Smt.Indu Sunilkumar, Thiruvalla V. The DCIT, Cochin

MA 54/COCH/2016

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 5732 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 11 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 12-03-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 12-04-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A DHANARAJ
• Assessee Lawyers: RAMESH JOHN
• Keywords: Unexplained investment; Rectification of order; Source of fund; Reasonable cause; Assessment record
• Section: 143(3); 153A; 69; 263

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI CHANDRA POOJARI , AM & GEORGE GEORGE K., JM M.P. NOS. 5 3 & 54/COCH/2016 (ARSG. OUT OF I.T.A. NOS. 54 & 55/COCH/2013) ASSESSMENT YEAR S : 2006 - 07 & 2008 - 09 SMT . INDU SUNIL KUMAR , SRAVANAM, POWER HOUSE ROAD, THIRUVALLA. [PAN: AGPPS 4558L] VS. THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE, KOCHI. (ASSESSEE - APPELLANT) (REVENUE - RESPONDENT) ASSESSEE BY SHRI RAMESH JOHN, CA REVENUE BY SHRI A. DHANARAJ, SR. DR DATE OF HEARING 02 /0 3 /2018 DATE OF PRONOUNCEMENT 12 / 0 3 /2018 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THESE TWO MISCELLANEOUS PETITIONS FILED BY THE ASSESSEE SEEK RECTIFICATION/RECALL OF THE TRIBUNAL ORDER IN ITA N OS. 54 & 55/COCH/2013 DATED 08 TH AUGUST 2014. M.P. NOS. 53 &54./C/2016 2 2. IN THESE TWO CASES, THE ASSESSEE CAME IN APPEAL BEFORE THIS TRIBUNAL SEEKING QUASHING OF THE ORDER OF THE COMMISSIONER OF INCOME -TAX PASSED U/S. 263 OF THE I.T. ACT. FOR THE ASSESSMENT YEARS 2006-07, THE OR IGINAL ASSESSMENT WAS FRAMED U/S. 143(3) OF THE I.T. ACT. WHILE PERUSING THE RE CORDS, THE CIT NOTICED THAT AN ADDITION OF RS.6.5 LAKHS WAS MADE BY THE ASSESSING OFFICER AS UNEXPLAINED INVESTMENT U/S. 69 OF THE ACT. THE ASSESSING OFFIC ER THOUGH DISCUSSED RELATING TO ANOTHER UNEXPLAINED INVESTMENT OF RS.17,90,107/- WAS OMITTED TO BE ASSESSED U/S. 69 OF THE I.T. ACT. AS SUCH, THE CIT GAVE DIRE CTION TO THE ASSESSING OFFICER TO MAKE THAT ADDITION FOR THE ASSESSMENT YEAR 2006-07. RELATING TO THE ASSESSMENT YEAR 2008-09, THE CIT INVOKED THE JURISDICTION U/S. 263 OF THE ACT TO MAKE FURTHER ADDITION OF RS.28,05,000/- IN RESPECT OF SA LE CONSIDERATION OF LAND AND BUILDING AT EDAPALLY. THE TRIBUNAL CONFIRMED THE E XERCISE OF JURISDICTION U/S. 263 OF THE ACT BY CIT FOR BOTH THE ASSESSMENT YEARS. H OWEVER, ACCORDING TO THE LD. AR, REGARDING FURTHER ADDITION SUGGESTED BY CIT, IT WAS REMITTED BY THE TRIBUNAL TO THE FILE OF THE ASSESSING OFFICER FOR FRESH CONS IDERATION. 3. THE LD. AR SUBMITTED THAT EVEN THOUGH THE TRIB UNAL ORDER WAS DATED 08/08/2014, THE ASSESSING OFFICER POSTED THE CASE F OR HEARING ON 08/02/2016. HE SUBMITTED THAT BEFORE POSTING OF THE CASE AND SU BSEQUENT TO THE ORDER OF THE TRIBUNAL DATED 08/08/2014, THE HIGH COURT RENDERED THE JUDGMENT DATED 06/03/2015 IN WP(C) NO. 7182 OF 2015 (W) IN THESE C ASES. THE LD. AR SUBMITTED THAT AS PER PARA 3 OF THE JUDGMENT DIRECT ION WAS GIVEN TO THE CIT(A) M.P. NOS. 53 &54./C/2016 3 TO CONSIDER THE VALIDITY OF THE SEARCH AND AS TO WH ETHER THE ASSESSING OFFICER HAD JURISDICTION TO INITIATE PROCEEDINGS U/S. 153A WHIC H RESULTED IN FRAMING OF THE ORIGINAL ASSESSMENT ORDER PRIOR TO DECIDING THE ISS UE ON MERITS AND DIRECTION WAS ALSO GIVEN TO ALLOW CROSS EXAMINATION OF THE PANCHA S AND THE AUTHORIZED OFFICERS. ACCORDING TO THE LD. AR, THIS WAS TO BE DONE PRIOR TO PROCEEDING WITH APPEAL ON MERITS. 3.1 IT WAS SUBMITTED THAT THE JUDGMENT OF THE HI GH COURT IN WP(C) NO. 7182 OF 2015 (W) ACTS RETROSPECTIVELY. THE LD. AR SUBMI TTED THAT THE APPEAL BEFORE THE CIT(A) WAS PENDING FOR DISPOSAL. ACCORDING TO THE LD. AR, IN VIEW OF THE SAID JUDGMENT, REQUEST WAS MADE BEFORE THE ASSESSING OFF ICER NOT TO GIVE EFFECT TO THE ORDER OF THIS TRIBUNAL SINCE JURISDICTIONAL ASP ECT HAS TO BE DECIDED BEFORE GOING INTO THE MERITS OF THE CASE IN VIEW OF THE HI GH COURT JUDGMENT. THE LD. AR SUBMITTED THAT THE ASSESSING OFFICER WITHOUT CONSID ERING THE REQUEST, VIDE ORDERS DATED 30/03/2016 GAVE EFFECT TO THE TRIBUNAL ORDER DATED 08/08/2014 FOR ASSESSMENT YEARS 2006-07 AND 2008-09. 3.2 THE LD. AR SUBMITTED THAT ON SUBSEQUENT VERIF ICATION OF ASSESSMENT RECORDS FOR ASSESSMENT YEAR 2006-07, THE ASSESSING OFFICER NOTICED THAT THE COST OF ADDITION/IMPROVEMENTS (OWN PROPERTY AT PARAVUR) MAD E DURING THE RELEVANT PREVIOUS YEAR WAS RS.17,90,107/- FOR ASSESSMENT YEA R 2006-07 AND THE SOURCE OF FUND FOR THIS INVESTMENT WAS NOT EXPLAINED AND HENC E THE SAID AMOUNT TO BE M.P. NOS. 53 &54./C/2016 4 CONSIDERED AS UNEXPLAINED INVESTMENT U/S. 69 OF THE ACT. ACCORDING TO THE LD. AR, THIS FINDING OF THE ASSESSING OFFICER WAS BROUG HT TO THE ATTENTION OF CIT BY THE ASSESSING OFFICER AND CONSEQUENTLY, NOTICE U/S. 263 WAS ISSUED ON 29/06/2012 CALLING FOR OBJECTIONS. 3.3 THE LD. AR SUBMITTED THAT FOR THE ASSESSMENT YEAR 2008-09 ALSO, SIMILAR STEPS WERE TAKEN BY THE ASSESSING OFFICER ON THE GR OUND THAT THERE WAS NO CAPITAL GAIN RETURNED ON THE SALE OF LAND AT EDAPALL Y FOR RS.2,80,55,000/- WHICH WAS BROUGHT TO THE NOTICE OF THE RESULTING IN THE N OTICE U/S. 263 OF THE ACT. THEREFORE, ACCORDING TO THE LD. AR, THE INITIATION FOR BOTH THE YEARS WERE NOT SUO MOTO AND THE INITIATION WAS BY THE ASSESSING OFFICE R BY DIRECTING THE CIT TO ISSUE NOTICE U/S. 263 OF THE ACT. IT WAS SUBMITTED THAT B ASED ON THE SAID FACTS STATED BY THE ASSESSING OFFICER, THE REVISION MADE BY THE CIT IS NOT A SUO MOTO AS FOUND BY THE TRIBUNAL BUT ONLY AT THE INSTANCE OF T HE ASSESSING OFFICER. HENCE, THE INITIATION IS BY THE ASSESSING OFFICER AND NOT THE CIT BASED ON WHICH CIT ISSUED NOTICE U/S. 263. 3.4 THE LD. AR SUBMITTED THAT AT THE TIME OF DIS POSAL OF THE TRIBUNAL ORDER DATED 08/08/2015, THE INFORMATION THAT SECTION 263 WAS INVOKED AT THE INITIATION OF THE ASSESSING OFFICER WAS NOT AVAILABLE AND IT C AME OUT ONLY PURSUANT TO ASSESSMENT ORDERS DATED 30/03/2016. THEREFORE, THE LD. AR SUBMITTED THAT THE REVISION ORDER PASSED BY THE CIT AT THE INITIATION OF THE ASSESSING OFFICER WAS M.P. NOS. 53 &54./C/2016 5 WITHOUT AUTHORITY OF LAW AND THE FINDING OF THE TRI BUNAL WITHOUT KNOWING THE FACTUAL POSITION AT THE TIME OF DISPOSAL OF THE APP EAL RESULTED IN A MISTAKE IN SUSTAINING THE ORDER U/S. 263 OF THE ACT. 4. ON THE OTHER HAND THE LD. DR RELIED ON THE ORD ER OF THE TRIBUNAL. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE MATERIAL ON RECORD. THE SCOPE AND AMBIT OF APPLICATION OF SECTION 254(2 ) IS VERY LIMITED. THE SAME IS RESTRICTED TO RECTIFICATION OF MISTAKES APPARENT FR OM 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 WOUL D MEAN PASSING OF A FRESH ORDER. THAT DOES NOT APPEAR TO BE THE LEGISLATIVE I NTENT. THE ORDER PASSED BY THE TRIBUNAL UNDER S. 254(1) IS THE EFFECTIVE ORDER SO FAR AS THE APPEAL IS CONCERNED. ANY ORDER PASSED UNDER S. 254(2) EITHER ALLOWING TH E AMENDMENT OR REFUSING TO AMEND GETS MERGED WITH THE ORIGINAL ORDER PASSED. T HE ORDER AS AMENDED OR REMAINING UN-AMENDED IS THE EFFECTIVE ORDER FOR ALL PRACTICAL PURPOSES. AN ORDER UNDER S. 254(2) DOES NOT HAVE EXISTENCE DE HORS THE ORDER UNDER S. 254(1). RECALLING OF THE ORDER IS NOT PERMISSIBLE UNDER S. 254(2). RECALLING OF AN ORDER AUTOMATICALLY NECESSITATES REHEARING AND RE- ADJUDI CATION OF THE ENTIRE SUBJECT- MATTER OF APPEAL. THE DISPUTE NO LONGER REMAINS RES TRICTED TO ANY MISTAKE SOUGHT TO BE RECTIFIED. POWER TO RECALL AN ORDER IS PRESCR IBED IN TERMS OF RULE 24 OF THE ITAT RULES, 1963, AND THAT TOO ONLY IN CASE WHERE T HE ASSESSEE SHOWS THAT IT M.P. NOS. 53 &54./C/2016 6 HAD A REASONABLE CAUSE FOR BEING ABSENT AT A TIME W HEN THE APPEAL WAS TAKEN UP AND WAS DECIDED EX-PARTE. JUDGED IN THE ABOVE BA CKGROUND THE ORDER PASSED BY THE TRIBUNAL IS INDEFENSIBLE. 5.1 THE WORDS USED IN S. 254(2) ARE SHALL MAKE SU CH AMENDMENT, IF THE MISTAKE IS BROUGHT TO ITS NOTICE EARLY, IF THERE IS A MIST AKE, THEN AN AMENDMENT IS REQUIRED TO BE CARRIED OUT IN THE ORIGINAL ORDER TO CORRECT THAT PARTICULAR MISTAKE. THE PROVISION DOES NOT INDICATE THAT THE TRIBUNAL C AN RECALL THE ENTIRE ORDER AND PASS A FRESH DECISION. THAT WOULD AMOUNT TO A REVIE W OF THE ENTIRE ORDER AND THAT IS NOT PERMISSIBLE UNDER THE IT ACT. THE POWER TO RECTIFY A MISTAKE UNDER S. 254(2) CANNOT BE USED FOR RECALLING THE ENTIRE ORDE R. NO POWER OF REVIEW HAS BEEN GIVEN TO THE TRIBUNAL UNDER THE IT ACT. THUS, WHAT IT COULD NOT DO DIRECTLY COULD NOT BE ALLOWED TO BE DONE INDIRECTLY. 5.2 IN THE CASE OF CIT VS. HINDUSTAN COCA COLA BEV ERAGES (P) LTD. (2007) 207 CTR (DEL) 119; (2007) 293 ITR 163 (DEL), THEIR LORD SHIPS WHILE CONSIDERING THE POWERS OF THE TRIBUNAL UNDER S. 254(2) OF THE IT A CT, 1961 OBSERVED AS UNDER: UNDER S. 254(2) OF THE IT ACT, 1961, THE TRIBUNAL HAS THE POWER TO RECTIFY MISTAKES IN ITS ORDER. HOWEVER, IT IS PLAIN THAT TH E POWER TO RECTIFY A MISTAKE IS NOT EQUIVALENT TO A POWER TO REVIEW OR RECALL TH E ORDER SOUGHT TO BE RECTIFIED. RECTIFICATION IS A SPECIES OF THE LARGER CONCEPT OF REVIEW. ALTHOUGH IT IS POSSIBLE THAT THE PRE-REQUISITE FOR EXERCISE OF EITHER POWER MAY BE SIMILAR (A MISTAKE APPARENT FROM THE RECORD), BY IT S VERY NATURE THE POWER TO RECTIFY A MISTAKE CANNOT RESULT IN THE RECALL AND R EVIEW OF THE ORDER SOUGHT TO BE RECTIFIED. M.P. NOS. 53 &54./C/2016 7 5.3 THUS THE SCOPE AND AMBIT OF APPLICATION U/S. 254(2) IS AS FOLLOWS: (A) FIRSTLY, THE SCOPE AND AMBIT OF APPLICATION OF S. 254(2) OF IT ACT IS RESTRICTED TO RECTIFICATION OF THE MISTAKES APPAREN T FROM THE RECORD. (B) SECONDLY, THAT NO PARTY APPEARING BEFORE THE TR IBUNAL SHOULD SUFFER ON ACCOUNT OF ANY MISTAKE COMMITTED BY THE TRIBUNAL AN D IF THE PREJUDICE HAS RESULTED TO THE PARTY, WHICH PREJUDICE IS ATTRIBUTA BLE TO THE TRIBUNALS MISTAKE/ERROR OR OMISSION, AND WHICH AN ERROR IS A MANIFEST ERROR, THEN THE TRIBUNAL WOULD BE JUSTIFIED IN RECTIFYING ITS MISTA KE. THE RULE OF PRECEDENT IS AN IMPORTANT ASPECT OF LEGAL CERTAINTY IN THE RULE OF LAW AND THAT PRINCIPLE IS NOT OBLITERATED BY S. 254(2) OF THE ACT AND NON-CON SIDERATION OF PRECEDENT BY THE TRIBUNAL CAUSES A PREJUDICE TO THE ASSESSEE. (C) THIRDLY, POWER TO RECTIFY A MISTAKE IS NOT EQUI VALENT TO A POWER TO REVIEW OR RECALL THE ORDER SOUGHT TO BE RECTIFIED. (D) FOURTHLY, UNDER S. 254(2) AN OVERSIGHT OF A FAC T CANNOT CONSTITUTE AN APPARENT MISTAKE RECTIFIABLE UNDER THE SECTION. M.P. NOS. 53 &54./C/2016 8 E) FIFTHLY, FAILURE ON THE PART OF THE TRIBUNAL TO CONSIDER AN ARGUMENT ADVANCED BY EITHER PARTY FOR ARRIVING AT A CONCLUSI ON IS NOT AN ERROR APPARENT ON RECORD, ALTHOUGH IT MAY BE AN ERROR OF JUDGMENT. (F) SIXTHLY, EVEN IF ON THE BASIS OF A WRONG CONCLU SION THE TRIBUNAL HAS NOT ALLOWED A CLAIM OF THE PARTY, IT WILL NOT BE A GROU ND FOR MOVING AN APPLICATION UNDER S. 254(2) OF THE ACT. (G) LASTLY, IN THE GARB OF AN APPLICATION FOR RECTI FICATION UNDER S. 254(2), THE ASSESSEE CANNOT BE PERMITTED TO REOPEN AND REARGUE THE WHOLE MATTER AS THE SAME IS BEYOND THE SCOPE OF S. 254(2) OF THE IT ACT . 5.4 IN THE INSTANT CASE, THE TRIBUNAL WHILE DECID ING THE APPEALS OF THE ASSESSEE VIDE ORDER DATED 8 TH AUGUST, 2014, CONSIDERED THE ARGUMENTS ADVANCED BY BOTH THE PARTIES AND DELIVERED THE JUDGMENT. NOW THE A SSESSEES CONTENTION RAISED IN THE INSTANT APPLICATIONS IS THAT THERE WAS A JUD GMENT OF HIGH COURT DATED 06/03/2015 IN WP(C) NO. 7182 OF 2015 (W) WHEREIN DI RECTION WAS GIVEN TO CIT(A) TO CONSIDER THE VALIDITY OF THE SEARCH AND A S TO WHETHER THE ASSESSING OFFICER HAD JURISDICTION TO INITIATE PROCEEDINGS U/ S. 153A WHICH RESULTED IN THE ORIGINAL ASSESSMENT ORDER PRIOR TO DECIDING THE ISS UE ON MERITS AND DIRECTION WAS ALSO GIVEN TO ALLOW CROSS EXAMINATION OF THE PANCHA S AND THE AUTHORIZED OFFICERS. THIS WAS TO BE DONE PRIOR TO PROCEEDING WITH APPEAL ON MERITS. IN VIEW OF THE M.P. NOS. 53 &54./C/2016 9 SAID JUDGMENT, A REQUEST WAS MADE BEFORE THE ASSESS ING OFFICER NOT TO GIVE EFFECT TO THE ORDER OF THIS TRIBUNAL SINCE THE JURI SDICTIONAL ASPECT HAS TO BE DECIDED BEFORE GOING INTO THE MERITS OF THE CASE. H OWEVER, THE ASSESSING OFFICER WITHOUT CONSIDERING THE REQUEST PASSED ORDER ON 30/ 03/2016 WHICH GAVE EFFECT TO THE ORDER OF THE TRIBUNAL. AS SEEN FROM THIS, T HE GRIEVANCE OF THE ASSESSEE IS WITH REGARD TO GIVING EFFECT TO THE ORDER OF THE TR IBUNAL AND NOT WITH REFERENCE TO THE TRIBUNAL ORDER CITED SUPRA. IF THERE IS GRIEVA NCE AGAINST THE GIVING EFFECT TO THE ORDER OF THE TRIBUNAL, THEN THE ASSESSEE IS HAV ING EVERY RIGHT TO FILE APPEAL AGAINST THAT ORDER AND THE REMEDY LIES WITH THE ASS ESSEE ELSEWHERE AND NOT BY WAY OF MISCELLANEOUS PETITIONS. HENCE IN OUR OPINIO N, THE MISCELLANEOUS PETITIONS FILED BY THE ASSESSEE HAVE NO MERITS AND DESERVE TO BE DISMISSED. 6. IN THE RESULT, THE MISCELLANEOUS PETITIONS FIL ED BY THE ASSESSEE ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 12 TH MARCH, 2018. SD/- SD/- ( GEORGE GEORGE K.) (CHAN DRA POOJARI) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 12 TH MARCH, 2018 GJ COPY TO: 1. SMT. INDU SUNIL KUMAR,SRAVANAM,POWER HOUSE ROAD, THIRUVALLA. 2. THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL C IRCLE, KOCHI. M.P. NOS. 53 &54./C/2016 10 3. THE COMMISSIONER OF INCOME-TAX(APPEALS)-IV, KOCH I. 4. THE COMMISSIONER OF INCOME-TAX, CENTRAL, KOCHI. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRA R) I.T.A.T. , COCHIN