DCIT, Central Circle-1, Bhubaneswar V. Sri SaiRameswar Solvents Pvt. Ltd, Jeypore

MA 9/CTK/2024

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 0952 (ITAT-CUTTACK)
• Duration Of Justice: 3 month(s) 6 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 11-07-2024
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 11-07-2024
• Assessment Year: 2016-2017
• Appeal Filed On: 04-04-2024
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: RAVI SHANKAR SISTLA
• Keywords: Principle of natural justice
• Section: 40A(3); 143(3); 254(2); 153C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BEFORE MANISH AGARWAL DCIT, Central Circle, Bhubaneswar PAN/GIR No (Appellant Per Bench This is an M.A. filed by the revenue seeking recall of the Tribunal order dated 13.10.2023 in IT(ss) year 2016-17. 2. S.C.Mohanty, ld Sr DR appeared for the revenue and Ravi Sistla, ld AR appeared for the assessee. 3. It was submitted by ld Sr assessment by relying upon the decision of the Hon’ble Supreme Court in IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE SHRI GEORGE MATHAN, JUDICIAL AND MANISH AGARWAL, ACCOUNTANT MEMBER M.A. No.09/CTK/2024 (in IT(ss)A No.24/CTK/2022) Assessment Year : 2016-17 DCIT, Central Circle, Bhubaneswar Vs. Sri Sairameswara Solvents Pvt Ltd., At:Bhadryya Street, jeypore PAN/GIR No. AAJCS 3201 K (Appellant) .. ( Respondent Assessee by : Shri Ravi Shankar Sistla, Revenue by : Shri S.C.Mohanty Date of Hearing : 12/0 Date of Pronouncement : 12/0 O R D E R This is an M.A. filed by the revenue seeking recall of the Tribunal order dated 13.10.2023 in IT(ss) A No.24/CTK/2022 for the assessment 17. S.C.Mohanty, ld Sr DR appeared for the revenue and Ravi Sistla, ld AR appeared for the assessee. It was submitted by ld Sr DR that the Tribunal has quashed the assessment by relying upon the decision of the Hon’ble Supreme Court in Page1 | 6 IN THE INCOME TAX APPELLATE TRIBUNAL, JUDICIAL MEMBER , ACCOUNTANT MEMBER A No.24/CTK/2022) Sri Sairameswara Solvents Pvt Ltd., At:Bhadryya Street, Respondent) Shri Ravi Shankar Sistla, CA : Shri S.C.Mohanty, Sr DR 07/2024 /07/2024 This is an M.A. filed by the revenue seeking recall of the Tribunal No.24/CTK/2022 for the assessment S.C.Mohanty, ld Sr DR appeared for the revenue and Ravi Shankar DR that the Tribunal has quashed the assessment by relying upon the decision of the Hon’ble Supreme Court in M.A. No.09/CTK/2024 (in IT(ss)A No.24/CTK/2022) Assessment Year : 2016-17 Page2 | 6 the case of Abhisar Buildwell Pvt Ltd. Vs ACIT, 454 ITR 212 (SC). It was submitted that the search in the assessee’s case was on 12.2.2016 and consequently, the assessment year 2016-17 is not an abated assessment. It was the submission that in view of the fact that the assessment year 2016-17 is not an abated assessment, the reliance on the decision of Hon’ble Supreme Court in the case of Abhisar Buildwell Pvt Ltd(supra) was wrong and it was a mistake apparent from the record. It was the submission that the order of the Tribunal is liable to be recalled and the appeal disposed off on merits. 4. In reply, ld AR has filed his objection to the miscellaneous application, which is as follows: “The respondent named above most respectfully showeth: “1. That the applicant has filed an application praying for recalling the judgement of this Hon'ble forum in case no. IT(SS)24/CTKI2022 dated 13-10-2023, on the ground that the case of the Hon'ble Supreme Court in the case of Abhisar Buildwell Pvt. Ltd., which was relied upon in the respondent's case, is not applicable to the case. 2. That in this regard, the respondent humbly submits that the miscellaneous application to recall the order in the case no. IT(SS)24/CTK/2022 cannot be entertained for the following reasons: 2.1 . the said appeal was disposed after a detailed analysis of the judgement delivered by the Hon'ble Supreme Court in the case of Abhisar Buildwell (P.) Ltd law, and therefore the alleged misapplication cannot tantamount to a "mistake apparent on the face of the record" for consideration u/s 254(2) of the Act; and 2.2. the assessment pertaining to the year of search (AY 2016-17) is not an "abated assessment" as observed by the applicant in its note. M.A. No.09/CTK/2024 (in IT(ss)A No.24/CTK/2022) Assessment Year : 2016-17 Page3 | 6 While non-application of a pertinent case law of the jurisdictional higher court is a mistake apparent from the face of the record, the ratio of a judgement applied after a detailed analysis and observations cannot be deemed to be an error on the face of the record merely because the findings are unfavorable to one of the parties in the appeal. 3. That the respondent makes the following submissions in relation to the above issues pertinent to the case: 3.1. While disposing the appeal of the respondent in ITA No-IT(SS)A NO.24/CTK/2022 for the AY 2016-17, in its order dated 13th October, 2023, the Hon'ble Bench, after considering and analysing the decision of the Hon'ble Supreme Court in the case of Abhisar Buildwell (P.) Ltd v. Asstt. CIT reported in [2023] 454 ITR 212 (sq, took the view that: "as it is noticed that there is no incriminating material found in the course of search which has been used for the assessment, in view of the principles laid down by the Hon”b!e Supreme Court in the case of Abhisar Buildwell (P.) Ltd. (supra), the assessment order is liable to be quashed and we do so." (Pt).:(P-.7) 3.2. Verbatim reproducing the relevant portions of the Supreme Court case, the Hon'ble Tribunal further observed in para 8 of the order that: "it must be specifically mentioned here that in the case of Abhisar Buildwell (P) Ltd., referred to supra, in sub-clause (iv) to para 14, directions have been given by the Hotvble Supreme Court. In these circumstances, with identical directions, the assessment order passed u/s.153C r.w.s. 143(3) of the Act, dated 29. 12.2017 stands quashed." 3.3. Therefore, the Hon'ble Tribunal has, in this case, has not merely cited a case law but has taken a particular view after analysing the decision of the Supreme Court and applied the ratio of the judgement to the case of the respondent. 4. That the applicant has stated in the note (in the second half) that" Since the year of search was the financial year relevant to the AY 2016-17, the assessment for the assessment year in question is an abated assessment' 4.1. In this connection, it is humbly submitted that the assessment for the assessment year in which the search was conducted is not an abated assessment. According to the second proviso to section 153A, M.A. No.09/CTK/2024 (in IT(ss)A No.24/CTK/2022) Assessment Year : 2016-17 Page4 | 6 an assessment abates only when it was pending on the date of search under any (other) section. 4.2. Therefore, since no assessment proceedings could have been initiated for a part of the financial year, the assessment proceedings initiated for the relevant assessment year pertaining to the year of search much after the search is completed cannot be considered to be an abated assessment. Thus, the learned assessing officer could have assumed jurisdiction u/s 153C/153A only when assessment proceedings were pending on the date of search and not otherwise. 5. Relevant case law: 5.1. The Supreme Court in the case of CITv. Reliance Telecom Ltd. [2021]133 taxmann.com 41 observed that" if the order passed by the ITAT was erroneous on merits, in that case, the remedy available to the Assessee was to prefer an appeal before the High Court." The Supreme Court has clarified that the power of the Income Tax Appellate Tribunal under Section 254 (2) of the Income Tax Act is limited to rectifying or amending an order in view of an error apparent from the record, and the said power cannot be used to recall an order. Thus, the view taken by the Tribunal in the case of the respondent would not come under the purview" mistake apparent from the record." 5.2. The Delhi High Court in the case of Ras Bihari Bansal v. CIT (Appeals) [2008]170 Taxman 31 / [2007] 293 ITR' 365 observed as under- "Section 254 of the Income-tax Act, 1961, enables the concerned authority to rectify any "mistake apparent from the record': The mere fact that the Tribunal had not aI/owed a deduction, even if the conclusion is wrong, will be no ground for moving an application under section 254(2) of the Act. Further, in the garb of an application for rectification, the assessee cannot be permitted to reopen and re-argue the whole matter, which is beyond the scope of the section." Thus, there has to be a clear distinction drawn between a "mistake apparent" and an "appealable error". 6. That it may be worthwhile to recall that in the case of the respondent, no incriminating material suggesting undisclosed income in the hands of the company was unearthed during the search operation on the Directors of the company. According to the Assessing Officer's version, while two additions viz., the alleged stock M.A. No.09/CTK/2024 (in IT(ss)A No.24/CTK/2022) Assessment Year : 2016-17 Page5 | 6 discrepancy and the alleged sales suppression are material gathered in the survey conducted on the company, the third addition of disallowance of cash expenditure u/s 40A(3) was only "unearthed during the course of the assessment proceedings". Thus, as the material that was used in the assessment was not unearthed during the alleged search, the learned assessing officer could not have assumed jurisdiction u/s 153C of the Act. It is accordingly prayed that the miscellaneous application filed by the application for recalling the order may be rejected in the interest of natural justice and fair play.” 5. It was the submission that the Tribunal had considered all the facts and then had applied the decision in the case of Abhisar Buildwell Pvt Ltd(supra). It was the submission that the order of the Tribunal is a speaking order and is liable to be sustained. It was the submission that if at all, the Revenue has any objection, it was upto the revenue to file appeal at appropriate forum and the alleged claim of the revenue is not a mistake apparent from the order of the Tribunal. 6. We have considered the rival submissions. A perusal of the facts of the present case clearly shows the decision of Hon’ble Supreme Court in the case of Abhisar Buildwell Pvt Ltd (supra) applies to cases where the assessment is abated. Clearly for the assessment year 2016-17, it is the assessment year relevant to the year, in which, search had taken place and the assessment remains unabated. Thus, clearly the decision relied upon by the Tribunal in the case of Abhisar Buildwell Pvt Ltd(supra) is erroneous and the wrong application of law as laid down by Hon’ble Supreme Court is a mistake apparent from record require rectification u/s.254(2) of the Act. M.A. No.09/CTK/2024 (in IT(ss)A No.24/CTK/2022) Assessment Year : 2016-17 Page6 | 6 This being so, as it is evident that the order of the Tribunal suffers from error, which is a mistake apparent from record, the order of the Tribunal in IT(ss)A No.24/CTK/2022 order dated 13.10.2023 stands recalled. Consequently, the appeal is restored to its original status. The appeal is now posted for hearing on 11.9.2024 for fresh adjudication on merits. 7. In the result, M.A. of the revenue stands allowed in terms indicated above. Order dictated and pronounced in the open court on 12/07/2024. Sd/- sd/- (Manish Agarwal) (George Mathan) ACCOUNTANT MEMBER JUDICIAL MEMBER Cuttack; Dated 12/07/2024 B.K.Parida, SPS (OS) Copy of the Order forwarded to : By order Sr.Pvt.secretary ITAT, Cuttack 1. The Appellant : DCIT, Central Circle, Bhubaneswar 2. The Respondent: Sri Sairameswara Solvents Pvt Ltd., At:Bhadryya Street, jeypore 3. The CIT(A)- 2, Bhubaneswar 4. Pr.CIT-2, Bhubaneswar 5. DR, ITAT, 6. Guard file. //True Copy//