SUBHASH CHANDER,DELHI V. ACIT CENTRAL CIRCLE 2, GURGAON

ITA 2078/DEL/2024

AI Insights

The case involves three appeals filed by the assessee, Subhash Chander, against the common order of the CIT(Appeals)-3, Gurgaon, which was dated 28/03/2024. The appeals pertain to the assessment years 2013-14 to 2015-16 and challenge the rectification order passed under section 154 read with section 250(6) of the Income Tax Act, 1961. The primary contention was that there was no mistake apparent from the record to warrant such a rectification. The Tribunal noted that similar issues had been previously addressed in the assessee's case and found in favor of the assessee, leading to the conclusion that the CIT(Appeals) had overstepped his jurisdiction in the current order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 37089 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2015-2016
• Other Referred Cases: Orient Craft Ltd. vs. DC IT, Gurgaon
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRAMOD KUMAR
• Assessee Lawyers: SOMIL AGARWAL; DEEPESH GARG
• Keywords: Rectification of order
• Section: 154; 254(2)

Judgement Text

"ITA Nos.2076, 2077 & 2078/Del/2024 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “G” NEW DELHI BEFORE SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER AND SHRI M BALAGANESH, ACCOUNTANT MEMBER आ.अ.सं/.I.T.A Nos.2076, 2077 & 2078/Del/2024 िनधा\tरणवष\t/Assessment Years:2013-14, 2014-15 & 2015-16 Subhash Chander 139, Bharat Apartment, Rohini, New Delhi. PAN No.AHUPG5848B बनाम Vs. DCIT Central Circle-2, NA, Gurgaon, Haryana. अपीलाथ\u0014 Appellant \u0016\u0017यथ\u0014/Respondent Assessee by Shri Somil Agarwal, Adv. & Shri Deepesh Garg, Adv. Revenue by Shri Pramod Kumar, Sr. DR सुनवाईक\bतारीख/ Date of hearing: 07.03.2025 उ\u000eोषणाक\bतारीख/Pronouncement on 07.03.2025 आदेश /O R D E R PER C.N. PRASAD, J.M. These three appeals are filed by the assessee against the common order of the Ld. CIT(Appeals)-3, Gurgaon dated 28/03/2024 for the assessment years 2013-14 to 2015-16 passed u/s 154 r.w.s. 250(6) of the I.T. Act. The assessee raised the following common grounds in all these appeals for assessment years 2013-14 to 2015- 16: - 1. “That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in passing ITA Nos.2076, 2077 & 2078/Del/2024 2 the impugned order u/s 154 dated 28.03.2024 even though there were no mistake apparent from record. 2. That having regard to the facts and circumstances of the case, the Ld. CIT(A) has erred in law and on facts in passing the impugned order and has erred in interpreting the order passed dated 23.07.2019 in respect of protective addition, more so when there was no mistake apparent from record and when such interpretation was not possible on facts and in law. 3. That having regard to the facts and circumstances of the case, the Ld. CIT(A) has erred in law and on facts in not rejecting the rectification petition filed by Ld. AO, more so when such application was not maintainable in law and the order passed by Ld. CIT(A) dated 23.07.2019 was already merged into the order of Hon’ble ITAT dated 14.07.2022 and was thus having no jurisdiction to pass the impugned order. 4. That having regard to the facts and circumstances of the case, the action of Ld. CIT(A) has erred in law and on facts in passing the impugned order u/s 154 is bad inter-alia for the reason that a similar petition u/s 254(2) was filed by the Assessing Officer before Hon’ble Tribunal and the same was decided in favour of assessee vide order dated 05.04.2024. 5. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in reviving the protective addition in the hands of assessee which could not be done either on facts or in law, more so when Hon’ble Tribunal found that the job work done by the assessee for M/s Orient Craft Ltd. was genuine. 6. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the grounds are without prejudice to each other.” ITA Nos.2076, 2077 & 2078/Del/2024 3 2. The Ld. Counsel for the assessee submits that the present appeals are filed against the rectification order passed by Ld. CIT(A) u/s 154 r.w.s. 250(6) of the Income Tax Act, 1961 dated 28.03.2024 for AY 2013-14 to 2015-16 in pursuance of a rectification application filed by Ld. AO, in respect of order passed by Ld. CIT(A) dated 23.07.2019 for AY 2013-14 and that too when there is no mistake apparent from record. Ld. Counsel submits that similar miscellaneous applications in assessee’s own case were filed by the Revenue before Hon’ble Tribunal and Hon’ble Tribunal dismissed said miscellaneous applications inter-alia holding that there is no apparent error, vide Tribunal’s order in MA No.204/Del/2023 at PB 162-167. Therefore, the Ld. Counsel for the assessee submits that the impugned order of the Ld. CIT(Appeals) purportedly rectifying and reviving the addition made in the hands of the assessee is beyond jurisdiction and beyond the scope of provision of section 154 and is liable to be quashed. 3. Ld. Counsel for the assessee further made his submission as under: - “Brief background of the case is that the assessee had undertaken job work for M/s Orient Craft Ltd. and assessment was framed in case of M/s Orient Craft Ltd., the receipt of services towards job work charges performed by the assessee, and Ld. AO disallowed the said job work charges and made addition on substantive basis ITA Nos.2076, 2077 & 2078/Del/2024 4 in case of Orient Craft Ltd. Further, corresponding addition was made in the case of the assessee on protective basis. The disallowance in the case of Orient Craft Ltd. was confirmed by Ld. CIT(A) and on that basis, Ld. CIT(A) vide order dated 23.07.2019 modified /reduced the disallowance made in the case of assessee to 5 % of the total disallowance. The assessee filed appeal against the said order of Ld. CIT(A) dated 23.07.2019 sustaining disallowance to the extent of 5%, however, revenue did not challenge the said order of Ld. CIT(A). Subsequently, Hon’ble Tribunal in assessee’s case vide order dated 14.07.2022 (PB 15—155) held that: “In the backdrop of respective arguments, we notice that the Co-ordinate Bench of Tribunal in ITA. No. 3310; 3011 & 3312/1M/2019 in the case of Orient Craft Ltd. vs. DC IT, Gurgaon vide three separate orders all dated 24.09.2021 have given a clear finding towards genuineness of job work charges incurred by the Orient Craft Ltd. through the assessee-company herein. The Coordinate Bench has thus deleted the corresponding additions in the hands of the Orient Craft Ltd., i.e., recipient of the services from the assessee carried out on substantive basis. The Co-ordinate bench, on appraisal of the facts carried out in the case of recipient, has rendered a favourable finding. Hence, the basis for additions made in the hands of the assessee and later modified by the CIT(A) is inconsistent with the order of Co-ordinate Bench and thus cannot be countenanced. The additions were made by the AO to the extent of the job work receipt billed to Orient Craft Ltd. which were reduced to 5% of expenses incurred by the assessee herein. Consequently, plea of the Revenue for restoration of the matter to the Assessing Officer for examination of corresponding expenses does not emanate from the assessment order and therefore cannot be entertained. ITA Nos.2076, 2077 & 2078/Del/2024 5 In the result, all the three appeals of the assessee in ITA No. 7654, 7655, 7656/Del/2019 are allowed.” [Emphasis added]” Subsequently a miscellaneous application in assessee’s case was filed by the Revenue before Hon’ble Tribunal and Hon’ble Tribunal dismissed the said application inter- alia holding that there is no apparent error and the copy of the said order is enclosed at PB 162-167. It is pertinent to submit that the rectification application considered by Ld. CIT(A) in impugned order is alleging the same error which were filed in MA before the Tribunal by the Revenue as is evident from page 162-165 of the Hon’ble Tribunal’s order in MA No. 2-4/Del/2023 and the rectification application reproduced at page 2-4 of the impugned order and the said matter has already been considered by the Hon’ble Tribunal and have dismissed the same vide Hon’ble Tribunal’s order in MA No. 2- 4/Del/2023 at PB 162-167. Thus, the rectification application considered by Ld. CIT(A) in the impugned order passed by Ld. CIT(A) is beyond jurisdiction and beyond the scope of section 154 and is liable to be quashed and it may please be held so. Without prejudice to above, it is respectfully submitted that Hon’ble Tribunal in assessee’s own case, (supra) has inter alia held that in the case of M/s Orient Craft Ltd., a clear finding towards genuineness of job work charges has been given and the coordinate bench of the Hon’ble Tribunal on appraisal of the facts carried out in the case of M/s Orient Craft Ltd., has rendered a favorable finding. The basis for addition made in the hands of the assessee and later modified by Ld. CIT(A) is inconsistent with the order of the Co-ordinate Bench and this cannot be countenanced and accordingly allowed the appeal of the assessee. In view of these findings of Hon’ble Tribunal in assessee’s own case the impugned order passed by Ld. CIT(A) purportedly by rectifying and reviving the addition made in the hands of the assessee is beyond jurisdiction and ITA Nos.2076, 2077 & 2078/Del/2024 6 beyond the scope of provision of section 154 and is liable to be quashed and may please be so held.” 4. On the other hand, the Ld. DR strongly supported the orders of the authorities below. 5. Heard rival submissions, perused the orders of the authorities below. We find considerable force in the submissions of the Ld. Counsel for the assessee that the order passed by the Ld. CIT(Appeals) u/s 154 rectifying his order and reviving the addition made in the hands of the assessee is beyond jurisdiction and beyond the scope of provision of section 154 of the Act. It is observed that in this case the rendering of services on job work basis by M/s Orient Craft Limited was held to be genuine and the addition made substantively in the case of M/s Orient Craft Limited has been deleted by the Tribunal. The miscellaneous application filed by the Revenue against the order of the Tribunal in the case of Orient Craft Limited was also dismissed. The protective addition made in the hands of the assessee was originally deleted by the Ld. CIT(A) except for the commission on estimate basis of 5% which was sustained by the Ld. CIT(A) and the Revenue did not prefer any appeal. However, this order of the Ld. CIT(Appeals) was challenged by the Assessee before the Tribunal and the Tribunal allowed the ITA Nos.2076, 2077 & 2078/Del/2024 7 appeals of the assessee deleting even the commission expenses which was sustained by the Ld. CIT(Appeals). Meanwhile the Revenue filed miscellaneous application before the Ld. CIT(Appeals) stating that the Tribunal deleted the substantive addition made in the hands of Orient Craft Limited and, therefore, the protective addition made in the hands of the assessee be revised. The Ld. CIT(Appeals) based on the rectification application filed by the Assessing Officer modified his order reviving the protective addition along with the disallowance of 5% towards commission as was done by the Assessing Officer in the assessment originally. In our view this is beyond the scope of provision of section 154 and also beyond the jurisdiction of Ld. CIT(Appeals). Thus, we quash the orders of the Ld. CIT(Appeals) passed u/s 154 r.w.s. 250(6) of the Act dated 28/03/2024 for the assessment years 2013-14 to 2015-16. The grounds raised by the assessee are allowed. 6. In the result, appeals of the assessee are allowed. Order pronounced in the open court on 07.03.2025 Sd/- Sd/- (M BALAGANESH) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 07.03.2025 *Kavita Arora, Sr. P.S. ITA Nos.2076, 2077 & 2078/Del/2024 8 Copy of order sent to- Assessee/AO/Pr. CIT/ CIT (A)/ ITAT (DR)/Guard file of ITAT. By order Assistant Registrar, ITAT: Delhi Benches-Delhi "