Sri Adichunchungiri Sikshana Trust, Bangalore V. Assistant Commissioner of Income Tax Central Circle-2(4), Bangalore

MA 72/BANG/2021

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 7573 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 13 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 25-11-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 12-08-2021
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Bonafide belief; Additional evidence; Set aside
• Section: 254(2); 113

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE-PRESIDENT AND SHRI B. R. BASKARAN, ACCOUNTANT MEMBER MP Nos.70 to 76/Bang/2021 (in ITA Nos.3007, 3028 to 3033/Bang/2018 and CONos.147 to 153/Bang/2018) Assessment Years : 2007-08 to 2013-14 Sri Adichunchunagiri Shikshana Trust, 1 st B Main, Vijayanagar, Bengaluru. PAN : AAATS 3584 P Vs. ACIT, Central Circle – 2(4), Bengaluru. Applicant by:Shri. L. Bharath, CA Respondent by :Shri. Dilip, Junior Standing Counsel for Department. Date of hearing:26.11.2021 Date of Pronouncement:26.11.2021 O R D E R Per N.V. Vasudevan, Vice-President: These are a Miscellaneous Petitions (MPs) filed by the assessee under section 254(2) of the Income Tax Act, 1961 (hereinafter called ‘the Act’) praying for rectification/recalling of the order dated 22.2.2021 of the Tribunal passed in the aforesaid appeal on the ground that the said order suffers from mistake apparent on record which requires to be rectified. 2. In a group of about 83 appeals, of which the appeal of the assessee was also one of the appeals, the Revenue has requested by way of an additional ground that the orders impugned in those appeals should be held to be orders passed without proper jurisdiction and should be set aside and remanded to the CIT(A) for decision afresh by the CIT(A) with competent jurisdiction. It has been stated in the application for raising additional grounds that the various MP Nos.70 to 76/Bang/2021 (in ITA Nos.3007, 3028 to 3033/Bang/2018 and CO Nos.147 to 153/Bang/2018) Page 2 of 10 assessees filed appeal before the Commissioner of Income Tax (Appeals) - 11, against the order of assessment. The CIT(A)-11, Bangalore passed orders in those appeals disregarding the directions dated 18.6.2018 by the Director General of Income Tax, (Investigation), Karnataka & Goa, Bengaluru, whereby the CIT(A)-11 was directed not to pass any further appellate orders during pendency of the explanation sought on the lapses in adjudicating appeals. It was the further plea of the revenue that by notification dated 16.07.2018, issued u/ s.120 of the Act, by the Principal Chief Commissioner of Income Tax, Karnataka & Goa, the appeals pending before Commissioner of Income Tax (Appeals) - 11 were transferred to Commissioner of Income Tax (Appeals) - 12, Bengaluru. It was the case of the revenue that Commissioner of Income Tax (Appeals) - 11 disregarding the directions issued by the Principal CCIT, has passed orders that were impugned in all the 83 appeals. It was the plea of the revenue that all the orders impugned in the 83 appeals were passed after 18.6.2018 and before 16.7.2018 and are therefore those orders are to be considered as orders passed without jurisdiction and on that ground are liable to be set aside. 3. The Tribunal in its order 22.2.2021, accepted the plea of the revenue and held that the action of then Ld CIT(A)-11 in ignoring the binding directions given by DGIT and proceeding to pass orders results serious lapse on his part in administering justice. The Tribunal held that all the orders impugned in the 83 appeals were passed between 18.6.2018 and 16.7.2018 the interests of revenue is prejudiced by the said action of the then Ld CIT(A)-11. The Tribunal therefore set aside the orders of the CIT(A) to the respective jurisdictional CIT(A) to decide the appeals MP Nos.70 to 76/Bang/2021 (in ITA Nos.3007, 3028 to 3033/Bang/2018 and CO Nos.147 to 153/Bang/2018) Page 3 of 10 afresh in accordance with law after due opportunity of hearing to the parties. The additional grounds of appeal were accordingly allowed. In view of the aforesaid conclusion, the issues on merits raised by the appellants in their appeal do not require any consideration. All the appeals and cross objections were treated as allowed for statistical purpose. In the aforesaid order of the Tribunal, the Tribunal came to the conclusion that the impugned order of the CIT(A) was passed after the date on which the CIT(A) was divested of his powers to act as CIT(A) and therefore the order of the CIT(A) was set aside and the issues raised in the various appeals by the different assessees before the CIT(A) were directed to be decided afresh by the jurisdictional CIT(A), after affording assessee opportunity of being heard. 4. In this MP, it has been contended by the assessee that at the time of hearing held on 02.02.2021, the Counsel of the assessee objected to the admission of additional grounds on the ground that facts with regard to additional ground were not on record and in such circumstances, additional evidence should not be admitted and he had relied on decided cases in this regard and these were not considered by the Tribunal. We find that the Tribunal in paragraph 6 of the order has noted the argument of Mr.Nagin Khincha, CA who appeared for the Assessee and has rejected the same and found has admitted the additional ground for adjudication and hence, there is no mistake much less mistake apparent on the face of the order. 5. It has been further alleged in the MP that the Assessee had relied on decision of Hon’ble Supreme Court in the case of CIT Vs. Green World MP Nos.70 to 76/Bang/2021 (in ITA Nos.3007, 3028 to 3033/Bang/2018 and CO Nos.147 to 153/Bang/2018) Page 4 of 10 Corporation, SLP (Civil) No.1789 of 2007 wherein it was held that when statute provides for different hierarchies providing for forums in relation to passing an order as also appellate or original order, higher authority cannot interfere with the independence which is the basic feature of any statutory scheme involving adjudicatory process. It has also been alleged that detailed submissions made on 10.2.2021 were not considered and hence non consideration of the submissionis vitiates the order passed by the Tribunal. 6. Further it has also been contended that the Assessee was under the bonafide belief that the hearing was restricted to only admission of additional grounds and not on the merits of the additional grounds and therefore the assessee was not given opportunity of being heard by the Tribunal. In our opinion, the contention is devoid of any merit. All the 83 appeals were consolidated and posted for hearing. On 24.9.2019 the standing counsel for the department was asked to furnish the copy of additional grounds, copy of order dated 18.6.2018 and copy of order dated 16.7.2018. Thereafter the case was adjourned from time to time and on 20.1.2020, the standing counsel was informed that the case would be adjourned to 10.2.2020 and no further time would be granted. On 10.2.2020, the concerned bench did not function and hence the appeals were adjourned to 15.6.2020 and thereafter to 7.10.2020 and 23.11.2020 and 11.1.2021. The case was thereafter adjourned to 2.2.2021 and was heard. The presence of counsels for various assesses have been noted in the order in the respective appeals. In fact arguments were advanced by the parties on the admissibility as well as merits of the additional ground. There is no basis for the learned counsel for the assessee to presume that he was under the bonafide belief that MP Nos.70 to 76/Bang/2021 (in ITA Nos.3007, 3028 to 3033/Bang/2018 and CO Nos.147 to 153/Bang/2018) Page 5 of 10 the hearing was confined only to admission of additional grounds of appeal. It is therefore incorrect to say that there was no opportunity of being heard afforded to the assessee. 7. As far as the contentions in paragraph-5 of this order raised in the MP is concerned, it is necessary to look at paragraph-7 to 9 of the Tribunal’s order: “7. We have given a very careful consideration to the rival submissions.It is undisputed that the impugned orders in all the appeals were passed after 18.6.2018 order dt.18.6.2018 by which Director- General of Income Tax (Investigation), Karnataka and Goa, Bengaluru, directed the then CIT(A)-11, Bengaluru, not to pass any further appellate orders during pendency of the explanation sought on the lapses in adjudicating the appeals. The CIT(A) had no jurisdiction to pass any orders in appeal on or after the aforesaid date. The order passed by him contrary to the directions of the superior officer cannot be said to be an order passed by a person having proper jurisdiction. The CBDT in its instruction dated 8.3.2018 (F.No.DGIT (Vug.)/HQW/SI/Appeals/2017-18/9959) has in paragraph-7 thereof instructed all Chief Commissioners of Income Tax to conduct regular inspections of the CIT(Appeals) working under them and keep a watch on the quality and quantity of orders passed by them. The instructions further lay down that failure on the part of the Chief Commissioners of Income Tax to do so would be viewed adversely by the CBDT. 8. We notice that the instruction so issued by CBDT places responsibility upon the Chief Commissioners to ensure the quality of the orders passed by CIT(A). The purpose, obviously, is to ensure that the Appellate Commissioners pass quality orders, while achieving the quota fixed for them. The Ld Standing Council submitted that the Director General of Income tax, Investigation, Karnataka & Goa, has issued a direction dated 18/06/2018 to the then CIT(A)-11 not to pass any further appellate orders, as he received certain information about the orders passed by the then CIT(A)-11. Admittedly, the above said direction has been defied by the then CIT(A) and he has proceeded to pass orders. There should not be any dispute that the instructions issued by CBDT are binding on all the income tax officials. The Ld MP Nos.70 to 76/Bang/2021 (in ITA Nos.3007, 3028 to 3033/Bang/2018 and CO Nos.147 to 153/Bang/2018) Page 6 of 10 Standing Council submitted that non-compliance with directions given by DGIT in compliance with the instruction issued by CBDT would cause prejudice to the revenue. Accordingly he submitted that the orders passed by the then Ld CIT(A)-11 after 18/06/2018 results in serious lapse on the part of the then Ld CIT(A)-11, as the same violates the binding directions given by DGIT. Accordingly he contended that all the impugned orders are liable to be quashed. 9. According to Ld Standing Counsel for the revenue, there is prima facie material on record to show that the orders purported to have been passed after 18.6.2018 and prior to 16.7.2018 were pre dated, which he offered to submit it in sealed cover. Though we declined to look into it, yet, considering the conduct of the then Ld CIT(A)-11, the stand taken by the revenue appears to be probable. In any case, the very action of then Ld CIT(A)-11 in ignoring the binding directions given by DGIT and proceeding to pass orders results serious lapse on his part in administering justice. We also notice that all the orders impugned in these appeals have been passed between 5.7.2018 and 13.7.2018, numbering around 50 orders, involving different Assessees and different issues, which is difficult task for any appellate authority. Hence we agree with the submission of Ld Standing Counsel that the interests of revenue is prejudiced by the said action of the then Ld CIT(A)-11. All these factors, in our view, would vitiate the appellate orders passed by him after 18-06-2018, even if the allegation of pre- dating of orders is not accepted/proved. Hence the impugned orders, in our view, is not curable and sustainable in the eyes of law.” 8. It can be seen from the aforesaid paragraph 7 to 9 of the order of the Tribunal, the Tribunal took the view that CBDT in Instruction No.20/2003 all Chief Commissioners of Income Tax shall conduct regular inspections of the CIT(Appeals) working under them and keep a watch on the quality and quantity of orders passed by them. The instructions further lay down that failure on the part of the Chief Commissioners of Income Tax to do so would be viewed adversely by the CBDT. The Tribunal held that the said directions which are binding on all revenue authorities is also a factor which compelled MP Nos.70 to 76/Bang/2021 (in ITA Nos.3007, 3028 to 3033/Bang/2018 and CO Nos.147 to 153/Bang/2018) Page 7 of 10 the DGIT(Investigation) to pass order dated 18.6.2018. Therefore the decision of the tribunal is based on facts of the case. As can be seen from the conclusion of the Tribunal in paragraph-7 to 9, the tribunal agreed with the contention of the revenue that non-compliance with directions given by DGIT in compliance with the instruction issued by CBDT would cause prejudice to the revenue. The tribunal also took note of the fact that all the orders impugned in the group of appeals have been passed between 18.6.2018 and 13.7.2018, numbering around 50 orders (83 appeals), involving different Assessees and different issues, which is difficult task for any appellate authority. Hence the tribunal agreed with the submission of Ld Standing Counsel that the interests of revenue is prejudiced by the said action of the then Ld CIT(A)-11. All these factors were cumulatively taken into account by the Tribunal in coming to a conclusion that the impugned orders were vitiated and the appellate orders passed after 18-06-2018 were invalid in the eyes of law. The above conclusions of the tribunal cannot be challenged in an application u/s.254(2) of the Act under the garb of pointing out a mistake apparent on the face of the record. 9. It has also been submitted that the case laws cited is not applicable to the assessee’s case. Even this submission is outside the purview of application under section 254(2) of the Act as it cannot be said that there is mistake apparent on the face of the record. In an MA under section 254(2) of the Act, the assessee cannot seek to reargue the appeal. The Tribunal does not have power to review its own orders. The scope of powers under section 254(2) of the Act is only to correct the mistakes that are apparent on the face of the record. The objections raised by the assessee in this MP cannot be said to be mistakes apparent on the face of the record. The assessee cannot reargue the MP Nos.70 to 76/Bang/2021 (in ITA Nos.3007, 3028 to 3033/Bang/2018 and CO Nos.147 to 153/Bang/2018) Page 8 of 10 matter and seek review of the order of the Tribunal. The provisions of section 254(2) of the Act can be invoked for the mistakes which are glaring in nature and can be pointed from the face of the order. The mistakes which require application of mind and long drawn process to arrive at the conclusion cannot amount to apparent mistake. If these types of mistakes are considered as apparent from record then it would lead to review the order. In this regard we find support & guidance from the judgment of Hon'ble Delhi High Court in the case Smt. Baljeet Jolly Vs. CIT reported in 113 taxman 38 wherein it was held as under: "A bare look at section 254(2) makes it clear that a 'mistake apparent from the record' is rectifiable. In order to attract the application of section 254(2), the 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) makes it clear that only amendment to the order passed under section 254(1) is permissible where it is brought to the notice of the Tribunal that there is any mistake apparent from the record. Amendment of an order does not mean obliteration of the order originally passed and its substitution by a new order. What the assessee intended, to do in the instant case was precisely the substitution of the order, which was not permissible under the provisions of section 254(2) and, therefore, the Tribunal was justified in holding that there was no mistake apparent on the face of the record. 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 mistake. 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 Apex MP Nos.70 to 76/Bang/2021 (in ITA Nos.3007, 3028 to 3033/Bang/2018 and CO Nos.147 to 153/Bang/2018) Page 9 of 10 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." 10. In this case, the order was passed by the CIT(A)-11 on 17.7.2018 and admitted position is that that by notification dated 16.07.2018, issued u/ s.120 of the Act, by the Principal Chief Commissioner of Income Tax, Karnataka & Goa, the appeals pending before Commissioner of Income Tax (Appeals) - 11 were transferred to Commissioner of Income Tax (Appeals) - 12, Bengaluru. Therefore, in the present case, the assessee cannot have any grievance whatsoever as the impugned order suffers from an irregularity which is not curable and the Tribunal has therefore adopted the right course by setting aside the impugned order. We do not find any mistake in the order which is apparent on the face of the record. Accordingly, this MPs are devoid of any merit and is liable to dismissed. 11. In the result, the miscellaneous petitions are dismissed. Pronounced in the open court on the date mentioned on the caption page. Sd/- Sd/- Bangalore, Dated: 26.11.2021. /NS/* (B. R. BASKARAN) (N. V. VASUDEVAN) Accountant Member Vice President MP Nos.70 to 76/Bang/2021 (in ITA Nos.3007, 3028 to 3033/Bang/2018 and CO Nos.147 to 153/Bang/2018) Page 10 of 10 Copy to: 1.Appellants2.Respondent 3.CIT4.CIT(A) 5.DR6.Guard file By order Assistant Registrar, ITAT, Bangalore.