Shri Abhishek Gupta, Indore V. ITO-5(5), Indore

MA 6/Ind/2023

• Counselvise Citation: [2023] 102 COUNSELVISE.COM (IT) 0141 (ITAT-INDORE)
• Duration Of Justice: 9 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 06-11-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 17-08-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 06-02-2023
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: REVENUE STRONGLY OPPOSED THIS SUBMISSION OF; REVENUE. DURING; REVENUE AGAIN
• Assessee Lawyers: SUBHASH CHAND JAIN
• Keywords: Principle of natural justice
• Section: 131; 254(2); 13; 22

Judgement Text

Page 1 of 11 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. 06/Ind/2023 (Arising out of ITA No. 74/Ind/2019) Assessment Year: 2014-15 Shri Abhishek Gupta, 303, Sangeeta Apartment, 66, Bhagwandeen Nagar, Indore बनाम/ Vs. ITO, Ward 5(5), Indore. (Assessee /Applicant) (Revenue /Respondent) PAN: AGAPG4006E Assessee by Shri Subhash Chand Jain, AR Revenue by Shri Ashish Porwal, Sr. DR Date of Hearing 18.08.2023 Date of Pronouncement 07.11.2023 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 preferred by assessee seeking re-call/rectification of the Order dated 17.08.2022 of ITAT, Indore Bench in ITA No. 74/Ind/2019 for assessment-year 2014-15 [“impugned order”]. 2. By means of impugned order, the ITAT has upheld the orders of both of the lower-authorities, namely the AO and CIT(A), holding the exempted Shri Abhishek Gupta, Indore. Vs. ITO, 5(5),Indore MANo.06/Ind/2023 Assessment year 2014-15 Page 2 of 11 long-term capital gain declared by assessee from shares as bogus or non- genuine and thereby dismissed assessee’s appeal. Now, the assessee has come in this M/A on the plea that there are ‘apparent mistakes’ in the impugned order of ITAT rendering it fit for rectification in terms of section 254(2) of the Act. 3. Ld. AR for assessee has filed a Written-Synopsis of 9 pages and also made oral submissions before us. Ld. DR for revenue, on the other hand, has filed certain documents from assessment-record of department and made oral submissions. We have heard Ld. AR as well as Ld. DR at length peacefully and considered their vehement arguments. Based on our careful consideration, we give our analysis on various contentions pressed and pleaded before us during hearing, one by one, in subsequent discussions. 4. Ld. AR for assessee makes first and foremost submission that the ITAT has committed an apparent mistake by accepting revenue’s argument that in response to the summon issued u/s 131 by AO, the assessee did not appear whereas the correct fact was such that on the date of hearing fixed by summon, the assessee did appear but the AO was not available in his office due to involvement in carrying out survey and the office of AO informed that new notice of hearing shall be issued. Under those circumstances, the assessee filed an affidavit to AO (copy of affidavit filed in Paper-Book of original appeal) but no further opportunity of hearing was given to assessee and the AO ignored assessee’s affidavit, which is against the ratio laid in Glass Lines Equipments Co. Ltd. Vs. CIT 253 ITR 454 (Guj). However, the ITAT has given weightage to revenue’s submission and taken incorrect conclusions in Para No. 13 and 14 of order, which is an apparent mistake. Ld. DR for revenue strongly opposed this submission of assessee/Ld. AR by filing following Order-Sheet (only relevant page re- produced below) from assessment-record of department: Shri Abhishek Gupta, Indore. Vs. ITO, 5(5),Indore MANo.06/Ind/2023 Assessment year 2014-15 Page 3 of 11 Shri Abhishek Gupta, Indore. Vs. ITO, 5(5),Indore MANo.06/Ind/2023 Assessment year 2014-15 Page 4 of 11 Drawing our attention to noting made by AO in aforesaid Order-Sheet on 09.09.2016, Ld. DR submitted that the AO issued summon u/s 131 on 09.09.2016 and fixed hearing on 21.09.2016. But on 19.09.2016, Shri Subhash Jain, CA and authorized representative of assessee (who has also represented assessee in hearing of impugned order and pleading this M/A as well) appeared and filed a written-application for extension of time, his adjournment-application was kept on record. Ld. AR also filed a copy of adjournment-application filed by assessee’s representative to AO; the same is scanned and re-produced below: Shri Abhishek Gupta, Indore. Vs. ITO, 5(5),Indore MANo.06/Ind/2023 Assessment year 2014-15 Page 5 of 11 Shri Abhishek Gupta, Indore. Vs. ITO, 5(5),Indore MANo.06/Ind/2023 Assessment year 2014-15 Page 6 of 11 Ld. DR pointed out that the said application was acknowledged by AO’s office through Official Seal dated 19.09.2016 which is exactly same date as mentioned in Order-Sheet. Then, Ld. DR submitted that the authorized representative of assessee also made a noting “Next hearing date 29.09.2016 – Noted” under his initial which is very much appearing on adjournment- application. Thus, Ld. DR strongly contended that the claim of assessee that he appeared on the date of hearing fixed by summon (i.e. 21.09.2016) and the AO was not available in his office, is absolutely false. Ld. DR submitted that the correct fact is such that the authorized representative appeared on 19.09.2016 and filed an adjournment-application for extension of time; the AO’s office fixed next date of hearing as 29.09.2016; and the next date was noted by assessee’s representative. Thus, the Ld. DR successfully demonstrated that the entire submission of assessee including the averments in affidavit, were false and the ITAT was very correct in accepting revenue’s submissions in Para No. 13 and 14 of impugned order. Therefore, Ld. DR strongly urged to reject this M/A of assessee for this first and foremost reason alone. We find that the documents filed by Ld. DR themselves speak the true fact that the assessee sought adjournment of hearing fixed by summon u/s 131 and on the adjourned date of 29.09.2016, did not make any compliance. Having said so, we are not required to make any further deliberation. We only suffice to mention that the first and most important contention raised by assessee miserably fails and that there is no error in the order of ITAT on this count. Rejected therefore. 5. Ld. AR then made other arguments. He submitted that during hearing before ITAT, it was pointed out that the CIT(A) has erred in framing order by giving a strange observation that the statement of assessee was recorded during assessment-proceeding and the assessee denied of having dealt in the scrip (shares) from which capital gain was declared. But no such statement was brought on record either in the order of CIT(A) or ITAT. Therefore, the order of CIT(A) was based on wrong fact. Ld. DR opposed this Shri Abhishek Gupta, Indore. Vs. ITO, 5(5),Indore MANo.06/Ind/2023 Assessment year 2014-15 Page 7 of 11 submission of assessee on twin-reasonings, namely (i) the ITAT’s order is based on independent appreciation of correct facts/evidences and nowhere the ITAT has framed its order by giving weightage to any such observation even if made by CIT(A) in his order, and (ii) there cannot be any M/A by assessee against CIT(A)’s observation. We find a strong merit in the reasonings advanced by Ld. DR. Therefore, this contention of assessee is rejected. 6. Ld. AR next submitted that the AO has neither provided a copy of inquiry report to assessee which is a violation of principle of natural justice as the assessee never got opportunity to cross-examine or rebut the same. Therefore, the AO’s order suffers from a serious flaw which makes his order nullity. This is supported by decisions of Hon’ble Supreme Court in CIT Vs. Sunita Dhaddha (2018) Taxcorp (LJ) 15102 (SC) and Andaman Timber Indutries, Civil Appeal No. 4228 of 2006 (SC). Ld. AR also submitted that the ITAT has failed to consider the judgements of Hon’ble Supreme Court though these were cited. Ld. DR opposed this plea of assessee and submitted that the ITAT has devoted a complete Para No. 16 to this very aspect of the matter and made an extensive discussion in 6 pages from Page No. 17 to 23 taking into account a very recent decision in PCIT Vs. Swati Bajaj ITA No. 6/2022 dated 14.06.2022 (Kolkata HC). In fact, on Page No. 21 of the order, the ITAT has also noted that an opportunity was provided to both sides to place their arguments in the light of decision in Swati Bajaj. Thereafter, the ITAT has also discussed the submissions made by both sides, more particularly the written-submission dated 17.05.2022 as well as oral submission made by assessee/Ld. AR. As a matter of fact, Ld. DR further pointed out that the decision in Swati Bajaj is an extensive decision running over as many as 150 pages in which Hon’ble Kolkata High Court has deeply considered, analysed and taken into account the jurisprudence coming from several decisions of Hon’ble Supreme Court including Andaman Timber Industries, Civil Appeal No. 4228 of 2006 (SC) as well as decisions of High Shri Abhishek Gupta, Indore. Vs. ITO, 5(5),Indore MANo.06/Ind/2023 Assessment year 2014-15 Page 8 of 11 Courts relating to the right of cross-examination, human probability, etc. In any case, the ITAT has provided sufficient opportunity to parties to place their arguments in the light of Swati Bajaj and considered their submissions. Therefore, the ITAT’s order cannot be said to suffer from any mistake in this regard. We find full substance in the arguments of Ld. DR and the contentions raised by assessee are devoid of any merit. Rejected therefore. 7. Ld. AR next submitted that the ITAT has dismissed assessee’s appeal relying upon decision of Hon’ble Kolkata High Court in Swati Bajaj holding that the same is very much applicable to assessee’s appeal. On other hand, in Para 22, the ITAT has observed thus: “22.....However, at this stage we would like to make a note of caution, which though is a known aspect, that every case has its own facts and evidences. This decision is confined to its own set of facts and nothing general should be carried on the basis of this decision.” Therefore, there is a mistake in ITAT’s order. Ld. DR invited our attention to Para No. 22 and urged to read the same in entirety and not a part of para referred by Ld. AR. The said Para No. 22 reads as under: “22. Thus, both of the additions made by Ld. AO are hereby upheld and the issues raised by the assessee fail. However, at this stage we would like to make a note of caution, which though is a known aspect, that every case has its own facts and evidences. This decision is confined to its own set of facts and nothing general should be carried on the basis of this decision.” [Emphasis supplied] Ld. DR submitted that in emphasized part of Para 22, the ITAT has correctly mentioned “Thus, both of the additions made by Ld. AO are hereby upheld and the issues raised by the assessee fail.” That means, the ITAT has upheld the additions on the basis of a detailed process of reasoning and analysis of assessee’s facts as mentioned in preceding Para 1 to 21. Thereafter, in the non-emphasized portion of para 22, which is only quoted by Ld. AR, the ITAT has taken care to mention that the decision given by it in present case Shri Abhishek Gupta, Indore. Vs. ITO, 5(5),Indore MANo.06/Ind/2023 Assessment year 2014-15 Page 9 of 11 of assessee is on its own set of facts and should not be construed as something general. Ld. DR submitted that he fails to understand what is wrong in this Para which the assessee/Ld. AR is claiming as apparent mistake. We find merit in submissions of Ld. DR for revenue. During hearing, Ld. AR fails to bring out any case of apparent mistake in ITAT’s order. Therefore, assessee’s claim is rejected. 8. Ld. AR next submitted that the ITAT, Indore Bench is functioning in the State of Madhya Pradesh, therefore it is bound by decision of Hon’ble Madhya Pradesh High Court only. However, so far there is no binding decision of Hon’ble Madhya Pradesh High Court on the issue involved in assessee’s appeal. The decision in Swati Bajaj is given by Hon’ble Kolkata High Court which is not a jurisdictional high court; therefore reliance cannot be placed on same. Ld. AR invited attention to decision in ACIT Vs. Saurastra Kutch Stock Exchange Ltd. (2008) 305 ITR 227 (SC) for the proposition that non-consideration of judgement of Apex Court or jurisdictional High Court is a mistake apparent from record. Ld. AR submitted that an apparent mistake has crept in the order of ITAT by not following the judgements of Hon’ble Apex Court and by relying on judgement of non-jurisdictional High Court of Kolkata. Ld. DR for revenue again opposed this submission of Ld. AR with full force. He submitted that so far the judgements of Hon’ble Supreme Court on the issue of giving opportunity of cross-examination to assessee are concerned, Kolkata High Court has already analysed a number of Supreme Court decisions in Swati Bajaj and has come out with a final conclusion which the ITAT has adopted. So far following the decision of Swati Bajaj given by a non-jurisdictional High Court is concerned, the Ld. AR himself agrees that there is no decision of Hon’ble Supreme Court or jurisdictional High Court on the issue involved between parties. Ld. DR submitted that had there been any decision of Hon’ble Supreme Court or Jurisdictional High Court on the issue and the ITAT would have not followed, certainly there would been a mistake as per ACIT Shri Abhishek Gupta, Indore. Vs. ITO, 5(5),Indore MANo.06/Ind/2023 Assessment year 2014-15 Page 10 of 11 Vs. Saurastra Kutch Stock Exchange Ltd. (supra) but when there is none, as agreed by Ld. AR himself, where is the mistake in ITAT’s order? Ld. DR submitted that the ITAT is very much justified in following the well-reasoned decision rendered by Kolkata High Court in Swati Bajaj applicable directly to assessee’s facts, in absence of any decision of Hon’ble Supreme Court or Jurisdictional High Court. Therefore, there is no mistake in the order of ITAT. We find a strong merit in the contention raised by Ld. DR. The arguments made by Ld. AR are devoid of any merit and therefore rejected. 9. Ld. AR then made last submission that the ITAT has not considered judgements of penny stock and allowed by ITAT, Indore, as submitted in assessee’s Written-submission/Paper-Book in original hearing of appeal. Ld. AR also submitted that subsequently, the ITAT has also allowed appeals in the matters of penny-stock in cases of Smt. Sheela Agarwal Vs. ITO and Shri Ankur Agarwal Vs. ITO, ITA No. 215, 216 & 217/Ind/2019 order dated 21.06.2023. Ld. DR for revenue briefly carried us to all paras of impugned order and drew specific attention to Para No. 15 in which the ITAT has considered various decisions one by one at length and given its findings. Our specific attention was also drawn to Para No. 11, 12, 13, 14 wherein the ITAT has noted the facts of assessee’s case pleaded by both sides at length. Then, in Para 17 of order, the ITAT has carefully delineated and noted the glaring fallacies in the transactions declared by assessee and thereafter, in subsequent Para No. 18 to 22, the ITAT accepted assessee’s transactions as non-genuine and upheld additions made by AO. Thus, Ld. DR contended, the ITAT has passed a well- reasoned extensive order taking into account the specific facts of assessee’s case and arguments of assessee including relevant judicial rulings. Ld. DR submitted that the impugned order is not in just a few paras or in summary form mechanically following the decision of Swati Bajaj simpliciter; it’s a detailed order. As far as some favourable Shri Abhishek Gupta, Indore. Vs. ITO, 5(5),Indore MANo.06/Ind/2023 Assessment year 2014-15 Page 11 of 11 decisions are concerned, every case has its own set of facts and accordingly decision. With these submission, Ld. DR strongly urged that there is no mistake of any type in ITAT’s order as being claimed by assessee. Therefore, this M/A must fail. After a careful consideration and on perusal of various paras of impugned order, we agree with Ld. DR’s submission that the ITAT has passed a well- reasoned order and there is no mistake as claimed by assessee. 10. We thus accept Revenue’s vehement contentions supporting the impugned order in very terms. Consequently, this M/A is devoid of any merit and dismissed. Order pronounced in the open court on 07.11.2023. Sd/- sd/- (VIJAY PAL RAO) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER Indore Ǒदनांक /Dated :07.11.2023 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 COPY Sr. Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore