SUBRAMANIAM SWAMINATHAN IYER, BHILAI,DURG V. DEPUTY COMMISSIONER OF INCOME TAX-1(1), BHILAI, DURG

MA 22/RPR/2025

AI Insights

The case involves Subramaniam Swaminathan Iyer, the applicant, who filed miscellaneous applications seeking recall of an order dated 10.02.2025 concerning the assessment year 2012-13. The original appeal (ITA No.71/RPR/2023) dealt with several additions made by the Assessing Officer, which were partly allowed for statistical purposes by the Tribunal. The applicant argued that the Tribunal had erred in not properly appreciating the facts and submissions during the hearing, leading to a request for a recall of the order. The Tribunal, however, found that the issues raised were not mistakes apparent from the record but rather disagreements with the Tribunal's earlier decision, which does not fall within the ambit of section 254(2) of the Act.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 787715 (ITAT-RAIPUR)
• Duration Of Justice: 3 month(s) 13 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 21-11-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 08-08-2025
• Other Referred Cases: Ishwarlal Mali Rathod Vs. Gopal and Ors., Lachman Dass Bhatia Hingwala vs. ACIT, CIT v. ITAT & Anr.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Keywords: Unexplained cash credit; Deemed dividend; Earning of tax free income; Bogus
• Section: 68; 139; 14A; 2(22)(e)

Judgement Text

"आयकर अपीलȣय अͬधकरण Ûयायपीठ रायपुर मɅ। IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR BEFORE SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER AND SHRI ARUN KHODPIA, ACCOUNTANT MEMBER M.A. Nos.21 & 22/RPR/2025 (Arising out of ITA No.71/RPR/2023) Ǔनधा[रण वष[ / Assessment Year : 2012-13 Subramaniam Swaminathan Iyer 12-A/7, Nehru Nagar, Bhilai (C.G.)-490 020 PAN: ANWPS2381P ……….. आवेदक/Applicant बनाम / V/s. The Deputy Commissioner of Income Tax-1(1), Bhilai (C.G.) ……Ĥ×यथȸ / Respondent Assessee by : None Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई कȧ तारȣख / Date of Hearing : 21.11.2025 घोषणा कȧ तारȣख / Date of Pronouncement : 21.11.2025 Printed from counselvise.com 2 MA Nos. 21 & 22/RPR/2025 A.Y. 2012-13 आदेश / ORDER PER PARTHA SARATHI CHAUDHURY, JM: These Miscellaneous Applications have been filed by the assessee arising out of ITA No.71/RPR/2023 for assessment year 2012-13 u/s. 254(2) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) against the order of Tribunal dated 10.02.2025. 2. At the time of hearing, none appeared on behalf of the assessee and no adjournment application has been filed. That as evident from the order sheet entries, the matters were posted for hearing on 29.08.2025, 12.09.2025, 19.09.2025, 17.10.2025 and on today i.e. 21.11.2025 and all these while there was no compliance by the assessee. In such scenario, it cannot be said that reasonable opportunities were not provided to the assessee. In other words, prolonged process of litigation and providing adjournment unnecessary delays the process of justice which hampers the trust of the litigants in the judicial process. The Hon'ble Supreme Court in the case of Ishwarlal Mali Rathod Vs. Gopal and Ors., passed in Special Leave Petition (Civil) Nos. 14117-14118 of 2021, order dated 20.09.2021, held and observed that as on today the judiciary and the justice delivery system is facing acute problem of delay which ultimately affects the rights of the litigant to access to justice and speedy trial. Arrears are mounting because of such delay and dilatory tactics and Printed from counselvise.com 3 MA Nos. 21 & 22/RPR/2025 A.Y. 2012-13 asking of repeated adjournments by the advocates and mechanically and in routine manner being granted by the courts. It cannot be disputed that due to delay in access to justice and not getting the timely justice it may shake the trust and confidence of the litigants in the justice delivery system. Therefore, the Hon'ble Apex Court has directed specifically that adjournments should not be granted in a routine manner and mechanically and such grant of adjournment by the Courts should not be a cause for delay in dispensing justice. We are of the considered view that sufficient opportunities in all these cases have been already provided to the assessee and the department in these prolonged litigation. Considering the aforesaid, we proceed to hear these matters considering the documents on record and the submissions of the Ld. CIT-DR. 3. The assessee by filing the present miscellaneous application has submitted as follows: “1. That the instant Miscellaneous Application (MA) is being filed by the Applicant seeking relief in the form of recall of order passed by the Hon’ble Income Tax Appellate Tribunal, Raipur Bench, Raipur, Pune (ITAT, Pune) in ITA No.71/RPR/2023, dated 10.2.2025 pertaining to A.Y.2012-13 partly allowing the appeal of the Applicant. Copy of order dated 10.2.2025 enclosed and marked as Annexure A. 2. That the Applicant preferred the impugned appeal before the Hon'ble Tribunal challenging the order passed by the Ld. CIT (Appeals) partly confirming the additions as made by the AO to the extent as under : 2.1. Rs.2,00,00,000- Amount credited to capital account treated as unexplained credit u/s.68. Printed from counselvise.com 4 MA Nos. 21 & 22/RPR/2025 A.Y. 2012-13 2.2. Rs.68,62,394-Unexplained credit U/s.68 representing agriculture income and other credits 2.3. Rs.6,12,607-Deemed Sales Tax in balance sheet treated as revenue receipt 2.4. Rs.1,45,75,000 — Deemed Dividend U/s.2(22)(e) 2.5. Rs.15,000 — Donation 2.6. Rs.8,87,725 — Disallowance under section 14A 3. The Appellant filed a detailed paper book before the Hon'ble Tribunal in support of its arguments and further filed a detailed written submission as well. 4. The Hon'ble Tribunal vide order dated 10.2.2025 adjudicated the grounds raised by the Appellant challenging the impugned additions as under: 4.1. Addition of Rs.15,000 — Donation 4.1.1. The impugned ground challenging the addition was not pressed by the Appellant and consequently the same was dismissed as not pressed. 4.2. Addition of Rs.1,45,75,000 - Deemed Dividend U/s 2(22)(e) 4.2.1. The impugned addition has been deleted and the ground allowed. 4.3. Addition of Rs.8,87,725 — Disallowance under section 14A 4.3.1. The Hon'ble Tribunal accepting the proposition that in absence of receipt of exempt income during the year no disallowance under section 14A can be made under law and accordingly restored the impugned issue to the file of the AO for the limited purpose to verify the factual position as to whether the Appellant received any exempt income during the year and in case the claim of the Appellant that he had not earn any exempt income during the year is found to be in order, then no disallowance under section 14A of the Act would be called for in his hands and accordingly the impugned ground was allowed for statistical purposes. 4.4. Addition of Rs.6,12,607 - Deemed Sales Tax Printed from counselvise.com 5 MA Nos. 21 & 22/RPR/2025 A.Y. 2012-13 4.4.1. The issue has been restored to the file of the AO for re-, 'N adjudication and accordingly the impugned ground was allowed for statistical purposes. 4.5. Addition of Rs.2,00,00,000 - Amount credited to capital account treated as unexplained credit u/s 68. 4.5.1. The issue has been restored to the file of the AO for re- adjudication and accordingly the impugned ground was allowed for statistical purposes 4.6. Addition of Rs.68,62,394 — Unexplained credit U/s. 68 representing agriculture income and other credits. 4.6.1. The impugned addition has been confirmed by the Hon'ble ITAT and the ground raised by the Appellant was dismissed. 5. It is the humble submission of the Applicant that the impugned order passed by the Hon'ble Tribunal, more particularly with respect to adjudication of the grounds pertaining to additions of Rs.6,12,607, Rs. 2,00,00,000 & Rs. 68,62,394, have been passed without due and proper appreciation of the facts and submissions as made before the Hon'ble Tribunal during the course of hearing apart from suffering from other mistakes apparent from the record and which are enumerated hereunder and consequently the order of the Hon'ble Tribunal deserves to be recalled and the appeal deserves to be reheard in the interest of justice. 6. Addition of Rs.6,12,607 6.1. That with respect to the addition of Rs.6,12,607 pertaining to alleged deemed sales tax as made by the AO, the Appellant during the course of hearing before the Hon'ble Tribunal categorically proved that the said amount has been paid by the Appellant on 14.4.2012 which is prior to the \"due date\" of filing return of income under section 139(1) of the Act and consequently no disallowance of the said amount was called for in the hands of the Appellant. 6.2. The Appellant further argued that it is trite law that in cases where the sales tax amount shown as outstanding in the balance sheet as on 31St March, is paid before the due date of filing the return of income under section 139(1) of the Act then no disallowance is warranted in law. Printed from counselvise.com 6 MA Nos. 21 & 22/RPR/2025 A.Y. 2012-13 6.3. The Hon'ble Tribunal most respectfully erred in not adjudicating this legal aspect as to whether in cases where the sales tax amount shown as outstanding in the balance sheet as on 31st March, is paid before the due date of filing the return of income under section 139 (1) of the Act, then whether any addition can be made under law. 6.4. The Hon'ble Tribunal most respectfully erred in restoring the entire issue to the file of the AO without adjudicating the legal argument of the Appellant wherein the Appellant argued that he having paid the amount of sales tax shown as liability in the balance sheet before the due date of filing the return of income under section 139(1), no addition is warranted under law. 6.5. It is the humble submission of the Appellant that the said legal issue ought to have been adjudicated and a categorical finding ought to have been given by the Hon'ble Tribunal and the issue, if required, ought to have been remanded to the file of the AO solely for the purpose of verification of the fact as to whether the amount of sales tax has actually been paid before the due date of filing the return of income as claimed by the Appellant. 6.6. The Hon'ble Tribunal, by not adjudicating the legal argument advanced by the Appellant, most respectfully, has committed mistake as per section 254 of the Income Tax Act, 1961 and which suitably deserves to be rectified as per law and in the interest of justice. 7. Addition of Rs.2,00,00,000 7.1. The Appellant challenging the legality of the addition of Rs.2,00,00,000 categorically submitted before the Hon'ble Tribunal at the time of hearing that the amount of Rs. 2,00,00,000 representing the accretion in the capital account of the Appellant did not represent any fresh flow of funds but was only a result of transfers/adjustments i.e corresponding reduction in the sundry creditors/associate credit balances and accordingly no addition was warranted in law. 7.2. The Appellant in support submitted copies of sundry creditors ledger accounts from where the amounts have been transferred to the capital account of the Appellant and which has also been duly recognized and appreciated by the Hon'ble Tribunal. Printed from counselvise.com 7 MA Nos. 21 & 22/RPR/2025 A.Y. 2012-13 7.3. It is an accepted fact that for the purpose of this impugned addition, the CIT(A) had duly called for the remand report from the AO as well as the Appellant filed rejoinder to the said remand report as well and which is already on record. 7.4. The Hon'ble Tribunal at paragraph 42 of the order have categorically accepted and adjudicated the fact that the observation of the CIT(A) that the transfers/adjustments were not made through passing of entries in the relevant books of accounts of the said concerns/divisions, apparently is not found to be in conformity with the material that has been placed on record by the Appellant. 7.5. The Hon'ble Tribunal further at paragraph 44 has observed that the observation of the CIT(A) that the claim of the Assessee that the amount of Rs.2 Crores was infused in his \"capital account\" to reduce the sundry creditors/associate credit balances that incorrect/bogus balance of the creditors/associate credit balances were projected which, thus, had sourced the investment in the acquisition of corresponding assets by him from his undisclosed income, categorically held that the same will have no bearing on the adjudication of the issue on hand for the year under consideration. 7.6. The Hon'ble Tribunal thus categorically accepted that on the basis of the facts and evidence filed before the Hon'ble Tribunal the amount of Rs.2,00,00,000 credited to the capital account of the Appellant was solely on account of transfer of funds from the ledgers of sundry creditors and accordingly did not and could not amount to income of the Appellant much less under section 68 of the Act. 7.7. The Hon'ble Tribunal has further categorically negated all the justifications given by the CIT(A) while confirming the impugned addition and consequently thus holding in essence and spirit that the addition so made was grossly illegal. 7.8. The Hon'ble Tribunal most respectfully ignoring the fact that the impugned issue has already been the subjected to remand report by the AO during the course of appeal proceedings before the CIT(A) and which further has been duly and adequately replied to by the Appellant, has most respectfully erred in not finally adjudicating the grounds on Printed from counselvise.com 8 MA Nos. 21 & 22/RPR/2025 A.Y. 2012-13 merits but remanding the issue to the file of the AO with a direction to re-adjudicate the same. 7.9. It is the humble submission of the Appellant that the Hon'ble Tribunal grossly erred in self contradicting itself in as much as on one hand the Hon'ble Tribunal has categorically accepted the fact that from the copies of documents placed by the Appellant during the course of hearing it is undisputed that the credit of Rs.2,00,00,000 to the capital account of the Appellant was wholly and exclusively out of reduction of the balances of sundry creditors and was solely emanating out of journal entry passed in the books of accounts and further categorically holding that the reasons given by the CIT(A) while proposing the addition are not factually and legally tenable in law and simultaneously on the other hand remanding the matter to the file of the AO for re-adjudication of the same which has self-contradicted each other and which most respectfully, constitutes a mistake as per section 254 of the Income Tax Act, 1961 and which suitably deserves to be rectified as per law and in the interest of justice. 8. Addition of Rs.68,62,394 8.1. The Appellant challenging the legality of the addition of Rs.68,62,394 (Rs.27,10,790 + Rs.41,51,604) categorically submitted before the Hon'ble Tribunal at the time of hearing that firstly the entire short/deficit amount of Rs.27,10,790 of agriculture income that was allegedly and apparently not disclosed by the Assessee in his respective returns of income for the year under consideration and that of the immediately two preceding years, could not have been assessed in the subject year as unexplained cash credit under section 68 of the Act. The Appellant further submitted that as there was no movement of funds in the books of account of Rs. 68,62,394, therefore, there was no justification for the AO to have held the same as unexplained cash credit under section 68 of the Act. The Appellant further submitted that, without prejudice, if the credit balances were held to be not genuine, then the addition of the same was liable to be made in the respective years to which the same pertained. 8.2. The Hon'ble Tribunal by confirming the addition and dismissing the ground of the Appellant have referred to and relied upon the communication filed by the Appellant before the AO during the course of assessment proceedings offering additional income of Rs.68,62,394 and have on the basis of Printed from counselvise.com 9 MA Nos. 21 & 22/RPR/2025 A.Y. 2012-13 the same upheld the addition as made by the AO under section 68 of the Act. 8.3. The Appellant most respectfully at the outset submits that the Hon'ble Tribunal grossly erred in not specifically adjudicating the arguments put forward by the Appellant and which have been reproduced hereinabove and have without even discussing the same solely on the basis of the declaration apparently and allegedly filed by the Appellant before the AO has proceeded to confirm the addition and dismissed the ground of the Appellant. 8.4. The Hon'ble Tribunal has further failed to accept and acknowledge the trite law that the addition under section 68 of the Act pertains to and can only be made with respect to the amount which has been credited in the books of accounts of the Appellant and not otherwise. 8.5. The alleged amount so offered for taxation to buy peace of mind by the Appellant during the course of assessment proceedings can by no stretch of imagination be considered to be an amount credited in the books of accounts of the Appellant so as to fall within the ambit of section 68 of the Act. 8.6 Further, the Hon'ble Tribunal failed to adjudicate the specific argument of the Appellant that the entire short/deficit amount of Rs.27, 10,790 of agriculture income that was allegedly and apparently not disclosed by the Assessee in his respective returns of income for the year under consideration and that of the immediately two preceding years, could not have been assessed in the subject year an unexplained cash credit under section 68 of the Act. The Hon'ble Tribunal further failed to adjudicate the specific argument of the Appellant that as there was no movement of funds in the books of account of Rs.68,62,394, and therefore, there was no justification for the AO to have held the same as unexplained cash credit under section 68 of the Act. The Hon'ble Tribunal further failed to adjudicate the specific argument of the Appellant that, without prejudice, if the credit balances were held to be not genuine, then the addition of the same was liable to be made in the respective years to which the same pertained. 8.7 The Hon'ble Tribunal, by not adjudicating the argument advanced by the Appellant and by not appreciating the trite law on the applicability of the provisions of section Printed from counselvise.com 10 MA Nos. 21 & 22/RPR/2025 A.Y. 2012-13 68 of the Act, most respectfully, has committed a mistake as per Section 254 of the Act Income Tax Act, 1961 and which suitably deserves to be rectified as per law and in the interest of justice, 9. Being aggrieved, the Applicant has preferred this impugned MA seeking recall of the order dated 10.2.2025 passed by the Hon'ble Tribunal Praying that the same may be recalled and the impugned appeal be reheard afresh in the interest of justice. 10. The Appellant places reliance on the decision of the Full Bench Hon'ble Delhi High Court in the case of Lachman Dass Bhatia Hingwala vs. ACIT wherein the Hon'ble Delhi High Court has held that under section 254(2) Tribunal is entitled to recall order in entirety to rectify apparent mistake. 11. The Appellant further relies on the decision of the Hon'ble MP High Court in the case of CIT v. ITAT & Anr. (1988) 172 ITR 158 (MP) wherein it has been held that non-consideration of material point raised but not considered amounts to a mistake apparent from the record rectifiable under section 254(2) of the Act.” 4. The Ld. Sr. DR submitted that nothing has been submitted by the assessee pointing out any mistake apparent from the order of the Tribunal. It was submitted by the Ld. Sr.DR that the order passed by the Tribunal is well-reasoned and the same does not call for any intervention as per Section 254(2) of the Act. 5. We have carefully considered the contents of the miscellaneous application and it is discernable that the assessee in the garb of the present miscellaneous applications filed u/s.254(2) of the Act is seeking review of the decision of the Tribunal which is not permitted within the jurisdiction as provided within the said provision of the Act. The Tribunal Printed from counselvise.com 11 MA Nos. 21 & 22/RPR/2025 A.Y. 2012-13 in its own wisdom after careful securitizing the facts and circumstances of the case and relying on various judicial pronouncements had partly allowed for statistical purposes, the appeal of the assessee. There are series of decisions by the Hon'ble Supreme Court as well as Hon'ble High Courts expounding scope of exercising powers under section 254(2) of the Act. We do not deem it necessary to recite and recapitulate all of them, but suffice to say that core of all these authoritative pronouncements is that power for rectification under section 254(2) of the Act can be exercised only when mistake, which is sought to be rectified, is an obvious and patent mistake, which is apparent from the record and not a mistake, which is required to be established by arguments and long drawn process of reasoning on points, on which there may conceivably be two opinions. 6. We are of the considered view that the plea taken by the assessee through these miscellaneous applications amounts to review of the order of the Tribunal which is beyond the scope of Section 254(2) of the Act. That further, the assessee even objected to the findings arrived at by the Tribunal which again tantamount to review of its own order by the Tribunal which is not permissible within the ambit of Section 254(2) of the Act. The aforesaid view is supported by the judgment of the Hon'ble Supreme Court in the case of T.S. Balaram, ITO v. Volkart Bros., (1971) 82 ITR 50 (SC), wherein the Hon'ble Apex Court had held as under: Printed from counselvise.com 12 MA Nos. 21 & 22/RPR/2025 A.Y. 2012-13 \" ....A mistake apparent on the record must be an obvious and patent mistake and not something which can be established by a long-drawn process of reasoning on points on which there may conceivably be two opinions. As seen earlier, the High Court of Bombay opined that the original assessments were in accordance with law though in our opinion the High Court was not justified in going into that question.......an error which has to be established by a long-drawn process of reasoning on points where there may conceivably be two opinions cannot be said to be an error apparent on the face of the record. A decision on debatable point of law is not a mistake apparent from the record........\" Also, a similar view had been taken by the Hon'ble Supreme Court in the case of Commissioner of Income Tax (IT-4) Vs. Reliance Telecom Ltd., (2021) 133 taxmann.com 41 (SC), wherein it was held as under: \"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. As observed hereinabove, the powers under Section 254(2) of the Act are only to correct and/or rectify the mistake apparent from the record and not beyond that.” Printed from counselvise.com 13 MA Nos. 21 & 22/RPR/2025 A.Y. 2012-13 7. Considering the aforesaid facts and on careful perusal of the judicial pronouncements, we are of the view that as the assessee in the garb of the present application filed u/s.254(2) of the Act had, in fact, sought for a review of the order so passed by the Tribunal, which as observed by us hereinabove does not fall within the realm of the powers vested with it u/s.254(2) of the Act, accordingly, the miscellaneous applications filed by the assessee u/s.254(2) of the Act are dismissed in terms with the aforesaid observations. 8. In the result, the miscellaneous application filed by the assessee in MA No. 21/RPR/2025 being devoid and bereft of any merits is dismissed. MA No.22/RPR/2025 A.Y.2012-13 9. On perusal of the records, it is noted that the captioned miscellaneous application has been inadvertently filed by the assessee in duplicate which is arising from the same order of the Tribunal passed in ITA No.71/RPR/2023, dated 10.02.2025 and accordingly, the same is dismissed as infructuous. Printed from counselvise.com 14 MA Nos. 21 & 22/RPR/2025 A.Y. 2012-13 10. In the combined result, both the miscellaneous application filed by the assessee are dismissed. Order pronounced in the open court on 21st day of November, 2025. Sd/- Sd/- ARUN KHODPIA PARTHA SARATHI CHAUDHURY ACCOUNTANT MEMBER JUDICIAL MEMBER रायपुर/ RAIPUR ; Ǒदनांक / Dated : 21st November, 2025. SB, Sr. PS आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ /The Appellant. 2. Ĥ×यथȸ /The Respondent. 3. The CIT(Appeals)-1, Raipur (C.G.) 4. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण, रायपुर बɅच, रायपुर / DR, ITAT, Raipur Bench, Raipur. 5. गाड[ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलȣय अͬधकरण, रायपुर / ITAT, Raipur. Printed from counselvise.com "