The DCIT, Circle-3(3), Surat V. M/s. Keshri Exports, Surat

MA 64/SRT/2022

AI Insights

The case involves fourteen Miscellaneous Applications (MAs) filed by Keshri Export and the DCIT, Circle-3(3), Surat, concerning various assessment years. The applications sought to address alleged mistakes in the Tribunal's earlier order regarding the assessment years and the characterization of the assessee as a beneficiary of non-genuine transactions. The Tribunal consolidated the hearings due to the commonality of issues across the applications. After reviewing the submissions and the relevant legal provisions, the Tribunal corrected the typographical error in the assessment years mentioned in the order but found no substantial mistakes that warranted a change in the original decision.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 301652 (ITAT-SURAT)
• Duration Of Justice: 7 month(s) 15 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 13-08-2023
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 27-07-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 28-12-2022
• Other Referred Cases: Pankaj K. Chaudhary vs. ITO, Mayank Diamonds Pvt. Ltd. vs. CIT, Peass Industrial Engineers (P) Ltd vs. DCIT, Dishman Pharmaceuticals and Chemicals Ltd. vs. DCIT (OSD), A.L.A. Firm vs. CIT, Phul Chand Bajrang Lal and another vs. ITO, CIT vs. Tamil Nadu Small Industries Development Corporation Ltd., CIT vs. Karam Chand Thapar and Br.P.Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Bogus purchase; Opportunity of being heard; Validity of assessment; Accommodation entries; Reason to believe; Reassessment proceedings; Borrowed satisfaction
• Section: 147; 148; 254(2); 13; 119; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, HON'BLE JUDICIAL MEMBER AND DR. A. L. SAINI, HON'BLE ACCOUNTANT MEMBER (Physical Hearing) Sl. No. MA Nos. Asst. Year Name of Appellant Name of Respondent 1. 60/SRT/2022 [arising in ITA No. 916/AHD/2017] 2007-08 The DCIT, Circle-3(3), Surat. Keshri Export, 405, SNS Platina, Near Reliance Market, Behind J H Ambani School, Above Surat People’s Bank, Vesu, Surat – 395007. PAN: AADFK3785D 2. 61/SRT/2022 [arising in ITA No. 917/AHD/2017] 2008-09 The DCIT, Circle-3(3), Surat. Keshri Export, 405, SNS Platina, Near Reliance Market, Behind J H Ambani School, Above Surat People’s Bank, Vesu, Surat – 395007. PAN: AADFK3785D 3. 62/SRT/2022 [arising in ITA No. 918/AHD/2017] 2009-10 The DCIT, Circle-3(3), Surat. Keshri Export, 405, SNS Platina, Near Reliance Market, Behind J H Ambani School, Above Surat People’s Bank, Vesu, Surat – 395007. PAN: AADFK3785D 4. 63/SRT/2022 [arising in ITA No. 919/AHD/2017] 2012-13 The DCIT, Circle-3(3), Surat. Keshri Export, 405, SNS Platina, Near Reliance Market, Behind J H Ambani School, Above Surat People’s Bank, Vesu, Surat – 395007. PAN: AADFK3785D 5. 64/SRT/2022 [arising in ITA No. 920/AHD/2017] 2013-14 The DCIT, Circle-3(3), Surat. Keshri Export, 405, SNS Platina, Near Reliance Market, Behind J H Ambani School, Above Surat People’s Bank, Vesu, Surat – 395007. PAN: AADFK3785D 6. 65/SRT/2022 [arising in ITA No. 761/SRT/2018] 2010-11 The DCIT, Circle-3(3), Surat. Keshri Export, 405, SNS Platina, Near Reliance Market, Behind J H Ambani School, Above Surat People’s Bank, Vesu, Surat – 395007. PAN: AADFK3785D 7. 66/SRT/2022 [arising in ITA No. 762/SRT/2018] 2014-15 The DCIT, Circle-3(3), Surat. Keshri Export, 405, SNS Platina, Near Reliance Market, Behind J H Ambani School, Above Surat People’s Bank, Vesu, Surat – 395007. PAN: AADFK3785D MAs. 60 to 66 & 7 to 13/SRT/2022 Keshri Exports 2 Sl. No. MA Nos. Asst. Year Name of Appellant Name of Respondent 8. 7/SRT/2023 [arising in ITA No. 889/AHD/2017] 2007-08 Keshri Export, 405, SNS Platina, Near Reliance Market, Behind J H Ambani School, Above Surat People’s Bank, Vesu, Surat – 395007. PAN: AADFK3785D The DCIT, Circle-3(3), Surat. 9. 8/SRT/2023 [arising in ITA No. 890/AHD/2017] 2008-09 Keshri Export, 405, SNS Platina, Near Reliance Market, Behind J H Ambani School, Above Surat People’s Bank, Vesu, Surat – 395007. PAN: AADFK3785D The DCIT, Circle-3(3), Surat. 10. 9/SRT/2023 [arising in ITA No. 891/AHD/2017] 2009-10 Keshri Export, 405, SNS Platina, Near Reliance Market, Behind J H Ambani School, Above Surat People’s Bank, Vesu, Surat – 395007. PAN: AADFK3785D The DCIT, Circle-3(3), Surat. 11. 10/SRT/2023 [arising in ITA No. 753/SRT/2018] 2010-11 Keshri Export, 405, SNS Platina, Near Reliance Market, Behind J H Ambani School, Above Surat People’s Bank, Vesu, Surat – 395007. PAN: AADFK3785D The DCIT, Circle-3(3), Surat. 12. 11/SRT/2023 [arising in ITA No. 892/AHD/2017] 2012-13 Keshri Export, 405, SNS Platina, Near Reliance Market, Behind J H Ambani School, Above Surat People’s Bank, Vesu, Surat – 395007. PAN: AADFK3785D The DCIT, Circle-3(3), Surat. 13. 12/SRT/2023 [arising in ITA No. 893/AHD/2017] 2013-14 Keshri Export, 405, SNS Platina, Near Reliance Market, Behind J H Ambani School, Above Surat People’s Bank, Vesu, Surat – 395007. PAN: AADFK3785D The DCIT, Circle-3(3), Surat. 14. 13/SRT/2023 [arising in ITA No. 754/SRT/2018] 2014-15 Keshri Export, 405, SNS Platina, Near Reliance Market, Behind J H Ambani School, Above Surat People’s Bank, Vesu, Surat – 395007. PAN: AADFK3785D The DCIT, Circle-3(3), Surat. MAs. 60 to 66 & 7 to 13/SRT/2022 Keshri Exports 3 Date of Hearing: 28/07/2023 Date of Pronouncement: 14/08/2023 Appellant by: Shri Vinod Kumar, Sr. DR Respondent by: Shri Hiren Vepari, CA आदेश / O R D E R PER DR. A. L. SAINI, AM: By way of these fourteen Miscellaneous Applications, out of which seven Miscellaneous Applications filed by the Revenue and the other seven Miscellaneous Applications filed by the Assessee, pertaining to different assessment years, wherein the Revenue as well as Assessee have 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 28.06.2022. 2. Since, the issue involved in all these Miscellaneous Applications, are common and identical, therefore these Miscellaneous Applications have been clubbed and heard together and a consolidated order is being passed for the sake of convenience and brevity. 3. So far seven Miscellaneous Applications filed by the Revenue, are concerned, Learned DR for the Revenue pointed out that there is a mistake in quoting the assessment year in the cause title, therefore, the same may be corrected. On the other hand, Learned Counsel for the assessee has fairly agreed that mistake in quoting the assessment year in the title of the order may be corrected. 4. We have heard both the parties. We note that there is mistake apparent from record in quoting the assessment year in the title of the Tribunal order. The said mistake is hereby corrected as follows: MAs. 60 to 66 & 7 to 13/SRT/2022 Keshri Exports 4 “IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JM & DR. A. L. SAINI, AM आयकर अपील सं./ITA Nos. 889 to 893/AHD/2017 AYs: (2007-08 to 2009-10, 2012-13 & 2013-14) (Physical Court Hearing) Keshri Exports, Shreeji Chambers, Sadhina Society, Varachha Road, Surat-395006. Vs. The DCIT, Circle-3(3), Surat. èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AADFK 3785 D (Appellant) (Respondent) आयकर अपील सं./ITA Nos. 916 to 920/AHD/2017 AYs: (2007-08 to 2009-10, 2012-13 & 2013-14) (Physical Court Hearing) The DCIT, Circle-3(3), Surat. Vs. Keshri Exports, Shreeji Chambers, Sadhina Society, Varachha Road, Surat-395006. èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AADFK 3785 D (Appellant) (Respondent) आयकर अपील सं./ITA Nos. 753 to 754/SRT/2018 Assessment Years: (2010-11 & 2014-15) (Physical Court Hearing) The DCIT, Circle-3(3), Surat. Vs. Keshri Exports, Shreeji Chambers, Sadhina Society, Varachha Road, Surat-395006. èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AADFK 3785 D (Appellant) (Respondent) आयकर अपील सं./ITA Nos. 761 to 762/SRT/2018 Assessment Years: (2010-11 & 2014-15) (Physical Court Hearing) Keshri Exports, Shreeji Chambers, Sadhina Society, Varachha Road, Surat-395006. Vs. The DCIT, Circle-3(3), Surat. èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AADFK 3785 D (Appellant) (Respondent) Assessee by Shri Hiren Vepari, CA Respondent by Shri H. P. Meena, CIT(DR) and Shri Vinod Kumar, Sr. DR Date of Hearing 26/05/2022 Date of Pronouncement 28/06/2022 MAs. 60 to 66 & 7 to 13/SRT/2022 Keshri Exports 5 5. In the result, all miscellaneous applications filed by the Revenue (in MA Nos.60 to 66/SRT/2022), are allowed to the extent indicated above. 6. Now, we shall take assessee’s Miscellaneous Application Nos. 7 to 13/SRT/2023. 7. The Learned Counsel for the assessee, submitted written submission, stating that there is mistake apparent from record, in respect of assessee’s Miscellaneous Application Nos. 7 to 13/SRT/2023, which is reproduced below: “Grounds 1 of MA: The assessee is not a beneficiary as per the detailed directory of beneficiary of the Investigation Report of the Income-tax Department. 1. Tribunal in paragraph 3 on page 2 of the order – sixth line from the top has held that “... the assessee is a beneficiary of non-genuine transaction...” 2. However, as per the exhaustive list of beneficiaries as per the Investigation Report, the assessee is not a beneficiary. 3. On page 156 of file II of the paper book, in Question 37 of statement recorded of Bhanwarlal Jain, he was asked about the list of beneficiaries of bogus purchases which he stated to be at Annexure D. 4. At Annexure D, on Page No.167 to 180 of file II being paper book, list of 94 beneficiaries of the Investigation Report and mentioned. Neither Investigation Report nor statement by the party makes even a vague reference to the assessee. 5. Therefore, Tribunal being last fact finding authority has apparently held assessee as a beneficiary. The need to be correct. 6. If the assessee is not a beneficiary in the case of bogus purchase, entire edifice of the case favours the assessee. Grounds 2 of the MA: Evidently, the information for reopening reached to the AO after the reopening; hence a case of non-application of mind and borrowed satisfaction. 1. In paragraph 3 on page No.2 of the Tribunal order, Tribunal has observed as under: “During the post assessment proceedings, based on the information available on record, reasons recorded u/s 148(2)... notice under Section 148 was issued on 28.3.2014...” 2. Internal flow of information as per the Investigation report (pages 15 to 21 of File II being paper book) Date Internal sharing of information Page reference 15-7-2014  Information about the beneficiaries passed on from ADIT(Invt. Unit IX, 19, 20, 21 of file II being MAs. 60 to 66 & 7 to 13/SRT/2022 Keshri Exports 6 Mumbai  DDIT (Investment.), Unit IX(2) asked the CIT-3, Surat to disseminate information to jurisdictional AO in the case of beneficiaries of bogus purchases paper book 16-7-2014 Information from DDIT(Inv.)II, Mumbai to the CIT-3- sharing of information in a CD and starting about potential beneficiaries who could have taken accommodation entries. 17-18 of file II being paper book 27-8-2014 CIT-3, Surat to Addl. CIT /Jt. CIT, Range 7,8, 9 about sharing of information about beneficiaries 16 of file II being paper book 5-9-2014 Addl. CIT of Range 9, Surat further shares information to all AOs of Range 9, Surat 15 of file II being paper book 28-3-2014 How reopening could have been done without information? Hence, ground No. (II)(i) not dealt with. CIT(A) order The AO admits that he did not have incriminating material Clause III of para 8.2 on page 15 of CIT(A) order Ground No.(II)(i) of the appeal clearly spell that officer did not apply his mind. Grounds 3 of the MA: Appeal Ground No.(III) on validity of the assessment not dealt with. In paragraph 13 of the order of the Tribunal, it dealt with the ground on validity of reopening (ground No.(II) but did not deal with the Ground on validity of assessment (ground No.(III). Second line of paragraph 13 of the Tribunal read as: “13. Before parting, .....challenging the validity of reopening of the assessment order...” (emphasis supplied). Validity of assessment comes after validity of reopening. Ground 4 of the MA: Assessee’s case is distinguishable from Pankaj K. Chaudhary (ITA No.1152/A/2017) In the case of the assessee, all suppliers remained present before the CIT(A) and confirmed having supplied goods (paragraph 8.4 – page21 and 22 of the order of the learned CIT(A). A.Y 2008-09 A.Y 2009-10, A.Y 2012-13, A.Y 2013-14 and A.Y 2014-15 Grounds numbers, 1, 2 and 3 of the MA for A.Y 2008-09, A.Y 2009-10, A.Y 2012-13, A.Y 2013-14 and A.Y 2014-15 are identical to grounds of 1, 3 and 4 of MA for the A.Y 2007-08. A.Y 2010-11 MAs. 60 to 66 & 7 to 13/SRT/2022 Keshri Exports 7 Ground numbers, 1,2 and 3 of MA are identical to Grounds of 1, 3 and 4 of MA for the A.Y 2007-08. The Tribunal has not dealt with the following grounds. Ground No.4 of MA  The Tribunal has not dealt with the ground of appeal (IV).  No speaking order is passed against the objection raised for the reopening  Ground of appeal (IV) – this defies Supreme Court decision in the case of GKN Driveshafts India Ltd. (259 ITR-19) and several other Gujarat HC decisions. Ground No. 5 of MA  The Tribunal has not dealt with ground of appeal (III)  Failure to issue notice u/s 129 makes the assessment fatal.  Following decisions were given in a horizontal chart, which have not been considered  62 taxman 344 (Kerala HC)  5 Taxman 297 (Calcutta HC)  119 ITR 376 (AP HC)  78 ITR 743 (AP HC)” 8. On the other hand, Learned Departmental Representative (Ld. DR) for the Revenue submitted that Tribunal has adjudicated the issue on merit after relying on the judgment of the Coordinate Bench, on identical facts, therefore, decision rendered by the Tribunal on merit can not be altered. If the ratio of the decision of the Tribunal is wrong, it can be rectified by the Higher authority ( Hon`ble High Court). Hence, ld DR contended that there is no mistake apparent in the order passed by the Tribunal, therefore these Miscellaneous Applications filed by the assessee should be dismissed. 9. We have heard both the parties. We note that in all these miscellaneous applications of the assessee, the identical and similar issues are involved. The Tribunal has passed the consolidated order, in assessee`s case, in ITA No.889 to 893, 916 to 920/Ahd/ 2017, 753 to 754/SRT 2018, and 761 to 762/SRT/2018, order dated 28.06.2022, which is reproduced below: MAs. 60 to 66 & 7 to 13/SRT/2022 Keshri Exports 8 7. We see no reasons to take any other view of the matter than the view so taken by the Division Bench of this Tribunal in group case in Pankaj K. Chaudhary (supra) vide order dated 27.09.2021. In this order, the Tribunal has inter alia observed as follows: “17. We have considered the submissions of the parties and have gone through the order of the lower authorities. We have also deliberated on each and every case laws relied by both the parties. We have also examined the financial statement of all the assessee(s) consisting of computation of income and audit report. We have also gone through the documentary evidences furnished in all cases. Ground No.1 in assessee’s appeal relates to the validity of reopening. The ld AR for the assessee vehemently argued that the AO reopened the case of the assessee on the basis of third party information, and without making any preliminary investigation, which was vague about the alleged accommodation entry by Bhanwarlal Jain Group. And that there was no specific information about the accommodation entry availed by the assessee. There is no live link between the reasons recorded qua the assessee. We find that the assessee has raised objection against the validity of the reopening before the AO. The objections of the assessee was duly disposed by AO in his order dated 09.02.2015. The assessee raised ground of appeal before ld CIT(A) while assailing the order of AO on reopening. The ld CIT(A) while considering the ground of appeal against the reopening held that the AO has received report from investigation wing Mumbai, which indicate that the assessee is beneficiary of the accommodation entry operators. The accommodation entry provider admitted before investigation wing that he has given such entry to various persons; based on such report the AO has reason to believe that the income of the assessee has escaped assessment and thus the action of AO in reopening is justified. 18. We find that the Hon’ble Jurisdictional High Court in Peass Industrial Engineers (P) Ltd Vs DCIT (supra) while considering the validity of similar notice of reopening, which was also issued on the basis of information of investigation wing that they have searched a person who is engaged in providing accommodation entries, held that where after scrutiny assessment the assessing officer received information from the investigation wing that well known entry operators of the country provided bogus entries to various beneficiaries, and assessee was one of such beneficiary, assessing officer was justified in re-opening assessment. Further similar view was taken by Hon’ble Jurisdictional High Court in Pushpak Bullion (P) Ltd Vs DCIT (supra). Therefore, respectfully following the order of Hon’ble High Court, we find that the assessing officer validly assumed the jurisdiction for making re-opening under section 147 on the basis of information of investigation wing Mumbai. So far as other submissions of the ld AR for the assessee that there is no live link of the reasons recorded, we find that the Hon’ble Jurisdictional High Court in Peass Industrial Engineers (P) Ltd clearly held that when assessing officer received information from the investigation wing that MAs. 60 to 66 & 7 to 13/SRT/2022 Keshri Exports 9 two well-known entry operators of the country provided bogus entries to various beneficiaries, and assessee was one of such beneficiary, assessing officer was justified. Hence, the ground No. 1 in assessee’s appeal is dismissed. 19. Ground No. 2 in assessee’s appeal and the grounds of appeal raised by the revenue are interconnected, which relates to restricting the disallowance of bogus purchases to the extent of 12.5%. The AO made of 100% of purchases shown from the hawala dealers/ entry provider namely Bhanwarlal Jain. We find that the AO while making additions of 100%, of disputed purchases solely relied on the report of the investigation wing Mumbai. No independent investigation was carried by the AO. The AO has not disputed the sale of the assessee. The AO made no comment on the evidences furnished by the assessee. We further find that ld CIT(A), while considering the submissions of the assessee accepted the lapses on the part of the AO and noted that no sale is possible in absence of purchases. The Books of the assessee was not rejected by the AO. The ld CIT(A) on further examination of the facts and various legal submissions find that Ahmedabad Tribunal in Bholanath Poly Fab Private Limited (supra) held that in the such cases the addition of bogus purchases was sustained to the extent of 12%, on the observation that the assessee may have made purchases from elsewhere and obtained the bills from impugned supplier to inflate Gross Profit Rate. The ld CIT(A) by considering the overall facts, concluded that the 100% disallowance of purchase is not justified. We also find that the ld.CIT(A) also considered the decision of jurisdictional High Court in Mayank Diamonds Pvt. Ltd. (supra) and compared the fact of the present case with the facts in Mayank Diamonds Pvt Ltd (supra) and noted that assessee in that case was also engaged in the trading of polished diamonds. The ld CIT(A) noted that in that case the AO made disallowance of entire bogus purchase and on first appeal before CIT(A) the disallowances were maintained. However, the Tribunal gave partial relief to the assessee directing to sustain the addition @12% of such bogus purchases. And on further appeal, the Hon'ble High Court sustained Gross Profit Rate @ 5% being average rate of profit in industry. 20. Now adverting to the facts of the present case, the ld.CIT(A) held that in some other similar cases; though he had sustain 5% of Gross Profit Rate, considering the fact that where Gross Profit shown by those assessee’s are more than 5%. However, in the present case, the assessee has merely shown Gross Profit Rate only at 0.78% of turnover, accordingly, the ld. CIT(A) was of the view that disallowance of 12.5% of impugned purchases/bogus purchases would be reasonable to meet the end of justice. 21. We have seen that during the financial year under consideration the assessee has shown total turnover of Rs.66,09,62,458/-. The assessee has shown Gross Profit @ 0.78% and net Profit @ 0.02% (page 11 of paper MAs. 60 to 66 & 7 to 13/SRT/2022 Keshri Exports 10 Book). The assessee while filing the return of income has declared taxable income of Rs.1,81,840/- only. We are conscious of the facts that dispute before us is only with regard of the disputed purchases of Rs.4.34 Crore, which was shown to have purchased from the entity managed by Bhanwarlal Jain Group. During the search action on Bhanwarlal Jain no stock of goods/ material was found to the investigation party. Bhanwarlal Jain while filing return of income has offered commission income (entry provider). Before us, the ld CIT-DR for the revenue vehemently submitted that the ratio of decision of Hon’ble Gujarat High Court in Mayank Diamond Private Limited (supra) is directly applicable on the facts of the present case. We find that in Mayank Diamonds the Hon’ble High Court restricted the additions to 5% of GP. We have seen that in Mayank Diamonds P Ltd (supra), the assessee had declared GP @ 1.03% on turnover of Rs.1.86 Crore. The disputed transaction in the said case was Rs.1.68 Crore. However, in the present case the assessee has declared the GP @ 0.78%. It is settled law that under Income-tax, the tax authorities are not entitled to tax the entire transaction, but only the income component of the disputed transaction, to prevent the possibility of revenue leakage. Therefore, considering overall facts and circumstances of the present case, we are of the view that disallowances @ 6% of impugned purchases/disputed purchases would be sufficient to meet the possibility of revenue leakage. In the result the ground No. 2 of appeal raised by the assessee is partly allowed and the grounds of appeal raised by revenue are dismissed. 22. In the result the appeal of revenue is dismissed and the appeal of the assessee is partly allowed.” 8. These appeals filed by the Revenue and Assessee, relate to Bhanwarlal Jain ground cases. The Assessing Officer made 100% addition of bogus purchases. On appeal by assessee, Ld. CIT(A) restricted the addition to 5% of bogus purchases by following the judgment of Hon'ble Gujarat High Court in the case of M/s Mayank Diamond Pvt. Ltd. (2014) (11) TMI 812 (Guj.). 9. The Ld. DR for the Revenue argued before us that assessee was engaged in taking bogus purchase bills/accommodation entry of bogus purchases therefore addition made by the assessing officer should be sustained. 10. Whereas, Ld. Counsel for the assessee contended that addition restricted by Ld. CIT(A) at the rate of 5% of bogus purchase should also be deleted. He also stated that assessee submitted bills, vouchers stock regular and bank statements, so there should not be addition in the hands of assessee. 11. We note that the issue under consideration is squarely covered by the decision of the Co-ordinate Bench in the case of Pankaj K. Choudhary (supra) and there is no change in facts and law, therefore respectfully following the binding precedent, we confirm the addition at the rate of 6% of bogus purchases / accommodation entry in respect of bogus purchases. MAs. 60 to 66 & 7 to 13/SRT/2022 Keshri Exports 11 12. Learned Counsel for the assessee informs the Bench that assessee does not wish to press ground no.1 relating to reassessment for assessment years 2007-08 and 2008-09, the assessee also does not wish to press ground about rejection of books of account. In nutshell, assessee has pressed ground on merit which is covered by the co-ordinate bench in the case of Pankaj K. Chaudhary (supra). Except to AY.2007-08 and 2008-09, assessee has pressed ground relating to reopening, which is being adjudicated in subsequent paras of this order. 13. Before parting, we would like to deal with other arguments made by Ld. Counsel for the assessee, challenging the validity of reopening of assessment under section 147 of the Act. The ld Counsel contended that reasons recorded by the assessing officer is bad in law. The reasons were recorded based on the report of investigation wing, which came late in the possession of the assessing officer whereas; the reasons were recorded prior to the report of the investigation wing. Besides, the assessing officer did not dispose of the objection of the assessee. 14. On the other hand, ld DR for the Revenue submitted that objections raised by the assessee were disposed of by the assessing officer, vide letter dated 09.09.2014 of the assessing officer (vide para No.3 of assessment order). Besides, the assessment was reopened based on information available before the assessing officer and not based on the report of investigation wing, hence reasons were recorded by the assessing officer as per the provisions of the Act. The ld DR pointed out that there is no infirmity in the reasons recorded by the assessing officer. 15. We have heard both the parties. Having gone through the entire gamut of facts and circumstances, we are of the view that not only there existed new information with the AO from the credible sources, but also that he has applied has mind and recorded the conclusion that the purchases claimed were non- genuine/mere accommodation entry on bogus purchases, and therefore bogus, (clearly meaning that what was disclosed was false and untruthful). The Hon'ble Supreme Court in the case of Phul Chand BajrangLal and another vs. ITO 203 ITR 456, was considering the question of reassessment beyond the period of four years in the case of an assessee firm; and had held that in case of acquiring fresh information specific in nature and reliable, relating to the concluded assessment, which went to falsify the statement made by the assessee at the time of original assessment and, therefore, he would be permitted under the law to draw fresh inference from such facts and material. The Court also went to an extent of saying that there are two distinct and different situations where the transaction itself, on the basis of subsequent information is found to be bogus transaction and in such event, mere disclosure of the transaction cannot be said to be true and full disclosure and the Income-tax Officer would have jurisdiction to reopen the concluded assessment. It would be apt to quote some observations of the Apex Court in the case of Phul Chand Bajrang Lal (supra), which read as under: "...one has to look to the purpose and intent of the provisions. One of the purposes of Section 147 appears to be to ensure that a party cannot get MAs. 60 to 66 & 7 to 13/SRT/2022 Keshri Exports 12 away by willfully making a false or untrue statement at the time of original assessment and when that falsity comes to notice to turn around and say 'you accepted my lie, now your hands are tied and you can do nothing'. It would, be travesty of justice to allow the assessee that latitude." 16. The Hon'ble Gujarat High Court in the case of Dishman Pharmaceuticals and Chemicals Ltd. vs. DCIT (OSD), Ahmedabad (2012) 346 ITR 228 (Guj) has summed up the requirements of the law, in such circumstances and has held that: “There is no set format in which such reasons must be recorded. It is not the language but the contents of such recorded reasons which assumes importance. In other words, a mere statement that the Assessing Officer had reason to believe that certain income has escaped assessment and such escapement of income was on account of non-filing of the return by the assessee or failure on his part to disclose fully and truly all material facts necessary for assessment would not be conclusive. Nor, absence of any such statement would be fatal if on the basis of reasons recorded, it can be culled out that there were sufficient grounds for the Assessing Officer to hold such beliefs." 17. A three Judges bench of Hon'ble Gujarat High Court in the case of A.L.A. Firm v. CIT, 189 (1991) ITR 285, after an elaborate discussion of the subject opined that the jurisdiction of the Income Tax Officer to reassess income arises if he has in consequence of specific and relevant information coming into his possession subsequent to the previous concluded assessment, reason to believe, that income chargeable to tax and had escaped assessment. It was held that even if the information be such that it could have been obtained by the I.T.O. during the previous assessment proceedings by conducting, an investigation or an enquiry but was not in fact so obtained, it would not affect the jurisdiction of the Income Tax Officer to initiate reassessment proceedings, if the twin conditions prescribed under section 147 of the Act are satisfied. 18. As observed earlier not only there existed new information with the AO from the credible sources, but also he had applied his mind and recorded the conclusion that the purchases claimed were non-genuine/bogus and therefore bogus, (clearly meaning that what was disclosed was false and untruthful). The requirements of section 147 r.w.s. 148 have clearly been met; and the reopening is held justified and legal. Therefore, we dismiss the ground raised by the assessee challenging the validity of reassessment. 19. In the result, appeals filed by assessees (ITA Nos. 889 to 893/AHD/2017 and ITA Nos. 761 to 762/SRT/2018) are dismissed, whereas the appeal filed by the Revenue (ITA No.916 to 920/AHD/2017 and ITA Nos. 753 to 754/SRT/2018) are partly allowed. 10. From the above judgment of the Tribunal, it is abundantly clear that Tribunal has considered the entire facts of the assessee`s case and adjudicated the issue taking the base of identical case law. The main MAs. 60 to 66 & 7 to 13/SRT/2022 Keshri Exports 13 issue/grievances of the assessee, in the miscellaneous application, which are stated in written submission of the assessee, (reproduced above), are that Tribunal being last fact finding authority has apparently held that assessee as a beneficiary, the same need to be corrected, the Assessee’s case is distinguishable from Pankaj K. Chaudhary (ITA No.1152/A/2017), and failure to issue notice u/s 129 of the Act makes the assessment fatal etc. We note that these issues have already been considered by the Bench. In case of Bhanwar lal Jain, Rajendra Jain, Gautom Jain, Dharimechand Jain etc, this Tribunal has consistently been making addition on bogus purchases at the rate of 6% of the total amount of bogus purchases. We note that Tribunal can rectify the order provided it falls within the ambit of provisions of section 254(2) of the Act. That is, a mistake apparent can be rectified under section 254(2) of the Act. Therefore, at this juncture, it is appropriate to go through the provisions of section 254(2) of the Act, which is reproduced below: “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 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.]” 11. 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 MAs. 60 to 66 & 7 to 13/SRT/2022 Keshri Exports 14 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. 12. We note that the conclusion reached by the Tribunal is the ratio of the decision of the Tribunal, which cannot be reviewed or rectified by the Tribunal. The said conclusion/decision (ratio) may be reviewed or rectified by the Hon`ble High Court or Hon`ble Supreme Court. The Tribunal cannot sit again to review or to examine its own conclusion, as it is not permitted by the provisions of section 254(2) of the Act, as narrated above. 13. On the identical facts, our view is fortified by the judgment of the Co-ordinate Bench of ITAT, Delhi in the case of Prem Colonisers Pvt. Ltd. vs. ITO, Ward-14(3) [in MA No. 130/Del/2012 for AY.2002-03] order dated 12.12.2012 wherein it was held as follows: “3. We have heard both the sides, considered the material on record and before reverting to facts, it would be apt to consider the relevant provisions of law relating to section 254(2). A bare look at section 254(2) of the Act, which deals with rectification, makes it amply clear that a ‘mistake apparent from the record’ is rectifiable. In order to attract the application of section 254(2), a mistake must exist and the same must be apparent from the record. The power to rectify the mistake, however, does not cover cases where a revision or review of the order is intended. ‘Mistake’ means to take or understand wrongly or inaccurately; to make an error in interpreting, it is an error; a fault, a misunderstanding, a misconception. ‘Apparent’ means visible; capable of being seen; easily seen; obvious; plain. A mistake which can be rectified under section 254(2) is one which is patent, which is obvious and whose discovery is not dependent on argument or elaboration. The language used in section 254(2) is permissible where it is brought to the notice of the Tribunal that there is any mistake apparent from the record. Accordingly, the amendment of an order does not MAs. 60 to 66 & 7 to 13/SRT/2022 Keshri Exports 15 mean obliteration of the order originally passed and its substitution by a new order which is not permissible under the provisions of section 254(2). Further, where an error is far from self evident, it ceases to be an apparent error. It is no doubt true that a mistake capable of being rectified under section 254(2) is not confined to clerical or arithmetical mistakes. On the other hand, it does not cover any mistake which may be discovered by a complicated process of investigation, argument or proof. As observed by the Supreme Court in Master Construction Co. (P.) Ltd. v. State of Orissa [1966] 17 STC 360, an error which is apparent on the face of the record should be one which is not an error which depends for its discovery on elaborate arguments on questions of fact or law. A similar view was also expressed in Satyanarayan Laxminarayan Hegde v. Mallikarjun Bhavanappa Tirumale AIR 1960 SC 137. It is to be noted that the language used in Order 47, Rule 1 of the Code of Civil Procedure, 1908 is different from the language used in section 254(2) of the Act. Power is given to various authorities to rectify any ‘mistake apparent from the record’ is undoubtedly not more than that of the High Court to entertain a writ petition on the basis of ‘an error apparent on the face of the record’. Mistake is an ordinary word, but in taxation laws, it has a special significance. It is not an arithmetical or clerical error alone that comes within its purview. It comprehends errors which, after a judicious probe into the record from which it is supposed to emanate, are discerned. The word ‘mistake’ is inherently indefinite in scope, as what may be a mistake for one may not be one for another. It is mostly subjective and the dividing line in border areas is thin and indiscernible. It is something which a duly and judiciously instructed mind can find out from the record. In order to attract the power to rectify under section 254(2) it is not sufficient if there is merely a mistake in the orders sought to be rectified. The mistake to be rectified must be one apparent from the record. A decision on the debatable point of law or undisputed question of fact is not a mistake apparent from the record. The plain meaning of the word ‘apparent’ is that it must be something which appears to be so ex facie and it is incapable of argument or debate. It is therefore, follows that a decision on a debatable point of law or fact or failure to apply the law to a set of facts which remains to be investigated cannot be corrected by way of rectification. 4. As is apparent from the discussion held in the preceding paragraphs, that a rectification application can lie only with regard to an error on the face of the record which has not emerged from the material on record and moreover, the assessee has not been able to point out any apparent mistake in the order passed by the Tribunal and in case application of the assessee is accepted, it would tantamount to review of the order of the Tribunal, as has rightly been pleaded by the ld. DR, that reviewing of the order of the Tribunal is not permissible and for that purpose useful reference can be made to the following decisions. 4.1 The Hon’ble Calcutta High Court in the case of CIT vs Gokul Chand Agarwal (202 ITR 14), has held as under: “Section 254(2) of the Income Tax Act, 1961, empowers the Tribunal to amend its order passed under section 254(1) to rectify any mistake apparent from the record either suo moto or on an application. The jurisdiction of the Tribunal to MAs. 60 to 66 & 7 to 13/SRT/2022 Keshri Exports 16 amend its order thus depends on whether or not there is a mistake apparent from the record. If, in its order, there is no mistake which is patent and obvious on the basis of the record, the exercise of the jurisdiction by the Tribunal under section 254(2) will be illegal and improper. An oversight of a fact cannot constitute an apparent mistake rectifiable under section 254(2). This might, at the worst, lead to perversity of the order for which the remedy available to the assessee is not under section 254(2) but a reference proceeding under section 256. The normal rule is that the remedy by way of review is a creature of the statute and, unless clothed with such power by the statute, no authority can exercise the power. Review proceedings imply proceedings where a party, as of right, can apply for reconsideration of the matter, already decided upon, after a fresh hearing on the merits of the controversy between the parties. Such remedy is certainly not provided by the Income Tax Act, 1961, in respect of proceedings before the Tribunal.” 4.2 In similar situation, while dealing with the rectification, the Hon'ble Andhra Pradesh High Court in the case of CIT and Anor vs. I.T.A.T and Anor (206 ITR 126 has held as under: “The appellate Tribunal, being a creature of the statute, has to confine itself in the exercise of its jurisdiction to the enabling or empowering terms of the statute. It has no inherent power. Even otherwise, in cases where specific provision delineates the powers of the court or Tribunal, it cannot draw upon its assumed inherent jurisdiction and pass orders as it pleases. The power of rectification which is specifically conferred on the Tribunal has to be exercised in terms of that provision. It cannot be enlarged on any assumption that the Tribunal has got an inherent power of rectification or review or revision. It is axiomatic that such power of review or revision has to be specifically conferred, it cannot be inferred. Unless there is a mistake apparent from the record in the sense of patent, obvious and 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 drawn arguments or by a process of investigation and research, it is not a mistake apparent from the record.” 4.3 Further, the Hon'ble Supreme Court in the case of CIT vs Karam Chand Thapar and Br.P.Ltd. (176 ITR 535) has held as under: “APPELLATE TRIBUNAL – DUTY TO CONSIDER CUMULATIVE EFFECT OF CIRCUMSTANCES AND TOTALITY OF FACTS – NO NEED TO STATE SO IN APPELLATE ORDER SPECIFICALLY – INCOME TAX ACT, 1961, SEC. 254,Further it was held as under: “It is equally well settled that the decision of the Tribunal has not to be scrutinized sentence by sentence merely to find out whether all facts have been set out in detail by the Tribunal or whether some incidental fact which appears on the record has not been noticed by the Tribunal in its judgment. If the court, on a fair reading of the judgment of the Tribunal, finds that it has taken into account all relevant material and has not taken into account any irrelevant material in basing its conclusions, the decision of the Tribunal is not liable to be interfered with, unless, of course, the conclusions arrived at by the Tribunal are MAs. 60 to 66 & 7 to 13/SRT/2022 Keshri Exports 17 perverse. It is not necessary for the Tribunal to state in its judgement specifically or in express words that it has taken into account the cumulative effect of the circumstances or has considered the totality of the facts, as if that were a magic formula; if the judgment of the tribunal shows that it has, in fact, done so, there is no reason to interfere with the decision of the Tribunal. Similarly the Bombay High Court in the case of CIT-vs- Ramesh Electric and Trading Co. (203 ITR 497) .............It is an accepted position that the Appellate Tribunal does not have any power to review its own orders under the provisions of the Act. The only power which the Tribunal possesses is to rectify any mistake in its own order which is apparent from the record........ The power of rectification under section 254(2) can be exercised only when the mistake which is sought to be rectified is an obvious and patent mistake which is apparent from the record and not a mistake which required to be established by arguments and a long drawn process of reasoning on points on which there may conceivably be two opinion. Failure of the Tribunal to consider an argument advanced by either party for arriving at a conclusion is not an error apparent on the record, although it may be an error of judgments........................” 4.4 We also draw support here from Hon’ble Madras High Court decision in T.C.(A) No. 156 of 2006 dated 21.08.2007 in the case of CIT Vs. Tamil Nadu Small Industries Development Corporation Ltd. wherein the Hon’ble High Court held as under:- “The Tribunal has no power to review its order. When the Tribunal has already decided an issue by applying its mind against the assessee, the same cannot be rectified under Section 254 (2) of the Act. There was no necessity whatsoever on the part of the Tribunal to review its own order. Even after the examination of the judgments of the Tribunal, we could not find a single reason in the whole order as to how the Tribunal is justified and for what reasons. There is no apparent error on the face of the record and thereby the Tribunal sat as an appellate authority over its own order. It is completely impermissible and the Tribunal has traveled out of its jurisdiction to allow a Miscellaneous Petition in the name of reviewing its own order. In the present case, in the guise of rectification, the Tribunal reviewed its earlier order and allowed the Miscellaneous Petition which is not in accordance with law. Section 254(2) of the Act does not contemplate rehearing of the appeal for a fresh disposal and doing so, would obliterate the distinction between the power to rectify mistakes and power to review the order made by the Tribunal. The scope and ambit of the application of Section 254(2) is limited and narrow. It is restricted to rectification of mistakes apparent from the record. Recalling the order obviously would mean passing of a fresh order. Recalling of the order is not permissible under Section 254(2) of the Act. Only glaring and any mistake apparent on the face of the record alone can be rectified and hence anything debatable cannot be a subject matter of rectification.” 4.5 Further, we place reliance upon Hon’ble Delhi High Court exposition on the scope of rectification u/s 254(2) as reported in the case of Ras Bihari Bansal Vs. Commissioner of Income Tax (2007) 293 ITR 365: MAs. 60 to 66 & 7 to 13/SRT/2022 Keshri Exports 18 “Section 254 of the Income Tax Act, 1961, enables the concerned authority to rectify any “mistake apparent from the record”. It is well settled that an oversight of a fact cannot constitute an apparent mistake rectifiable under this section. Similarly, failure of the Tribunal to consider an argument advanced by either party for arriving at a conclusion, is not an error apparent on the record, although it may be an error of judgment. The mere fact that the Tribunal had not allowed a deduction, even if the conclusion is wrong, will be no ground for moving an application under section 254(2) of the Act. Further, in the garb of an application for rectification, the assessee cannot be permitted to reopen and re- argue the whole matter, which is beyond the scope of the section.” Therefore, in view of the facts, circumstances, in the light of ratio of decisions cited and discussion as held above, we do not find any substance in the application of the assessee and dismiss the same being devoid of any merits. 5. As a result, this misc. application filed by the assessee gets dismissed.” 14. Thus, it is abundantly clear from the decision of the Coordinate Bench in the case of Prem Colonisers Pvt. Ltd (supra) that failure of the Tribunal to consider an argument advanced by either party for arriving at a conclusion is not an error apparent on the record, although it may be an error of judgment. Review proceedings imply proceedings where a party, as of right, can apply for reconsideration of the matter, already decided upon, after a fresh hearing on the merits of the controversy between the parties, such remedy is certainly not provided by section 254(2) the Income Tax Act, 1961. Further, in the garb of an application for rectification, the assessee cannot be permitted to reopen and re-argue the whole matter, which is beyond the scope of the section 254(2) of the Act. Therefore, considering the factual position of the assessee`s case and applicable precedent to these facts, we are of the view that there is no mistake apparent in the order of the Tribunal dated 28.06.2022, hence we dismiss all miscellaneous application of the assessee. 15. In the result, Miscellaneous Applications filed by the Revenue (in MA Nos. 60 to 66/SRT/2022) are allowed to the extent indicated above, MAs. 60 to 66 & 7 to 13/SRT/2022 Keshri Exports 19 whereas all Miscellaneous Applications filed by the Assessee (in MA Nos.7 to 13/SRT/2023) are dismissed. Registry is directed to place one copy of this order in all appeals folder / case file(s). Order is pronounced on 14/08/2023 in the open court. Sd/- Sd/- (PAWAN SINGH) (Dr. A. L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER Surat / Ǒदनांक/ Date: 14/08/2023 SAMANTA Copy of the Order forwarded to: 1. The Assessee 2. The Respondent 3. The CIT(A) 4. Pr.CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // TRUE COPY // Assistant Registrar/Sr. PS/PS ITAT, Surat