Shri Ashok Kumar Sahu, Jabalpur V. T.R.O 1/Assessing Officer, Jabalpur

MA 7/JAB/2016

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 5205 (ITAT-JABALPUR)
• Duration Of Justice: 5 year(s) 8 month(s) 1 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 10-02-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 08-06-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: AJAY MISHRA
• Keywords: Question of law; Competent authority; Assessment record; Onus to prove
• Section: 154; 143(3); 143(1); 143(2); 254(2)

Judgement Text

MA No 07/Jab/2016 (AY 2004-05) Ashok Kumar Sahu v. AO 1 IN THE INCOME TAX APPELLATE TRIBUNAL, JABALPUR BENCH, JABALPUR (through Virtual Hearing) BEFORE SH. SANJAY ARORA, HON’BLE ACCOUNTANT MEMBER & SH. MANOMOHAN DAS, HON’BLE JUDICIAL MEMBER M.A. No. 07/JAB/2016 (arising out of ITA No. 43/Jab/2013) Assessment Year: 2004-05 Ashok Kumar Sahu 314, Satna Bldg., Jabalpur [PAN: AMUPS 6528B] vs. Tax Recovery Officer-1, Assessing Officer, Jabalpur (Applicant) (Respondent) Appellant by Sh. Ajay Mishra, Adv. Respondent by Sh. S.K Halder, Sr. DR Date of hearing 04/02/2022 Date of pronouncement 11/02/2022 ORDER Per Sanjay Arora, AM This is a Miscellaneous Application (MA) by the assessee-appellant directed against the Order under section 254(1) dated 04/4/2016 by the Appellate Tribunal in his case for assessment year (AY) 2004-05, dismissing the additional ground sought to be raised in the captioned appeal contesting his assessment u/s. 143(3) for the relevant year dated 27/12/2006 in second appeal. 2.1 At the outset, it was submitted by Shri Mishra, the ld. counsel for the assessee, that vide his application dated 18/5/2015, submitted on 19/5/2015 (copy on record), the assessee had raised an Additional Ground (Addl. Gd.) before the Tribunal under rule 11 of the Income Tax (Appellate Tribunal) Rules, 1963, (‘the Rules’), reading as under: MA No 07/Jab/2016 (AY 2004-05) Ashok Kumar Sahu v. AO 2 ‘That on the facts and in the circumstances of the case Learned AO held no valid jurisdiction to make the assessment in view of the fact that in the instant matter selection of the case scrutiny assessment was done in utter defiance and total contravention of the instruction issued by Central Board of Direct Taxes for selection of cases during F.Y 2004-05 vide instruction No. 10 dated 20/09/2004 for non-corporate assessees which in turn even rendered the notice u/s 143(2) for framing assessment order in question being served upon the assessee beyond the limitation thus rendered the order in question liable to be quashed.’ The same stands dismissed by the Tribunal vide the impugned order, holding as under: ‘On perusal of the assessment order as well as the Commissioner of Income Tax (Appeals)'s order, we find that the details, such as, the date of (on) which the case was selected for scrutiny as per approval of CCIT are not available in the record of the assessment proceedings. Since it will require investigation into new facts which are not on record, therefore, the additional ground of appeal of the assessee cannot be admitted in view of the decision of the Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd. (supra), hence, we dismiss the additional ground of appeal raised by the assessee.’ The basis of the said dismissal, it is thus clear, he would continue, is its’ finding as to the non-availability of the approval by the CCIT, Bhopal, for selecting the assessee’s return for the relevant year for scrutiny on the record of the assessment proceedings. This is clearly erroneous inasmuch as the said approval had been given by the CCIT, Bhopal (the competent authority) on 28.9.2005, as apparent from the order u/s. 154 dated 29/12/2006, drawing attention to the relevant part thereof, reading as under: ‘The assessee filed the return income on 09-11-04 declaring income of Rs. 1,18,333/-. The return was processed u/s. 143(1) of the I.T. Act on 28-07-05. The case was selected for scrutiny after approval of Hon’ble CCIT, Bhopal. Notice u/s. 143(2) issued on 30-09-05 which was served on 30-9-05. ’ He would then draw our attention to the CBDT Instruction No.10 dated 20/9/2004 (PB pg. 4) which, vide para 4 thereof, provides that the returns of income filed during the financial year (FY) 2004-05 shall be selected for scrutiny within a period of three months from the date of filing the same, and which date in the assessee’s case thus expires on 08.02.2005. On the Bench observing that the date of approval (by the competent authority) is not stated in the sec.154 order (supra), he would MA No 07/Jab/2016 (AY 2004-05) Ashok Kumar Sahu v. AO 3 draw our attention to the Assessing Officer's (AO)(being Income Tax Officer, Ward-1(3), Jabalpur) letter dated 15/12/2017 to the assessee, furnished before the Tribunal in the instant proceedings, which encloses along with the copy of the letter dated 28.9.2005 by the Office of CCIT, Bhopal to the CIT-1, Jabalpur conveying the approval, inter alia, of the assessee’s return for AY 2004-05 for selective scrutiny, admitting though that the assessee did not have the said documents, or even the date of the said approval, with him, either at the time of moving the Tribunal under Rule 11 of the Rules or even at the time of hearing his appeal by it, and had inferred the same to be after 08.02.2005 (i.e., the relevant time limit) on the basis that the events narrated in the sec.154 order (supra), referred to earlier, were in a chronological order. The Tribunal, nevertheless, ought to have, he would argue, called for the assessment record before issuing a finding in the matter, in which case it would not have issued the said finding inasmuch as the documents being now (i.e., in the rectification proceedings) produced before it (being the order u/s. 154 (supra) and the AO’s letter dated 15/12/2017 to the assessee, enclosing along with the communications in the matter by the administrative authorities, i.e., the competent authority as well as, in turn, by the Range head), would show that the approval in the matter was indeed given only on 28/9/2005. This sums up the assessee’s case, also summarized by the Bench during hearing for clarity. 2.2 Sh. Halder, the ld. Sr. DR, would in response submit that there is nothing wrong in the Tribunals dismissing the assessee’s additional ground as inadmissible for want of anything on record to support the assessee’s contention of the approval for scrutiny selection in his case having been accorded in contravention of the Board Instruction No. 10 (supra), rendering the notice u/s. 143(2) dated 30/9/2005 as incompetent, with, rather, the assessee himself admitting (i.e., through his counsel) to be not in the know of the date of the said approval at the relevant time to have raised the Addl. Gd. MA No 07/Jab/2016 (AY 2004-05) Ashok Kumar Sahu v. AO 4 2.3 The hearing was closed at this stage, reserving the order, while making it known that the date of hearing of the appeal by the Tribunal shall be, in any case (refer para 3.8), on 17/2/2022; the matter having been already long delayed, so that no separate notices of hearing shall be sent to the parties. 3. We have heard the parties, and perused the material on record. 3.1 The Bench, per the impugned order, begins by noticing the law in the matter of admission of an additional ground, raising a legal plea for the first time before the Tribunal, with reference to the decision by the Apex Court in National Thermal Power Corporation Ltd. v. CIT [1998] 229 ITR 383 (SC), relied upon before it, reproducing the relevant part thereof, which is as under: ‘Undoubtedly, the Tribunal will have the discretion to allow or not allow a new ground to be raised. But where the Tribunal is only required to consider a question of law arising from the facts which are on record in the assessment proceedings we fail to see why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee.’ (pg. 387) It thus stands clarified by the Apex Court that there was no reason for the Tribunal not to admit the said additional ground where the relevant facts are borne out of the record, if the said admission was necessary to correctly determine the assessee’s tax liability for the relevant year. It is fairly well-settled that the power of the Tribunal to permit any party to the appeal to raise the question of jurisdiction, which goes to the root of the matter and does not involve further investigation into facts, cannot be disputed on a plain reading of r. 11 of the Rules. Further, the relevant facts, either admitted or proved, that can be taken into account for the purpose (of admission and adjudication of the said Ground), are not limited to that on the Tribunal’s record, but would also include that on the assessment file. 3.2 The Tribunal per the impugned order is thus in agreement with the assessee in its’ understanding of the law in the matter. It, however, goes on to not admit the assessee’s additional ground as the relevant facts, such as the date of approval by the CCIT, Bhopal is, as stated, ‘not available in the record of the assessment MA No 07/Jab/2016 (AY 2004-05) Ashok Kumar Sahu v. AO 5 proceedings’. It is this finding by it, resulting in the non-admission of said ground that the assessee challenges before us, claiming it as ‘mistaken’. As it appears, and as given to understand, there is nothing on record to indicate that the Tribunal, prior to arriving at or recording this finding, called for the assessment record, or otherwise had any basis to hold so. Rather, Sh. Halder would, during hearing, admit that the AO could not have issued the notice u/s. 143(2) – which conveys the selection of the assessee’s return of income for being subject to the verification procedure under the Act thereto, without the necessary approval, so that the very fact of the issue of the said notice itself implies that the AO is in receipt of the said approval, revealing its date. This is even otherwise in consonance with the inference arising in law inasmuch as all judicial and official acts are presumed to be regularly performed (sec. 114(e) of the Evidence Act). That being the case, the said approval and, consequently, the date of its grant, ought to be, or presumably so, a part of the assessment record. This would also explain our adverting to the calling of the assessment record by the Tribunal or, alternatively, to the existence of a basis with it, so as to say that the said approval is not available on the record of the assessment proceedings. No doubt, we may add, that the assessee making a claim, which could only be on the basis of the facts on record, ought to have placed the same before the Bench hearing his appeal, and which, where so, would have prevented an adverse order. Be that as it may, there has to be a basis, i.e., something on record, to suggest that the date of approval by the CCIT, Bhopal was not available on the assessment record, for the Tribunal to have said so, and which forms the basis of it deciding in the manner it does, and it’s order cannot be de hors the same. No Court or Tribunal, it is well-settled, can, by its’ action or, as the case may be, non-action, cause prejudice to any party before it. Reference in this context, apart from the legal maxim of actus curiae neminem gravabit, be made to the decision in Honda Siel Power Products Ltd. v. CIT [2007] 295 ITR 466 (SC), wherein the Apex Court held that when prejudice results from an order attributable to the Tribunal’s mistake, error or omission, then it is the duty of the Tribunal to set it right. MA No 07/Jab/2016 (AY 2004-05) Ashok Kumar Sahu v. AO 6 3.3 A perusal of the Tribunal’s record, however, and to our utter surprise, reveals that it had, on 20/5/2015, adjourned the hearing sine die to call the records. The instructions to the assessee by it, to quote from his letter dated 01/4/2016 (furnished on 01/4/2016), were: ‘to place (on record) the record of the assessment proceedings mainly to verify whether the selection of the case in the instant matter being done in conformity of CBDT Instruction No. 10 dated 20/9/2004’. The letter further states that certified copy of the order sheet/s pertaining to the assessment proceedings is being furnished, and which is appended thereto. It does not therefore lie in the mouth of the assessee to state that the assessment record was not called for by the Tribunal in deciding the matter, resulting in an erroneous finding by it and, thus, a prejudice being caused thereto, i.e., a ‘mistake’ within the meaning of s. 254(2) of the Act. In fact, the non-reference by Sh. Mishra to this requisition by the Tribunal, and the compliance thereto by the assessee-appellant during appellate proceedings, while arguing the matter before us, is, in the context of the instant proceedings, most unfortunate; a misrepresentation on the part of the assessee inasmuch as there is (taking advantage of the non-reference by the Tribunal in the impugned order to its’ calling the assessment record in the relevant respect, as well as to the order-sheets furnished by the assessee in response thereto) suppression of material facts, on one hand, and a lackadaisical approach by the Revenue (inasmuch as it is apparent that Sh. Halder, the ld. Sr. DR, had not studied the file), on the other. The conduct of the parties, who are supposed, nay, duty-bound to assist the Bench, is depreciable. Be that as it may, continuing further, an examination of the order-sheets enclosed along with the assessee’s letter dated 01/4/2016, shows the first entry therein to be in respect of the receipt of the directions by the CCIT, Bhopal for selection of the assessee’s case for scrutiny assessment. The same is undated. The next entry is dated 30/9/2005, and relates to the issue of notice u/s. 143(2), fixing the hearing for 18/10/2005. It is therefore clear that the Tribunal’s finding, reproduced hereinabove (para 2.1), alleged as ‘mistaken’, was only upon a perusal of the copy of the said order-sheets – furnished, on the assessee being required by it MA No 07/Jab/2016 (AY 2004-05) Ashok Kumar Sahu v. AO 7 to substantiate his claim, and which is sub silentio the said date. There is thus nothing on record to exhibit the date of the issue of the directions by the CCIT, Bhopal and, equally importantly, inspite the assessment record being called for by, and produced before, the Tribunal, and only with a view to ascertain the said date, being in its’ view, and as the assessee himself contends, vital in deciding the validity of his additional ground and, thus, in admitting it. How could, under the circumstances, one may ask, the impugned order be said to be ‘mistaken’; there being nothing on record, despite the record of the assessment proceedings being called for and, in fact, produced, to exhibit the date of approval by the competent authority, so as to hold it as beyond time? It needs to be borne in mind that the presumption in law, in view of sec. 114(e) of the Evidence Act, would be of the same being in time. The assessee raising a claim, the burden to prove the same was on him, and which he failed to. In fact, the admitted position is that the assessee himself was unaware of the said date, and obtained the same only subsequently on making an inspection of the assessment record, furnishing it in the instant proceedings. 3.4 We may here also clarify that we are conscious that the Tribunal in the impugned order does not refer to its’ calling the record of the assessment proceedings, nor to the order-sheets furnished by the assessee (on 01.4.2016) in response thereto. It instead refers to the assessment order and the first appellate order. It is thus open to be contended that the relevant finding by the Tribunal was issued oblivious of the order-sheets on its’ record. Such an argument could only be considered under review and not rectification proceedings. In fact, when regarded in the conspectus of the case, the argument is presumptuous, if not misconceived. The order-sheets were filed merely two days prior to the date of hearing (04/4/2016), by the same counsel who argued the matter before the Tribunal, and with a view to substantiate the assessee’s case as well as comply with it’s directions. Not referring thereto by the ld. counsel would in fact only be defeative of the assessee’s own case. There is in fact no whisper qua the ld. counsel having failed to bring this fact/ MA No 07/Jab/2016 (AY 2004-05) Ashok Kumar Sahu v. AO 8 material to the notice of the Bench at the time of hearing the appeal. Why, the Bench specifically notes (per the order-sheet entry dated 04/4/2016) that the case is heard only on the additional ground, and (where required) is to be heard on merits by the next Bench. The unmistakable inference that arises is that the order-sheets were referred to during hearing, and the impugned finding by the Tribunal, though adverts only to the orders by the Revenue authorities, it is conscious of and had perused the order-sheets produced before it and referred to during hearing before arriving at the said finding; its’ order being pronounced on the date of hearing itself. Per contra, assuming, i.e., for the sake of argument, that the ld. counsel, who is the same person who represented the assessee in the instant proceedings, had omitted to refer to letter dated 01.4.2016 (supra) as well as to the order-sheets enclosed along with, the same cannot be a part of the Tribunal’s record in terms of rule 18(6) of the Rules. The position that would obtain in such a case is that while the Tribunal required the assessee to substantiate his case with reference to the assessment record, the assessee failed to do so, again resulting in an adverse inference being liable to be drawn. The said contention, therefore, if raised, would be to no effect. 3.5 We are, in view of the foregoing, unable to be persuaded to hold the Tribunal’s relevant finding as ‘mistaken’, or of it having acted without any basis, as contended before us, so as to hold it as so, and direct a recall of the said ground. 3.6 The assessee’s second plea before us, made by adverting to his Gd. 1 before the first appellate authority, reading as: ‘That the whole assessment is illegal.’, i.e., that the Addl. Gd. was in effect also raised in first appeal. And that the Tribunal was therefore (per the impugned order) also incorrect in stating that the said Ground was raised before it for the first time (at para 3 of its’ order), only needs to be stated to be rejected. This, firstly, is an admitted position; the Tribunal stating (at para 3 of its’ order) that the ld. counsel (Sh. Mishra) did not answer on being asked as to why the Addl. Gd. was not raised before the AO or the first appellate authority. In fact, the assessee, by raising this plea, only contradicts himself inasmuch as the law MA No 07/Jab/2016 (AY 2004-05) Ashok Kumar Sahu v. AO 9 referred to and relied upon by him is itself in respect of a Ground raising a point of law for the first time before the Tribunal. Why, as explained during hearing itself, had it been not so, i.e., for the first time, the assessee would have instead raised the Ground of non-adjudication of his said Gd. (by the first appellate authority) before the Tribunal. Further, the said Gd.1 stands disposed of by the said authority by stating that no evidence was brought on record to substantiate the claim (vide para 3 of his order), and which finding was not disputed before the Tribunal. Further still, the said Gd.1 is as vague and ambiguous a ‘Ground’ as can be, which is to be, by definition, as indeed per the relevant rules, specific and definite, conveying the precise point on which the appellant is aggrieved. That is, cannot be regarded as a valid ground. It is in fact this deficiency that stands met by the assessee by raising a specific plea in the matter by way of an Additional Ground before the Tribunal. Finally, the plea is of no consequence as the Tribunal did not decide (i.e., decline admission for raising Addl. Gd.) on that basis, i.e., of the said Gd. having not been raised earlier, so that nothing in fact turns thereon. Rather, taking cognizance of the plea raised before it, it calls for the record of the assessment proceedings having regard to the law in the matter, and decides by adverting to the decision in NTPC Ltd. (supra). The said plea is accordingly dismissed as not maintainable. 3.7 Before parting with this order, we may clarify that we are conscious that the assessee, as apparent from the material on record, as well as fairly admitted by Sh. Mishra before us, was at the time of raising or even arguing his legal ground before the Tribunal, not aware of the date of approval by the competent authority in his case, which only could have led him to validly raise the said Ground before the Tribunal in the first place. This becomes all the more relevant as the notice stands issued and served within the time allowed u/s. 143(2), and admission of a Ground for the first time is subject to it being raised bona fide (NTPC Ltd. (supra)). It is for this reason that the Hon’ble Courts have held that where in an appeal to the first appellate authority, the assessee has not questioned the decision of the assessing MA No 07/Jab/2016 (AY 2004-05) Ashok Kumar Sahu v. AO 10 authority, so that the former has in his order not considered that point, the assessee is not entitled to question the decision of the latter on that point before the Tribunal in an appeal against the order of the former (see, inter alia, Hukumchand & Mannalal Co. v. CIT [1980] 126 ITR 251, 256 (MP)). That is, admission of an additional ground is a matter of discretion of the Tribunal, to be exercised by it judicially per a speaking order. This explains our having not decided the matter arising on this basis; it being apparent that the Tribunal was inclined to admit the Gd. raised, subject of course to the relevant facts being evidenced, and which it found as not. It is, therefore, not open for us, in the rectification proceedings, to question the exercise of the said discretion by the Tribunal. The scope of the rectification proceedings is severely limited, i.e., to examining the existence or otherwise of a ‘mistake’ – which could be of law or of fact or both, stated to imbue the impugned order. That is, the limited purview of the rectification proceedings makes it impermissible to venture into areas other than being canvassed and relevant for deciding the issue of the existence of the said ‘mistake’ and, further, if it had led to any prejudice being caused, so as to, where so, direct an amendment so as to ‘rectify’ the same. Further, it is for this very reason, i.e., the limited scope of the instant proceedings, that we also cannot go into the question of the adequacy or otherwise of the material before the Tribunal to have issued the finding as to the non-availability of the date of approval by the competent authority in the record of the assessment proceedings, which would require an investigation into facts. And, further, if it should have for the purpose, in the facts and circumstances of the case and in law (i.e., considering the presumption in law and the burden of proof thereunder), dwelled further in the matter, as the assessee seems to suggest. These are, it may be appreciated, rectification proceedings and, further, the Tribunal has no power to review its’ order. In fact, even in review, as explained by the Apex Court time and again, it is not permissible for the Hon’ble High Court to interfere with the decision by the Tribunal if it represents a possible conclusion on the basis of the material on record, even if it may have decided differently were it to decide the MA No 07/Jab/2016 (AY 2004-05) Ashok Kumar Sahu v. AO 11 same instead. Also relevant in the matter is the fact that the Tribunal, in so holding, is not deciding the relevant Gd., as raised, but deciding on its admissibility, being raised for the first time before it. 3.8 No other ground was argued before us. However, as observed, the Bench hearing the matter had, vide order sheet entry dated 04/4/2016, clearly stated that the order is heard on the additional ground only, and the appeal on merits shall be heard by the next Bench. That is, it was conscious that in case the assessee is unsuccessful qua the additional ground, the appeal would be heard by; it being a touring Bench, the next Bench. Para 6 of its’ order, accordingly, reads as under: ‘6. In the result, additional ground raised by the assessee, is dismissed.’ In fact, the appeal was posted for hearing subsequent to the impugned order, the last of which was on 14/6/2016, whereat it was adjourned sine die at the request of Sh. Mishra, presumably due to the pendency of the instant MA. The assessee’s other grounds, i.e., as raised per the Appeal Memo, therefore, survive for adjudication, hearing on which would be on 17/2/2022. As the appeal has been by mistake ‘killed’ by the Registry of the Tribunal, it is directed to restore the same in its’ records, and post it on that date before the regular Bench. 3.9 We decide accordingly. 4. In the result, the assessee’s Miscellaneous Petition is dismissed. Order pronounced in the Open Court on February 11, 2022 Sd/- Sd/- (Manomohan Das) (Sanjay Arora) Judicial Member Accountant Member Dated: 11/02/2022 * Aks/Sr. PS MA No 07/Jab/2016 (AY 2004-05) Ashok Kumar Sahu v. AO 12 Copy of the Order forwarded to: 1. The Applicant: Ashok Kumar Sahu, 314, Satna Building, Jabalpur (M.P.) 2. The Respondent: Tax Recovery Officer-1/Income Tax Officer, Ward-1(3), Aaykar Bhawan, Annexe Bldg., Mission Chowk, Napier Town, Jabalpur (M.P.) 3. The Principal CIT-1, Jabalpur 4. The CIT(Appeals)-1, Jabalpur 5. The Sr. DR, ITAT, Jabalpur 6. Guard File // True Copy //