RAVIKUMAR DHANDHANIA, SALEM V. ITO WARD 1 (4), SALEM

MA 85/CHNY/2022

• Counselvise Citation: [2023] 102 COUNSELVISE.COM (IT) 0969 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 2 month(s) 8 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 05-10-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 05-10-2023
• Assessment Year: 2007-2008
• Appeal Filed On: 27-07-2022
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 263; 271(1)(c); 254(2); 2(A)

Judgement Text

आयकर अपीलीय अिधकरण, ‘ए’ ᭠यायपीठ, चे᳖ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI ᮰ी वी दुगाᭅ राव, ᭠याियक सद᭭य एवं ᮰ी मंजुनाथ. जी, लेखा सद᭭य के समᭃ BEFORE SHRI V. DURGA RAO, HON’BLE JUDICIAL MEMBER AND SHRI MANJUNATHA. G, HON’BLE ACCOUNTANT MEMBER Misc. Application No. 85/Chny/2022 [In ITA No. 1793/Chny/2018] (िनधाŊरणवषŊ / Assessment Year: 2007-08) Ravikumar Dhandania, No. 17-F, Rajaji Road, Salem – 636 007. [PAN: ACGPD-9374-E] v. ITO, Ward-1(4), Salem – 636 007. (ᮧाथᭅक /Petitioner) (ᮧ᭜यथᱮ/Respondent) ᮧाथᭅक कᳱ ओरसे/ Petitioner by : Shri. I. Dinesh, Advocate ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : Shri. G. Suresh, JCIT सुनवाई कᳱ तारीख/Date of Hearing : 06.10.2023 घोषणा कᳱ तारीख/Date of Pronouncement : 06.10.2023 आदेश /O R D E R PER MANJUNATHA. G, ACCOUNTANT MEMBER: The present Miscellaneous Petition filed by the assessee u/s. 254(2) of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) is directed against the order of the Tribunal in ITA No. 1793/Chny/2018, dated 31.03.2022 for assessment year 2007-08 . :-2-: MA. No: 85/Chny/2022 2. The assessee has narrated facts of his case and mistakes stated to be apparent on record from the order of the tribunal ITA No. 1793/Chny/2018, dated 31.03.2022 and relevant contents of Miscellaneous Petition filed by the assessee are reproduced as under: “1. For this A.Y.2007-08, the Petitioner filed his ROI on 05.03.2009 admitting a total income of Rs.1,57,410/-. During this year, shares of of Mis. Dhandapani Spinning Mills Ltd of which the Petitioner is a Managing Director; issued 32,00,000 shares valuing Rs.10/- each to M/s.Singal Yarn (P) Ltd and M/s.Neelkanth Filaments. These were re-transferred to the Petitioner during this A.Y. The Petitioner met the Assessing Officer in person and brought this transaction to his notice and also filed a letter dated 31.03.2014 offering an additional income of Rs.3,20,00,000/-. 2. Acting on t.h1s. letter a notice u/s.148 was issued,. in. response to wrnch. a ROI was filed offering additional income of Rs.3,20,00,000/-. An order of reassessment was passed on 30.01.2015 accepting the returned income. • Alongside, the AO initiated penalty proceedings u/s.271(1)(c). 3. The Petitioner filed a detailed reply which was accepted by the AO and penalty proceedings were dropped vide an order sheet entry dated 03.07.2015. Thereafter, the PCIT invoked his revisionary power u/s.263 to set aside the order of AO dropping penalty proceedings holding the same to be erroneous and prejudicial to the interest of revenue which is the impugned order in this appeal. 4. Aggrieved by the order of PCIT an appeal was filed before this Hon'ble Tribunal and raised several grounds challenging the impugned order. During the course of hearing, the Petitioner made detailed arguments pertaining to all issues raised in the grounds of appeal before this Hon'ble Tribunal. In support of the arguments, the Petitioner also filed a paper book submitting all the correspondences and the order sheet entries obtained through RTI. Order was pronounced on 31.03.2022 whereby this Hon'ble Tribunal upheld the order of PCIT. 5. The Hon'ble Tribunal has stated at Para 4 of its order that "on careful perusal of the impugned order as well as the :-3-: MA. No: 85/Chny/2022 assessment order and considering the rival submissions of both the parties, we find that the assessee filed its return of income on 05.03.2009 admitting total income of Rs.1,57,410/- and subsequently filed another return on 23.06.2014 in response to notice uls.148 of the Act admitting the total income of Rs.3,21,57,410- the Hon'ble Tribunal failed to consider the basic evidence which prompted the AO to issue notice u/s.148, namely the communication dated 31.03.2014 voluntarily disclosing additional income in respect of re-transfer of shares. Only based on this notice u/s.148 was issued the very same day 31.03.2014; which is the last date for issuance of notice u/s. 148. But for the voluntary act of the Petitioner, re- assessment notice couldn't have been issued at all from the very next day. In sum and substance, the re-assessment proceedings itself is based on the voluntary act of the Petitioner which cannot be termed as concealment of income by the Petitioner. 6. Paras 5 & 6 of the order of ITAT which is extracted as under; "5. Further, from the copies of the order sheets available at assessee's paper book from pages 4 7 to 55, specially order sheet noted at page 54 we observe that the AO has dropped penalty proceedings uls.271(1)(c) of the Act with the following observations : "197 01.7.15 Considering the proceedings initiated uls. 148 at the time of assessee's declaration, assessee's positions, facts and circumstances of the case and assessee's cooperation for assessment proceedings, tax payments are carefully considered. After the due consideration, the proceedings initiated u/s.271(1)(c) is hereby dropped." 6. From the above, it is clear that the AO has dropped penalty proceeding in a casual manner as Note No.197, dated 01. 7.15 and after mentioning some irrelevant facts and basis he has dropped the penalty proceedings and signed the same on 03.07.15, which clearly shows a casual approach of the AO and we are hundred per cent satisfied and in agreement with the contention of the Id. CIT(DR) that the penalty proceedings uls.271(1)(c) of the Act had been dropped by the AO without any cogent reason and plausible cause and without application of mind in a casual manner". The ITAT having noted that the AO had recorded reason to drop the penalty proceedings erred in stating that the AO had :-4-: MA. No: 85/Chny/2022 acted with no cogent reason, plausible cause and without application of mind which is a mistake apparent on the record. 7. Also, at Para 7 the Hon'ble Tribunal states as under: 7. On perusal of the operative part of the revisionary order of the Id. Pr.CIT (reproduced in para 4), it is clear that the assessee has concealed the income, therefore, the Pr.CIT has rightly set aside the penalty proceedings uls.271(1)(c) dropped by the AO vide order sheet entry dated 03.07.2015, wherein the AO has not considered the income of the assessee properly regarding the shares worth of Rs.3,20,00,000/- transferred to the assessee during the year under consideration. Accordingly, we do not see any good reason to interfere with the findings of the Id. Pr. CIT and we uphold the same and dismiss the appeal of the assessee". The Hon'ble having noted the fact that the AO have framed an order of assessment accepting the returned income and having considered the submissions of the Petitioner had dropped the penalty proceedings which itself proves that the AO has applied his mind and took one possible view to drop the penalty proceedings having satisfied with the submissions of the Appellant. 8. It is respectfully submitted that the Hon'ble Tribunal having noted that the AO had applied his mind and taken one possible view, the order of PCIT u/s.263 in substituting the view adopted by AO is unsustainable as laid down by the Hon'ble Supreme Court in Malabar Industrial Co. Ltd Vs CIT - 243 ITR 83 (SC). This principle is now incorporated in Explanation 2(a) to section 263 itself w.e.f 01.06.2015. However, the Hon'ble Tribunal has upheld the order of PCIT. 9. Therefore, it is submitted that there are the following mistakes apparent on the face of records, which requires to be rectified. a. The finding of this Hon'ble Tribunal that issuance of notice u/s.148 is only based on the statement recorded from the Petitioner on 28.03.2014 pursuant to an open survey is wrong; and b. The Hon'ble Tribunal despite holding that the AO has dropped the proceedings after recording reasons which according to this Hon'ble Tribunal is not cogent, failed to follow the principle laid down by the Hon'ble Supreme court in the case of in Malabar Industrial Co. Ltd Vs CIT. 10. It is hence prayed that this Hon'ble Tribunal be pleased to re-call the order and post the same for hearing and hear the :-5-: MA. No: 85/Chny/2022 appeal on merits and pass any other order(s) as deem fit and thus render justice.” 3. We have heard both the parties and considered relevant contents of Miscellaneous Petition filed by the assessee u/s. 254(2) of the Act, against order of the Tribunal in ITA No. 1793/Chny/2018, dated 31.03.2022 for assessment year 2007-08 and we find that the appellant has failed to make out a prima facie, case of mistake apparent on record, which can be rectified u/s. 254(2) of the Act. Although, the Ld. Counsel for the assessee, sought to recall the order of the Tribunal in light of findings given in Para 4 to 6 of Tribunal order dated 31.03.2022, but, on perusal of findings of the Tribunal, we find that the Tribunal with a reason has upheld revision order passed by the PCIT u/s. 263 of the Act on order passed by the Assessing Officer dropping penalty u/s. 271(1)(c) of the Act. In our considered view, what is sought through present Miscellaneous Petition is review the decision rendered by the Tribunal in the given facts and circumstances of the case, which is not permissible u/s. 254(2) of the Act. The scope and powers of the Tribunal has been explained by the Hon’ble Supreme Court in the case CIT vs Reliance Telecom Limited, in Civil Appeal No. 7110/2021 dated 03.12.2021, where it has :-6-: MA. No: 85/Chny/2022 been clearly held that the powers u/s. 254(2) of the Act are only to correct and/or rectify the mistake apparent from record and not beyond that. Even, if the order passed by the ITAT was erroneous on merits, in that case, the remedy available to the assessee/respondent is to prefer an appeal before the High Court. Since, the appellant failed to make out a case of prima facie, mistake apparent on record which can be rectified u/s. 254(2) of the Act, in our considered view, petition filed by the assessee against the order of the Tribunal is deserves to be dismissed and thus, we dismiss Miscellaneous Petition filed by the assessee. 4. In the result, Miscellaneous Petition filed by the assessee is dismissed. Order pronounced in the court on 06 th October, 2023 at Chennai. Sd/- (वी दुगाᭅ राव) (V. DURGA RAO) ᭠याियकसद᭭य/Judicial Member Sd/- (मंजुनाथ. जी) (MANJUNATHA. G) लेखासद᭭य/Accountant Member चे᳖ई/Chennai, ᳰदनांक/Dated: 06 th October, 2023 JPV आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy to: 1. अपीलाथᱮ/Appellant 2. ᮧ᭜यथᱮ/Respondent 3. आयकर आयुᲦ/CIT 4. िवभागीय ᮧितिनिध/DR 5. गाडᭅ फाईल/GF