Sri Gautam Dutta, Kolkata V. ITO, Ward 34(4), Kolkata, Kolkata

MA 60/KOL/2017

• Counselvise Citation: [2017] 124 COUNSELVISE.COM (IT) 6009 (ITAT-KOLKATA)
• Duration Of Justice: 7 month(s) 22 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 13-12-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2007-2008
• Appeal Filed On: 21-04-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S KUMAR CIT LD
• Assessee Lawyers: R DHAR LD
• Keywords: Commercial expediency
• Section: 40A(3)

Judgement Text

INCOME TAX APPELLATE TRIBUNAL D BENCH : KOLKATA BEFORE SHRI WASEEM AHMED, AM & SHRI S.S.VISWANE THRA RAVI, JM M.A. NO. 60/KO L/2017 [IN I.T A NO. 853/KOL/2014 A.Y 2007-08] GAUTAM DUTTA VS. INCOME TAX OFFICER PAN: ACQPD-1755M WARD 34(4),KOLKATA [ APPLICANT ] [ RESPONDENT ] APPLICANT BY : SHRI R. DHAR, ADVOCATE, LD.AR RESPONDENT BY : SHRI S.KUMAR, ADDL. CIT , LD.SR.DR DATE OF HEARING : 10-11-2017 DATE OF PRONOUNCEMENT : 13-12-2017 ORDER SHRI S.S.VISWANETHRA RAVI, JM BY VIRTUE OF THIS MISCELLANEOUS APPLICATION FILED B Y THE ASSESSEE U/S. 254(2) OF THE ACT, THE ASSESSEE INTENDS TO RECALL T HE IMPUGNED ORDER DT. 10-02-2017 PASSED BY THIS TRIBUNAL. 2. BY WAY OF THIS MISC. APPLICATION THE LD.AR SUBMI TS THAT THE POINT OF BUSINESS EXPEDIENCY WAS ARGUED BEFORE THE TRIBUNAL. THE TRIBUNAL OVERLOOKED THE SAME AND CONFIRMED THE DISALLOWANCE MADE BY THE AO U/S. 40A(3) OF THE ACT UPHOLDING THE ORDER OF THE CIT-A. HE FURTHER SUBMITS THAT IN ORDER TO GAIN HIGHER PROFITS THE ASSESSEE M ADE CASH PURCHASE, WHICH IS MUCH LOWER THAN THE CHEQUE PAYMENTS. HE AL SO SUBMITS THAT IT IS A BUSINESS EXPEDIENCY AND DISALLOWANCE CANNOT BE MA DE IN VIEW OF FIRST PROVISO TO SUB-SECTION (3A) OF SECTION 40A OF THE A CT AND REFERRED TO PARA 5 OF THE IMPUGNED ORDER AND ARGUED THAT THIS TRIBUN AL DID NOT CONSIDER THE PROVISO TO SUB-SECTION (3A) OF SECTION 40A, BUT ONL Y CONSIDERED SUB- SECTION (3) OF SECTION 40A OF THE ACT AND PRAYED TO RECALL THE SAID ORDER. 3. THE LD.DR SUBMITS THAT THE SAID BUSINESS EXPEDIE NCY AS CANVASSED BY THE LD.AR IS SUBJECTED TO EXCEPTION AS MAY BE PR ESCRIBED UNDER RULE 6DD OF THE IT RULES AND THE CASE OF THE ASSESSEE DO ES NOT FALL IN ANY OF M.A NO. 60/KOL/2017 2 THE EXCEPTION AS PROVIDED IN RULE 6DD OF INCOME TAX RULES 1962. THE LD. DR ALSO ARGUED THAT SUB-SECTION (3A) WAS SUBSTITUTE D BY THE FINANCE ACT, 2008, WHICH CAME INTO FORCE W.E.F 1-4-2008 AND THUS , THE SAID SUBSTITUTION OF SUB SECTION 3A TO SECTION 40A OF TH E ACT DOES NOT APPLY TO THE CASE IN HAND AS IT RELATES TO A.Y 2007-08 I.E. YEAR UNDER CONSIDERATION. HE RELIED ON THE IMPUGNED ORDER OF THE TRIBUNAL. 4. HEARD BOTH THE PARTIES AND PERUSED THE RECORD. W E FIND THAT THE CONTENTION OF ASSESSEE AT THE TIME OF HEARING OF MA IN APPEAL IN ITA NO. 853/KOL/2014 FOR A.Y 2007-08- BY THE ASSESSEE WAS T HAT THE ASSESSEE MADE CASH PURCHASES IN ORDER TO GET HIGHER PROFITS, WHICH WAS CONSIDERED BY THIS TRIBUNAL VIDE PARA NO. 9 OF THE SAID ORDER DT. 10-02-2017. THE ARGUMENT OF THE LD.AR WAS THAT FIRST PROVISO TO SUB -SECTION (3A) OF SECTION 40A WAS NOT CONSIDERED BY THIS TRIBUNAL, WHEREIN SA ID BUSINESS EXPEDIENCY INVOLVES TO GAIN HIGHER PROFITS. THIS WA S CONSIDERED BY THIS TRIBUNAL, WHICH IS EVIDENT FROM PARA NO. 9 OF THE S AID ORDER. THE RELEVANT EXTRACT OF THE ORDER IS REPRODUCED BELOW : BEFORE THE CIT-A CONTENDED THE SAID PAYMENTS WERE IN CA SH IN ORDER GET HIGHER PROFIT AND VEHEMENTLY SUPPORTED HIS CONTENTION TH AT IT IS A COMMERCIAL EXPEDIENCY TO PURCHASE GOODS AT CHEAPER PRICE AND IN OUR OPINION IT IS NOT TENABLE. 5. FROM THE ABOVE OBSERVATION OF THE TRIBUNAL, IT I S CLEAR THAT THE CONTENTION OF THE ASSESSEE WAS DULY CONSIDERED. HOW EVER WE ALSO NOTE THE TRIBUNAL DID NOT MAKE ANY REFERENCE TO THE PROVISIO N OF SUB SECTION 3A OF SECTION 40A OF THE ACT IN ITS ORDER. NOW THE QUESTI ON ARISES WHETHER NON- MENTIONING THE SECTION OF THE ACT IN THE ORDER REND ER THE ORDER ERRONEOUS. IN OUR CONSIDERED OPINION THE ANSWER IS IN NEGATIVE . 6. HOWEVER WE ALSO NOTE THAT SUB SECTION (3) & (3A) WERE SUBSTITUTED BY THE FINANCE ACT, 2008, WHICH CAME INTO FORCE FRO M 1-4-2008. THIS IS NOT AT ALL APPLICABLE TO THE CASE IN HAND FOR THE A .Y. UNDER CONSIDERATION. THEREFORE THE TRIBUNAL DID NOT MAKE ANY REFERENCE T O THE PROVISIONS OF SECTION 3A OF THE ACT. M.A NO. 60/KOL/2017 3 7. THEREFORE, IT CANNOT BE ALLEGED THAT THE ORDER O F TRIBUNAL CONTAINS APPARENT MISTAKE AS SPECIFIED U/S. 254(2) OF THE AC T. THUS, IT CAN BE SAID THAT THE ORDER WAS PASSED BY THE TRIBUNAL AFTER CON SIDERING THE ARGUMENT OF THE LD. AR FOR THE ASSESSEE. 8. AT THIS JUNCTURE WE WANT TO REPRODUCE THE PROVIS ION OF SECTION 254(2) OF THE ACT WHICH READS AS UNDER : 254(2) THE APPELLATE TRIBUNAL MAY, AT ANY TIME WITHIN [SIX M ONTHS FROM THE END OF THE MONTH IN WHICH THE ORDER WAS PASSED], WI TH A VIEW TO RECTIFYING ANY MISTAKE APPARENT FROM THE RECORD, AMEND A NY 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 OFFI CER. 9. FROM THE ABOVE PROPOSITION WE NOTE THAT THE POWE R OF THE HONBLE ITAT IS LIMITED TO THE EXTENT OF THE MISTAKE APPARE NT FROM RECORD. IN THIS REGARD, WE FIND SUPPORT AND GUIDANCE FROM THE ORDER OF THIS TRIBUNAL IN MA NO.70/KOL/2016 DATED 20.07.2016, WHEREIN IT WAS HEL D AS UNDER:- 28. AS RIGHTLY CONTENDED BY THE LEARNED COUNSEL FOR THE ASSESSEE, THE POWER OF THEE TRIBUNAL UNDER S. 254(2) OF THE ACT IS CO NFINED TO RECTIFYING ANY MISTAKE APPARENT FROM THE RECORD. THE TRIBUNAL DOES NOT HAVE INHERENT POWER OF RECTIFICATION OR REVIEW OR REVISION. U NLESS THERE IS MISTAKE APPARENT FROM THE RECORD IN THE SENSE OF PATENT, OBVIOUS, CLEAR ERROR OR MISTAKE, THE TRIBUNAL CANNOT RECALL ITS PREVIOUS ORDER. IF THE ERROR OR MISTAKE IS ONE WHICH COULD BE ESTABLISHED ONLY BY LONG-DR AWN ARGUMENTS OR BY WAY OF PROCESS OF INVESTIGATION AND RESEA RCH, IT IS NOT A MISTAKE APPARENT FROM THE RECORD. UNLESS THERE IS MANIFEST ERRORS WHICH ARE OBVIOUS, CLEAR AND SELF EVIDENT, THE TRIBUNAL CANNOT RECALL ITS PREVIOUS ORDER IN AN ATTEMPT TO REWRITE THE SAME. FAILURE OF THE TRIBUNAL TO CONSIDER AN ARGUMENTS ADVANCED BY EITHER PARTY FOR ARRIVIN G AT A CONCLUSION IS NOT AN ERROR APPARENT ON THE RECORD, ALTHO UGH IT MAY BE AN ERROR OF JUDGMENT. THE TRIBUNAL CANNOT IN EXERCISE OF I TS POWER OF RECTIFICATION LOOK INTO SOME OTHER CIRCUMSTANCES WHICH WOUL D SUPPORT OR NOT SUPPORT ITS CONCLUSION. THE TRIBUNAL CANNOT RE-DECIDE THE MATTER AND IT HAS NO POWER TO REVIEW ITS ORDER. THE TRIBUNAL HAS NO POWER TO RECTIFY A DECISION ON DEBATABLE POINT OF LAW. A DECISION ON DEBAT ABLE POINT OF LAW IS NOT A MISTAKE APPARENT FROM THE RECORD. 29. WHERE THE TRIBUNAL HAS OVERLOOKED THE RELEVANT MAT ERIAL ON RECORD, THERE WOULD BE AN ERROR APPARENT FROM RECORD WHICH CAN BE RECTIFIED BY SETTING ASIDE THE ORDER FOR FRESH CONSIDERATION. WHERE A MATERIAL FACT BROUGHT TO THE NOTICE OF THE TRIBUNAL HAS BEEN LOST SIG HT OF, THE TRIBUNAL M.A NO. 60/KOL/2017 4 HAS THE POWER TO RECTIFY THE MISTAKE SO COMMITTED; PROVIDE D THE MATERIAL FACT HAS AN IMPORTANT BEARING ON THE ULTIMATE DECISION. THE MISTAKE POINTED OUT IN THE APPLICATION U/S. 254(2)OF THE ACT B Y THE REVENUE IN THE PRESENT CASE CANNOT BE SAID TO FALL NEITHER OF THE ABOVE CATEGORIES. IN VIEW OF THE ABOVE, WE HOLD THAT THERE IS NO MIST AKE APPARENT IN THE ORDER OF TRIBUNAL AND THEREFORE THE QUESTION OF REC TIFICATION FOR THE SAME UNDER THE PROVISION OF SECTION 254(2) OF THE A CT DOES NOT ARISE. 10. AS FAR AS THE ARGUMENTS OF THE LD.DR CONCERNED, WE FIND THAT HE HAS RIGHTLY POINTED OUT THAT SUB SECTION (3) & (3A) WER E SUBSTITUTED BY THE FINANCE ACT, 2008, WHICH CAME INTO FORCE FROM 1-4-2 008. THIS IS NOT AT ALL APPLICABLE TO THE CASE IN HAND FOR THE A.Y UNDER CO NSIDERATION. THUS, WE FIND FORCE IN THE SUBMISSIONS OF THE LD. DR. 11. IN VIEW OF ABOVE, THE GROUNDS OF MA FILED BY TH E ASSESSEE STAND DISMISSED. 12. IN THE RESULT, THE MISC. APPLICATION FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13-12-2017 SD/- SD/- WASEEM AHMED S.S.VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 13-12-2017 COPY OF THE ORDER FORWARDED TO: 1 . APPLICANT/ASSESSEE : SHRI GAUTAM DUTTA, 2G BENTINCK STREET, KOLKATA-700 001. 2 RESPONDENT/DEPARTMENT : THE ITO, WARD 34(4), PODDAR COURT, KOLKATA-700 068. 3 . CIT, 4 . CIT(A), 5 . DR, KOLKATA BENCHES, KOLKATA **PP/SPS TRUE COPY BY ORDER, SR.PS, H.O.O, ITAT,KOL