Cybercity Builders & Developers Private Limited , Hyderabad V. Dy. Commissioner of Income Tax , Central Circle-1(1), Hyderabad

MA 99/Hyd/2021

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 3091 (ITAT-HYDERABAD)
• Duration Of Justice: 8 month(s) 17 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 25-08-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB-A
• Next Hearing Date: 25-08-2022
• Assessment Year: 2016-2017
• Appeal Filed On: 08-12-2021
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Earning of tax free income; Rule 8D; Set aside
• Section: 14A; 254(2)

Judgement Text

आयकर अपीलीय अिधकरण, हैदराबाद पीठ म IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES “A”, HYDERABAD BEFORE SHRI RAMA KANTA PANDA, ACCOUNTANT MEMBER & SHRI K.NARASIMHA CHARY, JUDICIAL MEMBER िव.आवे.सं / M.A. No. 99/Hyd/2021 (Arising out of ITA No. 421/Hyd/2019) ( िनधा रण वष / Assessment Year: 2016-17) Cybercity Builders and Developers, Hyderabad [PAN : AACCC8152C] Vs DCIT, Central Circle-1(1), Hyderabad (आवेदक / Applicant) ( यथ / Respondent) िनधा रती ारा / Assessee by: Shri K.C.Devdas, AR राज व ारा / Revenue by: Shri P.V.Subba Raju, DR सु नवाई की तारीख/Date of hearing: 26/08/2022 घोषणा की तारीख/Pronouncement on: 26/08/2022 आदेश / ORDER PER K. NARASIMHA CHARY, JM: By way of this Miscellaneous Application, Cybercity Builders and Developers, (“the assessee”) requested the Tribunal to recall the order dated 27/05/2021 in ITA No. 421/Hyd/2019 for the assessment year 2016- 17 on the ground that restoring issue relating to the exempt income to the file of the Ld. CIT(A) with a direction to decide the same in the light of the view taken by the Tribunal in the case of M/s. Karvy Stock Broking Ltd., relied upon by the assessee. M.A.No. 99/Hyd/2021 Page 2 of 6 2. Main plank of argument of the learned AR is that the share capital and reserves and surplus of assessee are far exceeding the investments made by the assessee which yielded exempt income and, therefore, no disallowance under section 14A of the Income Tax Act, 1961 (for short “the Act”) read with Rule 8D(2)(ii) of the Income Tax Rules. His grievance is that the Tribunal while deciding the issue, however, missed to take note of the same. Further, he submitted that though the Department’s grievance in the appeal was that the Ld. CIT(A) deleted addition without any supporting evidence, as a matter of fact, the Ld. CIT(A) held that there was no exempt income. 3. Per contra, learned DR submitted that the order at the end of paragraph No. 9 reads that the learned Assessing Officer noted that the exempt income was Rs. 29,91,859/-. He submits that mistakes apparent on the face of record alone are amenable for correction by the Tribunal in exercise of powers under section 254(2) of the Act but not the errors of fact or law in view of the decision of the Hon'ble Apex Court in the case of CIT Vs. Reliance Telecom Ltd., (2021) 133 taxmann.com 41 (SC). 4. In reply, Learned AR prayed that, if for any reason, the mistake is not rectified, leave may be granted to the assessee to seek the deletion of the disallowance under section 14A of the Act read with Rule 8D(2)(ii) of the Rules on the grounds now urged in this MA. 5. We have gone through the record in the light of the submissions made on either side. In the impugned order, a Co-ordinate Bench of this Tribunal appreciated the facts in detail in the light of the submissions made on either side and also decision of the Mumbai Bench of the Tribunal in the case of Delite Enterprises. It is also considered in the light of section 28(v) of the Act to set aside the issue to the file of the Ld. CIT(A). It is also M.A.No. 99/Hyd/2021 Page 3 of 6 submitted before us that pursuant to the restoration of the issue to the file of the Ld. CIT(A) with a direction given by the Tribunal, Ld. CIT(A) disposed-of the appeal, against which, the assessee preferred ITA No. 185/Hyd/2022 and the same is pending. 6. The question that arises for our consideration is whether any error in judgment, which is said to have been the result of non-consideration of the submissions made on behalf of the assessee in the perspective in which they were projected, would constitute an error apparent on record, so as to be recalled by the Tribunal in exercise of powers under section 254(2) of the Act. 7. Under section 254(2) of the Act, the Tribunal may at any time within six months from the end of the month in which the order was passed, with a view to rectify any mistake apparent from record, amend any order passed by it under sub-section (1), and shall make such an amendment if the mistake is brought to its notice by the assessee or the Assessing Officer. It is, therefore, incumbent upon the miscellaneous applicant to point out that there is mistake in the order that is apparent from the record. This aspect has been considered by the Hon'ble Apex Court in the case of Reliance Telecom Ltd. (supra). 8. In the case of Reliance Telecom Ltd. (supra), Hon'ble Apex Court held that in a case where a detailed order was passed by the ITAT, the said order could not have been recalled by the Appellate Tribunal in exercise of powers under section 254(2) of the Act; that if the assessee was of the opinion that the order passed by the ITAT was erroneous, either on facts or in law, in that case, the only remedy available to the assessee was to prefer the appeal before the High Court; that, therefore, as such, the order passed by the ITAT recalling its earlier order which has been passed in M.A.No. 99/Hyd/2021 Page 4 of 6 exercise of powers under section 254(2) of the Act is beyond the scope and ambit of the powers of the Appellate Tribunal conferred under section 254(2) of the Act; and that, therefore, the order passed by the ITAT recalling its earlier order is unsustainable, which deserves to be set aside. It was further observed that merely because parties might have in detail gone into the merits of the case before the ITAT and merely because the parties might have filed detailed submissions, it does not confer jurisdiction upon the ITAT to pass the order de hors section 254(2) of the Act, and the powers under section 254(2) of the Act are only to correct and/or rectify the mistake apparent from the record and not beyond that. Hon'ble Apex Court held that even the observations that the merits might have been decided erroneously and the ITAT had jurisdiction and within its powers it may pass an order recalling its earlier order which is an erroneous order, cannot be accepted, and 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. Observing so, the Hon'ble Supreme Court, in the case of Reliance Telecom Ltd. (supra), quashed the order passed by the ITAT, recalling the earlier order. 9. In this case, we find that the Tribunal passed detailed order, in partly allowing the appeal for statistical purpose, after discussing the case on merits, considering the contentions of the assessee that they have made investments in partnership firms and while referring the provisions under section 28(v) of the Act. Detailed reasoning in the order of the Tribunal resulted in the partly allowing the Revenue’s appeal for statistical purposes. Long drawn reasoning is anti-thesis to the mistake apparent on the face of record. 10. By no stretch of imagination, therefore, could we say that the order dated 27/05/2021 suffer any mistake apparent on the face of record. And M.A.No. 99/Hyd/2021 Page 5 of 6 any error of judgment in such order either on facts or on law is not amenable for rectification under section 254(2) of the Act, and recalling of such an order, in our opinion, would amount to review of the same, which is not permissible in view of the above observations of the Hon'ble Apex Court in the case of Reliance Telecom Ltd. (supra). Respectfully following the decision of the Hon’ble Supreme Court in the case of Reliance Telecom Ltd.(supra), we find that with passing of the order dated 27/05/2021 in ITA No. 421/Hyd/2019 on merits, the Tribunal has become functus officio and the prayer of the assessee to reopen the same is impermissible under law. Consequently, we decline to grant the prayer of the assessee. 11. In the result, the Miscellaneous Application filed by the assessee is dismissed. Order pronounced in the open court on this the 26 th day of August, 2022 Sd/- Sd/- (RAMA KANTA PANDA) (K. NARASIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER Hyderabad, Dated: 26/08/2022 TNMM M.A.No. 99/Hyd/2021 Page 6 of 6 Copy forwarded to: 1. M/s.Cybercity Builders & Developers Private Limited, 3 rd & 4 th Floor, Plot No. 55, Kavuri Hills, Road No. 36, Extended Jubilee Hills Road, Opp: Water Tank, Hyderabad. 2. Dy. Commissioner of Income Tax, Central Circle-1(1), Hyderabad. 3. CIT(Appeals)-11, Hyderabad. 4. Pr.CIT(Central)-Hyderabad. 5. DR, ITAT, Hyderabad. 6. GUARD FILE TRUE COPY ASSISTANT REGISTRAR ITAT, HYDERABAD