Sri Mellacheruvu Veerambhotla Gupta V. Commissioner of Income Tax, Guntur

ITTA/139/2014

AI Insights

The case involves Sri Mellacheruvu Veerambhotla Gupta, the appellant, contesting the additions made to his income by the Commissioner of Income Tax, Guntur, based on promissory notes deemed void for lack of consideration under Section 43 of the Negotiable Instruments Act, 1881. The Tribunal had previously upheld these additions, leading to the appellant's request for rectification under Section 254(2) of the Income Tax Act, 1961. The High Court, however, found no apparent error in the Tribunal's decision and dismissed the appeal, emphasizing that the rectification proceedings did not cover the merits of the case as argued by the appellant.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 796280 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 04-03-2014
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961, Negotiable Instruments Act, 1881
• Result in Favour of: Revenue
• Court: HIGH COURT
• Keywords: Assessment Year 2008-09; Income Tax; Promissory notes; Rectification proceedings; Void for Want of Consideration
• Section: 254(2); 43

Judgement Text

"IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A. No. 139 of 2014 Date: 04.03.2014 Between: Sri Mellacheruvu Veerambhotla Gupta, Guntur District. … Appellant And Commissioner of Income Tax, Guntur. … Respondent This Court made the following: THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A. No. 139 of 2014 JUDGMENT: (Per the Hon’ble The Chief Justice Sri Kalyan Jyoti Sengupta) This appeal is sought to be preferred against the judgment and order of the learned Tribunal dated 11.12.2013 in relation to the assessment year 2008-09 and sought to be admitted on the following suggested questions of law: “a) Whether the order of the Hon’ble Tribunal is in accordance with law, weight of evidence, facts and circumstances of the case? b) Whether the Hon’ble Tribunal is right in upholding the additions made to income on the basis of promissory notes which are void for want of consideration u/s. 43 of the Negotiable Instruments Act, 1881? c) When the “negative fact” that promissory notes are without consideration is established by the sworn statements of both the maker and the holder independently are the authorities right in levying tax without rebuttal/ d) Whether the Hon’ble Tribunal is right in overlooking the fact that the promissory notes were not witnessed only because they were never acted upon? e) Whether or not the order of the Hon’ble Tribunal upholding the additions made only on the basis of void promissory notes and nothing else is perverse? f) Whether the authorities who treated the promissory notes as of no worth and consequence by not returning them within 3 years justified in relying upon them to make additions? g) Whether the addition made by the assessing authority without any material is sustainable?” It would appear from the aforesaid suggested questions of law that the impugned judgment and order has not been challenged. Rather, the judgment and order of the learned Tribunal, which was sought to be rectified by the appellant under Section 254(2) of the Income Tax Act, 1961 (for short, “the Act”) was sought to be challenged. But, factually, the aforesaid judgment and order is not appealed against. The learned Tribunal on fact found that there is no error apparent from record, meaning thereby, the learned Tribunal did not find any material to exercise jurisdiction under Section 254(2) of the Act. Learned counsel argued on merit of the matter in relation to the first judgment and order. Simply, we cannot entertain this argument, as it is not the subject matter of the rectification proceedings. When the learned Tribunal found that there is no obvious and patent mistake nor does it appear apparently from the records the correction under the aforesaid Section is not called for. We set out the relevant findings of the learned Tribunal as under: “Considering the facts of the case, we are of the considered view that there is no mistake in the order of the Tribunal and grounds taken by the assessee are beyond the purview of Section 254(2) of the Act.” We therefore do not find any reason to interfere with this order. Moreover, we noticed that patently wrong information has been supplied to this Court when the appellant states that by order dated 11.12.2013 the earlier order dated 09.11.2012 has been confirmed. But, it is not so under the law. The earlier order remains as there was no mistake and in exercise of the power under Section 254(2) of the Act there is no provision for confirming of any order. The appeal is accordingly dismissed. No order as to costs. ___________________ K.J. SENGUPTA, CJ ___________________ SANJAY KUMAR, J Date: 04.03.2014 ES "