M/S PRINCE PIPES & FITTINGS LTD., MUMBAI V. DY. CIT-7(3)((2), MUMBAI

MA 78/MUM/2022

• Counselvise Citation: [2022] 103 COUNSELVISE.COM (IT) 9318 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 30-10-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 11-08-2022
• Assessment Year: 2012-2013
• Appeal Filed On: 30-03-2022
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Capital asset converted into stock in trade; Depreciation; Tax effect
• Section: 115JB; 80IC; 254(2); 80IC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, MUMBAI BEFORE SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER, AND SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER M.A. no.78/Mum./2022 IN ITA No.1632/Mum./2020 (Assessment Year : 2012–13) M/s. Prince Pipes & Fittings Ltd. The Ruby, 8 th Floor 29, Senapati Bapat Marg Tulsi Pipe Road, Dadar (West) Mumbai 400 028 PAN – AAACP2319J ................ Applicant v/s Dy. Commissioner of Income Tax Circle–7(3)(2), Mumbai ................Respondent Assessee by : Shri K. Gopal a/w Shri Om Kandalkar and Ms. Neha Paranjpe Revenue by : Shri Soumendu Kumar Dash Date of Hearing – 12/08/2022 Date of Order – 31/10/2022 O R D E R PER SANDEEP SINGH KARHAIL, J.M. By way of this Miscellaneous Application under section 254(2) of the Income Tax Act, 1961 ("the Act"), the assessee seeks recall of the order dated 21/09/2021, passed under section 254(1) of the Act by the coordinate bench of Tribunal in assessee’s appeal being ITA no.1632/Mum./2020, for the assessment year 2012–13. M/s. Prince Pipes & Fittings Ltd. M.A. no.78/Mum./2022 Page | 2 2. During the course of hearing, learned Authorised Representative (‘learned AR’) submitted that when the appeal was listed for hearing, the accountant of assessee was under the impression that there would be no tax demand for the year under consideration, since the income was assessed under MAT as per book profit and accordingly, instruction was given to the learned counsel to withdraw the appeal. The coordinate bench of the Tribunal accepting the request made by the learned counsel dismissed the appeal filed by the assessee as withdrawn. The learned AR submitted that subsequently it came to the notice of the assessee that though for assessment year 2012–13, there is no tax effect, however, withdrawal of the appeal would impact the subsequent year taxes as unabsorbed depreciation carried forward from previous year is to be set off against the future income. In support of its submissions, learned AR also placed on record affidavit sworn by Shri Parag Patil, Employee and Financial Accountant, of the assessee company. Accordingly, learned AR prayed for recall of order dated 21/09/2021 passed by the coordinate bench of the Tribunal. 3. On the other hand, learned DR vehemently opposed the prayer for recall of the order and submitted that there is nothing available on record to show any mistake apparent from record. 4. We have considered the rival submissions and perused the material available on record. As is evident from the order dated 24/09/2021, during the course of hearing of appeal before coordinate bench of the Tribunal, learned representative for the parties made following submissions: M/s. Prince Pipes & Fittings Ltd. M.A. no.78/Mum./2022 Page | 3 “2. At the outset, learned counsel for the assessee submitted that the major issue concerning disallowance of deduction under section 80IC of the Income Tax Act, 1961 has become academic as the Assessing Officer (AO) has ultimately computed the income of the assessee under section 115JB of the Act. Thus, she submitted, the issue of deduction under section 80IC of the Act has become irrelevant in the context of computation of book profit under section 115JB of the Act. Therefore, on instructions, she made a request for withdrawal of the present appeal. The learned Departmental Representative did not express any objection to the aforesaid request of the assessee.” 5. Accordingly, coordinate bench of the Tribunal vide order dated 21/09/2021 permitted the assessee to withdraw the appeal and as a result, the appeal was dismissed as withdrawn. By way of present miscellaneous application, assessee has submitted that as the accountant of assessee was under the belief that there is no tax demand, for the year under consideration, the appeal before the Tribunal was withdrawn and accordingly learned counsel appearing for the assessee was instructed. However, subsequently it came to the notice of the assessee that withdrawal of the appeal, for the year under consideration, would impact the subsequent years’ tax liability. In support of its submissions the assessee has also filed an affidavit dated 23/04/2022 sworn by an employee and financial accountant of the assessee company, who claims to have instructed the learned counsel to withdraw the appeal at the time of hearing. From the perusal of record, we find that neither assessee nor the learned counsel appearing on its behalf filed any letter seeking withdrawal of the appeal. Learned AR also confirmed the fact that the appeal was withdrawn at the oral prayer of the learned counsel and the accountant had also orally instructed the learned counsel to withdraw the appeal. M/s. Prince Pipes & Fittings Ltd. M.A. no.78/Mum./2022 Page | 4 6. In support of its submissions, the learned AR placed reliance upon decision of Hon’ble Delhi High Court in Federal Mogul Goetze (India) Ltd. vs ACIT, (2022) 215 DTR (Del) 107, wherein the Hon’ble Court accepted the plea of the taxpayer that where appeal has been withdrawn by the counsel for the reason that certain issue stood resolved, which in fact were outstanding and need to be adjudicated, the Tribunal has the power under section 254(2) of the Act to recall such an order. As is evident from the record, in the present case, the learned counsel acted on the instructions of the assessee to withdraw the appeal and it is not a case where due to inadvertent error on part of the counsel the appeal was withdrawn. Therefore, the aforesaid decision relied upon by the learned AR is factually distinguishable. 7. We find that in Jayant D. Sanghavi vs ITAT, [2017] 295 CTR 229 (Bom.), while dealing with facts wherein appeal of the assessee was allegedly withdrawn on the basis of advice of the Advocate and issue arose regarding the power of the Tribunal under section 254(2) of the Act, the Hon’ble jurisdictional High Court observed as under: “9. In the present facts there is nothing on record in the form of the Advocates letter, etc. to indicate that the petitioner acted upon his legal advise and the same was wrong. Therefore, whether the petitioner acted on advise of his Advocate or not is itself a subject matter of debate. Thus taking the application outside the scope of Section 254(2) of the Act.” 8. There is nothing available on record to show that assessee’s instruction to the learned counsel was based on any wrong advice. Further, there is nothing available on record to show that the instruction given by the deponent of aforesaid affidavit is solely on his own volition or after discussion with the M/s. Prince Pipes & Fittings Ltd. M.A. no.78/Mum./2022 Page | 5 other team members. It is also not the claim of the assessee that the deponent of aforesaid affidavit was not authorized by the assessee company to give instructions to the concerned counsel. Therefore, in the present case, on the basis of material available on record, which was present at the time of deciding the appeal, it cannot be said that there is any mistake apparent from the record to justify the invocation of provisions of section 245(2) of the Act. Thus, we find no merits in the miscellaneous application filed by the assessee. Accordingly, the same is dismissed. 9. In the result, Miscellaneous Application by the assessee is dismissed. Order pronounced in the open Court on 31/10/2022 Sd/- OM PRAKASH KANT ACCOUNTANT MEMBER Sd/- SANDEEP SINGH KARHAIL JUDICIAL MEMBER MUMBAI, DATED: 31/10/2022 Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The CIT(A); (4) The CIT, Mumbai City concerned; (5) The DR, ITAT, Mumbai; (6) Guard file. True Copy By Order Pradeep J. Chowdhury Sr. Private Secretary Assistant Registrar ITAT, Mumbai