ACIT, CHENNAI V. Max Value Housing, CHENNAI

MA 69/CHNY/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4708 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 1 month(s) 17 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 22-03-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 05-02-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUBASHINI
• Keywords: Tax effect
• Section: 254(2)

Judgement Text

, , IN THE INCOME-TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . , . , BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY, JUDICIAL MEMBER M.P. NO. 69/CHNY/2018 [IN M.P. NO. 115/MDS/2017 IN I.T.A.NO.1989/MDS/2014] ASSESSMENT YEAR:2008-09 THE ASSISTANT COMMISSIONER OF INCOME TAX, NON CORPORATE CIRCLE 3, CHENNAI 600 034. VS. M/S. MAX VALUE HOUSING, FLAT F5, SIR USMAN COURT, 63/27, ELDAMS ROAD, ALWARPET, CHENNAI 600 018. [PAN: AANFM2165P] ( /APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : MS. SUBASHINI, JCIT / RESPONDENT BY : NONE / DATE OF HEARING : 15.02.2019 /DATE OF PRONOUNCEMENT : 22.03.2019 / O R D E R PER DUVVURU RL REDDY, JUDICIAL MEMBER: BY MEANS OF PRESENT MISCELLANEOUS PETITION, THE REVENUE SEEKS TO QUASH THE ORDER PASSED BY THE TRIBUNAL IN THE MISCELLANEOUS PETITION FILED BY THE ASSESSEE IN M.P. NO. 115/MDS/2017 DATED 21.09.2017 IN I.T.A. NO. 1989/MDS/2014 DATED 29.01.2016 FOR THE ASSESSMENT YEAR 2008-09 ON THE GROUND THAT THE TAX EFFECT IN THE APPEAL FILED BY THE REVENUE IS NOT BELOW THE MONETARY LIMIT OF .10 LAKHS IN VIEW OF THE DIRECTIONS OF THE CBDT VIDE ITS CIRCULAR DATED 10.12.2015 SINCE THE ASSESSEE FAILED TO INCORPORATE THE M.P. NO. 69/CHNY/18 2 NOTIONAL TAX WHILE COMPUTING THE TOTAL TAX EFFECT IN THE ORIGINAL APPEAL FILED BY THE REVENUE. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE. WHEN THE NOTICE OF HEARING WAS SEND BY RPAD, THE SAME WAS RETURNED WITH THE COMMENTS OF THE POSTAL AUTHORITIES AS LEFT. HENCE, WE PROCEED TO ADJUDICATE THE PETITION FILED BY THE REVENUE AFTER HEARING THE LD. DR. 3. WE HAVE HEARD THE LD. DR, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE TRIBUNAL. IN THIS CASE, AFTER HEARING BOTH THE SIDES, THE APPEAL FILED BY THE REVENUE IN I.T.A. NO. 1989/MDS/2014 WAS ADJUDICATED AND PASSED DETAILED ORDER DATED 29.01.2016. HOWEVER, THE ASSESSEE MOVED A MISCELLANEOUS PETITION IN M.P. NO. 115/MDS/2017 BY STATING THAT THE APPEAL FILED BY THE REVENUE BEFORE THE TRIBUNAL IS NOT MAINTAINABLE, IN VIEW OF THE DIRECTIONS OF THE CBDT VIDE ITS CIRCULAR DATED 10.12.2015 AS THE TAX EFFECT IN ITS APPEAL IS BELOW THE MONETARY LIMIT OF .10 LAKHS. IN THE PETITION, BY QUANTIFYING THE TAX EFFECT, IT WAS THE SUBMISSION OF THE ASSESSEE THAT THE ACTUAL TAX EFFECT IN THE APPEAL OF THE REVENUE IS .3,54,294/- AND THUS, VIDE ORDER IN M.P. NO. 115/MDS/2017 DATED 21.09.2017, THE TRIBUNAL RECALLED ITS ORDER IN I.T.A. NO. 1989/MDS/2014 DATED 29.01.2016 AND POSTED THE APPEAL FOR HEARING ON REGULAR COURSE. M.P. NO. 69/CHNY/18 3 4. THE PLEA OF THE REVENUE IN THE PRESENT MISCELLANEOUS PETITION AT PARA 4 & 5 READ AS UNDER: 4. KIND ATTENTION IS INVITED TO THE DIRECTIONS OF THE CBDTS CIRCULAR NO. 21/2015 DT. 10.12.2015, WHEREIN IT IS CLEARLY STATED THAT IN CASES WHERE RETURNED LOSS IS REDUCED OR ASSESSED AS INCOME, THE TAX EFFECT WOULD INCLUDE NOTIONAL TAX ON DISPUTED ADDITIONS. ON VERIFICATION OF RECORDS, IT IS SEEN THAT THE DISALLOWANCE INVOLVED IN THE APPEAL WAS .82 LAKHS WHOSE TAX EFFECT IS .27 LAKHS AND HENCE ABOVE THE TAX EFFECT LIMIT PRESCRIBED. 5. IN VIEW OF THE ABOVE FACTS/REASONS, IT IS PRAYED THAT THE ORDER OF THE HONBLE ITAT MP NO. 115/MDS/2017 [IN ITA NO. 1989/MDS/2014] ASST. YEAR 2008-09 DT. 21.09.2017 RECALLING TRIBUNALS ORDER DT. 29.01.2016 & ALLOWING ASSESSEES MP, MAY PLEASE BE DELETED AND RENDER JUSTICE AT THE EARLIEST CONVENIENCE. 5. OPERATIVE FORCE OF THE ARGUMENTS ADVANCED BY THE LD. DR WAS THAT THE ITAT WAS PUT TO CONCEIVE INCOMPLETE/WRONG CALCULATION OF TAX EFFECT BY IGNORING AND OMITTING THE NOTIONAL TAX WHILE COMPUTING THE TOTAL TAX EFFECT IN THE ORIGINAL APPEAL FILED BY THE REVENUE AND CUMULATIVE EFFECT OF THIS CONCEIVEMENT OF THESE WRONG FACTS HAD GOAD THE ADJUDICATING AUTHORITY ON WRONG CONCLUSION TO RECALL THE APPEAL ORDER DATED 29.01.2016 IN THE ORDER PASSED IN MP NO. 115/MDS/2017 DATED 21.09.2017. IT WAS FURTHER SUBMISSION OF THE LD. DR THAT THE ASSIMILATION OF INCORRECT FACTS WOULD LAY FOUNDATION OF WRONG REASON AND RESULT IN AN INCORRECT ADJUDICATION. SINCE INCORRECT FACTS/CALCULATION OF TAX EFFECT WAS BROUGHT ON RECORD IN THE MP FILED BY THE ASSESSEE, IT WOULD COME WITHIN THE AMBIT OF APPARENT ERROR AND THE M.P. NO. 69/CHNY/18 4 MP ORDER DATED 21.09.2017 IS LIABLE TO BE RECTIFIED BY STATING THAT THERE IS NO NEED TO RECALL THE APPEAL ORDER DATED 29.01.2016. 6. THERE ARE SERIES OF DECISIONS AT THE END OF THE HON'BLE SUPREME COURT AS WELL AS HON'BLE HIGH COURT EXPOUNDING SCOPE OF EXERCISING POWERS UNDER SECTION 254(2) OF THE ACT. WE DO NOT DEEM IT NECESSARY TO RECITE AND RECAPITULATE ALL OF THEM, BUT SUFFICE TO SAY THAT CORE OF ALL THESE AUTHORITATIVE PRONOUNCEMENTS IS THAT POWER FOR RECTIFICATION UNDER SECTION 254(2) OF THE ACT CAN BE EXERCISED ONLY WHEN MISTAKE, WHICH IS SOUGHT TO BE RECTIFIED, IS AN OBVIOUS AND PATENT MISTAKE, WHICH IS APPARENT FROM THE RECORD AND NOT A MISTAKE, WHICH IS REQUIRED TO BE ESTABLISHED BY ARGUMENTS AND LONG DRAWN PROCESS OF REASONING ON POINTS, ON WHICH THERE MAY CONCEIVABLY BE TWO OPINIONS. FOR FORTIFYING THIS VIEW, WE MAKE REFERENCE TO THE DECISION OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF ACIT VS. SAURASHTRA KUTCH STOCK EXCHANGE LD., 262 ITR 146 WHICH HAS BEEN UPHELD BY THE HON'BLE SUPREME COURT REPORTED IN 305 ITR 227. THE HON'BLE COURT HAS LAID DOWN FOLLOWING PROPOSITION WHILE CONCLUDING THE JUDGMENT: (A) THE TRIBUNAL HAS POWER TO RECTIFY A MISTAKE APPARENT FROM THE RECORD ON ITS OWN MOTION OR ON AN APPLICATION BY A PARTY UNDER SECTION 254(2) OF THE ACT; (B) AN ORDER ON APPEAL WOULD CONSIST OF AN ORDER MADE UNDER SECTION 254(1) OF THE ACT OR IT COULD BE AN ORDER MADE UNDER SUB-SECTION (1) AS AMENDED BY AN ORDER UNDER SUB-SECTION (2) OF SECTION 254 OF THE ACT; M.P. NO. 69/CHNY/18 5 (C) THE POWER OF RECTIFICATION IS TO BE EXERCISED TO REMOVE AN ERROR OR CORRECT A MISTAKE AND NOT FOR DISTURBING FINALITY, THE FUNDAMENTAL PRINCIPLE BEING THAT POWER OF RECTIFICATION IS FOR JUSTICE AND FAIR PLAY; (D) THAT POWER OF RECTIFICATION CAN BE EXERCISED EVEN IF A MISTAKE IS COMMITTED BY THE TRIBUNAL OR EVEN IF A MISTAKE HAS OCCURRED AT THE INSTANCE OF PARTY TO THE APPEAL; (E) A MISTAKE APPARENT FROM RECORD SHOULD BE SELF-EVIDENT, SHOULD NOT BE A DEBATABLE ISSUE, BUT THIS TEST MIGHT BREAK DOWN BECAUSE JUDICIAL OPINIONS DIFFER AND WHAT IS A MISTAKE APPARENT FROM THE RECORD CANNOT BE DEFINED PRECISELY AND MUST BE LEFT TO BE DETERMINED JUDICIALLY ON THE FACTS OF EACH CASE; (F) NON-CONSIDERATION OF A JUDGMENT OF THE JURISDICTIONAL HIGH COURT WOULD ALWAYS CONSTITUTE A MISTAKE APPARENT FROM THE RECORD, REGARDLESS OF THE JUDGMENT BEING RENDERED PRIOR TO OR SUBSEQUENT TO THE ORDER PROPOSED TO BE RECTIFIED; (G) AFTER THE MISTAKE IS CORRECTED, CONSEQUENTIAL ORDER MUST FOLLOW AND THE TRIBUNAL HAS POWER TO PASS ALL NECESSARY CONSEQUENTIAL ORDERS.' WE ARE CONSCIOUS OF THE FACT THAT ERROR OF FACT AND LAW IN APPRECIATING THE CIRCUMSTANCES, SECTION AND PROVISION COULD FALL WITHIN THE AMBIT OF APPARENT ERROR. SINCE INCORRECT FACTS WERE AGITATED IN THE PETITION FILED BY THE ASSESSEE, WHICH GOAD THE TRIBUNAL TO REACH WRONG CONCLUSIONS TO RECALL THE APPEAL ORDER, WE RESTORE THE ORDER PASSED BY THE TRIBUNAL IN I.T.A. NO. 1989/MDS/2014 DATED 29.01.2016 AND THE MP ORDER IN MP NO. 115/MDS/2017 DATED 21.09.2017 STANDS RECALLED AND WITHDRAWN/CANCELLED. ACCORDINGLY, THE PRESENT MP FILED BY THE REVENUE STANDS ALLOWED. FURTHER WE MAKE IT CLEAR THAT ONCE THE ORDER PASSED IN MP NO. 115/MDS/2017 DATED 21.09.2017 IS CANCELLED, AND SINCE THE APPEAL ORDER DATED 29.01.2016 HOLDS M.P. NO. 69/CHNY/18 6 GOOD, THERE IS NO NEED TO POST THE MAIN APPEAL FOR HEARING ANYMORE. 7. IN THE RESULT, THE M.P. FILED BY THE REVENUE IS ALLOWED. ORDER PRONOUNCED ON THE 22 ND MARCH, 2019 AT CHENNAI. SD/- SD/- (ABRAHAM P. GEORGE) ACCOUNTANT MEMBER (DUVVURU RL REDDY) JUDICIAL MEMBER CHENNAI, DATED, THE 22.03.2019 VM/- /COPY TO: 1. / APPELLANT, 2. / RESPONDENT, 3. ( ) /CIT(A), 4. /CIT, 5. /DR & 6. /GF.