Sandar Medicaids P. Ltd, Hyderabad V. DCIT Circle 3(1), Hyderabad

MA 81/HYD/2011

• Counselvise Citation: [2011] 123 COUNSELVISE.COM (IT) 6620 (ITAT-HYDERABAD)
• Duration Of Justice: 1 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 23-06-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 23-05-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MRS NIVEDITA BISWAS
• Assessee Lawyers: K L RATHI
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI G.C. GUPTA, VICE PRESIDENT & SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER M.A. NO. 81/HYD/2011 (ARISING OUT OF I.T.A. NO. 1403/HYD/2010) ASSESSMENT YEAR : 2005-06 M/S. SANDOR MEDICAIDS PVT. LTD., HYDERABAD PAN: AADCS4168H V S. DY. CIT, CIRCLE - 3(1) HYDERABAD APPL IC ANT RESPONDENT APPELLANT BY: MR. K.L. RATHI RESPONDENT BY: MRS. NIVEDITA BISWAS O R D E R PER CHANDRA POOJARI, AM: THIS MISCELLANEOUS APPLICATION IS BY THE ASSESSEE SEEKING THE RECTIFICATION IN THE ORDER OF THIS TRIBUNAL DATED 21 ST APRIL, 2011 IN I.T.A. NO. 1403/HYD/2010 FOR ASSESSMENT YEAR 2005-06. 2. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE RAISED THE GROUND WITH REGARD TO DISALLOWANCE OF SALES TAX OF RS. 2,73,735 WHICH WAS DISMISSED BY THE TRIBUNAL WITHOUT CONSIDERING THE ARGUMENTS OF THE COUNSEL. ACCORDING TO HIM IT IS ESTABLISHED THAT DIRECT SALES TAX LIABILITY IN RESPECT OF RS. 2,73,375/- IS OF THE ASSESSEES CONSIGNMENT AGENT WHO IS ASSESSABLE IN RESPECT OF THE TURNOVER PERTAINING TO THE ASSESSEE. IF THE ASSESSEE WAS DIRECTLY ASSESSED TO S ALES TAX ON THIS TURNOVER (WHICH IN FACT IS BEING ASSESSED IN THE HANDS OF CONSIGNMENT AGENT M/S. SANDOR HEALTH CARE PVT. LTD.) THE ASSESSEE WOULD HAVE BEEN DEFINITELY LIAB LE TO M.A. NO. 81/HYD/2011 M/S. SANDOR MEDICAIDS PVT. LTD. ======================== 2 THE PAYMENT OF THE SAME TO SALES TAX DEPARTMENT, BUT SINCE THE TURNOVER IN RESPECT OF ASSESSEES GOODS IS THROUGH CONSIGNMENT AGENT OBVIOUSLY THE SAME IS ASSESSABLE IN THE HANDS OF THE CONSIGNMENT AGENT AND I N TURN AS PER ACCOUNTING PRACTICE IT WILL RAISE THE DEMA ND AGAINST THE ASSESSEE AND IN SUCH CASE THE ONLY COURSE IS BY ADJUSTMENT ENTRIES. THEREFORE, IT ESCAPED THE NOTICE OF THE TRIBUNAL THAT M/S. SANDOR HEALTH CARE PVT. LTD., IS BEING ASSESSEES CONSIGNMENT AGENT, WHO IS LIABLE FOR PAYMENT OF SALE TAX OF RS. 2,73,375/- TO SALES TAX DEPARTMENT AND WHO WILL BE RE-COMPENSATED BY RAISING THE BILL AGAINST THE ASSESSEE TOWARDS THE DISCHARGE OF SAID SALES TAX LIABILITY RAISED BY SALES TAX DEPARTMENT AGA INST HIM. 3. ACCORDING TO THE LEARNED COUNSEL FOR THE ASSESSEE, THE ROLE OF CONSIGNMENT AGENT HAS TO BE TAKEN INTO CONSIDERATION IN THE MATTER OF PAYMENT OF SALES TAX TO TH E SALES TAX DEPARTMENT AND IF SO CONSIDERED, OBVIOUSLY THE ASSESSEE IS DISCHARGING THE DEBT TO THE CONSIGNMENT AGENT, AS THE LIABILITY IS PAID BY CONSIGNMENT AGENT AN D HE DID PAY AS IS EVIDENT FROM THE ACCOUNT COPY OF CONSIGNMENT AGENT AS GIVEN AT PAGE 16 OF THE PAPER BOO K. IT IS WORTH NOTING THAT THE CONSIGNMENT AGENT I.E., SANDOR HEALTH CARE PVT. LTD., HAS PAID THIS ENTIRE AMOUNT BY ACCOUNT PAYEE CHEQUES AND THESE DETAILS ARE GIVEN IN T HE EXTRACT OF SALES TAX ACCOUNT OF SANDOR HEALTH CARE PVT. LTD., AT PAGE 16 OF MATERIAL PAPER BOOK SO ALSO COPY OF FORM 3CD MENTIONING THE PAYMENT AT CLAUSE 21(I) (PAGE 6 OF MATERIAL PAPER BOOK) WAS FILED WITH RETURN OF INCOM E M.A. NO. 81/HYD/2011 M/S. SANDOR MEDICAIDS PVT. LTD. ======================== 3 ITSELF. THUS THE DATE, CHEQUE NO. AND THE NAME OF THE BANK, AND BRIEF DESCRIPTION OF THE SALES-TAX PERTAININ G TO EITHER 2002-03 OR 2003-04 AGAINST EACH CHEQUE SO ISSU ED IS MENTIONED. IN THE CIRCUMSTANCES THE OBSERVATION OF TRIBUNAL THAT QUERY RAISED ABOUT PROOF OF PAYMENT WAS REPLIED IN EVASIVE WAY IS VERY MUCH WRONG INASMUCH AS THE APPELLANT MORE RELIED ON THE POINT THAT POWER U/S. 154 CANNOT BE EXERCISED AS IT IS DEBATABLE ISSUE AND O N THAT GROUND ITSELF THE ORDER U/S. 154 SHOULD BE STRUCK DOWN APART FROM THE FACT THAT FORM 3CD WHICH WAS FILED WITH THE RETURN OF INCOME ALONG WITH COMPLETE DETAILS OF PAYMENT OF SALES TAX WAS PART OF THE RECORD. THEREFORE , IT WAS GENUINELY THAT THAT THE HONBLE TRIBUNAL WILL LOOK I NTO THE SALES TAX ACCOUNT OF CONSIGNMENT AGENT AND FORM 3CD AND WILL BE CONVINCED THAT ALL PAYMENTS WERE BY ACCOUNT PAYEE CHEQUES, HENCE QUESTION OF EVASIVE REPL Y DOES NOT ARISE, AND THE ASSESSEE HUMBLY SUBMITS THAT TH E SALES TAX ACCOUNTS AND FORM 3CD SEEMS TO HAVE ESCAPED THE NOTICE OF THE TRIBUNAL. 4. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE CASE IS NOT AT ALL COVERED BY PROVISIONS OF SECTIO N 154. THE ASSESSEE ALSO FILED COPY OF CLASSIC SUPREME COU RT JUDGEMENT IN ITO V. VOKART BROTHERS AND OTHERS (PAGE 2 0 & 21 OF THE MATERIAL PAPER BOOK) WHERE THE HONBLE SUPREME COURT HAS VERY CLEARLY HELD THAT THE MISTAKE APPARENT FROM RECORD MUST BE OBVIOUS AND PATENT MISTAKE AND NOT SOMETHING WHICH CAN BE ESTABLISHED BY A LONG PROCESS OF REASONING. NOW THROUGH THIS PETITION THE ASSESSEE BEGS THE HONBLE TRIBUNAL TO RECTIFY THE MISTA KE M.A. NO. 81/HYD/2011 M/S. SANDOR MEDICAIDS PVT. LTD. ======================== 4 PERTAINING TO THE DATES OF PAYMENT OF SALES TAX BY CONSIGNMENT AGENT WHICH WERE PAID BY ACCOUNT PAYEE CHEQUES AND ALSO FROM THE POINT OF VIEW THAT THE PROVISIONS OF SECTION 154 CANNOT BE PRESSED IN THE KIN D OF SITUATION. 5. THE LEARNED DR RELIED ON THE ORDER OF THE TRIBUNAL. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD AS WELL AS THE ORDER OF THE TRIBUN AL IN I.T.A. NO. 1403/HYD/2010 DATED 21 ST APRIL, 2011. THE LEARNED COUNSEL FOR THE ASSESSEE WHILE ARGUING THE IS SUE BEFORE US MUCH DWELL UPON THE PAPER BOOK PAGE NO. 1 6 WHICH REPRESENT THE SALES TAX ACCOUNT IN THE BOOKS OF SANDOR HEALTH CARE PVT. LTD. (SHCPL FOR SHORT). WE FI ND IN THIS ACCOUNT A JOURNAL ENTRY ON 31.3.2005 DEBITING SMPL ACCOUNT AND CREDITING SALES TAX ACCOUNT IN THE BOOKS OF SHCPL AT RS. 2,73,735. SIMILARLY IN THE BO OKS OF SANDOR MEDICAIDS PVT. LTD. (SMPL FOR SHORT) ON 31.3.20 05 A JOURNAL ENTRY WAS PASSED DEBITING THE SALES TAX ACCOU NT AND CREDITING SHCPL ACCOUNT FOR RS. 2,73,735. BY THES E TWO ENTRIES THE ASSESSEE TRIED TO DEMONSTRATE THAT THE AMOUNT OF RS. 2,73,735 WAS ACTUALLY PAID BY THE CONCERNED PARTY BEFORE DUE DATE AS PROVIDED U/S. 43 B OF THE INCOME-TAX ACT, 1961 AND MORE SO, THIS PROVISION I S NOT AT ALL APPLICABLE TO THE ASSESSEE. THIS ASPECT WAS ACTUALLY CONSIDERED BY THE TRIBUNAL IN ITS ORDER AT PAR A 11 AND GIVEN THE FINDINGS. NOW THE ASSESSEE WANTS TO RE - ARGUE ITS CASE BEFORE US. THE PROVISIONS OF SECTION 254(2) DO NOT PROVIDE FOR RE-ARGUMENT AND REVIEW OF THE EARLI ER ORDER OF THE TRIBUNAL. THE SCOPE AND AMBIT OF SECTION M.A. NO. 81/HYD/2011 M/S. SANDOR MEDICAIDS PVT. LTD. ======================== 5 254(2) IS VERY LIMITED. IT IS LIMITED TO RECTIFICATION O F MISTAKES APPARENT FROM RECORD BUT TO REVIEW OR RECALL THE ORDER IS NOT PERMISSIBLE U/S. 254(2) IF NECESSITATING RE- HEARING OR RE-ADJUDICATION OF THE ENTIRE SUBJECT MATTER OF APPEAL AND THE DISPUTE AFTER BEING PUT FOR RE-HEARING NO LONGER REMAINS RESTRICTED TO ANY MISTAKE SOUGHT TO BE RECTIFIED. 7. THE TRIBUNAL CANNOT GO INTO THE MERIT OF THE APPEAL ALL OVER AGAIN. IT IS, NOT WITHIN THE SCOPE OF AN APP LICATION FOR RECTIFICATION TO RE-ARGUE THE CASE AND AVAIL OF A FURTHER CHANCE WHERE THERE IS NO MISTAKE APPARENT ON THE FACT O F RECORD. THERE MAY BE ERROR OF JUDGEMENT IN THE ORDER OF THE TRIBUNAL. THAT DOES NOT GIVE THE POWER TO THE TRIBUNAL TO RECTIFY THE SAME. IF THERE IS AN ERROR O F JUDGEMENT THE REMEDY LIES ELSEWHERE. UNDER THE GARB RECTIFICATION THE TRIBUNAL CANNOT EXERCISE POWERS OF R EVIEW AND AS SUCH THE TRIBUNAL CANNOT CONSIDER THIS APPLICATI ON FILED BY THE ASSESSEE. THE PROVISIONS OF SECTION 254 (2) OF THE ACT ARE NOT SIMILAR TO THOSE OF REVIEW UNDER CODE OF CIVIL PROCEDURE AND HENCE THE TRIBUNAL CANNOT RECALL THE EARLIER ORDER OF THE TRIBUNAL IN THIS CASE WITH A VIEW TO PASS A FRESH ORDER. THE TRIBUNAL WHILE PASSING THE EARLIER ORDER CONSIDERED THE MERIT OF THE CONTENTIONS URGED BE FORE IT AND ARRIVED AT A REASONABLE CONCLUSION. THAT CONCLUSION IS FINAL AND THE TRIBUNAL HAS NO INHERENT AUTHORITY TO REVIEW ITS DECISION IN THE LIGHT OF THE NEW ARGUMENT BEFORE THE TRIBUNAL. IN OUR OPINION, THE ASSESSEES COUNSEL HEREIN WANTS TO REVIEW OF EARLIER ORDER OF THE TRIBUNAL AND IT IS NOT OPEN TO THE TRIBUNAL TO REV IEW M.A. NO. 81/HYD/2011 M/S. SANDOR MEDICAIDS PVT. LTD. ======================== 6 ITS ORDER. IT IS NEEDLESS TO SAY THAT THE TRIBUNAL HAS CONSIDERED THE ENTIRE ARGUMENT OF THE LEARNED COUNSEL FOR THE ASSESSEE AND CASE LAWS CITED BY HIM AT THE TIME OF DISPOSING OF THE CASE. NOW IT IS NOT POSSIBLE TO RE- APPRECIATE THE SAME. ACCORDINGLY ON THE SET OF FACTS A ND CIRCUMSTANCES OF THE CASE, WE DO NOT FIND ANY MERIT IN THE ARGUMENT OF THE ASSESSEES COUNSEL. 8. IN THE RESULT, THE MA FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD JUNE, 2011. SD/- (G.C. GUPTA) VICE PRESIDENT SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED THE 23 RD JUNE, 2011 TPRAO COPY FORWARDED TO: 1. M/S. SANDOR MEDICAIDS PVT. LTD., C/O. SHRI K.L. RATHI, ADVOCATE, 3-5-144/5, EDEN GARDEN, HYDERABAD-1. 2. THE DCIT, CIRCLE-3(1), HYDERABAD. 3. THE CIT(A)-IV, HYDERABAD 4 THE CIT-III, HYDERABAD 5. THE DR A BENCH, ITAT, HYDERABAD