THE COMMISSIONER OF INCOME TAX V. SHRI A R SHARATH

ITA/602/2013

AI Insights

This case involves an appeal by the Revenue against the decision of the Income Tax Appellate Tribunal, which had dismissed a rectification petition concerning the assessment orders for the years 1998-99 to 2004-05. The core issue revolved around the application of Section 254(2) of the Income Tax Act, 1961, where the Revenue contended that an error apparent on the face of the record existed in the Tribunal's earlier order. The Tribunal had previously set aside the assessment order for the year 2004-05, which was contested by the Revenue on grounds of misrepresentation by the assessee regarding the nature of the assessment order.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 729016 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 27-06-2013
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: A SHANKAR
• Assessee Lawyers: G KAMALADHAR
• Keywords: Assessment Order; Income Tax; Incriminating documents; Non compliance; Prosecution Proceedings; Rectification petition
• Section: 144; 142(1); 143(2); 143(1); 254(2); 132; 153A; 260A; 276CC

Judgement Text

"IN THE HIGH COURT OF KARNATAKA AT BANGALORE DATED THIS THE 27th DAY OF JUNE 2013 PRESENT THE HON’BLE MR. JUSTICE N.KUMAR AND THE HON’BLE MR. JUSTICE B.MANOHAR I.T.A.NO.602 OF 2013 BETWEEN: 1. The Commissioner of Income-Tax C.R. Building Queens Road Bangalore 2. The Income-Tax Officer Ward – 3(4) C.R. Building Queens Road Bangalore. ...Appellants (BY Sri.G.Kamaladhar, Adv.) AND: Shri.A.R.Sharath L/R of Late Shri.A.N.Rangaswamy No.64, Hospital Road Balepet Road Cross Bangalore – 560 053. …Respondent (By Sri.A.Shankar, Adv.) . . . . This I.T.A. is filed under Section 260A of the Income Tax Act, 1961 arising out of order dated - 2 - 12.07.2013 passed in M.P.No.48/Bang/2013 (in ITA No.483 to 489/Bang/2008), for the assessment year 1998-99 to 2004-05 praying this Hon’ble Corut to: 1. Formulate the substantial questions of law stated above (ii) allow the appeal and set-aside the orders passed by the Income Tax Appellate Tribunal, Bangalore in M.P.No.48/Bang/2013 (in I.T.A. Nos.483, 484, 485, 486, 487, 488 & 489/Bang/2008 dated 12.07.2013 and confirm the order of the Appellate Commissioner confirming the order passed by the Income Tax Officer, Ward-3(4), Bangalore. This I.T.A. coming on for admission, this day, N.Kumar J., delivered the following: JUDGMENT This appeal is preferred by the Revenue challenging the order passed by the tribunal dismissing the rectification petition filed under Section 254(2) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’ for short) on the ground that there was no error in the order of the Tribunal. 2. A search under Section 132 of the Act was conducted in the case of assessee on 04.07.2003 in his residential premises and business premises M/s Blue Club. During the course of search, certain incriminating documents were found and seized. - 3 - 3. A notice under Section 153A of the Act was issued to the assessee on 16.02.2004 giving him an opportunity to file the return of income within 30 days from the date of receipt of notice. The notice was served on the assessee on 27.02.2004. The assessee did not file the returns within the time prescribed. The copies of the seized material were furnished to the assessee on 13.04.2004. On account of the non response to the notice, a show cause notice under Section 276cc of the Act was issued to the assessee on 30.08.2004 calling upon him to explain as to why the prosecution proceedings should not be initiated for non-compliance to the notice under Section 153A of the Act. The said notice was also served on 04.09.2004 on the assessee, but there was no response. Thereafter, a notice under Section 142(1) of the Act was issued to the assessee on 21.09.2004 requesting him to produce the books of accounts and other details for determining his income. The said notice was also served on the assessee on 29.09.2004, again there was no response. However, after several notices, the assessee filed the return of - 4 - income on 29.09.2005 disclosing a total income of Rs.50,000/- being the estimated income from the Real Estate business and an enquiry was conducted. The assessing officer proceeded to pass an order on 09.01.2006. Aggrieved by the aid order, the assessee preferred an appeal, which came to be partly allowed on 14.02.2008. Aggrieved by the said order, both the parties preferred an appeal to the Tribunal. The Tribunal, by its order dated 25.02.2009, granted complete relief to the assessee; however, it cancelled the assessment. However, as the Tribunal held, in a proceeding under Section 153A of the Act, no assessment order could have been passed for the assessment year 2004-05. The authorities initiated fresh proceedings for passing orders for the assessment years 2004-05. After hearing the assessee, an order came to be passed on 22.03.2010, again passing the very same order. Aggrieved by the same, the assessee preferred an appeal to the Commissioner of Income Tax (Appeals) to set aside the said order. Against the said order, the revenue has preferred appeal to the Tribunal. - 5 - In the meanwhile, the revenue filed an application under Section 254 (2) of the Act for rectification of the mistake. The mistake according to them was the original assessment order passed for the year 2004-05 was not under Section 153A of the Act, but it was an order passed under Section 144 of the Act. The assessee had suppressed the said fact and acting on that representation, the said order of assessment came to be set aside and therefore, it was contended the said order requires to be rectified. No doubt, the said application was filed within four years, the time prescribed for filing such application. In support of their contention they also produced notice under Section 143 (2) & (1) of the Act. Therefore, they contended that there is an error apparent on the face of the record. Therefore the said order requires to be recalled. The Tribunal, on consideration of the material on record, the statutory provisions came to the conclusion that the Tribunal has not committed any error in passing the said order and therefore, no case for rectification of the order is made out. Accordingly, it - 6 - dismissed the application. It is against the said order, the present appeal is filed. 4. We have heard the learned counsel for the parties. 5. From the facts stated above, the Tribunal committed no error in passing the order dated 25.02.2009. The error apparent on the face of the record means error committed by the Court or the Tribunal in passing the order under challenge. Admittedly, the Tribunal has not committed any such error. In fact, even after fresh proceedings were initiated, the assessing authority, in the assessment order categorically states that it is a proceeding under Section 153A and when the order of assessment was passed the Appellate Authority has set aside the same. It is only thereafter, they are seeking for rectification of the mistake. 6. In the facts and circumstances of the case, we are satisfied that there is no error apparent on the face of the record committed by the Tribunal, which calls for - 7 - invoking Section 254(2) of the Act. Therefore, the Tribunal was justified in dismissing the application. We do not find any infirmity in the order, which calls for our interference. Accordingly, appeal is dismissed. SD/- JUDGE SD/- JUDGE SS "