M/s. Gem Granites, CHENNAI V. DCIT, CHENNAI

MA 5/CHNY/2012

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 8009 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 20-04-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 20-04-2012
• Assessment Year: 1997-1998
• Appeal Filed On: 03-02-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Non passing of speaking order; Reassessment proceedings
• Section: 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH A CHENNAI (BEFORE SHRI N.S.SAINI, ACCOUNTANT MEMBER AND SHRI V.DURGA RAO, JUDICIAL MEMBER ) .. M.P. NO. 05/MDS/2012 (IN I.T.A. NO. 70/MDS/2005) ASSESSMENT YEAR : 1997-98 M/S.GEM GRANITES, NO.76,CATHEDRAL ROAD, CHENNAI 600 086. PAN : AAAFG 2370 F (PETITIONER) V. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-XV, CHENNAI 600 034. (RESPONDENT) PETITIONER BY : SHRI PHILIP GEORGE,ADVOCATE RESPONDENT BY : SHRI SHAJI P JACOB, ADDL.C.I.T. DR DATE OF HEARING : 20.04.12 DATE OF PRONOUNCEMENT : 20.0 4.12 O R D E R PER N.S.SAINI, ACCOUNTANT MEMBER : THIS IS A MISCELLANEOUS APPLICATION FILED ON 03.02 .2012 BY THE ASSESSEE ARISING OUT OF THE ORDER OF THE TRIBUNAL P ASSED IN ITA NO.70/MDS./05 DATED 22.12.06. AT THE OUTSET, THE M ISCELLANEOUS APPLICATION IS BEYOND THE TIME LIMIT AND THEREFORE, BARRED BY LIMITATION. M.P. NO.5/MDS/12 2 THE ASSESSEE EXPLAINED THAT HE HAS FILED AN APPEAL AGAINST THE ORDER OF THE TRIBUNAL BEFORE THE HONBLE MADRAS HIGH COUR T AND WAS PURSUING THE SAME. HOWEVER, THE HONBLE MADRAS HIG H COURT IN TAX CASE (APPEAL) NO.545 OF 2011 VIDE ITS ORDER DATED 0 4.01.12 DISMISSED THE APPEAL OF ASSESSEE WITH THE FOLLOWING OBSERVATIONS:- 4. I HAVE CONSIDERED THE ABOVE SUBMISSION. WHILE WE DISMISS THIS TAX CASE APPEAL, WE ONLY OBSERVE THAT IT IS FO R THE APPELLANT TO WORK OUT HIS REMEDY, IF THEY ARE ADVISED TO DO S O, BY FILING APPROPRIATE APPLICATION BEFORE THE INCOME-TAX APPEL LATE TRIBUNAL AND INSOFAR AS THE LIMITATION IS CONCERNED , THE APPELLANT IS AT LIBERTY TO PUT FORTH THE EXPLANATIO N FOR EXCLUSION OF THE PERIOD OF PENDENCY OF THE TAX CASE APPEAL BEFOR E THIS COURT FROM THE DATE OF FILING. I.E. 06.11.2007, TILL THIS ORDER IS PASSED. IN THE EVENT SUCH APPLICATION IS FILED, THE TRIBUNA L HAS TO CONSIDER SUCH EXPLANATION AS WELL. IN VIEW OF THE R EPRESENTATION OF THE LEARNED COUNSEL FOR THE APPELLANT, THE PETIT ION BEFORE THE APPELLATE TRIBUNAL, IF ADVISED, SHALL BE FILED ON O R BEFORE 06.02.2012. M.P. NO.5/MDS/12 3 2. LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT AS THE ASSESSEE WAS LEGALLY PURSUING THE APPEAL FILED BEFORE THE HO NBLE MADRAS HIGH COURT, HE COULD NOT FILE MISCELLANEOUS APPLICATION BEFORE THE TRIBUNAL. HE THEREFORE, PRAYED THAT THE TIME TAKEN IN DISPOSI NG OF THE APPEAL BEFORE THE HONBLE MADRAS HIGH COURT MAY BE EXCLUDE D AND ON EXCLUDING THE SAME, THIS MISCELLANEOUS APPLICATION IS WITHIN THE TIME LIMIT. 3. LD. DEPARTMENTAL REPRESENTATIVE DID NOT OBJECT TO THE ABOVE PLEADING OF THE ASSESSEE. 4. WE FIND THAT IT IS NOT IN DISPUTE THE ASSESSEE HAS FILED AN APPEAL BEFORE HONBLE MADRAS HIGH COURT WITHIN THE PRESCRIBED TIME. IT IS A SETTLED POSITION OF LAW THAT AN ASSESSEE CA NNOT BE COMPELLED TO TAKE MULTIPLE PROCEEDINGS AGAINST THE SAME CAUSE OF ACTION. THE ASSESSEE WAS RELYING ON AN ALTERNATIVE PROCEEDING. THE DELAY IN FILING OF THE MISCELLANEOUS APPLICATION IS CONSIDER ED AS FOR BONA FIDE REASONS AND THEREFORE CONDONED. BOTH THE PARTIES T HEREFORE, WERE HEARD ON MERITS OF THE MISCELLANEOUS APPLICATION. M.P. NO.5/MDS/12 4 5. LD. AUTHORISED REPRESENTATIVE OF THE ASSESSEE C ONTENDED BY FILING A WRITTEN SUBMISSIONS AS UNDER:- THE PETITIONER/APPELLANT HAD FILED AN APPEAL RAISI NG GROUNDS QUESTIONING THE ACTION OF THE C.I.T.(A) IN UPHOLDIN G CERTAIN PORTIONS OF THE ADDITIONS MADE, IN THE ORDER U/S.14 3(3) R.W.S.147, WHILE HAVING HELD THAT THE GROUND WHICH THE ASSESSING OFFICER HAD RECORDED AS THE REASONS FOR REOPENING WAS NOT VALID AND HAVING DELETED THE ADDITION AS BE ING WITHOUT JURISDICTION. THIS FINDING OF THE C.I.T.(A) WAS ACC EPTED BY DEPARTMENT AS NO APPEAL WAS FILED AND THE MATTER HA D BECOME FINAL. WHEN THE APPEAL WAS POSTED FOR HEARIN G, THE HONBLE TRIBUNAL, BASED ON A LETTER FILED WITH THE REGISTRY REQUESTING FOR WITHDRAWING THE APPEAL, DISMISSED TH E APPEAL EXPARTE. THEREAFTER THE ASSESSING OFFICER PURPORT ING TO GIVE EFFECT TO THE ORDER OF THE C.I.T.(A) PASSED AN ORDE R CONFIRMING THE DELETION OF THE ADDITION FOR WHICH THE ASSESSME NT WAS REOPENED BUT ASSESSING THE OTHER AMOUNTS. MEANWHILE THE PETITIONER/APPELLANT HAD APPROACHED THE HONBLE HIG H COURT, MADRAS, IN TAX CASE APPEAL NO.545 OF 2011 AND THE H ONBLE M.P. NO.5/MDS/12 5 MADRAS HIGH COURT WHILE DISMISSING THE APPEAL WAS P LEASED TO DIRECT THE PETITIONER/APPELLANT TO FILE A MISCEL LANEOUS APPLICATION BEFORE THE TRIBUNAL. THE PETITIONER/APPELLANT SUBMITS THAT THE MISCELLA NEOUS APPLICATION IS FILED CONSEQUENT TO THE JUDGEMENT OF THE HONBLE MADRAS HIGH COURT IN THE ABOVE TAX CASE APPEAL. UNDER SECTION 254(2), THE INCOME TAX APPELLATE TRI BUNAL HAS THE POWER TO RECTIFY ANY MISTAKE APPARENT FROM THE FACT OF THE RECORD. THE RECORD OF THE TRIBUNAL RELATING TO THE PROCEEDINGS CONSISTS OF THE GROUNDS OF APPEAL FILED ALONG WITH FORM 36 AND THE ORDER PASSED. THE POWER OF THE TRI BUNAL THEREFORE EMBRACES ANY MISTAKE THAT CAN BE DEDUCTED FROM A PERUSAL OF THE RECORDS. THE MISTAKE CAN ARISE FROM THE ACTS OF OMISSION OR COMMISSION OF ANY OF THE PARTIES INVOLV ED IN THE PROCEEDINGS, I.E. THE ASSESSEE, THE REVENUE OR THE TRIBUNAL ITSELF. IT IS NOT THAT MISTAKE THAN CAN BE RECTIFI ED IS ONLY THAT COMMITTED BY THE TRIBUNAL. THE ISSUE RAISED IN THE GROUNDS OF APPEAL IS THAT THE ORDER OF THE C.I.T.(A) NOT QUASHING THE ENTIRE ASSESSMENT MA DE M.P. NO.5/MDS/12 6 U/S.143(3) R.W.S. 147 WAS NOT VALID. THIS GROUND A RISES BECAUSE THE C.I.T.(A) HAD HELD THAT THE INITIATION OF THE REASSESSMENT PROCEEDINGS BY THE ASSESSING OFFICER W AS NOT CORRECT AND THAT THE INITIATION OF THE PROCEEDINGS ON THE REASON RECORDED WOULD NOT SURVIVE. THE DEPARTMENT DID NOT FILE ANY APPEAL AGAINST THIS ORDER AND THIS FINDING HAS BECO ME FINAL. THEREFORE, IN ITS APPEAL, THE CASE OF THE ASSESSEE WAS THAT WHEN THE VERY BASE FOR THE REOPENING GOES THE REASO N FOR REOPENING GOES AND THE ACTION TAKEN BY THE ASSESSIN G OFFICER I/S.147 WAS ILLEGAL AND THE NOTICE U/S.148 WAS AB I NITIO VOID. THIS PRINCIPLE OF LAW IS SUPPORTED BY THE DECISION OF THEHONBLE MADRAS HIGH COURT IN THE CASE OF C.I.T V. RAJ FINLE ASE LTD. REPORTED IN [2008] 220 CTR (MAD.) 306, WHEREIN THEH ONBLE MADRAS HIGH COURT HAS HELD THAT WERE THE REASON FOR REOPENING IS NOT AVAILABLE, THE WHOLE REASSESSMENT IS INVALID AND NO ADDITIONS CAN BE MADE. THE MISTAKE THAT HAS ARISEN IS THAT OF THE WRONG A ND ILLEGAL ORDER OF THE C.I.T.(A) BEING U0PHELD BECAUSE THE AS SESSEE M.P. NO.5/MDS/12 7 HAD REQUESTED FOR WITHDRAWAL, WHICH THE TRIBUNAL EX ERCISING ITS POWER HAS PERMITTED. THE POWER AND DUTY OF THE TRIBUNAL IS EXERCISED O NLY IN RELATION TO THE GROUNDS OF APPEAL ARISING IN THE AP PEAL. THE ORDER PASSED BY THE TRIBUNAL IN THE APPEAL WHI CH IS IN REALITY A DECISION ON THE GROUNDS OF APPEAL BEFORE IT MUST BE AN ORDER WHICH IS PASSED KEEPING IN MIND THE ISSUE RAISED IN THE GROUNDS OF APPEAL. THE TRIBUNAL WHILE PASSING A N ORDER, WHETHER BY PASSING A SPEAKING ORDER OR EXPARTE NON SPEAKING ORDER, IS AN ORDER PASSED EFFECTING AND ULTIMATELY ADJUDICATING ON THE GROUNDS OF APPEAL. SIMILARLY WHEN AN APPEAL IS DISMISSED AS WITHDRAWN IT IS AN ORDER GIVING A FINA LITY TO THE ISSUES RAISED IN THE GROUNDS OF APPEAL. THE WITHDR AWAL OF AN APPEAL CANNOT BE DONE WITHOUT THE PERMISSION AND CO NSENT OF THE TRIBUNAL. IT IS AN ACCEPTABLE PRINCIPLE OF LAW THAT AN ASSE SSEE CANNOT BE BOUND BY ANY MISTAKEN ACTION ON HIS PART WHICH W OULD CAUSE PREJUDICE TO ITSELF. IN THIS CASE THE LAW IS VERY CLEAR THAT UNLESS THE REASON, CONSTITUTING THE BASE FOR REOPEN ING EXITS, M.P. NO.5/MDS/12 8 THE REOPENING IS INVALID. THE ASSESSEE BY WITHDRAW ING ITS APPEAL HAS MADE A CRUCIAL ERROR IN PREJUDICING HIS RIGHTS AS AN ASSESSEE. THE TRIBUNAL HAVING CONSENTED TO PERMIT THE WITHDRAWAL HAS THEREBY ALLOWED A MISTAKE OF LAW TO BE PERPETUATED. THIS MISTAKE OF LAW IS A MISTAKE APPA RENT FROM THE RECORD AS BUT FOR THE DISMISSAL OF THE APPEAL A S WITHDRAWN, THE GROUNDS RAISED BEFORE THE TRIBUNAL MAY HAVE BEE N ADJUDICATED IN FAVOUR OF THE ASSESSEE. IN THE CASE OF GANGA BISHEN & SONGS V. ASSESSING OFFICER REPORTED IN [19 97] 60 ITD (DEL.) 341, THE HONBLE TRIBUNAL HAD IN THE INTERES T OF JUSTICE AFTER RECEIVING A LETTER FOR WITHDRAWAL GIVEN AN OP PORTUNITY TO THE ASSESSEE AND THE BENCH ENQUIRED OF THE LEARNED COUNSEL WHETHER HE UNDERSTOOD THE IMPLICATIONS OF THE WITHD RAWAL OF THE APPEAL. IT IS SUBMITTED THAT IN THE PETITIONER / APPELLANT S CASE AN EXPARTE ORDER WAS PASSED AND NO ENQUIRY WAS MADE AS TO THE IMPLICATIONS OF THE WITHDRAWAL. IN THE INTERESTS O F JUSTICE, SUCH AN ENQUIRY OUGHT TO HAVE BEEN MADE. IN ANY EVENT, THE M.P. NO.5/MDS/12 9 HONBLE TRIBUNAL OUGHT TO HAVE CONSIDERED THE IMPLI CATIONS ON THE GROUNDS OF APPEAL. IN THE ABOVE CIRCUMSTANCES, IT IS HUMBLY SUBMITTED THAT KEEPING IN MIND THE DICTUM THAT ONE OF THE IMPORTAN T REASONS FOR GIVING THE POWER OF RECTIFICATION WAS TO ENSURE THAT NO PREJUDICE IS CAUSED TO EITHER SIDE APPEARING BEFORE IT AND THAT THE RIGHT OF THE TRIBUNAL IS BORN FROM THE FUNDAMEN TAL PRINCIPLE THAT JUSTICE IS ABOVE ALL AND IS EXERCISED TO REMOV E AN ERROR AND DISTURB THE FINALITY, THE ORDER OF THE TRIBUNAL MAY BE RECTIFIED BY RECALLING THE SAME AND GIVING THE PETITIONER/APPELLANT AN OPPORTUNITY OF BEING HEARD. DATED AT CHENNAI THIS THE 20 TH DAY OF APRIL, 2012. 6. LD. D.R. VEHEMENTLY OBJECTED THE MISCELLANEOUS APPLICATION AND THE SUBMISSIONS OF THE LD. AUTHORISED REPRESENT ATIVE OF THE ASSESSEE. HE CONTENDED THAT THE TRIBUNAL HAS ALLOW ED THE WITHDRAWAL OF THE APPEAL ON THE BASIS OF THE REQUES T OF THE ASSESSEE AND THEREFORE, THERE WAS NO ERROR IN THE ORDER OF T HE TRIBUNAL, WHICH CAN BE LEGALLY RECTIFIED U/S.254(2) OF THE ACT. M.P. NO.5/MDS/12 10 7. WE FIND THAT THE ASSESSEE, AT THE TIME OF HEARI NG OF THE ORIGINAL APPEAL BEFORE THE TRIBUNAL, FILED A WRITTEN PRAYER DATED 10.10.06, WHICH READS AS UNDER:- REF: OUR APPEAL NO.ITA NO.0070/MDS/2006 ASST YEA R 1997-98 WE WOULD LIKE TO WITHDRAW OUR APPEAL REFERRED ABOVE , SINCE THE INCOME TAX DEPARTMENT HAS NOT FILED APPEAL BEFO RE YOU FOR THE SAID ASSESSMENT YEAR. IN VIEW OF THE ABOVE PRAYER OF THE ASSESSEE, THE TR IBUNAL HELD AS UNDER:- IN THIS APPEAL, THE ASSESSEE HAS VIDE LETTER DATED 10.10.2006 MADE A PRAYER FOR WITHDRAWAL OF APPEAL, FOR WHICH THE LD. DR HAD NO OBJECTION. THEREFORE, THE APPEAL IS DISMISSED AS WITHDRAWN. 8. THE SOLE CONTENTION OF THE ASSESSEE BEFORE US I S THAT AS IT HAS MADE A MISTAKE IN WITHDRAWING THE APPEAL AND TRIBUN AL HAVING CONSENTED TO SUCH WITHDRAWAL, THE CONSEQUENT ORDER OF THE TRIBUNAL IS M.P. NO.5/MDS/12 11 AN ORDER WHICH CONTAINS MISTAKES AND CAN BE RECTIFI ED U/S.254(2) OF THE ACT. 9. WE FIND THAT IT IS NOT IN DISPUTE THE TRIBUNAL HAS THE POWER TO GIVE CONSENT TO THE PRAYER OF THE APPELLANT TO WITH DRAW HIS APPEAL. FURTHER, IT IS OBSERVED THAT IN THE WITHDRAWAL LETT ER, THE SOLE REASON GIVEN BY THE ASSESSEE FOR WITHDRAWING THE APPEAL WA S THAT THE REVENUE HAS NOT FILED ANY APPEAL AGAINST THE ORDER OF THE ASSESSING OFFICER. LD. AR COULD NOT POINT OUT ANY MISTAKE IN THE ABOVE LETTER PRAYING FOR WITHDRAWAL OF APPEAL. THUS, WE DO NOT FIND ANY FORCE IN THE ARGUMENT OF THE LD. A.R THAT THE TRIBUNAL HAVI NG CONSENTED TO THE PRAYER OF THE APPELLANT TO WITHDRAW APPEAL FOR SUCH A REASON RESULTED IN ANY MISTAKE WHICH CAN BE RECTIFIED U/S. 254(2) OF THE ACT. IT IS A SETTLED POSITION OF LAW THAT U/S.254(2) OF THE ACT ONLY SUCH MISTAKES, WHICH ARE APPARENT FROM THE RECORD, CAN O NLY BE RECTIFIED. A MISTAKE, WHICH IS DEBATABLE OR ON WHICH THERE CAN BE CONCEIVABLY MORE THAN ONE VIEW CANNOT BE CONSIDERED AS MISTAKE APPARENT FROM THE RECORD. THEREFORE, THE MISCELLANEOUS APPLICATI ON FILED BY THE ASSESSEE IS DISMISSED. M.P. NO.5/MDS/12 12 3. IN THE RESULT, THE MISCELLANEOUS APPLICATION FIL ED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE HEARING IN THE PRESENCE OF THE PARTIES ON 20 TH APRIL, 2012. SD/- SD/- (V.DURGA RAO) (N.S.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 20 TH APRIL , 2012. K S SUNDARAM. COPY TO: (1) PETITIONER (2) RESPONDENT (3) CIT(A) (4) CIT (5) D.R. (6) GUARD FILE