Smt. Sarla jain, Khandwa V. ITO Ward 1 Khandwa, Khandwa

MA 54/Ind/2023

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 9092 (ITAT-INDORE)
• Duration Of Justice: 2 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 21-01-2024
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 11-01-2024
• Assessment Year: 2015-2016
• Appeal Filed On: 21-11-2023
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Question of law; Bogus
• Section: 143(3); 143(2); 254(2); 153C; 20

Judgement Text

आयकर अपीलȣय अͬधकरण, इंदौर Ûयायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI B.M. BIYANI, ACCOUNTANT MEMBER MA No. 54/Ind/2023 (Arising out of ITA No.287/Ind/2019) Assessment Year: 2015-16 Smt. Sarla Jain, C/o Nakoda Marketing, Bhavani Mata Road, Khandwa बनाम/ Vs. ITO, Ward 1, Khandwa (Applicant/Assessee) (Respondent/Revenue) PAN: ABVPJ1316J Assessee by Shri Pawan Ved, Adv. Revenue by Shri Ashish Porwal, Sr. DR Date of Hearing 12.01.2024 Date of Pronouncement 22.01.2024 आदेश / O R D E R Per B.M. Biyani, A.M.: This Misc. Application [‘”M/A”] u/s 254(2) of Income-tax Act, 1961 is filed by Assessee seeking rectification/re-call of Order dated 24.08.2023 of ITAT, Indore Bench in ITA No. 287/Ind/2019 for assessment-year 2015-16 [“impugned order”] which Assessee’s appeal decided. 2. Ld. AR for applicant/assessee carried us to the contents of M/A and briefed various apparent mistakes noted by assessee in the impugned order Smt.Sarla Jain, Khandwa M/A No. 54/Ind/2023 – AY 2015-16 Page 2 of 8 of ITAT which requires rectification/re-calling. Then, the learned Representatives of both sides made vehement pleadings on those issues one by one. We have heard them peacefully at length and proceed to give our adjudication in subsequent paragraphs. 3. Firstly, Ld. AR submitted that the ITAT has committed an apparent mistake in dismissing assessee’s Ground No. 1 wherein the assessee raised a legal claim that the assessment made by AO was null and void since it had been made u/s 143(3) in place of section 153C. Ld. AR submitted that the AO made assessment on the basis of material seized during search of other person, therefore the assessee’s assessment ought to have been made u/s 153C and not u/s 143(3) as had been done by AO. Ld. AR submitted that the AO had no choice to go away from section 153C as per verdict of section 153C as well as decided rulings. Ld. AR placed a heavy reliance upon third member decision of ITAT in ITA No. 50/JAB/2018 Tarun Devon (P) Ltd. Vs. DCIT, Central, Jabalpur. Ld. AR also submitted that the reliance placed by assessee on FAQ No. 70 of CBDT Circular No. 20 of 2021 was in order and the ITAT has not understood the said Circular properly. Therefore, the ITAT’s order suffers from an apparent mistake. Replying to this, Ld. DR for revenue strongly opposed assessee’s/Ld. AR’s claim contending that the ITAT has already decided this issue by an extensive analysis in Para No. 8 to 16 of impugned order. We, however, re-produce below only concluding para No. 15 to 16 for the sake of brevity: “15. We have considered rival submissions of both sides and perused the material held on record to which our attention is drawn including the orders of Smt.Sarla Jain, Khandwa M/A No. 54/Ind/2023 – AY 2015-16 Page 3 of 8 lower-authorities. After a careful consideration of the pleadings of both sides, we find much weightage in the submission of Ld. DR for revenue (i) that the assessee is just speculating that the case was taken for scrutiny u/s 143(2) on the basis of search-material; (ii) that the first para of assessment-order clearly exhibits that the case had been selected for scrutiny under CASS (Computer Aided Scrutiny Selection); and (iii) that Para No. 7 of assessment- order also speaks clearly that the AO made just additional or ancillary use of the report of search received from Jt. DIT(Inv), Indore. Therefore, it is a case where normal scrutiny has been conducted by AO and there is nothing to suggest that the situation and condition of section 153C is satisfied. Regarding the reliance placed by Ld. AR on FAQ No. 70 of CBDT Circular No. 21/2020 (supra), we firstly observe that the said clarification was given by CBDT for a different objective i.e. the eligibility for Vivad Se Vishwas Scheme, Computation of tax liability, Procedures for scheme, etc. That clarification is nothing to do with applicability or non-applicability of section 153C or 143(2)/143(3). Furthermore, the first sentence of FAQ clearly states “If the assessment order has been framed in the case of a taxpayer under section 143(3)/144 of the Act based on the search executed in some other taxpayer’s case...” The situation mentioned in this sentence itself admits that the assessment of “X” person can validly be made u/s 143(3)/144 on the basis of search executed in “Y”. When it is so, the reliance on FAQ sought to be placed by Ld. AR in favour of assessee is rather against assessee. In present case, the AO has made assessment upon assessee u/s 143(3) based on the search executed in “Moira / Nyati Group”. 16. We would like to add here that there may be a case where situation and condition of section 153C is satisfied, in that case the AO has to proceed only u/s 153C. But in the present case, the AO has conducted scrutiny under CASS and the search-information has been made use as additional or ancillary information, we do not feel that the present case has the situation or condition which warrants application of section 153C. In that view of matter, we are of the considered view that the AO is very much justified in framing assessment u/s 143(3). Therefore, there is no worth in the ground of assessee. The same is hereby dismissed.” Ld. DR went on submitting that the assessee is merely seeking reconsideration/review of ITAT’s order otherwise there is no apparent mistake as being claimed. He submitted that reconsideration/review does not come within the scope and ambit of section 254(2) and therefore the assessee’s claim has to be rejected for this very reason. On a careful consideration, we find that the ITAT has arrived at a well-reasoned conclusion in Para No. 15 to 16 after recording the pleadings made by parties before it in Para No. 8 to 14 and giving a careful consideration to Smt.Sarla Jain, Khandwa M/A No. 54/Ind/2023 – AY 2015-16 Page 4 of 8 those pleadings containing all factual aspects of assessee’s case in the light of provisions of section 153C. The third member order in ITA No. 50/JAB/2018 Tarun Devon (P) Ltd. Vs. DCIT, Central, Jabalpur (supra) relied upon by Ld. AR is dated 09.10.2023 which is subsequent to passing of impugned order dated 24.08.2023. Since the said order did not exist on the date of passing impugned order by ITAT, it cannot be considered in this M/A proceeding whatever may be decision therein. Needless to mention that the said order is not a decision of Hon’ble Supreme Court or Hon’ble Jurisdictional High Court so that M/A can arise as held in Saurasthra Kutch Stock Exchange 305 ITR 227 (SC). Therefore, there is no mistake in impugned order. We may also mention that once the ITAT has taken a view based on assessee’s facts with a thorough discussion in its order and even if the assessee is not satisfied with the view of ITAT, the remedy lies elsewhere and not in section 254(2) under which this M/A is filed. Faced with this situation, we reject this claim of assessee. 4. Ld. AR next submitted that the ITAT has committed an apparent mistake in dismissing assessee’s Ground No. 2 wherein the assessee challenged the AO’s action of treating the long-term capital gain as bogus. The exact mistake being pointed out by Ld. AR is such that during the course of hearing, he relied upon a binding decision of Hon’ble Jurisdictional High Court of Madhya Pradesh in one case titled CIT-I, Indore Vs. Arzoo Anand, ITA No. 24 of 2010 dated 06.01.2022 wherein the Hon’ble Court upheld ITAT’s order holding that the capital gain was not Smt.Sarla Jain, Khandwa M/A No. 54/Ind/2023 – AY 2015-16 Page 5 of 8 bogus. Ld. AR submitted that the said decision of Hon’ble High Court favouring assessee has not been considered by ITAT in impugned order while dismissing Ground No. 2 of assessee. Therefore, there is an apparent mistake. We re-produce below the paras of order of Hon’ble High Court relied upon by Ld. AR for an immediate reference: “(6) We have heard learned counsel for the Revenue at length. Record perused. Learned Counsel submitted that learned ITAT was not justified in reversing the well reason assessment order duly confirmed in appeal by the Ld. CIT(A). According to him, the JCIT on proper appreciation of evidence arrived at a pure finding of fact that entire transaction was a subterfuge to bring the unaccounted cash available in the hands of the assessee in her books of accounts through ‘hammering’ of share price of “Khokha Company” with the help of unscrupulous share Trades. According to him the off line trading in share of an unknown public limited company below face value and sale thereof just after one year at phenomenal sale was not genuine transaction but it was a sharp practice to avoid the higher incidence of taxation. According to learned counsel, tribunal did not appreciate the law laid down in Sumantidayal v. SIT : 214 ITR 801: and 291 ITR 278 and as such the order is unsustainable in law. (7) After hearing learned counsel for the revenue at length and going through the records, we find no merit and substance in this or connected appeals. Pure findings of facts on proper appreciation of law have been recorded by the Tribunal and the order does not give rise to any substantial question of law. Under the scheme of the Act, learned Tribunal is the last forum in the hierarchy where questions of facts can be threshed out. Section 260A is clear that from the decision of the Tribunal, an appeal would lie to this only when case involves ‘substantial question of law’ arising in case between the parties. The phrase ‘substantial question of law’ is not defined anywhere, therefore, test laid down by the Supreme Court in this regard would be the guiding factor. According to their Lordships of the Supreme Court, a point of law which admits of no two opinions may be a proposition of law but not substantial question of law. A substantial question of law must be debatable, not previously settled by la of the land or binding precedent and must have a material bearing on the decision of the case, if answered either way, in so far as the rights of the parties before it are concerned: see Santosh Hazari vs. Purushottam Tiwari, AIR 2001 S.C.965: Govindraju vs. Marimman; AIR 2005 SC 1008, It is equally well settled that where finding are based on appreciation of evidence, it is not open for the High Court to interfere, unless such findings are vitiated by consideration of irrelevant evidence resulting in miscarriage of justice. Mere error in appreciation of facts/evidence without resulting miscarriage of justice, does not give rise to a substantial question of law where the lower appellate authority has exercised discretion in sound juridical manner and recorded probable finding of fact, the order is not open to challenge and interferences, where no substantial question of law is involved Smt.Sarla Jain, Khandwa M/A No. 54/Ind/2023 – AY 2015-16 Page 6 of 8 in appeal, there is no scope for entertaining second appeal. While exercising jurisdiction under 260A, we cannot reverse the findings of the ITAT merely on the ground that on facts found by the Tribunal another view is possible. On the contrary we find that JCIT and the CIT(A) while deciding the matter proceeded on certain assumptions/conjectures which were not borne out from material on record. In this view of the matter reliance on decisions reported in 214 ITR 801 and 291 ITR 228 are clearly distinguishable and of avail to the counsel for the appellant.” It is true that the Ld. AR referred above Paras while hearing the original appeal. But, we remember that even at that time, it was hinted by Bench that in Para No. 6, the Hon’ble High Court has only noted the revenue’s contention. Further, in Para No. 7, the Hon’ble High Court has held that the ITAT has recorded pure findings of facts on proper appreciation and the ITAT’s order did not give rise to any substantial question of law. The decision of High Court thus rests on findings of facts by ITAT. There can hardly be any dispute that the finding of bogus or non-bogus nature of capital gain declared by assessee is dependent on several factors like the person doing the transactions, the scripts in which transactions have been done, the modus adopted, etc. Therefore, the factual finding in one case can very well differ from other case. Hence, the decision taken by High Court confirming factual finding of ITAT in that case does not become a precedent. We have once again conveyed this understanding of ours to Ld. AR during hearing of present M/A. Therefore, we do not find any merit in the claim of Ld. AR; the same is hereby rejected. 5. Ld. AR lastly submitted that while dealing Ground No. 2 of assessee, the ITAT has remanded to AO with a direction to supply Smt.Sarla Jain, Khandwa M/A No. 54/Ind/2023 – AY 2015-16 Page 7 of 8 search material. The assessee claims in Para No. 3 / Page No. 5 of the M/A that the AO has not supplied the material despite “many requests” by assessee. Hence, in the situation, the ITAT ought to have taken an adverse view against AO and deleted addition instead of giving another opportunity to AO to supply material. Therefore, there is an apparent mistake in impugned order. Ld. DR opposed the submission of Ld. AR and argued that the ITAT has remanded the entire issue to AO for several reasons as mentioned in Para No. 20 of impugned order and one of those reasons was non-supply of material by AO. He further submitted that during assessment-proceeding, the assessee has not made any request/demand to AO to supply the material. When we countered Ld. AR on the stand taken by Ld. DR, Ld. AR asserted that the assessee made request/demand after first- appeal. This fact is also ascertainable from copy of latest application dated 20.11.2020 filed by assessee re-produced on Page No. 18 of impugned order according to which the first application was filed on 06.05.2019. We find that assessment-order was passed by AO on 13.10.2017 and the order of first-appeal was passed by CIT(A) on 14.01.2019. That means, the assessee filed request/demand to AO after passing of order of first-appeal as asserted by Ld. AR. Therefore, when the assessee filed request/demand after disposal of first-appeal, it is not fair on the part of assessee to claim that the AO did not supply material despite many requests. Be that as it may, we do not find any mistake in remanding issue to AO and giving direction to AO Smt.Sarla Jain, Khandwa M/A No. 54/Ind/2023 – AY 2015-16 Page 8 of 8 to supply the material required by assessee. Therefore, this last contention of assessee is also devoid of merit and rejected. 6. We thus reject assessee’s all claims in present M/A. Consequently, this M/A is found to have not merit and dismissed. Order pronounced in open court on 22.01.2024. Sd/- sd/- (VIJAY PAL RAO) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER Indore Ǒदनांक /Dated : 22.01.2024. CPU/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPYSr. Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore