M/s. M A Projects Pvt. Ltd., Delhi V. DCIT, New Delhi

MA 92/DEL/2020

• Counselvise Citation: [2023] 102 COUNSELVISE.COM (IT) 0877 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 month(s) 12 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 09-10-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 06-07-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 27-02-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revision of order; Additional evidence; Tax effect
• Section: 263; 207; 254(2)

Judgement Text

Page | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “E”: NEW DELHI BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND MS ASTHA CHANDRA, JUDICIAL MEMBER MA No. 92/Del/2020 (In ITA No. 402/Del/2015) (Assessment Year: 2011-12) M/s. M. A. Projects (P) Ltd, BA-17A, DDA Flats, Ashok Vihar, Phase-1, new Delhi Vs. Dy. Commissioner of Income Tax, Central Circle-03, New Delhi (Appellant) (Respondent) PAN: AAECM2372E Assessee by : Sh. Salil Kapoor, Adv Sh. Sumit Lalchandani, Adv Sh. Shivam Yadav, Adv Revenue by: Shri Kanv Bali, Sr. DR Date of Hearing 07/07/2023 Date of pronouncement 10/10/2023 O R D E R PER M. BALAGANESH, A. M.: 1. By virtue of this miscellaneous application, the assessee seeks to recall the order passed by this tribunal in ITA No. 402/Del/2015 dated 9.8.2019 for the Asst Year 2011-12. 2. We have heard the rival submissions and perused the materials available on record. We find that this tribunal had confirmed the addition of Rs 50,00,000/- u/s 68 of the Act in respect of share application money received from Indian Hosiery Pvt Ltd. The assessee in its miscellaneous application had sought to distinguish the decision relied upon by the tribunal of the Hon’ble Apex Court in the case of NRA Iron & Steel Pvt Ltd reported in 412 ITR 161 (SC) on facts. Further the ld. AR drew our MA No. 92/Del/2020 M/s. M. A. Projects (P) Ltd Page | 2 attention to the case law paper book filed during the original appellate proceedings, wherein the decision of Hon’ble Jurisdictional High Court in the case of CIT vs Gangeshwari Metal P Ltd reported in 361 ITR 10(Del) was specifically relied upon which was not taken note of by the tribunal while passing the appeal order. The ld. AR heavily relied upon the decision of the Hon’ble Supreme Court in the case of ACIT vs Saurashtra Kutch Stock Exchange Ltd reported in 305 ITR 227 (SC), wherein it had been held that non-consideration of decision of Hon’ble Jurisdictional High Court or of Hon’ble Supreme Court in an order would constitute mistake apparent from record in the order warranting rectification u/s 254(2) of the Act. 3. Per Contra, the ld. DR relied on the decision of Hon’ble Supreme Court in the case of CIT vs Reliance Telecom Ltd in Civil Appeal No. 7110 of 2021 and CIT vs Reliance Communications Ltd in Civil Appeal No. 7111 of 2021 dated 3.12.2021. The ld. DR argued that this tribunal does not have any power to recall the order passed by it pursuant to the decision of the Hon’ble Supreme Court in Reliance Telecom referred supra. 4. We are unable to comprehend ourselves to accept to the contentions of the ld. DR in this regard, in view of the fact that the decision of Hon’ble Jurisdictional High Court in the case of Gangeshwari Metal referred supra though referred to by then ld. AR at the time of original appeal hearing by referring to the case law paper book had not been considered and adjudicated by the tribunal while passing the order. In our considered opinion, if the contention of the revenue is to be accepted, then it would result in destroying the entire judicial system wherein if the tribunal passes an order without considering the decision of Hon’ble Jurisdictional High Court relied upon by inadvertence, then said order could never be recalled u/s 254(2) of the Act. This would result in gross injustice being rendered to the parties in appeal. MA No. 92/Del/2020 M/s. M. A. Projects (P) Ltd Page | 3 5. We have also gone through the decision of Hon’ble Supreme Court in the case of Reliance Telecom referred supra, wherein we find that the Hon’ble Apex Court had not overruled or distinguished its earlier decision rendered in the case of ACIT vs Saurashtra Kutch Stock Exchange Ltd referred supra and in the case of Honda Siel Products reported in 295 ITR 466 (SC). Further, we find that the co-ordinate bench of Hyderabad Tribunal in the case of GVPR Engineers Ltd vs ACIT in MA Nos. 58 & 59 / Hyd/2022 dated 6.5.2022 had addressed this issue by considering the decision of Reliance Telecom referred supra and held that the tribunal has power to rectify any mistake that is apparent from record u/s 254(2) of the Act. For the sake of convenience, the relevant operative portion of the order passed by the Hyderabad Tribunal in miscellaneous application proceedings referred supra is reproduced below:- “25. So far as the contention of Revenue with regard to the terms of decision of hon'ble Supreme Court in the case of Reliance Telecom Ltd. (supra), in our view, the said decision is binding on all the Tribunals as well as the courts below. However, on perusal of the said decision, it is abundantly clear that the Tribunal cannot revisit its earlier order and go into details on merits. However, the hon'ble Supreme Court in the case of Reliance Telecom Ltd (supra) at Paras 3.1 and 3.2 has categorically held that the Tribunal has power to rectify any mistake apparent from the record only and further it held that the powers under Section 254(2) of the Act are akin to Order XLVII Rule 1 CP and the Tribunal is not required to re-visit its earlier order and to go into detail on merits and the powers under Section 254(2) of the Act are only to rectify/correct any mistake apparent from the record. 26. However, in our view there is a distinction between erroneous order passed on merits and an order passed on account of mistake apparent from the record. In the present Tribunal's order dt.23.11.2021, the Tribunal had committed various mistakes as mentioned in foregoing paras, however it can be summarized as under: (i) The Tribunal has not followed the earlier decisions in the case of assessee; (ii) The Tribunal had by mistake mentioned that the previous bench(es) has not considered the Explanation to section 801A while deciding the case in respect of the assessee; (iii) The Tribunal has not adjudicated the facts in the present case; MA No. 92/Del/2020 M/s. M. A. Projects (P) Ltd Page | 4 (iv) The Tribunal has relied upon the decision of M/s. NEC NCC MAYTAS - JV Vs. DCIT (supra) without bringing on record how the said decision is applicable in the facts of the present case and; (v) The Tribunal committed mistake by not considering the order passed by Id.PCIT u/s 263 of the Act and subsequent order giving effect passed by the Assessing Officer for A.Y. 2011-12 and 2012- 13. In our considered opinion, the Tribunal has power to rectify any mistake apparent on the face of the record and the hon'ble Supreme Court in the case of Honda Siel Power Products Ltd (supra) held that when there was a mistake, error or omission on part of the Tribunal, then it is the duty of Tribunal to set it right. 27. In the present case, since the facts have not been adjudicated, which have not been denied by the Revenue and therefore, there are mistakes apparent from record. It is settled position of law that the mistakes of the Court should not harm any person. 28. The mistake apparent from record had not been defined in the I.T Act, however there are many mistakes which had been considered by the Hon'ble Supreme Court and High Courts as mistake apparent from record. 1. M/s. Universal Cold Storage Ltd Vs. DCIT (2020) 168 Taxman 178 (Mad) - When the Tribunal passed order dismissing the appeal of assessee on account of non- appearance of the assessee, then it has power to recall its order. II. Hon'ble Supreme Court of India in Assistant Commissioner of Income Tax vs. Saurashtra Kutch Stock Exchange Limited (2008) 219 CTR (SC) 90 settled long ago that non-consideration of the decision of the jurisdictional High Court /Supreme Court constitutes mistake apparent from record and is rectifiable within the meaning of section 254(2) of the Income Tax Act, 1961. III. Non-consideration of the decisions of the constitutional/writ court touching upon the issue under consideration and ignored by the Hon'ble tribunal while adjudicating the matter in dispute, Amore Jewels (2018) 2 NYPCTR 734 (Bom) holding that non consideration of case laws cited and hence covered under s 254(2) (4) R.A. Boga vs. AAC (1977) 110 ITR 1 (P&H)(FB), IV. A mistake apparent from record means an 'obvious or patent mistake' or a 'glaring and obvious mistake'. Hotly debatable issues are excluded; hardly debatable issues are included. The issue may be complicated, yet the mistake may be simple. It is a mistake MA No. 92/Del/2020 M/s. M. A. Projects (P) Ltd Page | 5 apparent from record. The test is not complexity of the issue but simplicity of the mistake.. V. Sun Engineering Works (P) Ltd. (1992) 198 ITR 297 (SC), "it is neither desirable nor permissible to pick out a word or a sentence from the judgment of this Court, divorced from the context of the question under consideration, and to treat it to be complete law declared by this Court". The Tribunal has ended up doing something which, as is the law laid down by the Hon'ble Supreme Court, is impermissible in law. That cannot but be a glaring, obvious and patent error and, accordingly, liable to be rectified under s. 254(2) of the Act. To suggest that a conscious mistake, even if that be a mistake apparent from record, cannot be rectified under s. 254(2) is somewhat devoid of logic and rationale. If a conscious mistake is a mistake apparent from record, there is no reason for not rectifying the same under the provisions of law. To err is human but there cannot be any justification for perpetuating an error. VI. In Laxmi Electronic Corporation Ltd. vs. CIT (1991) 188 ITR 398 (All) the Tribunal had omitted to consider a preliminary objection that the appeals were barred by time although the same had been urged in arguments before the Tribunal. The Court held that the proposition that a contention urged but not dealt with by the Tribunal can be taken as having been negatived is not inconsistent with the power of the Tribunal to reopen the appeal where it is brought to its notice that an important contention raised by the party was not dealt with by the Tribunal in its order. The Court held that such a power must be held to be inherent in the Tribunal since it would be a case where the party has suffered prejudice for no fault of his and on account of the mistake or error on the part of the Tribunal. It held that the failure to deal with the preliminary objection relating to the maintainability of the appeal on the ground of limitation amounted to an error apparent on the face of the record which empowered the Tribunal to reopen the appeal and rectify the mistake if it was so satisfied. VII. In Kil Kotagiri Tea and Coffee Estates Company Ltd. vs. ITAT (1988) 174 ITR 579 the Kerala High Court held that where the Tribunal had relied on a decision of a single Judge of the Kerala High Court which was subsequently overruled the order passed by the Appellate Tribunal disclosed a mistake apparent from the record and that the Tribunal ought to have exercised its powers under Section 254(2) and rectified its order on the basis of the assessee's application for rectification. VIII. Non consideration of a provision of law which would have material bearing on the decision is a glaring obvious and self-evident mistake apparent from the record. Such a mistake would be required to be corrected (CIT vs. Quilon Marine Produce Co. MA No. 92/Del/2020 M/s. M. A. Projects (P) Ltd Page | 6 (1986) 157 ITR 448). Modu Finblo vs. 1st WTO (1995) 53 ITD 53 (Pune) (TM) ITO vs. Gilard Electronics (1986) 18 ITD 176 (JP), ACIT vs. Sornamy Alkington Ltd. (1994) 49 ITD 207 (Delhi). Similarly, non consideration of a Rule World also be rectifiable CIT vs. Ballabh Prasad Agarwalla (1997) 90 Taxman 283 (Cal.) IX. 257 ITR 440 (Raj) - CIT vs. S.S.Gupta - A finding of fact was reached against the Assessee on the basis of material which was conveyed to the Tribunal after the hearing was over without affording an opportunity to the assessee to explain the information, which information apparently vitiated the order. On a miscellaneous application filed by the assessee the Tribunal recalled its order and reheard the appeals. The High Court on an appeal preferred by the department confirmed the order of the Tribunal. X. 179 CTR 265 (SC) - Jyotsna Suri vs. ITAT - The Tribunal decided the matter on merits without considering the application for adducing additional evidence pending before it. The Assessee filed a rectification application which was rejected. The High Court while deciding the appeal on merits affirmed the view of the Tribunal and held that no application u ITR s 254(2) would lie in the circumstances. On an appeal, the Supreme Court set aside the order of the High Court and remanded the matter back to the file of the Tribunal to decide the application u ITR r 29 on merits and thereafter dispose of the appeal on merits. XI. 261 ITR 49 (Del - Seth Madanlal Modi vs. CIT - The Tribunal admittedly relied on a wrong section while passing the order on merits. The Assessee filed an application for rectification on that ground. The Tribunal upheld the application and recalled its order. The Department went in appeal, the High Court upheld the decisions of the Tribunal inasmuch as reliance on a wrong provision of law tantamount to an error apparent on record. Also see 267 ITR 450 (Mad) Prithviraj Chohan vs. CIT. XII. Similarly, in case the Tribunal had dismissed the appeal of the assessee on account of low tax effect as per the CBDT Circular, or case of the assessee falls in any exceptions mentioned in board circular, then in our view the Tribunal has power to recall the order as the mistakes are apparat on the face of the record. XIII. Lastly, in the case of Cumbum Co-operative Town Bank Limited, Prakasam in M.A. 89/Hyd/2021 in ITA No.2040/Hyd/2018 dt. 05.05.2022, the Tribunal has recalled its order, as the Tribunal had allowed the appeal of the assessee by relying upon the wrong provisions of law. 29. In view of the above, respectfully following the decisions of hon'ble Supreme Court in the case of Honda Siel Power Products Ltd (supra) and MA No. 92/Del/2020 M/s. M. A. Projects (P) Ltd Page | 7 III Member case in the case of ITO Vs. M/s. Minnow Trading Company Pvt. Ltd (supra), and Cumbum Co-operative Town Bank Limited (supra), we are of the opinion that the assessee has made out the case for recalling of the order. Accordingly, we recall the impugned order dt.23.11.2021. In view of the above we hereby direct the Registry to fix the matter for re-hearing in its due course for adjudication on merit of the appeal and grounds raised therein. Ordered accordingly.” 6. In the instant case of miscellaneous application, we are not revisiting the case on merits, but instead, we are only stating the fact that the decision of Hon’ble Jurisdictional High Court relied upon by the assessee had not been considered by the tribunal and whether the decision of Hon’ble Supreme Court in the case of NRA Iron & Steel referred supra had been correctly applied while passing the appellate order. Hence in our considered opinion and respectfully following the decisions of Hon’ble Supreme Court in the case of ACIT vs Saurashtra Kutch Stock Exchange Ltd reported in 305 ITR 227 (SC) and Honda Siel Products reported in 295 ITR 466 (SC), we are inclined to recall the order passed by the tribunal in ITA No. 402/Del/2015 dated 9.8.2019 only for the limited purpose of applicability of the decision of Hon’ble Jurisdictional High Court in the case of CIT vs Gangeshwari Metal P Ltd reported in 361 ITR 10(Del) and the decision of Hon’ble Apex Court in the case of NRA Iron & Steel reported in 412 ITR 161 (SC) to the facts of the instant case. Registry is directed to fix the main appeal for hearing on 29.11.2023 after issuing notices to both the parties. 7. In the result, the miscellaneous application of the assessee is allowed in the abovementioned terms. Order pronounced in the open court on 10/10/2023. -Sd/- -Sd/- (ASTHA CHANDRA) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated:10/10/2023 A K Keot MA No. 92/Del/2020 M/s. M. A. Projects (P) Ltd Page | 8 Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi Date of dictation 09/10/2023 Date on which the typed draft is placed before the dictating member 09/10/2023 Date on which the typed draft is placed before the other member Date on which the approved draft comes to the Sr. PS/ PS Date on which the fair order is placed before the dictating member for pronouncement Date on which the fair order comes back to the Sr. PS/ PS Date on which the final order is uploaded on the website of ITAT date on which the file goes to the Bench Clerk Date on which the file goes to the Head Clerk The date on which the file goes to the Assistant Registrar for signature on the order Date of dispatch of the order