PR. CIT, GHAZIABAD V. R.K.AGGARWAL (HUF), GHAZIABAD

MA 294/DEL/2022

AI Insights

The case involves a miscellaneous application under Section 254(2) of the Income Tax Act, 1961, by the Principal CIT, Ghaziabad, against R.K. Aggarwal (HUF). The application sought rectification of an earlier order concerning the assessment year 2009-10, which was allegedly based on an error regarding the acceptance of an advance/security received from M/s. Parsvnath Developers Limited. The Revenue contended that the assessee had acknowledged the receipt of Rs. 4,78,97,500 in the assessment year 2009-10, which should have been considered in the earlier order. However, the court, referencing a Supreme Court decision, held that the ITAT's powers under Section 254(2) do not allow for a recall of an order unless there is an error apparent on the record.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 792454 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 5 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 05-12-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2009-2010
• Appeal Filed On: 30-09-2022
• Other Referred Cases: CIT (IT- 4), Mumbai Vs. Reliance Telecom Ltd. [2021] 133 taxmann.com 41(SC)
• Laws Referred To: Section 254(2) of the Income Tax Act, Rule 24 of the Income Tax Appellate Tribunal Rules, 1963
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARPREET KAUR HANSARA
• Assessee Lawyers: S RAJ KUMAR; J P SHARMA
• Keywords: Set aside; Reassessment proceedings; Rectification of order

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘E’ NEW DELHI BEFORE SHRI M BALAGANESH, ACCOUNTANT MEMBER AND SHRI VIMAL KUMAR, JUDICIAL MEMBER M.A.No.294/Del/2022 (Arising out of ITA No. 3306/Del/2019) Assessment Year: 2009-10 Principal CIT, Ghaziabad PIN: 201 002 Vs. R.K. Aggarwal (HUF), C/o Raj Kumar & Associates, CAs, L-7A (LFG), South Extension, Part-II, New Delhi-1100 46 PAN AAIHR0679G (Applicant) (Respondent) ORDER PER VIMAL KUMAR, JUDICIAL MEMBER: The miscellaneous application under Section 254(2) read with Rule 24 of the Income Tax Appellate Tribunal Rules, 1963 is for rectification of Order dated 04.05.2022 for assessment year 2009-10. Assessee by S/Shri Raj Kumar & JP Sharma, CAs Department by Ms. Harpreet Kaur Hansara, Sr. DR Date of hearing 21.11.2025 Date of pronouncement 05.12.2025 Printed from counselvise.com 2 MA No.294/Del./2022 2. Learned Authorized Representative for the Revenue submitted that para no.4 of miscellaneous application during the course of reassessment proceedings the assessee had submitted in reply dated 23/03/2015 signed by Ashish Wadhawan, Partner M. Pal & Company, CA and copy of ledger account with M/s. Parsavnath Exotica, Arthala project for the period 01/04/2008 to 31/03/2009 signed by Karta of R.K. Agarwal (HUF) filed before the then ITO, Ward-1(2), Ghaziabad, where the amount of Rs. 4,78,97,500/- has been reflected as Journal entry passed on 01/04/2008 i.e. A.Y. 2009-10 itself. It can be seen that the assessee himself has accepted that the advance/security received from M/s. Parasvnath Developers limited against the Development Project for land at Arthala (Exotica Project) of Rs.4,78,97,500/- was received in assessment year 2009-10. Therefore, the order may be recalled and the appeal may be decided on merit. 3. Learned Authorized Representative for the appellant/assessee submitted that miscellaneous application does not contain facts showing errors apparent on record requiring rectification. Hon'ble Supreme Court of India in CIT (IT- 4), Mumbai Vs. Reliance Telecom Ltd. [2021] 133 taxmann.com 41(SC) has held that as under: Printed from counselvise.com 3 MA No.294/Del./2022 “4. In the present case, a detailed order was passed by the ITAT when it passed an order on 6-9-2013, by which the ITAT held in favour of the Revenue. Therefore, the said order could not have been recalled by the Appellate Tribunal in exercise of powers under section 254(2) of the Act. 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, which as such was already filed by the Assessee before the High Court, which the Assessee withdrew after the order passed by the ITAT dated 18-11-2016 recalling its earlier order dated 6-9-2013. Therefore, as such, the order passed by the ITAT recalling its earlier order dated 6-9-2013 which has been passed in 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. Therefore, the order passed by the ITAT dated 18-11-2016 recalling its earlier order dated 6-9-2013 is unsustainable, which ought to have been set aside by the High Court. 5. From the impugned judgment and order passed by the High Court, it appears that the High Court has dismissed the writ petitions by observing that (i) the Revenue itself had in detail gone into merits of the case before the ITAT and the parties filed detailed submissions based on which the ITAT passed its order recalling its earlier order; (ii) the Revenue had not contended that the ITAT had become functus officio after delivering its original order and that if it had to relook/revisit the order, it must be for limited purpose as permitted by section 254(2) of the Act; and (iii) that the merits might have been decided erroneously but ITAT had the jurisdiction and within its powers it may pass an erroneous order and that such objections had not been raised before ITAT. 6. None of the aforesaid grounds are tenable in law. Merely because the Revenue 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.” Printed from counselvise.com 4 MA No.294/Del./2022 4. From examination of record in light of aforesaid rival contentions, it is crystal clear that the Revenue has prayed for recall of order dated 04.05.2022 by mentioning facts which do not show error apparent on record. Therefore, miscellaneous application being de void of merit deserves dismissal. 5. In the result, miscellaneous application of the Revenue is dismissed. Order pronounced in the open court on 05th December, 2025. Sd/- Sd/- (M BALAGANESH) ACCOUNTANT MEMBER (VIMAL KUMAR) JUDICIAL MEMBER Dated: 5 December, 2025. Mohan Lal Copy forwarded to: 1. Applicant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi Printed from counselvise.com "