Amtex Software Solutions Pvt. Ltd., CHENNAI V. DCIT, CHENNAI

MA 54/CHNY/2017

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 5666 (ITAT-CHENNAI)
• Duration Of Justice: 11 month(s) 21 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 23-01-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 23-06-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 01-02-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B SAGADEVAN
• Keywords: Rectification of order
• Section: 154

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . , . , BEFORE SHRI ABRAHAM P. GEORGE , ACCOUNTANT MEMBER & SHRI DUVVURU R L REDDY , JUDICIAL MEMBER M .P. NO. 54 /MDS/2017 [IN I.T.A.NO. 8 7 8 /MDS/201 5 ] / ASSESSMENT YEAR :20 1 0 - 11 M/S. AMTEX SOFTWARE SOLUTIONS PVT. LTD., NO. 1, COMMANDER - IN - CHIEF ROAD, EGMORE, CHENNAI 600 008 . [PAN: AAF C A0638J ] VS. THE DEPUTY COMMISSIO NER OF INCOME TAX, CORPORATE CIRCLE 1(1 ), CHENNAI. ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI S.P. CHIDAMBARAM, ADVOCATE / RESPONDENT BY : SHRI B. SAGADEVAN , J CIT / DATE OF HEARING : 05 . 0 1 .201 8 / DATE OF P RONOUNCEMENT : 23 . 0 1 .201 8 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : BY MEANS OF PRESENT MISCELLANEOUS PETITION, THE ASSESSEE SEEKS TO RECTIFY THE ORDER PASSED BY THE TRIBUNAL IN I.T.A. NO. 8 7 8/MDS/2015 DATED 15.09 .201 6 FOR THE ASSESSMENT YEAR 20 10 - 11 . BY REFERRING TO THE PETITION, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT INCONSISTENT VIEW WAS TAKEN BY NOT FOLLOWING THE DECISION OF THE COORDINATE BENCHES DECI SION IN THE CASE OF DCIT V. ATMEL R&D (P) LTD. [2016] 74 TAXMANN.COM 106, WHEREIN, ERP M .P. NO . 54 /M/ 1 7 2 WAS INCLUDED AS ITES, WHEREAS, IN THE TRIBUNAL ORDER DATED 15.09.2016, ERP WAS EXCLUDED FROM ITES, AND PRAYED FOR RECTIFICATION OF THE APPARENT MISTAKE ON RECORD. 2. ON THE OTHER HAND, THE LD. DR HAS SUBMITTED THAT THE ERP IS A SEPARATE DIVISION WHICH IS ENGAGED IN PROJECT IMPLEMENTATION AND NOT PROVIDING ANY IT ENABLED SERVICES, THE TRIBUNAL HAS RIGHTLY EXCLUDED FROM IT ENABLED SERVICES AND THUS, THERE WAS NO MISTAKE APPARENT ON RECORD AND PLEADED THAT NO RECTIFICATION IS WARRANTED. 3. WE HAVE HEARD BOTH SIDES, PERUSED THE RECORDS. THE CASE LAW RELIED ON BY THE ASSESSEE IN THE PETITION IN THE CASE OF DCIT V. ATMEL R&D (P) LTD. (SUPRA) WAS NOT AVAILABLE DURING THE CO URSE OF HEARING OF THE ORIGINAL APPEAL. IT IS APPARENT FROM THE RECORDS THAT DURING THE FINANCIAL YEAR UNDER REPORT, THE ERP DIVISION OF M/S. JEEVAN SCIENTIFIC TECHNOLOGY LTD. HAS ADDED NEW CLIENTS FOR ERP IMPLEMENTATIONS AND ALSO ADDED NEW CLIENTS TO PROV IDE PROFESSIONAL SERVICES AND SEGREGATED INTO DIFFERENT VERTICALS LIKE BFSI, IT, ITES, LOGISTICS & MANUFACTURING INDUSTRIES, ETC. THEREFORE, THE TPO HELD THAT THE ERP IS A SEPARATE DIVISION WHICH WAS ENGAGED IN PROJECT IMPLEMENTATION AND NOT PROVIDING THE IT ENABLED SERVICES . THEREFORE, WHILE ADJUDICATING THE GROUND RAISED BY THE ASSESSEE, THE TRIBUNAL , IN ITS ORDER DATED 15.09.2016 HELD THAT ONLY BPO SEGMENT DATA OF THE COMPARABLE M .P. NO . 54 /M/ 1 7 3 COMPANY JEEVAN SCIENTIFIC LIMITED SHOULD BE CONSIDERED FOR THE PURPOSE OF BE NCHMARKING INSTEAD OF ADOPTING BOTH ERP AND BPO SEGMENTS. 4. IN THE CASE OF CIT V. HI TECH ARAI LTD. [2010] 321 ITR 477, THE HON BLE JURISDICTIONAL HIGH COURT HAS OBSERVED AND HELD THAT SIMPLY BECAUSE THE COORDINATE BENCH OF THE TRIBUNAL HAD EARLIER TAK EN A DIFFERENT VIEW, THE TRIBUNAL ON THIS OCCASION ALSO OUGHT TO HAVE FOLLOWED THE SAME. WHEN IT WAS FOUND THAT THE TRIBUNAL HAS APPLIED THE LAW CORRECTLY IN THE IMPUGNED ORDER, THERE IS NO GAINSAYING THAT THERE WAS AN EARLIER ORDER BY THE COORDINATE BENCH AND THEREFORE, FOR THAT REASON, THIS TIME ALSO THE TRIBUNAL SHOULD HAVE BLINDLY FOLLOWED ITS OWN EARLIER DECISION EVEN IF SUCH EARLIER DECISION DID NOT REFLECT THE CORRECT POSITION OF THE LAW . THEREFORE, IT CANNOT BE SAID THAT THE DECISION TAKEN BY THE T RIBUNAL IS A MISTAKE APPARENT ON RECORD. 5. FURTHER, THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF EXPRESS NEWSPAPERS LIMITED V. DCIT [2010] 320 ITR 12 MAD) HAS ELABORATELY EXAMINED THE SCOPE OF SECTION 254(2) AND RELEVANT PORTION OF THE DECISION IS EXTRACTED AS UNDER: THE SCOPE AND AMPLITUDE OF SECTION 254(2) FIND THE ANALOGOUS PROVISION 12 OF SECTION 154 OF THE ACT HAVE BEEN CONSIDERED BY A CATENA OF DECISIONS OF THE APEX COURT AND OTHER HIGH COURTS. THE UNIFORM OPINION OF THE COURTS OF SUPERIO R JURISDICTION IS THAT A 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 UNDER SECTION 254(2). A N 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 M .P. NO . 54 /M/ 1 7 4 JUDGMENT IS CORRECT OR NOT. AN ERROR APPARENT ON THE RECORD MEANS AN ERROR WHICH STRIKES ONE ON MERE LOOKING AND DOES NOT NEED A LONG DRAWN OUT PROCESS OF REASONING ON POINTS ON WHICH THERE MAY BE CONCEIVABLY TWO OPINIONS. THE 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 T O REMAIN ON RECORD. IF THE VIEW ACCEPTED BY THE COURT IN THE ORIGINAL JUDGMENT IS ONE OF POSSIBLE VIEWS, THE CASE CANNOT BE SAID TO BE COVERED BY AN ERROR APPARENT ON THE FACE OF THE RECORD. SECTION 254(2) SPECIFICALLY EMPOWERS THE TRIBUNAL TO AMEND AT ANY TIME WITHIN FOUR YEARS FROM THE DATE OF AN ORDER, ANY ORDER PASSED BY IT UNDER SECTION 254(1) WITH A VIEW TO RECTIFY ANY MISTAKE APPARENT FROM THE RECORD EITHER SUO MOTU OR ON AN APPLICATION. IN ORDER TO ATTRACT THE APPLICATION OF SECTION 254(2), THE MIST AKE MUST EXIST AND THE SAME MUST BE APPARENT FROM THE RECORD. THE EXPRESSION 'MISTAKE APPARENT FROM THE RECORD' CONTAINED IN SECTIONS 154 AND 254(2) HAS WIDER CONTENT THAN THE EXPRESSION 'ERROR APPARENT ON THE FACE OF THE RECORD OCCURRING IN ORDER 47, RUL E 1 OF THE CODE OF CIVIL PROCEDURE. THE RESTRICTIONS ON THE POWER OF REVIEW UNDER ORDER 47, RULE 1 OF THE CODE OF CIVIL PROCEDURE DO NOT HOLD GOOD IN THE CASES OF SECTIONS 254(2) AND 154 OF THE ACT. SECTION 254(2) DOES NOT CONFER POWER ON THE TRIBUNAL TO R EVIEW ITS EARLIER ORDER. UNDER THE GARB OF RECTIFICATION OF MISTAKE IT IS NOT POSSIBLE FOR A PARTY TO TAKE FURTHER CHANCE OF REARGUING THE APPEAL ALREADY DECIDED. WHAT CAN BE RECTIFIED UNDER SECTION 254(2) IS A MISTAKE WHICH IS APPARENT AND PATENT. THE MIS TAKE HAS TO BE SUCH FOR WHICH NO ELABORATE REASONS OR ENQUIRY IS NECESSARY. WHERE TWO OPINIONS ARE POSSIBLE THEN IT CANNOT BE SAID TO BE A MISTAKE APPARENT ON THE RECORD. WHEN PREJUDICE RESULTING FROM AN ORDER IS ATTRIBUTABLE TO THE TRIBUNAL'S MISTAKE, ERR OR OR OMISSION, IT IS ITS BOUNDEN DUTY TO SET IT RIGHT. THE PURPOSE BEHIND THE ENACTMENT OF SECTION 254(2) OF THE ACT TO AMEND ANY ORDER PASSED UNDER SUB - SECTION (1), IF ANY MISTAKE APPARENT FROM THE RECORD IS BROUGHT TO THE NOTICE OF THE TRIBUNAL, IS BASE D ON THE FUNDAMENTAL PRINCIPLE THAT NO PARTY APPEARING BEFORE THE TRIBUNAL, BE IT AN ASSESSEE OR THE DEPARTMENT, SHOULD SUFFER ON ACCOUNT OF ANY MISTAKE COMMITTED BY THE TRIBUNAL. THIS FUNDAMENTAL PRINCIPLE HAS NOTHING TO DO WITH THE INHERENT POWER OF THE TRIBUNAL. IF PREJUDICE HAS RESULTED TO THE PARTY, WHICH PRE JUDICE IS ATTRIBUTABLE TO THE TRIBUNAL S MISTAKE, ERROR OR OMISSION AND WHICH ERROR IS A MANIFEST ERROR, THEN THE TRIBUNAL WOULD BE JUSTIFIED IN RECTIFYING ITS MISTAKE. RECTIFICATION CAN BE MADE O NLY WHEN A GLARING MISTAKE OF FACT OR LAW COMMITTED BY THE OFFICER PASSING THE ORDER BECOMES APPARENT FROM THE RECORD. THE RECTIFICATION IS NOT POSSIBLE IF THE QUESTION IS DEBATABLE. A POINT WHICH WAS NOT EXAMINED ON FACTS OR IN LAW CANNOT BE DEALT WITH AS A MISTAKE APPARENT FROM THE M .P. NO . 54 /M/ 1 7 5 RECORD. NO ERROR CAN BE SAID TO BE APPARENT ON THE FACE OF THE RECORD IF IT IS NOT MANIFEST OR SELF - EVIDENT AND REQUIRES AN EXAMINATION OR ARGUMENT TO ESTABLISH IT. WHERE WITHOUT ANY ELABORATE ARGUMENT ONE COULD POINT TO THE ER ROR AND SAY HERE IS A SUBSTANTIAL POINT OF LAW WHICH STARES ONE IN THE FACE, AND THERE COULD REASONABLY BE NO TWO OPINIONS ENTERTAINED ABOUT IT, IS A CLEAR CASE OF ERROR APPARENT ON THE FACE OF THE RECORD. VIDE ASST. CIT V. SAURASHTRA KUTCH STOCK EXCHANGE LTD. [2008] 305 ITR 227 (SC), HONDA SIEL POWER PRODUCTS LTD. V. CIT [2007] 295 ITR 466 (SC), HARI VISHNU KAMATH V. AHMAD ISHAQUE, AIR 1955 SC 233; [1955] 1 SCR 1104, CIT V. KESHRI METAL PVT. LTD. (1999] 237 ITR 165 (SC), DEVA METAL POWDERS P. LTD. V. COMMI SSIONER, TRADE TAX [2007] 10 VST 751 (SC) ; [2008] 2 SCC439, CIT V. HERO CYCLES PVT. LTD. [1997] 228 ITR 463 (SC), SATYANARAYAN LAXMINARAYAN HEGDE V. MALLIKARJUN BHAVANAPPA. TIRU MALE, AIR 1960 SC 137; [1960] 1 SCR 890, THUNGABHADRA INDUSTRIES LTD. V. GOVE RNMENT OF ANDHRA PRADESH REP. BY THE DEPUTY COMMISSIONER OF COMMERCIAL TAXES, AIR 1964 SC: 1372, BATUK K. VIYAS V. SURAT BOROUGH MUNICIPALITY, ILR 1953 BORN 191,MRS. K. T. M. S. UMMA SALMA V.CIT [1983] 144 ITR 890 (MAD), KIL KOTAGIRI TEA AND COFFEE ESTATES CO. LTD. V. ITAT [1988]174 ITR 579 (KER), CITV. R. CHELLADURAI [1979] 118 ITR 108 (MAD), STATE OF TAMIL NADU V. THAKOREBHAI AND BROTHERS[1983] 52 STC 104 (MAD); JAINARAIN JEEVRAJ V. CIT [L980] 121 ITR 358 (RAJ), CIT V. VARDHMAN SPINNING [1997] 226 ITR 296 (P&H), BATA INDIA LTD. V. DEPUTY CIT(L996] 217 ITR 871 (CAL) AND CIT V PRAHLAD RAI TODI [2001] 251 ITR 833 (GAU HATI). FROM THE VARIOUS JUDGMENTS OF THE SUPREME COURT ABOVE REFERRED TO AND OTHER HIGH COURTS, IT IS CLEAR THAT THE TRIBUNAL'S POWER UNDER SE CTION 254(2) IS NOT TO REVIEW ITS EARLIER ORDER BUT ONLY TO AMEND IT WITH A VIEW TO RECTIFY ANY MISTAKE APPARENT FROM THE RECORD. WHAT CAN BE TERMED AS 'MISTAKE APPARENT ? MISTAKE IN GENERAL MEANS TO TAKE OR UNDERSTAND WRONGLY OR INACCURATELY; TO MAKE A N ERROR IN INTERPRETING; IT IS AN ERROR; A FAULT, A MISUNDERSTANDING, A MISCONCEPTION. MISTAKE IN TAXATION LAWS HAS A SPECIAL SIGNIFICANCE. IT IS MOSTLY SUBJECTIVE AND THE DIVIDING LINE IS THIN AND INDISCERNIBLE. APPARENT MEANS VISIBLE, CAPABLE OF BEING SEEN, EASILY SEEN, OBVIOUS PLAIN, OPEN TO VIEW, EVIDENT, APPEARS, APP4ARING AS REAL AND TRUE, CONSPICUOUS, MANIFEST, SEEMING. THE PLAN MEANING OF THE WORD APPARENT IS THAT IT MUST BE SOMETHING WHICH APPEARS TO BE EX FACIE AND INCAPABLE OF ARGUMENT AND DE BATE. IF SUCH A MISTAKE APPARENT ON THE FACE OF RECORD IS BROUGHT O THE NOTICE, SECTION 254(2) EMPOWERS THE TRIBUNAL TO AMEND THE ORDER PASSED UNDER SECTION 254(1). AMENDMENT OF AN ORDER DOES NOT MEAN OBLITERATION OF THE ORDER M .P. NO . 54 /M/ 1 7 6 ORIGINALLY PASSED AND ITS S UBSTITUTION BY A NEW ORDER. WHAT IS MISTAKE APPARENT ON THE FACE OF THE RECORD OR WHERE DOES A MISTAKE CEASE TO BE MERE MISTAKE, AND BECOME MISTAKE APPARENT ON THE FACE OF THE RECORD IS RATHER DIFFICULT TO DEFINE PRECISELY, SCIENTIFICALLY AND WITH CERTAINT Y. AN ELEMENT OF INDEFINITENESS INHERENT IN ITS VERY NATURE AND IT MUST BE DISCERNIBLE FROM THE FACTS OF EACH CASE BY JUDICIOUSLY TRAIN ED MIND. MERE EXISTENCE OF A MISTAKE OR ERROR WOULD NOT PER SE RENDER THE ORDER AMENABLE FOR RECTIFICATION, BUT SUCH A MISTAKE MUST BE ONE WHICH MUST BE MANIFEST ON THE FACE OF THE RECORD. 6 . THEREFORE, IN VIEW OF THE FACTS AND CIRCUMSTANCES AND IN THE L IGHT OF THE DISCUSSION HELD ABOVE AND THE RATIO OF THE DECISIONS AS CITED ABOVE, WE DO NOT FIND ANY MERIT IN THE MISCELLANEOUS PETITION OF THE ASSESSEE AND THE SAME STANDS DISMISSED. 7 . IN THE RESULT, THE MP FILED BY THE ASSESSEE IS DISMISSED . ORDER PRON OUNCED ON THE 23 RD JANUARY, 201 8 AT CHENNAI. SD/ - SD/ - ( ABRAHAM P. GEORGE ) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI, DATED, THE 23 .01. 201 8 VM/ - / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.