The Asstt. Commissioner of Income Tax, Circle-5, Surat V. Late Shri Bhimsen Darbarilal Arora, Surat

MA 55/SRT/2023

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 3168 (ITAT-SURAT)
• Duration Of Justice: 6 month(s) 27 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 01-04-2024
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 11-01-2024
• Assessment Year: 2010-2011
• Appeal Filed On: 05-09-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Opportunity of being heard
• Section: 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JM & DR. A. L. SAINI, AM Miscellaneous Application No.55/SRT/2023 [Arising out of ITA No.1706/AHD/2016] Assessment Year: (2010-11) (Physical Hearing) The ITO, Ward – 2(2)(1), Surat Vs. Late Bhimsen Darbarilal Arora, L/h. Rajat Bhimsen Arora, A-201, Madhulika Apartment, Bhatar Road, Surat (Appellant) (Respondent) èथायीलेखासं./जीआइआरसं./PAN/GIR No.: ACAPS9230L Appellant by Shri Vinod Kumar, Sr. DR Respondent by Shri Akshay Modi, CA Date of Hearing 12/01/2024 Date of Pronouncement 02/04/2024 आदेश / O R D E R PER DR. A. L. SAINI, AM: By way of the captioned Miscellaneous Application, the Revenue has sought to point out that a mistake apparent from record within the meaning of section 254(2) of the Income Tax Act, 1961 (in short ‘the Act’) has crept in the order of the Tribunal dated 22.02.2023. 2. The learned Senior Departmental Representative (ld. Sr. DR) for the Revenue argued that while deciding the appeal on the issue of the disallowances of the unaccounted purchases of Rs.4,36,12,234/- the Ld. CIT(A) has placed reliance on the decision of the Hon'ble Gujarat High Court in the case of the CIT Vs. Bholanath Fab Pvt Ltd (2013) 355 ITR 290(Guj) and upheld the addition made by the AO @12.5% of the unaccounted purchases. However, the Tribunal has restricted the addition to 6% instead of 12.5% of the unaccounted purchases by placing reliance Page | 2 MA.55/SRT/2023/AY.2010-11 Late Bhimsen Darbarilal Arora on the decision of the Hon'ble ITAT, Surat in the case of Pankaj K Chaudhary in ITA No. dated 27.10.2021, which is not acceptable, hence there is a mistake apparent from record, which require rectification. Hence, order of Tribunal dated 22.02.2023 may be recalled. 3. On the other hand, Learned Counsel for the assessee, argued that Tribunal has passed the speaking order on merit; therefore it should not be recalled, as there is no mistake apparent from record. 4. We have heard both the parties and perused the material available on record. We note that learned Senior Departmental Representative (ld. Sr. DR) for the Revenue argued that the disallowance of bogus purchases in the case of textile industries is at the rate of 12.5% instead of 6% and therefore, Ld DR requested the Tribunal to recall the order of Tribunal to rectify the said mistake. The ld DR pointed out that since, the assessee is a textile industry, therefore by relying on the judgment of the Co-ordinate Bench of ITAT, Ahmedabad in the case of Bholanath Poly Fab Pvt. Ltd., in ITA No.137/Ahd/2009, the addition at the rate of 12.5% should be sustained on bogus purchase instead of 6%. However, we note that first of all it is debatable issue on law which cannot be rectified. As per the provisions of section 254(2) of the Act, only mistake apparent on record may be rectified, the provisions of section 254(2) of the Act read as under: “Orders of Appellate Tribunal. “254. (2) The Appellate Tribunal may, at any time within [six months from the end of the month in which the order was passed], with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub-section (1), and shall make such amendment if the mistake is brought to its notice by the assessee or the [Assessing] Officer. Provided that an amendment which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee, shall not be made under this sub-section unless the Appellate Tribunal has Page | 3 MA.55/SRT/2023/AY.2010-11 Late Bhimsen Darbarilal Arora given notice to the assessee of its intention to do so and has allowed the assessee a reasonable opportunity of being heard : [Provided further that any application filed by the assessee in this sub- section on or after the 1st day of October, 1998, shall be accompanied by a fee of fifty rupees.]” 5. Having gone through sub-section 2 of section 254 of the Act, as noted above, we observed that “any mistake apparent from the record” can be rectified. The plain meaning of the word ‘apparent’ is that it must be something which appears to be ex-facie and incapable of argument and debate. Thus, section 254(2) of the Act does not cover any mistake which may be discovered by a complicated process of investigation, argument or proof. Therefore, amendment of an order under section 254(2) of the Act, does not mean entire obliteration of order originally passed by the Tribunal and its substitution by a new order of Tribunal, this is not permissible under section 254(2) of the Act. Power to rectify an order, under section 254(2) of the Act is extremely limited and it does not extend to correcting errors of law, or re-appreciating factual findings. Based on these facts and circumstances, we dismiss the miscellaneous application filed by the Revenue. 6. In the result, the miscellaneous application filed by the Revenue is dismissed. Order is pronounced on 02/04/2024 in the open court. Sd/- Sd/- (PAWAN SINGH) (Dr. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER lwjr /Surat Ǒदनांक/ Date: 02/04/2024 SAMANTA Copy of the Order forwarded to: 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT Page | 4 MA.55/SRT/2023/AY.2010-11 Late Bhimsen Darbarilal Arora 5. DR/AR, ITAT, Surat 6. Guard File By Order // TRUE COPY // Assistant Registrar/Sr. PS/PS ITAT, Surat