Assistant Commissioner of Income-tax, Pune V. M/s. Alfa Laval India Ltd., Pune

MA 99/PUN/2022

AI Insights

The case involves a Miscellaneous Application (MA No.99/PUN/2022) filed by the Revenue against the order of the Income Tax Appellate Tribunal in ITA No.937/PUN/2017 concerning the assessment year 2012-13. The Revenue sought to recall the Tribunal's earlier decision, which had favored the assessee, M/s. Alfa Laval India Ltd., on several grounds related to the benchmarking of international transactions and disallowance under section 14A of the Income Tax Act. The Tribunal had previously dismissed similar grounds in the assessee's favor based on precedents set in the assessee's own case for A.Y. 2011-12. The Tribunal, upon reviewing the Miscellaneous Application, found no apparent mistake in its original order and dismissed the application, reiterating that the powers under section 254(2) do not allow for a review of the Tribunal's decisions.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 138155 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 10 month(s) 3 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 20-08-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 20-07-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 17-10-2019
• Other Referred Cases: ACIT Vs. Saurashtra Kutch Stock Exchange Ltd., CIT Vs. Ramesh Electric & Trading Company
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 14A; 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE „C‟ BENCHES :: PUNE BEFORE SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER & DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER M.A.No.99/PUN/2022 (Arising out of ITA No.937/PUN/2017) (A.Y. 2012-13) DCIT, Circle-8, Pune. vs M/s. Alfa Laval India Ltd., Mumbai Pune Road, Dapodi, Pune-411012 PAN: AAACA 5899 A Appellant/Revenue Respondent /Assessee Assessee by : Shri Nikhil S. Pathak, Adv. Revenue by : Shri Suhas Kulkarni, DR Date of hearing : 21/07/2023 Date of pronouncement : 21/08/2023 O R D E R Per PARTHA SARATHI CHAUDHURY, JM: This Misc. Application preferred by the Revenue emanates from the order of this Tribunal in ITA No.937/PUN/2017, dated 01/04/2019 for A.Y.2012-13 with a prayer to recall the said order. 2. We have heard the rival contentions, perused the order of the Tribunal dated 01/04/2019 in ITA No.937/PUN/2017 and the contents of the Misc. Application filed by the Revenue. 3. The Revenue had preferred the appeal before the Tribunal (supra). The first ground that was adjudicated by the Tribunal as contested by the Revenue on appeal that what is the most appropriate method whether Cost Plus (or) TNMM to benchmark the international transactions of the assessee. In this regard, the Tribunal in para 2 of MA No.99/PUN/2022 M/s. Alfa Laval India Ltd. 2 its order has mentioned that at the time of hearing, ld.AR of the assessee had appraised the bench that this particular ground raised by the Revenue is covered in favour of the assessee in assessee‟s own case for A.Y. 2011-12. Thereafter, the findings for A.Y. 2011-12 in assessee‟s case has been considered by the Tribunal and resultantly at para 4, it had been held that the said issue was dealt with and is squarely covered in favour of the assessee as per the Tribunal‟s finding in assessee‟s own case for A.Y. 2011-12 in ITA No.2638/PUN/2016 and, therefore, the relief provided to the assessee by the ld. CIT(A) was sustained and the ground No.1 raised in appeal by the Revenue was dismissed. 4. With regard to ground No.2, the Tribunal observed that placing reliance on the decision in assessee‟s own case in ITA No.2638/PUN/2016 (supra), the matter was restored back to the file of the AO, therefore with the same parity of the reasoning in assessee‟s own case in ITA No.2638/PUN/2016 (supra), the Tribunal for the relevant A.Y. 2012-13 also remitted the matter back to the file of the AO for verification with the direction that AO shall comply with the principles of natural justice and decide the issue in accordance with law. Therefore, ground No.2 raised in appeal by the Revenue was allowed for statistical purposes. 5. Similarly, ground No.3 in the Revenue‟s appeal was with regard to the disallowance u/sec. 14A of the Act. The Tribunal on this issue MA No.99/PUN/2022 M/s. Alfa Laval India Ltd. 3 also observed that it is covered in favour of the assessee in assessee‟s own case in ITA No.2638/PUN/2016 (supra) and after considering the entire issue and giving thoughtful consideration to the findings, held that since there was no change in the facts and circumstances with respect to the relevant assessment year, therefore following its own decision for A.Y. 2011-12 in assessee‟s own case, the Tribunal sustained the relief provided to the assessee by the ld. CIT(A). Thus, ground No.3 raised in appeal by the Revenue was dismissed. 6. Therefore, for all three grounds raised in appeal by the Revenue in its own wisdom after considering the submissions of the parties therein and the documents on record, this Tribunal had passed necessary order as on record. The Revenue in its Misc. Application has failed to point out any mistake much less apparent from record in the order of the Tribunal. Further, we observe that the Revenue had preferred MA Nos.46/PUN/2020 & 23/PUN/2022 arising out of ITA Nos. 2638/PUN/2016 & 1945/PUN/2017 for A.Ys. 2011-12 & 2013-14 respectively, vide order dated 08/08/2022, the Tribunal had dismissed the Misc. Applications filed by the Revenue being devoid of merits. We also observe that Revenue in the present Misc. Application has raised new grounds for adjudication which was not there in the original grounds raised in appeal before the Tribunal in ITA No.937/PUN/2017 for A.Y. 2012-13. This is beyond the scope of permissible limit u/sec. 254(2) of the Act where only mistake apparent from record can be MA No.99/PUN/2022 M/s. Alfa Laval India Ltd. 4 rectified by the Tribunal and there is no permission for reviewing its own order in the garb of rectification. That, by raising the present grounds in this Misc. Application by the Revenue, it is actually seeking for review of the decision of the Tribunal, which is therefore not permissible within the jurisdictional ambit u/sec. 254(2) of the Act. 7. We also find that there are series of decisions by the Hon'ble Supreme Court as well as Hon'ble High Courts expounding scope of exercising powers u/sec. 254(2) of the Act. We do not deem it necessary to recite and recapitulate all of them, but suffice to say that core of all these authoritative pronouncements is that power for rectification u/sec. 254(2) of the Act can be exercised only when mistake, which is sought to be rectified, is an obvious and patent mistake, which is apparent from the record and not a mistake, which is required to be established by arguments and long drawn process of reasoning on points, on which there may conceivably be two opinions. For fortifying this view, we make reference to the decision of the Hon'ble jurisdictional High Court in the case of ACIT Vs. Saurashtra Kutch Stock Exchange Ltd., 262 ITR 146 which has been upheld by the Hon'ble Supreme Court reported in 305 ITR 227. 8. The Hon'ble Jurisdictional High Court in the case of CIT Vs. Ramesh Electric & Trading Company reported in 203 ITR 497 has held that the scope of section 254(2) is limited to rectification of mistake MA No.99/PUN/2022 M/s. Alfa Laval India Ltd. 5 apparent from record itself and not rectification in error of judgment. The relevant observations of the Hon'ble High Court are as under: “The Tribunal cannot, in exercise of its power of rectification, look into some other circumstances which would support or not support its conclusion so arrived at. The mistake which the Tribunal is entitled to correct is not an error of judgment but a mistake which is apparent from the record itself.” We are of the considered view that in the guise of rectification, the Revenue is seeking review of the order of Tribunal, which is beyond the scope of powers as envisaged u/s. 254(2) of the Act. 9. In view of the above and as per the Misc. Application filed before us, we do not find any mistake, much less any apparent mistake that warrants rectification in the order of Tribunal dated 01.04.2019. The Tribunal in its own wisdom after considering the entire facts and circumstances and judicial precedents had adjudicated the appeal of the Revenue. Therefore, we are of the considered view that the Tribunal has rightly adjudicated the issue on merits and there is no apparent error in the order of the Tribunal. In view thereof, Misc. Application filed the Revenue is dismissed as devoid of any merits. 10. In the result, Misc. Application filed by the Revenue is dismissed. Order pronounced in open Court on 21 st August, 2023. Sd/- Sd/- (DIPAK P. RIPOTE) (PARTHA SARATHI CHAUDHURY) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated : 21 st August, 2023 MA No.99/PUN/2022 M/s. Alfa Laval India Ltd. 6 vr/- Copy to : 1. The Appellant. 2. The Respondent. 3. The Pr. CIT concerned. 5. The DR, ITAT, “C” Benches, Pune. 6. Guard File. By Order // TRUE COPY // Senior Private Secretary ITAT, Pune.