ZS Associates India Pvt.Ltd, Pune V. Principal Commissioner of Income-tax-4, Pune

MA 54/PUN/2023

AI Insights

The case involves ZS Associates India Private Limited, which filed a miscellaneous application against the Principal Commissioner of Income Tax, Pune-4, seeking to recall an earlier tribunal order that dismissed their appeal concerning the assessment year 2016-17. The tribunal's earlier decision was based on the failure of the Assessing Officer to inquire about significant service tax refunds during the assessment, which was deemed both erroneous and prejudicial to the interests of the revenue. The tribunal considered the assessee's arguments but found no merit in recalling the earlier order, emphasizing that the purpose of section 254(2) rectification proceedings is to correct apparent mistakes and not to re-examine issues requiring detailed inquiries.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 138027 (ITAT-PUNE)
• Duration Of Justice: 7 month(s) 3 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 25-10-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 05-10-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 22-03-2023
• Other Referred Cases: Malabar Industrial Company Ltd. vs. CIT [2000] 243 ITR 83 (SC), Rampyari Devi Saraogi vs. CIT [1968] 67 ITR 84 (SC), Tara Devi Aggarwal vs CIT 1973 SCR (2)1035, Gee Vee Enterprises vs. Addl. CIT [1975] 99 ITR 375 (Del.), ACIT vs. Saurashtra Kutch Stock Exchange Ltd., [2008] 305 ITR 227 (SC), CIT vs. Reliance Telecom Ltd., [2021] 133 taxmann.com 41 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KUMAR ARVIND BHARDWAJ

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE “B” BENCH : PUNE BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND DR. DIPAK RIPOTE, ACCOUNTANT MEMBER M.A.No.54/PUN./2023 Arising out of ITA.No.191/PUN./2021 - Assessment Year 2016-17 ZS Associates India Private Limited, Tower-3, World Trade Centre, Kharadi, Pune PIN – 411 014. PAN AAACZ2157Q vs. The Principal Commissioner of Income Tax, Pune-4, Room No.322, 3 rd Floor, AayakarSadan, Bodhi Towers, Salisbury Park, Gultekadi, Pune. Maharashtra. PIN – 411 037. (Applicant) (Respondent) For Assessee : Shri Ketan Ved For Revenue : Shri Kumar Arvind Bhardwaj Date of Hearing : 06.10.2023 Date of Pronouncement : 26.10.2023 ORDER PER SATBEER SINGH GODARA, J.M. This assessee’s miscellaneous applications filed u/s.254(2) of the Income Tax Act, 1961 [in short “the Act”] seeks to recall the tribunal’s order dated 27.01.2023 in dismissing the main appeal ITA.No.191/PUN./2021 for the assessment year 2016-17. Heard both the parties. Case file perused. 2 M.A.No.54/PUN./2023 2. It emerges during the course of hearing from a perusal of our tribunal’s main order dated 27.01.2023 that the assessee’s various factual/legal arguments stand rejected in the following terms : “3. Mr. Ketan Ved invited our attention to the impugned revision discussion rejecting its vehement contentions as follows: 3 M.A.No.54/PUN./2023 4 M.A.No.54/PUN./2023 5 M.A.No.54/PUN./2023 3.1. Mr. Ved vehemently argued that the PCIT herein has erred in law and on facts in taking recourse to his sec.263 revision jurisdiction in the facts and circumstances of the instant case. He submitted very fairly at the same time during the course of hearing that the Assessing Officer had nowhere issued or raised any specific query at all qua the assessee’s service tax refund(s) totalling to Rs.11,44,99,901/- whilst framing the above stated assessment. We hardly see any reason therefore to deviate from the settled legal proposition as per hon'ble apex court’s landmark decisions in Malabar Industrial Company Ltd. vs. CIT [2000] 243 ITR 83 (SC), Rampyari Devi Saraogi vs. CIT [1968] 67 ITR 84 (SC), Tara Devi Aggarwal vs CIT 1973 SCR (2)1035 holding that such a failure on the Assessing Officer’s part in making inquiry(ies) at all indeed attracts both the limbs of an assessment being erroneous as well as prejudicial to the interest of Revenue, simultaneously. Case law Gee Vee Enterprises vs. Addl. CIT [1975] 99 ITR 375 (Del.) also holds that the Assessing Officer’s role in framing a regular assessment is that of an investigator as well as an adjudicator. Mr. Ved at this stage submitted that sec.145A has been wrongly invoked in case of a mere service provider entity. 4. The Revenue has placed strong reliance on the PCIT’s impugned revision directions. 6 M.A.No.54/PUN./2023 5. We have given our thoughtful consideration to the foregoing rival contentions and see no reason to interfere with the learned PCIT’s detailed discussion and findings seeking to invoke sec.145A of the Act at this stage. This is for the precise reason that although the assessee’s arguments qua applicability of sec.145A prima faciedeserve to be accepted, but at the same time, we are indeed mindful of the fact that we have upheld the PCIT’s revision jurisdiction in principle in preceding paragraphs once it has come on record that the Assessing Officer had not carried-out any inquiries at all regarding the impugned service tax refund during the course of assessment proceedings. We, therefore, are of the considered opinion that even if we apply the “Doctrine of Severability” for concluding that the PCIT has correctly invoked his revision jurisdiction but wrongly applied sec.145A, the net result would remain the same only since the Assessing Officer is yet to apply his mind on the issue in consequential assessment. Faced with the situation, we refrain ourselves from commenting upon merits of the instant issue of service tax refund vis-à-vis the applicability of sec.145A of the Act at this premature stage and leave it open for the taxpayer herein to raise all of his factual as well as legal arguments before the departmental authorities in consequential proceedings as per law. Ordered accordingly.” 7 M.A.No.54/PUN./2023 3. It has come on record that we have considered assessee’s arguments at length thereby upholding the learned PCIT’s sec.263 revision directions as the Assessing Officer had not carried out any factual verification of the relevant issue(s) in his sec.143(3) assessment dated 21.01.2018. The assessee could further not dispute the clinching fact that we had invoked “doctrine of severability” in holding that even the PCIT’s revision directions regarding issue of applicability of sec.145A are not sustainable; that would hardly have much an impact qua legality thereof, as this was found to be a fit case for invoking the statutory jurisdiction of revision u/sec.263 of the Act in principle. 4. Learned counsel vehemently argued in this factual backdrop in light of the assessee’s pleadings that we ought to recall our impugned order as we have not only committed an apparent mistake in not considering hon’ble jurisdictional high court’s various case law (supra), but also have not examined the matter in correct factual and legal perspective(s). 5. We find no merit in assessee’s submissions as our impugned order has duly considered the rival submissions at length before accepting the Revenue’s arguments. We make it clear that ACIT vs. Saurashtra Kutch Stock Exchange Ltd., [2008] 305 ITR 227 (SC) and CIT vs. Reliance Telecom Ltd., [2021] 133 taxmann.com 41 (SC); have settled the law long 8 M.A.No.54/PUN./2023 back that the purpose of sec.254(2) rectification proceedings is only to correct an apparent mistake than those requiring detailed roving enquiries. Rejected accordingly. 6. This miscellaneous application of the Assessee is dismissed. Order pronounced in the open Court on 26.10.2023. Sd/- Sd/- [DR. DIPAK P. RIPOTE] [SATBEER SINGH GODARA] ACCOUNTANT MEMBER JUDICIAL MEMBER Pune, Dated 26 th October, 2023 VBP/- Copy to 1. The appellant 2. The respondent 3. The Addl. CIT, Range-12, Pune. 4. D.R. ITAT, Pune “B” Bench, Pune 5. Guard File. //By Order// Assistant Registrar, ITAT, Pune Benches, Pune.