RAVISH VOHRA,NEW DELHI V. DCIT CIRCLE-20(2), NEW DELHI

MA 296/DEL/2024

AI Insights

The case involves Ravish Vohra, the applicant/assessee, who filed a miscellaneous application against the order of the Tribunal concerning the Assessment Year 2017-18. The application was based on the grounds that there was a mistake apparent on record in the Tribunal's previous order, which led to the recall of that order. The Tribunal had initially dismissed the assessee's appeal, relying heavily on the findings of the CIT (A) and not considering the materials and arguments presented by the assessee. The Tribunal acknowledged that the materials and arguments were not comprehensively considered in the earlier decision, which constituted a mistake apparent on record.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 398314 (ITAT-DELHI)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 04-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2017-2018
• Other Referred Cases: Income Tax Officer, Jaipur vs. Sons Jewellers, Umacharan Shaw & Bros Vs CIT, Agson Global Pvt Ltd vs ACIT, Nilkantha Saha vs. ITO, Omar Salay Mohamed Sait vs. CIT, Dhakeswari Cotton mills Ltd. vs. CIT, M/s Mehta Parikh & Co. vs. CIT, Dhirajlal Girdharilal vs. CIT, Atish Singla vs. ACIT, Shamsher Singh Gill v. ITO, T&T Motors Limited vs ACIT, Devyani Food Industries Ltd vs ACIT, Lokesh Constructions Pvt Ltd vs ACIT, YCD Industries vs National Faceless Assessment Centre, Surender Kumar vs CIT, Lal Construction Company Vs DCIT
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: YOGESHWAR SHARMA
• Assessee Lawyers: RAKESH GUPTA; AGGARWAL
• Keywords: Opportunity of being heard; Revised return; Bogus
• Section: 44AD

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “F”, NEW DELHI. BEFORE SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER and SHRI SUDHIR PAREEK, JUDICIAL MEMBER MA No.296/Del/2024 (arising in ITA No.161/DEL/2023) (Assessment Year : 2017-18) Ravish Vohra, vs. DCIT, Circle 20 (2), C – 11, Anand Niketan, New Delhi. New Delhi – 110 021. (PAN: AAEPV2296B) (APPLICANT) (RESPONDENT) APPLICANT/ASSESSEE BY : Dr. Rakesh Gupta, Aggarwal, Shri Somil Aggarwal, Advocate REVENUE BY : Shri Yogeshwar Sharma, Sr. DR Date of Hearing : 16.05.2025 Date of Order : 04.06.2025 O R D E R PER S. RIFAUR RAHMAN, ACCOUNTANT MEMBER : 1. This misc. application is filed by the applicant/assessee against the order of the Tribunal in ITA No.161/Del/2023 dated 28.02.2024 for Assessment Year 2017-18 on the ground that there is mistake apparent on record and accordingly, prayed to recall the order. 2. At the time of hearing, ld. AR submitted as under :- “That the appellant filed appeal before Hon'ble Income Tax Appellate Tribunal against the addition of Rs. 17,13,484/- sustained by the first appellate authority and following detailed submission were made as is evident from detailed Submission and Paper Book filed before the Tribunal: 2 MA No.1/Del/2025  The assessee established his proprietorship firm M/s 'RVI' Global' in November 2014 (A Y 15-16). M/s RVI Global was appointed as an exclusive distributor in India by Emiliana Parati Enterprise Pvt Ltd (EP India) for wallpapers and accessories under the 'Roberto Cavalli' brand on 30th November 20 14(Refer Page No. 80 to 89 of PB). This agreement was for a limited number of products i.e. RC-3 and Blu Marine wallpaper collections. Thereafter, a supplementary agreement was entered into on 18th February 20 16(Refer Page No.90 to 93 of PB) wherein the scope and potential of the business was significantly enhanced. The full impact of these positive changes in the business model reflected increase in sales figure for the first time in the year relevant to the present case i.e. A Y 2017-18.  It may also be noted that the purchases /Sale of the assessee has not been disputed by the Ld. AO and the assessee has adequately discharged the primary onus cast upon it. It has established its bonafides and the genuineness of the business. It has provided the reasons for increase in sales. It has provided all possible details of the cash sales by submitting some bills, also gave names, addresses and PAN of some of its customers (Refer page No.94 to 104 of PB), Also gave details of some purchase invoices for A Y 2017-18. (Refer page No. 68 to 79 of PB) and Computation of Income (Refer Page No. 39 and 40 of PB).  The assessee has filed detailed explanation substantiating the sales made by the assessee with voluminous evidences and provided the name, address, Pan, Bill number and invoice copy of the bill issued for some of the cash buyer and cash sale is the regular feature of this retail trading business.  Purchases made for effecting the sales has not been rejected by Revenue and hence the sales can't be considered to be unexplained.  The quarterly VAT returns were revised for two quarters in AY 2017- 18 i.e. 2nd & 3rd quarters rather than for any specific quarter. This is due to an accounting error that resulted in some purchases and sales were left by oversight by the person who was filing VAT/GST return at that time and to err is human. The VAT return for Third quarter was also revised in which there is change only in figure of purchases from Rs.5,94,522.00 (Refer Page No. 59 of PB) to Rs.13,15,917.00 (Refer Page No. 64 of PB). The sales figure was not changed (Refer Page No. 58 to 62, 63 to 67 of PB). In revising 2 quarter return, assessee has paid extra tax Rs.1,52,040/- (i.e., 3,01,067-1,49,026) on actual sales 3 MA No.1/Del/2025 made by him, similarly figure of purchase has also revised from Rs. 2,57,703(Refer Page No.49 of PB) to Rs. 16,54,129 (Refer Page No. 54 of PB) i.e., increase of Rs.13,96,426, as these purchases are interstate so he also paid extra VAT of Rs. 27,928/- thus in total on revising return for 2nd quarter he has paid additional VAT of Rs. 1,79,968/- (1,52,040+27,928), purchase figures in 3rd quarter were also increased from Rs 5,94,522 to Rs.13,15,917 while filing revised return, an increase of Rs 7,21,395 on which extra vat of Rs 14,428 was paid i.e., 2% on Rs 7,21,395. Thus, in revising VAT return assessee paid extra VAT of Rs.1,94,396 (1,79,968+14,428).  The quarterly cash sales of the period were accepted as genuine by the AO which means that the rectification of V AT return, however, was accepted by Ld. AO in realty. Since the VAT has been introduced, number of returns are revised many times all over India, but no addition has been made by the income tax department unless and until some information has been received from the VAT department that the figures given in the return are wrong or bogus sales/purchases have been made. The VAT department has not pointed out any error till date in the VAT return for the F.Y 2016-17 and in the absence of any evidence, no addition can be made.  The addition has been made by the AO/confirmed by CIT(A) only on the basis of assumption/presumption surmises and conjectures and without bringing any evidence on records which has no value in eye of law.  As the assessee has filed return u/s 44AD, he is not required to maintain books of accounts and therefore, provision of section 69A are not applicable. The provision of section 69A are applicable when there is unexplained money, etc., which are not recording in the books of accounts maintained by the assessee for any source of income, as the assessee has not maintained any books of accounts, therefore, no addition can be made.  As the sales of Rs.95,15,399/- declared by the assessee and paid the tax on income of Rs.7,61,232/- shown @8% of Sales under section 44AD which includes the addition of Rs. 17,13,484/-. confirmed by CIT. The action of the CIT in confirming addition of Rs. 17,13,4841- (which is out of sales) amounts to Double Taxation as assessee has already paid tax on Income.  The assessment order is unsustainable as no show-cause notice was issued and no opportunity of being heard was provided to the assessee 4 MA No.1/Del/2025 before the order was passed and therefore, the assessment order has been passed in violation of the Board's Instructions, which are binding upon the AO. This renders the assessment order bad in law and void- ab-initio.  The revenue has also not placed any material on record to demonstrate that the VAT return filed by the assessee before the appropriate authorities have not been rejected by the authorities (Refer Page No.11 of Ramesh Kochar ITA no. 171IDEL/2022 AY 2017-18)  The assessee further relied upon series of decisions in favour of the assessee which are as under: o Income Tax Officer, Jaipur vs. Sons Jewellers, ITAT Jaipur dated 29.09.2022, ITA No. 161/JP/2022. o Umacharan Shaw & Bros Vs CIT, (1959) 37 ITR 271 (SC). o Agson Global Pvt Ltd vs ACIT, ITAT Delhi, ITA No. 3746/Del/2019. o Nilkantha Saha vs. ITO, ITAT Kolkata, ITA No. 88/Gau/2020. o Omar Salay Mohamed Sait vs. CIT, (1959) 37 ITR 151 (SC). o Dhakeswari Cotton mills Ltd. vs. CIT, 1955 AIR 65. o M/s Mehta Parikh & Co. vs. CIT (1956) 30 ITR 181 (SC). o Dhirajlal Girdharilal vs. CIT, [1954] 26 ITR 736 (SC). o Atish Singla, ITAT Delhi dated 06.04.2022, ITA No. 1185/Del/2021. o Shamsher Singh Gill v. ITO, ITAT Delhi ITA No.2987/De1l2015, dated 28-2-2017. o T&T Motors Limited vs ACIT (Delhi ITAT, ITA No. 3161/De1l2013). o Devyani Food Industries Ltd vs ACIT (Delhi ITA, ITA No. 4973/Del/20 15). o Lokesh Constructions Pvt Ltd vs ACIT (Delhi High Court WP (C) 5491/2021. o YCD Industries vs National Faceless Assessment Centre (Delhi High Court - WP (C) 5552/2021). o Surender Kumar vs CIT (Delhi ITAT-ITA No. 8219IDe1l2018). o Lal Construction Company Vs DCIT (ITAT Hyderabad I.T.A. No. 980/HYD/2019, date of order – 12/10/2020.” 3. He further submitted that while deciding the issue, the Tribunal has heavily relied on the findings of the ld. CIT (A) and dismissed the appeal of the assessee with the observation that the assessee could not point out any factual 5 MA No.1/Del/2025 error in the aforementioned findings of the ld. CIT (A) though placed reliance on several judicial decisions. He submitted that assessee has brought on record various factual material and also brought to our notice that ld. CIT (A) himself analysed the cash sales of last three months which is part of the appellate order and also assessee has submitted several materials as part of the paper book before the Hon’ble Tribunal. He submitted that it is a mistake apparent on record in not considering the various factual materials placed on record. 4. On the other hand, ld. DR of the Revenue objected to the above submissions and submitted that the order passed u/s 254(1) cannot be reviewed. 5. Considered the rival submissions and material placed on record. We observed that the coordinate Bench has considered the findings of ld. CIT (A) and not considered the materials submitted before them by the assessee. Further, they have not considered the fact that the assessee was declaring his income u/s 44AD of the Act and there is no requirement to maintain books of account. The ld. CIT(A) has only analysed the VAT returns and rejected the plea of the assessee. The non-consideration of factual material submitted before the Bench also a mistake apparent on record. We are aware that the Tribunal do not have power to review its own order u/s 254(2) of the Act. However, in this case, the material furnished before us clearly shows that the Tribunal while passing its order such materials furnished were not considered 6 MA No.1/Del/2025 comprehensively. We observed that none of the materials filed were considered, none of the arguments were considered and simply sustained the order of ld. CIT (A) without giving any reasons and is a non-speaking order. Therefore, non-consideration of the judgments cited and arguments placed would constitute mistake apparent on record. In this regard, we find force from the judgment of Hon’ble Supreme Court in the case of ACIT vs. Saurashtra Kutch Stock Exchange Ltd. wherein it was held that, “non- consideration of decision of jurisdictional High Court and of Supreme Court can be said to be a mistake apparent from record which can be rectified under section 254(2)”. We are reproducing the relevant paras of the aforesaid judgment as under :- “39. As stated earlier, the decision was rendered in appeal by the Income- tax Appellate Tribunal, Rajkot. Miscellaneous Application came to be filed by the assessee under sub-section (2) of section 254 of the Act stating therein that a decision of the 'Jurisdictional Court', i.e., the High Court of Gujarat in Hiralal Bhagwati's case (supra) was not brought to the notice of the Tribunal and thus there was a \"mistake apparent from record\" which required rectification. 40. The core issue, therefore, is whether non-consideration of a decision of Jurisdictional Court (in this case a decision of the High Court of Gujarat) or of the Supreme Court can be said to be a \"mistake apparent from the record\"? In our opinion, both - the Tribunal and the High Court - were right in holding that such a mistake can be said to be a \"mistake apparent from the record\" which could be rectified under section 254(2).” 7 MA No.1/Del/2025 6. Further, we also find force from the judgment of Hon’ble Supreme Court in Honda Siel Power Products Ltd. v. CIT (2007) 295 ITR 466. Therefore, we recall the order and direct the Registry to fix the appeal for hearing in due course, issue notice to parties. 7. In the result, the misc. application filed by the assessee is allowed. Order pronounced in the open court on this 4TH day of June, 2025. SD/- SD/- (SUDHIR PAREEK) (S. RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 04.06.2025 TS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "