Pr.CIT-Central,Gurgaon, Chandigarh V. Chandigarh Educational Trust, Mohali

MA 5/CHANDI/2022

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 3927 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 14 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 14-06-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2021-2022
• Appeal Filed On: 31-01-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA DHAR
• Keywords: Opportunity of being heard; Set aside
• Section: 12AA; 195; 192; 254(2)

Judgement Text

आयकर अपील य अ धकरण,च डीगढ़ यायपीठ “ए” , च डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “A”, CHANDIGARH ी एन.के.सैनी, उपा य एवं ी स ु धांश ु ीवा%तव, या'यक सद%य BEFORE: SHRI. N.K.SAINI, VP & SHRI. SUDHANSHU SRIVASTAVA, JM Miscellaneous Application No. 5/Chd/2022 ( ITA Nos. 96/Chd/2021) Assessment Year : 2021-22 Chandigarh Educational Trust, 2368, Phase-10, Mohali The PCIT(Central)-Gurgaon at Chandigarh C.R. Building, Himalaya Marg, Sector 17-E, Chandigarh PAN NO: AABTC2038D Appellant Respondent Miscellaneous Application No. 6/Chd/2022 ( ITA Nos. 97/Chd/2021) Assessment Year : 2021-22 Chandigarh Educational Society, Chandigarh Group of Colleges, VPO Jhanjeri,State Highway-12A, Sirhind Road, Mohali -Punjab The PCIT(Central)-Gurgaon at Chandigarh C.R. Building, Himalaya Marg, Sector 17-E, Chandigarh PAN NO: AAAAC8124A Appellant Respondent Miscellaneous Application No. 7/Chd/2022 ( ITA Nos. 98/Chd/2021) Assessment Year : 2021-22 Shri Guru Ram Dass Educational Society, Chandigarh Engineering College, VPO- Landran, Tehsil and District: Mohali Punjab The PCIT(Central)-Gurgaon at Chandigarh C.R. Building, Himalaya Marg, Sector 17-E, Chandigarh PAN NO: AACTS6157Q Appellant Respondent ! " Assessee by : Shri Sudhir Sehgal, Advocate # ! " Revenue by : Smt. Priyanka Dhar, Sr. DR $ % ! & Date of Hearing : 15/06/2022 '()* ! & Date of Pronouncement : 15/06/2022 2 आदेश/Order PER N.K. SAINI, VICE PRESIDENT These Miscellaneous Applications arising out of the common order dt. 31/08/2021 in ITA Nos. 96 to 98/Chd/2021 have been filed by the Department stating therein as under: Sub: Miscellaneous Applications filed before the Hon'ble ITAT, Chandigarh in the following cases:- Sr. No. ITA No. Name of the Case Filed on 1 MA NO. 5/Chd/2022 Chandigarh Educational Trust 02.02.2022 2 MA NO. 6/Chd/2022 Chandigarh Educational Society 08.02.2022 3 MA NO. 7/Chd/2022 M/s. Shri Guru Ram Dass Educational Society 02.02.2022 Kindly refer to your office letter bearing F. No. CIT (DR)/ITAT/Chd/2022-23/178 dated 02.06.2022 on the above cited subject vide which clarification with respect to withdrawal of three miscellaneous applications is sought as these are not covered under the ambit of section 254(2) of the Act in absence of mistake apparent from record. 2. In this connection, it is submitted that the Hon'ble ITAT through its combined order dated 31.08.2021 had set aside the orders of Pr. CIT (Central) wherein the registrations under section 12AA were cancelled and the issues of 12AA registrations were remanded back to his files to be adjudicated afresh in accordance with law after providing due and reasonable opportunities of being heard to the assessees and also keeping m view the findings given by the A. O. as regards to the violation of the provisions contained in section 13(l)(c) of the Act. 3. Meanwhile, the assessees have filed applications before the Hon'ble ITSC under section 245C on 17.09.2021 and subsequently called for report from Principal Commissioner of Income Tax (Central), Gurgaon under Rule 9. 4. As the assessees have approached the ITSC, the order of Hon'ble ITAT remains unimplementable. Hence, miscellaneous application was filed to bring this fact to the notice of Hon'ble ITAT and seek directions from the Hon'ble ITAT with respect to implementation of its order dated 31.08.2021. 5. The comments of this report have been approved by Pr. Commissioner of Income Tax (Central), Gurgaon vide his letter No. Pr. CIT(C)/GGM/2022-23/Judl./1022-23 dated 10.06.2022 for further submission to the CIT (DR), ITAT, Chandigarh. Yours faithfully, Sd/- (Adarsh Mishra) Assistant Commissioner of Income Tax, Central Circle-2, Chandigarh 2. During the course of hearing the Ld. Sr. DR reiterated the contents of the aforesaid Miscellaneous Applications. 3 3. In his rival submissions the Ld. Counsel for the Assessee furnished the written submission dt. 31/05/2022 which reads as under: Reg: 1. Chandigarh Educational Trust, 2368, Phase 10, Mohali, Punjab 16660 2. Chandigarh Group of Colleges, VPO Jhanjheri, State Highway, 12-A, Sirhind Road, SAS Nagar, Mohali, 140307. 3. Shri Guru Ram Dass Educational Society, Chandigarh Engineering College, VPO, Landran, Tehsil & Distt. Mohali, Punjab. Sub: Reply to the Misc. Applications filed by the department. We have to very humbly submit that in all the above said three cases, the facts are identical and in the above said cases, the Hon'ble ITAT, Chandigarh Bench, Chandigarh passed the consolidated order in respect of all the above said entities vide order, dated 31.08.2021 and had set aside the order as passed by the Ld. PCIT (Central), Gurgaon, wherein, the registration granted to the appellant u/s 12AA was cancelled, with the directions to the PCIT (Central), Gurgaon to decide the issue on 12AA registration afresh after giving due opportunity to the assessee and also after the outcome of examination by the Assessing Officer on various issues, after completion of assessment and also keeping in view the finding given by the Assessing Officer at the time of assessment proceedings. 2. Now, as per Misc. Applications of the department, it has been mentioned in para 4 that the finding as given by the Hon'ble ITAT with regard to the alleged violation of provisions contained in section 13(1)( c) of the Income Tax Act have now become non- implementable, is not correct finding, because of the following facts:- i). At the very outset, it is submitted that the application as moved by the Assessing Officer u/s 254(2) is not maintainable at all, because section 254(2) as read, lays down that the application can be entertained before the Tribunal with a view to rectify "any mistake apparent from record" and a plain meaning of word apparent is that it must be something, which appears to be "Ex-facie" and incapable of argument and debate and the mistake apparent must be on the face of record. In above cases, there exists no mistake apparent from record, because as per Misc. Applications filed by the Assessing Officer, no mistake has been pointed out in the order, which could be called as 'apparent' from record. The Tribunal cannot review its own finding or rewrite a fresh judgment. It cannot review its earlier order and neither it can go into the merits of appeal again. The expression 'mistake apparent on record', it is well settled means a 'mistake either clerical or grammatical or arithmetical or of like nature, which can be detected without there being any necessity to re-argue the matter or to reappraise the facts as appearing from the records. ii). Power to rectify an order, under section 254(2) is extremely limited and it does not extend to correcting errors of law, or re-appreciating factual findings because such - appreciation legitimately falls in sphere of further appeal-CIT v. Maruti Insurance Distribution Services Ltd. [2013] 212 Taxman 123 (Mag.)/[2012] 26 taxmann.com 68 (Delhi). iii). Further, your goodself's attention is invited to the judgment of Hon'ble Punjab & Haryana High Court in the case of Ved Parkash Madan Lai Vs CIT 102 ITR 2013 (Punjab) and Venkateswara Oil Mills 32 STC 660, 663 (SC) that the mistake to be rectified must be apparent from record. A mistake apparent on record must be an obvious and patent mistake and not something, which can be established by long drawn process of reasoning on points, on which, there may be two opinions. A decision on debatable point of law is not a mistake apparent from record as held by the 'Apex Court' in the 4 case of T.S. Balram, ITO vs. Volkat Bros. 82 ITR 50 and the said judgment has been followed in large number of cases. Thus, the rectification proceedings cannot be resorted in order to make a revision in the matter, on which, there could be two plausible interpretations. iv). The plain meaning of word 'apparent' is that, it must be something, which appears to be so 'ex facie' and is incapable of argument or debate. It, therefore, follows that a decision on debatable point of law or fact or failure to apply the law to a set of facts, which remain to be investigated cannot be corrected by way of rectification as held in the decision of N.Rajamoni Amma vs. DCIT as reported in 192 ITR 90,91,93-94 (Kerala) and in the case of M. Rajamoni Amma vs. DCIT as reported in 195 ITR 873 (SC). 3. Therefore, in view of above facts, the applications as filed by the department be dismissed. Besides that without prejudice to above, the following facts need your kind honour's consideration'^ a). It is a fact that the assessee has approached the Hon'ble Settlement Commission/Interim Board of Settlement on 17.09.2021 and that petitions were filed on the basis of notification by the Central Board of Direct Taxes to enable the assessees, who could file the petitions before the Hon'ble Settlement Commission earlier and that petitions have since been admitted and the department has submitted the 245D (4) reports for the purposes of finalization of the cases. b). It is submitted that the Hon'ble Settlement Commission has stepped into the shoes of the Assessing Officer since as per Section 245F, the Settlement Commission shall have all the powers of "Income Tax Authorities" in relation to the case before it and which is evident from clause (2) of section 245F and till the order is passed by the Hon'ble Settlement commission, the Settlement Commission shall have the exclusive jurisdiction over the case of the assessee. Clause (2) is being reproduced as under:- "(2) Where an application made under section 245C has been allowed to be proceeded with under section 245D, the Settlement Commission shall, until an order is passed under sub- section (4) of section 245D, have, subject to the provisions of sub- section (3) of that section, exclusive jurisdiction to exercise the powers and perform the functions of an income- tax authority under this Act in relation to the case." c). From the above perusal of section, it is very clear that the Settlement commission steps into the shoes of the 'Assessing Officer' and as and when the order of the Hon'ble Settlement commission shall be finalized, the consequential effect will be given by the Assessing Officer and also then the Ld. PCIT, Gurgaon can decide the issue of alleged violation u/s 13(1 )(c) and it is not that the order of the Hon'ble ITAT has become non- implementable and, thus, the Misc. Applications as moved by the Ld. Assistant Commissioner of Income Tax, Central Circle-ll, Chandigarh may, please, be dismissed. d). Your goodself's attention is also invited to section 245A of the Income Tax Act where the definition of case has been mentioned, which is being reproduced as under:- "245A. In this Chapter, unless the context otherwise requires,- (a) "Bench" means a Bench of the Settlement Commission; (b) "case" means any proceedings for assessment under this Act, of any person in respect of any assessment year or assessment years which may be pending before an Assessing Officer on the date on which an application under sub-section (1) of section 245C is made." 4. From the above definition, it is very clear that the applicant can approach the Hon'ble Income Tax Settlement Commission only, when the assessment proceedings are pending before the Assessing Officer and after the orders are passed by the Income Tax Settlement Commission u/s 245D(4), then the consequential effect is given by the 5 Assessing Officer. Thus, the application can be filed, when proceedings are pending before Assessing Officer and since the Hon'ble Income Tax Settlement commission has to perform functions of the Income Tax Authority i.e. Assessing Officer and, thus, as and when orders will be passed by the Hon'ble ITSC, the PCIT is free to exercise his powers for alleged violations u/s 13(1)( c) and hence, the Misc. Petition be dismissed and oblige. Thanking you, Yours faithfully, For Chandigarh Educational Trust For Chandigarh Group of Colleges For Shri Guru Ram Dass Educational Society Sd/- Sudhir Sehgal AR 4. During the course of hearing the Ld. Counsel for the Assessee reiterated the contents of the aforesaid written submission and submitted that no mistake has been pointed out by the Department in the order dt. 31/08/2021 passed by the ITAT, therefore these Miscellaneous Applications are not maintainable. 5. We have considered the submissions of both the parties and perused the material available on the record. In the present case, it is not in dispute that the Department has moved the applications under section 254(2) of the Income Tax Act, 1961(hereinafter referred to as ‘Act’), the provisions contained therein read as under: 254. (1) The Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. (1A) [***] (2) The Appellate Tribunal may, at any time within six months from the end of the month in which the order was passed, with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub-section (1), and shall make such amendment if the mistake is brought to its notice by the assessee or the Assessing Officer : Provided that an amendment which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee, shall not be made under this sub-section unless the Appellate Tribunal has given notice to the assessee of its intention to do so and has allowed the assessee a reasonable opportunity of being heard : Provided further that any application filed by the assessee in this sub-section on or after the 1st day of October, 1998, shall be accompanied by a fee of fifty rupees. 6. From the aforesaid provisions, it is clear that only the mistake apparent from the record can be rectified under section 254(2) of the Act, however, in the instant case no mistake of whatsoever nature has been pointed out by the department in the order dt. 6 31/08/2021 passed by the ITAT in ITA Nos. 96 to 98/Chd/2021 therefore, these Miscellaneous Applications filed by the Department are not maintainable and hence dismissed. 7. In the result, Miscellaneous Applications by the department are dismissed. (Order pronounced in the open Court on 15/06/2022 ) Sd/- Sd/- स ु धांश ु ीवा%तव एन.के.सैनी, (SUDHANSHU SRIVASTAVA) ( N.K. SAINI) या'यक सद%य/ JUDICIAL MEMBER उपा य / VICE PRESIDENT AG Date: 15/06/2022 ( + ! , - . - Copy of the order forwarded to : 1. The Appellant 2. The Respondent 3. $ / CIT 4. $ / 0 1 The CIT(A) 5. - 2 ग 4 5 & 4 5 678 ग9 DR, ITAT, CHANDIGARH 6. ग 8 : % Guard File