VIS BOGUS PURCHASES. IT IS STATED THAT AT THE TIME OF HEARING, THE APPELLANT ALSO SUBMITTED WRITTEN SUBMISSIONS AND CASE LAW PAPER BOOK. THE LD. COUNSEL ARGUES THAT THE TRIBUNAL IN THE IMPUGNED ORDER INTER ALIA TRUNCATED ADDITION FROM 12.5% TO 5% OF SUPPOSED BOGUS PURCHASES WITHOUT DIRECTING THE AO TO REDUCE FROM SUCH QUANTUM THE SUM OF GROSS PROFIT ALREADY DISCLOSED AND ASSESSED TO TAX IN CONNECTION WITH SUCH BOGUS PURCHASES. THUS IT IS STATED THAT THE TRI BUNAL, INAD VERTENTLY AND THROUGH OVERSIGHT, DID NOT ADJUDICATE ON GROUND NO. 4 EMBEDDED IN APPEAL MEMO FILED BEFORE IT, WHICH PROJECTS, WITHOUT PREJUDICE AND INDEPENDENT ARGUMENT , THAT GROSS PROFIT ALREADY SHOWN AND ASSESSED ON BOGUS PURCHASES OUGHT TO BE REDUCED FROM AMOUNT REPRESENTING RESTRICTED 5% ADDITION APPROVED BY THE TRIBUNAL. THUS IT IS ARGUED BY THE LD. COUNSEL THAT OVERLOOKING OF A SUBSTANTIVE, ALTERNATIVE AND CONSEQUENTIAL ARGUMENT MANIFESTED IN GROUND NO. 4 OF TRUNCATING THE QUANTUM OF PURPO RTED BOGUS PURCHASE ADDITION ARRIVED AT AFTER APPLYING YARDSTICK OF 5% TO AGGREGATE BOGUS PURCHASES BY ALREADY ASHOK NAGRAJ MEHTA MA NO. 493 & 494/MUM/2019 3 DECLARED AND ASSESSED PROFITS IS A SELF EVIDENT ERROR VULNERABLE TO CORRECTION U/S 254(2) OF THE ACT. IT IS STATED THAT IN THE APPELLANTS CASE , GROSS PROFIT OF RS. 51,07,474/ - BEING 1.59% OF THE TOTAL BOGUS PURCHASES OF RS.31,64,30,707/ - (NET OF TAXES) AS PER WORKING SET OUT AT PAGE 52 OF THE PAPER BOOK ALREADY OFFERED AND ASSESSED TO TAX AND CONSEQUENTLY WHAT CAN BE BROUGHT TO TAX BY THE AO IS B ALANCE SUM OF RS.1,09,69,435/ - (I.E. RS.1,60,76,909/ - LESS RS.51,07,474/ - ), THAT REMAINS AFTER DEDUCTING FROM RS.1,60,76,909/ - BEING 5% OF BOGUS PURCHASES SUSTAINED BY THE TRIBUNAL, THE AFORESAID GROSS PROFIT ALREADY REFLECTED AND ASSESSED AS AFOREMENTIONE D WHICH IN INSTANT CASE IS 1. 59% I.E. RS.51,07,474/ - IN CONFORMITY WITH THE CHART FILED . IT IS STATED THAT APPROPRIATE DIRECTION BE GIVEN TO THE AO ON AFORESAID LINES SO THAT GROUND NO. 4 OF APPEAL MEMO IS NOT ONLY DETERMINED AND DISPOSED OF, BUT THE APPEL LAN T IS SAVED FROM DOUBLE TAXATION. THUS IT IS STATED THAT THE LAST SENTENCE OF PARAGRAPH 19, PAGE 12 OF THE IMPUGNED ORDER BE RECTIFIED IN CONFORMITY WITH WHAT IS STATED ABOVE SO TO REMEDY THE GRIEVANCE COMPLAINED OF IN GROUND NO. 4. THE LD. COUNSEL FUR THER SUBMITS THAT IF THE IMPUGNED ORDER IS NOT AMENDED AS NARRATED ABOVE, IT WOULD CAUSE GREAT PREJUDICE, FINANCIAL HARDSHIP AND IRREPARABLE DAMAGE, HARM AND LOSS TO THE APPLICANT - ASSESSEE. IT IS STATED THAT THE FINANCIAL STAKES INVOLVED IN THIS APPLICATIO N FOR RECTIFICATION IN TERMS OF TAXES RS.15.32 LACS (APPROXIMATE) AND INTEREST RS.15.02 LACS (APPROXIMATE) IS CONSIDERABLE AND HEAVY AND THIS WEIGHTY FACTOR BY ITSELF AND ALONE VINDICATES THAT THE TRIBUNALS ORDER DATED 14.12.2018 IS CORRECTED. ASHOK NAGRAJ MEHTA MA NO. 493 & 494/MUM/2019 4 IN VIEW O F THE ABOVE, THE LD. COUNSEL SUBMITS THAT THE TRIBUNAL (A) ADJUDICATE AND DECIDE GROUND NO. 4 OF THE APPEAL MEMO, (B) RECTIFY/MODIFY PARAGRAPH 19, PAGE 12 OF THE ORDER DATED 14.12.2018 AS STATED HEREINABOVE AFTER GIVING APPLICANT - ASSESSEE AN OPPORTUNITY OF BEING HEARD AND (C) TO PASS SUCH FURTHER AND OTHER ORDERS AS MAY IN THE INTEREST AND ENDS OF JUSTICE APPEAR TO THE TRIBUNAL TO BE JUST, EXPEDIENT AND NECESSARY ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE. II 3. ON THE OTHER HAND, THE LD. DR SUBMITS THAT THERE IS NO MISTAKE APPARENT FROM RECORD IN THE IMPUGNED ORDER PASSED BY THE TRIBUNAL. SH E SUBMITS THAT THE TRIBUNAL HAS NO POWER TO REVIEW ITS ORDER IN THE GARB OF SECTION 254(2) OF THE ACT. III 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD. THE REASONS FOR OUR DECISIONS ARE GIVEN BELOW. THE ISSUE FOR OUR CONSIDERATION FALLS IN A NARROW COMPASS. WE HAVE TO DECIDE WHETHER THE TRIBUNAL IN THE IMPUGNED ORDER HAS CONSIDERED THE 4 TH GROUND OF APPEAL, WHICH READS AS U NDER : ON THE FACTS AND IN LAW AND WITHOUT PREJUDICE TO ABOVE GROUNDS OF APPEAL, THE LD. CIT(A) ERRED IN SUSTAINING AN ADDITION TO THE EXTENT OF 12.5% OF THE ALLEGED BOGUS PURCHASES WITHOUT REDUCING THE GP ALREADY SHOWN BY THE APPELLANT ON THESE ALLEGED BOGUS PURCHASES. 4.1 LET US DISCUSS THE BACKGROUND FACTS OF THE CASE. THE AO HAS MADE AN ADDITION OF RS.31,65,79,780/ - TOWARDS BOGUS PURCHASES BY WORKING OUT THE PEAK BALANCES. THERE IS NO DISPUTE THAT THESE WERE BOGUS PURCHASES. IN ASHOK NAGRAJ MEHTA MA NO. 493 & 494/MUM/2019 5 APPEAL BY THE ASSESSE E, THE LD. CIT(A) BY FOLLOWING THE JUDGMENT OF THE HONBLE GUJARAT HIGH COURT IN BHOLANATH POLY FAB PVT. LTD . [355 ITR 290 (GUJ)] AND CIT V. SIMIT SHETH (2013) [38 TAXMANN.COM 385 (GUJ).] SUSTAINED THE ADDITION TO THE EXTENT OF 12.5% OF THE VALUE OF BOGUS PURCHASES, THUS ESTIMATING THE PROFIT ELEMENT EMBEDDED THEREIN. AGAINST THE ORDER OF CIT(A), THE ASSESSEE PREFERRED APPEAL BEFORE THE TRIBUNAL. IN THE IMPUGNED ORDER, THE TRIBUNAL HAS MENTIONED AT PARA 3 THAT WE SHALL FIRST TAKE UP THE ISSUE OF ADDITION RELATING TO BOGUS PURCHASES. ALSO IN THE IMPUGNED ORDER, THE TRIBUNAL HAS MENTIONED AT PARA 13 THE CONTENTIONS OF THE LD. COUNSEL STATING THAT : 13 . THE LD A.R FURTHER SUBMITTED THAT THE GROSS PROFIT RATE AND NET PROFIT RATE DECLARED BY THE ASSESSEE OVER THE YEARS IS CONSISTENT, I.E., THE AVERAGE RATE OF G.P DECLARED BY THE ASSESSEE WAS 1.97% AND THE AVERAGE RATE OF N.P DECLARED BY THE ASSESSEE WAS 0 .76%. ACCORDINGLY THE LD A.R SUBMITTED THE G.P RATE AND N.P RATE WOULD HAVE GONE DOWN, HAD THE ASSESSEE ACCOUNTED FOR BOGUS PURCHASES, AS ALLEGED BY THE AO. ACCORDINGLY, THE LD A.R SUBMITTED THAT THE ENTIRE ADDITION SHOULD BE DELETED. THEN AFTER CONSIDER ING THE CONTENTIONS OF THE LD. COUNSEL AND LD. DR, THE TRIBUNAL IN THE IMPUGNED ORDER HELD THAT : 15. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORD. WE NOTICE THAT THE ASSESSING OFFICER HAS MADE THE IMPUGNED ADDITION IN BOTH THE YEARS, MAINLY FOR THE REASON THAT THE ASSESSEE HAS FAILED TO PRODUCE THE SUPPLIERS BEFORE HIM AND FURTHER THE NOTICE S ISSUED TO THE SUPPLIERS HAVE BEEN RETURNED BACK UNSERVED. FURTHER THESE PARTIES WERE ALSO IDENTIFIED AS HAWALA DEALERS BY THE SALES TAX DEPARTMENT OF GOVERNMENT OF MAHARASHTRA. THOUGH THE ASSESSEE COULD FURNISH THE COPIES OF INVOICES, DELIVERY CHALLANS A ND PAYMENT DETAILS, YET THE ASSESSEE ALSO COULD NOT FURNISH EVIDENCES FOR TRANSPORTATION OF MATERIALS FROM THE ASHOK NAGRAJ MEHTA MA NO. 493 & 494/MUM/2019 6 SUPPLIERS TO IT. THOUGH THE ASSESSEE CLAIMS THAT IT HAS RECONCILED PURCHASES WITH SALES, AS POINTED BY LD CIT(A), THE ASSESSEE HAS NOT CORRELATED THE PURCHASES WITH SALES ON BILL TO BILL BASIS, I.E., THE ASSESSEE COULD TALLY THE QUANTITY OF PURCHASES WITH THE QUANTITY OF SALES ON OVER ALL BASIS. 16. IN ANY CASE, THE TAX AUTHORITIES HAVE ACCEPTED THAT THE ASSESSEE HAS CORRELATED THE QUANTITY OF PURC HASES WITH THE QUANTITY OF SALES. EVEN THOUGH THE LD CIT(A) HAS OBSERVED THAT THERE WAS NO ONE TO ONE RECONCILIATION, YET THE FACT REMAINS THAT THE AGGREGATE QUANTITY OF PURCHASES HAS BEEN CORRELATED WITH THE AGGREGATE QUANTITY OF SALES. WE HAVE ALSO NOTIC ED THAT THE AO HAS ACCEPTED THE SALES. HENCE THERE IS MERIT IN THE CONTENTIONS OF THE ASSESSEE THAT HE COULD NOT HAVE SOLD THE GOODS WITHOUT PURCHASING THE MATERIALS. UNDER THESE FACTS, AS PER THE DECISION RENDERED BY HONBLE GUJARAT HIGH COURT IN THE CASE OF SIMIT P SHETH (SUPRA), THE PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES MAY BE ASSESSED TO TAX. SINCE THE SUPPLIERS HAVE BEEN BRANDED AS HAWALA DEALERS PROVIDING ONLY ACCOMMODATION BILLS WITHOUT ACTUALLY SUPPLYING MATERIALS, IT IS FOR THE ASSESSEE TO PROV E THAT THE PURCHASES WERE ACTUALLY MADE FROM THOSE SUPPLIERS ONLY. IN THE INSTANT CASE, THE ASSESSEE HAS FAILED TO PROVE THE SAME, AS HE HAS TAKEN THE STAND THAT HE HAS PURCHASED GOODS THROUGH BROKERS. IN THESE SET OF FACTS, ONE OF THE POSSIBILITIES IS THA T THE ASSESSEE COULD HAVE PURCHASED MATERIALS FROM ONE SOURCE AND COULD HAVE OBTAINED ACCOMMODATION BILLS FROM THESE HAWALA DEALERS. IN THESE KIND OF SITUATIONS, THERE IS ALSO A POSSIBILITY THAT THE ASSESSEE COULD HAVE MADE PROFIT ON PURCHASES IN THE FORM OF SAVINGS BY WAY OF VAT TAX AND ALSO BY WAY OF DISCOUNTS. WE HAVE NOTICED THAT THE LD. CIT(A) HAS FOLLOWED THE DECISION RENDERED BY HONBLE GUJARAT HIGH COURT IN THE CASE OF SIMIT P SHETH (SUPRA), WHEREIN THE PROFIT RATE WAS DETERMINED AT 12.50% AND HENCE THE LD CIT(A) HAS ALSO SUSTAINED ADDITION TO THE EXTENT OF 12.50% IN THE INSTANT CASES ALSO. FOR THE REASONS DISCUSSED IN THE ENSUING PARAGRAPHS, WE ARE OF THE VIEW THAT THE PROFIT RATE OF 12.50% DETERMINED BY THE LD CIT(A) IS ON THE HIGHER SIDE. 17. BEF ORE ADDRESSING THE ISSUE RELATING TO RATE OF PROFIT, WE PREFER TO ADDRESS THE VIEW TAKEN BY THE AO. WE HAVE NOTICED THAT THE ASSESSING OFFICER HAS ASSESSED PEAK AMOUNT OF PURCHASES. WE HAVE EARLIER NOTICED THAT THE ASSESSING OFFICER HAS ASHOK NAGRAJ MEHTA MA NO. 493 & 494/MUM/2019 7 ACCEPTED THE SALES AND THE ASSESSEE COULD NOT HAVE SOLD THE GOODS WITHOUT PURCHASING THEM. HENCE THE HONBLE GUJARAT HIGH COURT HAS HELD THAT THE PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES ALONE SHOULD BE BROUGHT TO TAX. HENCE THE APPROACH OF THE ASSESSING OFFICER TO ASSESS T HE PEAK CREDIT OF PURCHASES CANNOT BE SUSTAINED FOR THE ABOVE SAID REASON AND ALSO FOR THE REASON THAT THE AO HIMSELF HAS ACCEPTED THAT THE ASSESSEE HAS RECONCILED THE QUANTITY OF PURCHASES WITH QUANTITY OF SALES. 18. FURTHER, WE HAVE NOTICED THAT THE AO HAS ALSO INVOKED THE PROVISIONS OF SEC.69C OF THE ACT. A PERUSAL OF PROVISIONS OF SEC.69C WOULD SHOW THAT THE SAID SECTION SHALL APPLY ONLY IN THE CASES, WHERE THE ASSESSEE COULD NOT EXPLAIN THE SOURCE OF EXPENDITURE INCURRED BY HIM TO THE SATISFACTION OF THE AO. THERE SHOULD NOT BE ANY DISPUTE THAT, WHEN THE PURCHASES HAVE BEEN ACCOUNTED IN THE BOOKS OF ACCOUNTS, THE SOURCES OF EXPENSES WOULD STAND EXPLAINED BY THE ENTRIES RECORDED IN THE BOOKS OF ACCOUNTS. HENCE, IN OUR VIEW, THE AO WAS NOT RIGHT IN LAW I N INVOKING THE PROVISIONS OF SEC.69C IN THE INSTANT CASE. 19. WE HAVE EARLIER NOTICED THAT THE ASSESSEE HAS NOT CORRELATED QUANTITY OF PURCHASES WITH THE QUANTITY OF SALES ON BILL TO BILL BASIS. FURTHER THE ASSESSEE HAS ALSO NOT PRODUCED EVIDENCES TO SHOW THAT THE MATERIALS WERE ACTUALLY TRANSPORTED FROM THE IMPUGNED SUPPLIERS TO THE ASSESSEE. THE AO COULD NOT TRACE THE SUPPLIERS AND THE ASSESSEE ALSO COULD NOT OBTAIN CONFIRMATION LETTERS FROM THEM AND THE ASSESSEE ALSO COULD NOT PRODUCE THEM BEFORE THE AO. UNDER THESE SET OF FACTS, IT CANNOT BE SAID THAT THE ASSESSEE HAS CONCLUSIVELY PROVED THE PURCHASES. HENCE WE ARE OF THE OPINION THAT THE LD CIT(A) WAS JUSTIFIED IN HOLDING THAT THE PROFIT ELEMENT EMBEDDED IN SUCH PURCHASES ALONE COULD BE ASSESSED TO TAX. WE HAVE EARLIER OBSERVED THAT THE PROFIT RATE OF 12.50% ESTIMATED BY LD CIT(A) IS ON THE HIGHER SIDE. THIS IS FOR THE REASON THAT THE VAT RATE APPLICABLE TO THE PRODUCTS DEALT IN BY THE ASSESSEE WAS ONLY 4%. WE HAVE EARLIER OBSERVED THAT THE ASSESSEE, AT THE MOST, COULD HAVE MADE SAVINGS BY WAY OF VAT TAX AND OBTAINED DISCOUNT. THE ASSESSEE COULD HAVE ALSO INCURRED EXPENSES IN GETTING THE ACCOMMODATION BILLS. CONSIDERING THESE FACTS, THE PROFIT THAT COULD HAVE MADE BY THE ASSESSEE IN THE IMPUGNED PURCHASES , IN OUR VIEW, ASHOK NAGRAJ MEHTA MA NO. 493 & 494/MUM/2019 8 MAY BE DETERMINED @ 5%. HENCE, WE HAVE HELD THAT THE ESTIMATE OF 12.50% MADE BY THE AO IS ON THE HIGHER SIDE. ACCORDINGLY WE MODIFY THE ORDER PASSED BY LD CIT(A) ON THIS ISSUE AND DIRECT THE AO TO RESTRICT THE ADDITION TO 5% OF THE VALUE OF ALLEGED BOGUS PURCHASES. 4.2 THUS THE 4 TH GROUND OF APPEAL SHOULD NOT BE SEEN IN ISOLATION. THE TRIBUNAL IN THE IMPUGNED ORDER HAS CONSIDERED ALL THE GROUNDS OF APPEAL INCLUDING THE 4 TH ONE, WHILE DECIDING THE CASE. IN THE INSTANT CASE, AS MENTIONED AB OVE, THE EXPLANATIONS GIVEN BY THE ASSESSEE HAVE BEEN DULY CONSIDERED. IN THE IMPUGNED ORDER ALL THE SUBMISSIONS AND EXPLANATIONS BY THE ASSESSEE HAVE BEEN SUMMARIZED AND THEN A FINDING HAS BEEN ARRIVED AT. THE ISSUE HAS BEEN DECIDED AFTER CONSIDERING THE FACTS IN ENTIRETY AVAILABLE ON RECORD. A PERUSAL OF THE ABOVE FACTS CLEARLY INDICATE THAT THE APPLICANT HAS NOT POINTED OUT ANY MISTAKE APPARENT FROM THE RECORD. A MISTAKE APPARENT ON THE RECORD MUST BE AN OBVIOUS MISTAKE AND NOT SOMETHING WHICH CAN BE E STABLISHED BY A LONG DRAWN PROCESS OF REASONING ON POINTS ON WHICH THERE MAY BE CONCEIVABLY TWO OPINIONS. A DECISION ON A DEBATABLE POINT OF LAW IS NOT A MISTAKE APPARENT FROM THE RECORD. THIS VIEW IS SUPPORTED BY THE DECISION OF THE HONBLE SUPREME COURT IN T.S. BALARAM, ITO V. VOLKART BROS ., (1971) 82 ITR 50 (SC), MASTER CONSTRUCTION CO. P. LTD. V. STATE OF ORISSA , AIR 1966 SC 1047, KARAM CHAND THAPAR & BROS. (COAL SALES) LTD. V. STATE OF U.P. (1976) TAX LR 1921, 1927 (SC) AND CCE V. ASCU LTD ., (2003) 9 SCC 230, 232. WE MAY REFER HERE TO THE DECISION IN ACIT V. SAURASTRA KUTCH STOCK EXCHANGE LTD . (2008) 305 ITR 227 (SC), WHEREIN THE HONBLE SUPREME COURT RELYING ON ITS DECISION IN PATEL NARSHI THAKERSHI & ORS. ASHOK NAGRAJ MEHTA MA NO. 493 & 494/MUM/2019 9 VS. PRADYUMANSINGHJI ARJUNSINGHJI (1971) 3 SC C 844, HARI VISHNU KAMATH VS. SYED AHMAD ISHAQUE (1955) 1 SCR 1104, SATYANARAYAN LAXMINARAYAN HEGDE & ORS. VS. MALLIKARJUN BHAVANAPPA TIRUMALE (1960) 1 SCR 890 AND SYED YAKOOB VS. K.S. RADHAKRISHNAN & ORS. (1964) 5 SCR 64A HELD THAT : PATENT, MANIFEST AND SELF - EVIDENT ERROR WHICH DOES NOT REQUIRE ELABORATE DISCUSSION OF EVIDENCE OR ARGUMENT TO ESTABLISH IT, CAN BE SAID TO BE AN ERROR APPARENT ON THE FACE OF THE RECORD AND CAN BE CORRECTED WHILE EXERCISING CERTIORARI JURISDICTION. AN ERROR CANNOT BE SAID TO BE APPARENT ON THE FACE OF THE RECORD IF ONE HAS TO TRAVEL BEYOND THE RECORD TO SEE WHETHER THE JUDGMENT IS CORRECT OR NOT. AN ERROR APPARENT ON THE FACE OF THE RECORD MEANS AN ERROR WHICH STRIKES ON MERE LOOKING AND DOES NOT NEED LONG DRAWN OUT PROCESS O F REASONING ON POINTS WHERE THERE MAY CONCEIVABLY BE TWO OPINIONS. SUCH ERROR SHOULD NOT REQUIRE ANY EXTRANEOUS MATTER TO SHOW ITS INCORRECTNESS. TO PUT IT DIFFERENTLY, IT SHOULD BE SO MANIFEST AND CLEAR THAT NO COURT WOULD PERMIT IT TO REMAIN ON RECORD. I F THE VIEW ACCEPTED BY THE COURT IN THE ORIGINAL JUDGMENT IS ONE OF THE POSSIBLE VIEWS, THE CASE CANNOT BE SAID TO BE COVERED BY AN ERROR APPARENT ON THE FACE OF THE RECORD. FOR GUIDANCE, WE MAY REFER HERE TO THE DECISION IN CIT V. RAMESH ELECTRIC & TRADING CO. (1993) 203 ITR 497 (BOM), WHEREIN THEIR LORDSHIPS OF THE HONBLE BOMBAY HIGH COURT HAVE HELD: UNDER S. 254(2) OF THE IT ACT, 1961, THE TRIBUNAL MAY, WITH A VIEW TO RECTIFYING ANY MISTAKE APPARENT FROM THE RECORD, AMEND ANY ORDER PASSED BY I T UNDER SUB S (1) WITHIN THE TIME PRESCRIBED THEREIN. IT IS AN ACCEPTED POSITION THAT THE TRIBUNAL DOES NOT HAVE ANY POWER TO REVIEW ITS OWN ORDERS UNDER THE PROVISIONS OF THE IT ACT, 1961. THE ONLY POWER WHICH THE TRIBUNAL POSSESSES IS TO RECTIFY ANY MIST AKE IN ITS OWN ORDER WHICH IS ASHOK NAGRAJ MEHTA MA NO. 493 & 494/MUM/2019 10 APPARENT FROM THE RECORD. THIS IS MERELY A POWER OF AMENDING ITS ORDER. IN THE PRESENT CASE, IN THE FIRST ORDER, THERE IS NO MISTAKE WHICH IS APPARENT FROM THE RECORD AT ALL. THE TRIBUNAL WAS REQUIRED TO DECIDE WHETHER THE COM MISSION PAYMENT OF RS.54,000 WAS DEDUCTIBLE UNDER S. 37. AFTER EXAMINING THE CIRCUMSTANCES, THE TRIBUNAL CAME TO A CONCLUSION THAT IT WAS NOT SO DEDUCTIBLE. THE TRIBUNAL CANNOT, IN EXERCISE OF ITS POWER OF RECTIFICATION, LOOK INTO SOME OTHER CIRCUMSTANCES WHICH WOULD SUPPORT OR NOT SUPPORT ITS CONCLUSION SO ARRIVED AT. THE MISTAKE THE TRIBUNAL IS ENTITLED TO CORRECT IS NOT AN ERROR OF JUDGMENT BUT A MISTAKE WHICH IS APPARENT FROM THE RECORD ITSELF. THE TRIBUNAL HAS, PATENTLY, FAR EXCEEDED ITS JURISDICTION U NDER S. 254(2) IN REDECIDING THE ENTIRE DISPUTE WHICH WAS BEFORE IT, IN THIS FASHION, AND THE TRIBUNAL HAS COMMITTED A GROSS AND INEXPLICABLE ERROR. FAILURE BY THE TRIBUNAL TO CONSIDER AN ARGUMENT ADVANCED BY EITHER PARTY FOR ARRIVING AT A CONCLUSION IS NO T AN ERROR APPARENT ON THE RECORD, ALTHOUGH IT MAY BE AN ERROR OF JUDGMENT. 4.3 IN FACT, NOT A SINGLE ERROR IN THE IMPUGNED ORDER HAS BEEN POINTED OUT BY THE LD. COUNSEL FOR THE APPLICANT. WHAT THE APPLICANT WANTS IS A REVIEW OF THE ORDER PASSED BY THE TR IBUNAL. THE TRIBUNAL IS A CREATURE OF THE STATUTE. THE TRIBUNAL CANNOT REVIEW ITS OWN DECISION UNLESS IT IS PERMITTED TO DO SO BY THE STATUTE. THE HONBLE SUPREME COURT HAS HELD IN PATEL NARSHI THAKERSHI V. PRADYUMANSINGHJI ARJUNSINGHJI [AIR 1970 SC 1273] THAT THE POWER TO REVIEW IS NOT AN INHERENT POWER. IT MUST BE CONFERRED BY LAW EITHER SPECIFICALLY OR BY NECESSARY IMPLICATION. IT IS A SETTLED LAW THAT THE TRIBUNAL HAS NO POWER TO REVIEW ITS ORDER IN THE GARB OF SECTION 254(2) OF THE A CT AS HELD IN CIT V. GLOBE TRANSPORT CORPN. [1992] 195 ITR 311 (RAJ) (HC), CIT V. ROOP NARAIN SARDAR MAL [2004] 267 ITR 601 (RAJ) (HC), CIT V. DEVILAL SONI [2004] 271 ITR 566 (RAJ) (HC), JAINARAIN JEEVRAJ V. CIT [1980] 121 ITR 358 (RAJ.) (HC), ASHOK NAGRAJ MEHTA MA NO. 493 & 494/MUM/2019 11 PRAJATANTRA PRACHAR SAMITI V. CIT [2003] 264 ITR 160 (ORISSA) (HC), CIT V. JAGABANDHU ROUL [1984] 145 ITR 153 (ORISSA) (HC), CIT & ANR. V. ITAT & ANR. [1992] 196 ITR 640 (ORISSA) (HC), SHAW WALLACE & CO. LTD. V. ITAT & OTHERS [1999] 240 ITR 579 (CAL) (HC), CIT V. SUMA N TEA & PLYWOOD INDUSTRIES PVT. LTD. [1997] 226 ITR 34 (CAL) (HC), ITO V. ITAT & ANR. [1998] 229 ITR 651 (PAT.) (HC), CIT & ANR. V. ITAT & ANR. [1994] 206 ITR 126 (AP) (HC), ACIT V. C. N. ANANTHRAM [2004] 266 ITR 470 (KAR) (HC). IN VIEW OF THE FACTUAL SCE NARIO AND POSITION OF LAW DELINEATED ABOVE, THE PRESENT MA , BEING DEVOID OF MERIT, IS DISMISSED. OUR DECISION FOR AY 2011 - 12 APPLIES MUTATIS MUTANDIS TO AY 2012 - 13. 5. HOWEVER, BEFORE WE PART WITH THE MATTER, WE MUST DEAL WITH ONE PROCEDURAL ISSUE AS WELL . WHILE HEARING OF THESE APPEALS WAS CONCLUDED ON 10.01.2020, THIS ORDER THEREON IS BEING PRONOUNCED TODAY. LET US REVERT TO THE PREVAILING SITUATION IN THE COUNTRY. ON 24TH MARCH, 2020, A NATIONWIDE LOCKDOWN WAS IMPOSED FOR 21 DAYS TO PREVENT THE SPREAD O F COVID - 19 EPIDEMIC, AND THIS LOCKDOWN WAS EXTENDED FROM TIME TO TIME. AS A MATTER OF FACT, EVEN BEFORE THIS FORMAL NATIONWIDE LOCKDOWN, THE FUNCTIONING OF THE INCOME TAX APPELLATE TRIBUNAL AT MUMBAI WAS SEVERELY RESTRICTED ON ACCOUNT OF LOCKDOWN BY THE MAHARASHTRA GOVERNMENT, AND ON ACCOUNT OF STRICT ENFORCEMENT OF HEALTH ADVISORIES WITH A VIEW OF CHECKING SPREAD OF COVID - 19. THE EPIDEMIC SITUATION IN MUMBAI BEING GRAVE, THERE WAS NOT MUCH OF A RELAXATION IN SUBSEQUENT LOCKDOWNS ALSO. IN ANY CASE, THERE WAS UNPRECEDENTED DISRUPTION OF JUDICIAL WORK ALL OVER THE COUNTRY. AS A MATTER OF FACT, IT HAS BEEN SUCH AN UNPRECEDENTED SITUATION, CAUSING DISRUPTION IN THE FUNCTIONING OF JUDICIAL MACHINERY, THAT HON'BLE SUPREME COURT OF INDIA, ASHOK NAGRAJ MEHTA MA NO. 493 & 494/MUM/2019 12 IN AN UN PRECEDENTED ORDER IN THE HISTORY OF INDIA AND VIDE ORDER DATED 6.5.2020 READ WITH ORDER DATED 23.3.2020, EXTENDED THE LIMITATION TO EXCLUDE NOT ONLY THIS LOCKDOWN PERIOD BUT ALSO A FE W MORE DAYS PRIOR TO, AND AFTER THE LOCKDOWN BY OBSERVING THAT 'IN CASE T HE LIMITATION HAS EXPIRED AFTER 15.03.2020 THEN THE PERIOD FROM 15.03.2020 TILL THE DATE ON WHICH THE LOCKDOWN IS LIFTED IN THE JURISDICTIONAL AREA WHERE THE DISPUTE LIES OR WHERE THE CAUSE OF ACTION ARISES SHALL BE EXTENDED FOR A PERIOD OF 15 DAYS AFTER T HE LIFTING OF LOCKDOWN'. HON'BLE BOMBAY HIGH COURT, IN AN ORDER DATED 15TH APRIL 2020, HAS, BESIDES EXTENDING THE VALIDITY OF ALL INTERIM ORDERS, HAS ALSO OBSERVED THAT, 'IT IS ALSO CLARIFIED THAT WHILE CALCULATING TIME FOR DISPOSAL OF MATTERS MADE TIME - BO UND BY THIS COURT, THE PERIOD FOR WHICH THE ORDER DATED 26TH MARCH 2020 CONTINUES TO OPERATE SHALL BE ADDED AND TIME SHALL STAND EXTENDED ACCORDINGLY', AND ALSO OBSERVED THAT 'ARRANGEMENT CONTINUED BY AN ORDER DATED 26TH MARCH 2020 TILL 30TH APRIL 2020 SHA LL CONTINUE FURTHER TILL 15TH JUNE 2020'. THE HONBLE BOMBAY HIGH COURT ITSELF HAS, VIDE JUDGMENT DATED 15 TH APRIL 2020, HELD THAT 'WHILE CALCULATING THE TIME FOR DISPOSAL OF MATTERS MADE TIME - BOUND BY THIS COURT, THE PERIOD FOR WHICH THE ORDER DATED 26TH MARCH 2020 CONTINUES TO OPERATE SHALL BE ADDED AND TIME SHALL STAND EXTENDED ACCORDINGLY'. 6. IN THE RESULT, THE MAS FILED BY THE APPELLANT ARE DISMISSED. ORDER PRONOUNCED UNDER RULE 34(4) OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1962, BY PLACING THE DETAILS ON THE NOTICE BOARD. SD/ - SD/ - ( AMARJIT SINGH ) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER ASHOK NAGRAJ MEHTA MA NO. 493 & 494/MUM/2019 13 MUMBAI ; DATED: 31/07/2020 RAHUL SHARMA, SR. P.S. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI