THE PR. CIT-1, RAJKOT, RAJKOT V. M\S. LEXICO CERAMICS, RAJKOT

MA 46/RJT/2023

AI Insights

The case revolves around a Miscellaneous Application (MA) filed by the Revenue against the order of the ITAT dated 12.05.2023, which had quashed the decision of the Principal Commissioner of Income Tax (PCIT). The PCIT had found that the assessing officer did not conduct necessary inquiries regarding the new capital introduced by nine partners amounting to Rs. 3,10,78,000. The Revenue argued that the ITAT's decision was a mistake apparent from the record as it overlooked the PCIT's findings. However, since the Gujarat High Court had already admitted an appeal on the same issues, the ITAT decided not to proceed with the MA to avoid conflicting judgments.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 705342 (ITAT-RAJKOT)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 04-07-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Assessment Year: 2015-2016
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: KALPESH DOSHI
• Keywords: Question of law; Revision of order
• Section: 143(3)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT BEFORE DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER AND SHRI DINESH MOHAN SINHA, JUDICIAL MEMBER ͪवͪवध आवेदन/MA No.46/RJT/2023 (Arising out of ITA No.1/Rjt/2023) (AY. 2015-16) (Physical Hearing) Asistant Commissioner of Income-tax,Circle-1(1), Rajkot, Vs. M/s Lexico Ceramics c/o Kalpesh S. Doshi & Co., 1006-09, The Spire-2, Near Sheetal Park BRTS Stop, 150 Ft. Ring Road, Rajkot-360005 èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AAEFL8870D (Appellant) (Respondent) अपीलाथȸओरसे/ Applicant by :Shri Abhimanyu Singh Yadav, Sr-DR Ĥ×यथȸकȧओरसे/Respondent by :Shri Kalpesh Doshi, AR सुनवाईकȧतारȣख/Date of Hearing : 02/05/2025 घोषणाकȧतारȣख /Date of Pronouncement : 04/07/2025 आदेश / O R D E R PER DR. A. L. SAINI, AM: By way of this Miscellaneous Application (MA), the Revenue has sought to point out that a mistake apparent from record within the meaning of section 254(2) of the Income-tax Act, 1961 (in short, ‘the Act’) has crept in the order of Tribunal dated 12.05.2023 vide ITA No.1/RJT/2023. 2. Learned Sr-DR for the Revenue, argued that, Miscellaneous Applications filed by the Revenue is against the issue of unexplained introduction of capital by partners, and the ITAT in the order stated that the assessing officer had made enquiries and after consideration of Page | 2 MMA No.46/Rjt/2023 (AY 2015-16) M/sM/s. Lexico Ceramics material placed on record. Hence, there is no error in the assessment framed by the assessing officer under section 143(3) causing prejudice to the interest of revenue and therefore the ITAT quashed the order of ld.PCIT. The Ld. PCIT has given the finding that the assessment order remained silent about the treatment of balance amount of Rs. 3,10,78,000/- introduced by remaining 9 partners. In para 9 of order u/s 263, the PCIT has further confirmed that he has gone through the records and carefully considered the submissions made by the assessee during the assessment proceedings. The Ld. PCTT has further given a finding in para 9 that the assessing officer did not conduct any inquiry in respect of new capital introduced by partners amounting to Rs. 3,10,78,000/-. The ITAT, despite acknowledging the fact that the appellant did not present its case before Ld. PCIT and despite the specific findings of Ld. PCIT that assessing officer has not carried out necessary inquiries with respect to capital introduced by 9 out of 11 partners has quashed the decision of Ld. PCIT on merits, which is a mistake apparent from record, which needs correction, therefore order of the Tribunal dated 12.05.2023, should be recalled to correct the above patent error. 3. On the other hand, Ld. Counsel submitted that against the order of the Tribunal, in ITA No. 1/RJT/2023, dated 12.05.2023, the Revenue (Department) has filed an appeal before the Hon’ble High Court of Gujarat and the issue raised by the Department in the said Miscellaneous Application is exactly the questions of law which is admitted by the Hon’ble Gujarat High Court. Since the Department has filed an appeal against the decision of the ITAT and same questions of law, as stated in the present miscellaneous application filed by the Department, have been raised by the department, before the Hon’ble Gujarat High Court and appeal of the Department has been admitted by the Hon’ble Gujarat High Page | 3 MMA No.46/Rjt/2023 (AY 2015-16) M/sM/s. Lexico Ceramics Court, therefore, the Department should not have any grievance to file the miscellaneous application, against the order of the Tribunal, which is challenged by the Department before the Hon’ble Gujarat High Court. Hence, the present miscellaneous application of the revenue should be dismissed. 4. In a rejoinder, Learned Sr-DR for the Revenue, fairly agreed that Department has filed an appeal against the decision of the ITAT, before the Hon’ble Gujarat High Court. 5. We have given our thoughtful consideration to rival contention. We note that Department has filed an appeal against the decision of the ITAT, before the Hon’ble Gujarat High Court. We note that section 254(2) of the Income Tax Act, allows the Tribunal to rectify any mistake apparent from the record in its order within 6 months from the end of the month in which the order was passed. However, once Hon’ble Gujarat High Court has taken cognizance of the same issue, which is raised by the Department in the present miscellaneous application, (especially if it is a substantial question of law arising from the alleged mistake), then, in that circumstances, we should refrain from adjudicating the miscellaneous application of the Department, particularly if it leads to conflicting positions. Considering the totality of the facts involved in the present case, we are of the view that in the present case since the appeal against the order of the Tribunal has already been admitted and a substantial question of law has been framed by the Hon'ble High Court of Gujarat, which we have noted, therefore, we cannot proceed with the Miscellaneous Application u/s 254(2) of the Act, and hence the miscellaneous application filed by the revenue is here by dismissed. Page | 4 MMA No.46/Rjt/2023 (AY 2015-16) M/sM/s. Lexico Ceramics 6. In the result, miscellaneous application filed by the Revenue is dismissed. Order is pronounced in the open court on 04/07/2025 Sd/- Sd/- (DINESH MOHAN SINHA) (Dr. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER Rajkot Ǒदनांक/ Date: 04/07/2024 Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. Pr. CIT 5. DR/AR, ITAT, Rajkot 6. Guard File By Order Assistant Registrar/Sr. PS/PS ITAT, Rajkot "