PRAMOD KUMAR BIHARI V. THE INCOME TAX APPELLATE TRIBUNAL,CTC

WP(C)/16784/2019

AI Insights

The case involves Pramod Kumar Bihari, the petitioner, who sought to quash the orders of the Income Tax Appellate Tribunal, Cuttack, which dismissed his appeal and subsequent application for the incorporation of new documents. The original dispute arose from the Assessing Officer's addition of unexplained expenditure to the petitioner's income, which was upheld by the CIT(A) and the Tribunal. The petitioner argued that new documents received post the Tribunal's decision were crucial and sought their incorporation, which was denied under the limited scope of Section 254(2) of the Income Tax Act. The High Court, referencing the Supreme Court's decision in Tek Ram (Dead) through LRs v. Commissioner of Income Tax, found merit in the petitioner's argument and remanded the case for a fresh hearing.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 747276 (HC-MISC)
• Appeal Type: Others
• Pronouncement Date: 04-04-2024
• Assessment Year: misc
• Other Referred Cases: Tek Ram (Dead) through LRs v. Commissioner of Income Tax, (2013) 357 ITR 133 (SC)
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: S C MOHANTY
• Assessee Lawyers: B PANDA
• Keywords: Appellate Tribunal; Income Tax; Rectification of mistake; Unexplained expenditure; Perversion of Law
• Section: 254(2); 69C

Judgement Text

" Page 1 of 5 IN THE HIGH COURT OF ORISSA AT CUTTACK W.P.(C) No. 16784 of 2019 Pramod Kumar Bihari ….. Petitioner Mr. B. Panda and Associates, Advocates Vs. The Income Tax Appellate Tribunal, Cuttack and others ….. Opposite Parties Mr. S.C. Mohanty, Sr. S.C, I.T. Dept. CORAM: DR. JUSTICE B.R. SARANGI MR. JUSTICE G. SATAPATHY ORDER 04.04.2024 Order No. 08. This matter is taken up by hybrid mode. 2. Heard Mr. B. Panda, learned counsel for the petitioner and Mr. S.C. Mohanty, learned Senior Standing Counsel appearing for the opposite party-Income Tax Department. 3. The petitioner has filed this writ petition seeking to quash the order dated 08.07.2019 passed in M.A. No.47/CTK/2017 (ITA No.40/CTK/2017), by which the Income Tax Appellate Tribunal, Cuttack Bench, Cuttack, while dismissing the said M.A., observed that the scope of Section 254(2) to rectify mistake apparent from record is very limited and the Tribunal cannot review its own decisions within limited scope of Section 254(2) unless there is a mistake apparent from records or it is shown that the Tribunal order is perverse not sustainable in the eye of law. 4. Mr. B. Panda, learned counsel for the petitioner contended that after disposal of ITA No.40/CTK/2017 by the Tribunal vide order dated 26.05.2017, the petitioner received certain documents. Therefore, he filed M.A. No. 47/CTK/2017 seeking incorporation of Page 2 of 5 the said documents in ITA No.40/CTK/2017 before the Tribunal for consideration. But, the Tribunal, vide order dated 08.07.2019 dismissed M.A. No. 47/CTK/2017 on the ground that there is no provision for incorporation of documents under Section 254 (2) of the Income Tax Act and unless there is mistake apparent on the face of the record, the order passed in ITA No.40/CTK/2017 cannot be interfered with. To substantiate his contention, he has relied upon the judgment of the apex Court in Tek Ram (Dead) through LRs v. Commissioner of Income Tax, (2013) 357 ITR 133 (SC). 5. Mr. S.C. Mohanty, learned Senior Standing Counsel appearing for the opposite party-Income Tax Department contended that on the basis of the materials available on record, the Tribunal, after due adjudication, vide order dated 26.05.2017 dismissed ITA No.40/CTK/2017. Therefore, the Tribunal is well justified in passing the order dated 08.07.2019 dismissing M.A. No.47/CTK/2017, which does not warrant interference of this Court at this stage. 6. As it appears, during the course of assessment proceedings, the Assessing Officer found that the assessee had five credit cards of different banks, namely, ICICI Bank, Citi Bank, HDFC Bank, State Bank of India and Axis Bank. From the AIR information, the Assessing Officer found that the assessee had made payment of Rs.25,04,397/- using three credit cards. He further found that the assessee has shown gross receipts of Rs.20,96,350/-, expenditure of Rs 19,28,650/- and net profit of Rs.1,67,700/- from the business of readymade garments. Therefore, the Assessing Officer concluded that the expenditure shown by the assessee was Rs.19,28,650/- and the payments shown to have been made using five credit cards of Rs.25,97,119/- and the source of balance expenditure of Rs.6,68,469/- remained unexplained. Thereby, the assessee was Page 3 of 5 asked by the Assessing Officer for details of transaction in respect of five credit cards, but the assessee submitted details in respect of only three credit cards, namely, ICICI Bank, State Bank of India and Axis Bank. Further, the total credits in these three credit cards did not match with the gross receipts of Rs.20,96,350/- shown in the return of income. Therefore, the Assessing Officer made addition of Rs.6,68,469/- to the income of the assessee u/s 69C of the Income Tax Act. 7. Against the said order, the petitioner preferred appeal and the CIT(A) confirmed the action of the Assessing Officer observing that it was not in dispute that payment of Rs.25,04,397/- was made by the assessee using the five credit cards. The assessee has only one account in ICICI Bank and the receipts in that account are of Rs. 15,35,073/-. Further, receipts in ICICI Bank credit card, Axis Bank credit card and Citi Bank credit card are of Rs.47,317/-, Rs.74,065/- and Rs.5,00,556/- aggregating of the receipts of three credit cards is Rs.21,07,011/-. The gross receipts shown by the assessee in the return of income are of Rs.20,96,350/- Therefore, considering the entire facts of the case, he was in agreement with the Assessing Officer that the source of payment of Rs.6,68,469/- remained unexplained and addition made by the Assessing Officer u/s. 69C of the Act was confirmed by him. 8. Aggrieved by the order of the CIT(A), the petitioner preferred ITA No.40/CTK/2017 and the Income Tax Appellate Tribunal, Cuttack Bench, Cuttack, vide order dated 26.05.2017 dismissed the said appeal confirming the order passed by the First Appellate Authority and the Assessing Officer. 9. After dismissal of ITA No.40/CTK/2017 vide order dated 26.05.2017, the petitioner received certain documents and, therefore, Page 4 of 5 he filed M.A. No. 47/CTK/2017 to recall the said order for incorporation of the documents in ITA No.40/CTK/2017. The Income Tax Appellate Tribunal, vide order dated 08.07.2019, dismissed the said M.A. observing that the scope of Section 254(2) to rectify mistake apparent from record is very limited and the Tribunal cannot review its own decisions within limited scope of Section 254(2) unless there is a mistake apparent from records neither it is shown that the Tribunal order is perverse not sustainable in the eye of law. 10. In Tek Ram (Dead) through LRs (supra), the apex court in paragraphs-4 & 5 of the said judgment held as follows: “4. In our opinion, the documents, which the appellants have now filed before this Court are of some relevance and those documents should be looked into by the High Court before it comes to a conclusion whether the appeal requires to be allowed or to be rejected. 5. Taking that view of the matter, we set aside the order passed by the High Court and remand the matter back to the High Court for fresh disposal of IT appeal No.109 of 2005, after accepting the documents that were/may be filed by the appellants.” 11. In view of the law laid down by the apex Court in Tek Ram (Dead) through LRs (supra), this Court is of the considered view that the order dated 08.07.2019 passed by the Income Tax Appellate Tribunal, Cuttack Bench, Cuttack in M.A. No.47/CTK/2017 cannot be sustained in the eye of law and consequentially, the order dated 26.05.2017 passed in ITA No.40/CTK/2017 by the Income Tax Appellate Tribunal, Cuttack Bench, Cuttack also cannot be sustained in the eye of law. Accordingly, both the orders dated 26.05.2017 and 08.07.2019 are liable to be quashed and are hereby quashed and this Court remits the matter to the Income Tax Appellate Tribunal, Cuttack Bench, Cuttack to rehear the matter afresh taking into Page 5 of 5 consideration the documents relied upon by the petitioner in M.A. No.47/CTK/2017 by affording opportunity of hearing to the petitioner. Alok (DR. B.R. SARANGI) JUDGE (G. SATAPATHY) JUDGE Digitally Signed Signed by: ALOK RANJAN SETHY Designation: A.R-cum-Sr. Secretary Reason: Authentication Location: ORISSA HIGH COURT Date: 06-Apr-2024 18:15:45 Signature Not Verified "