ACIT CIR. - 11(1), MUMBAI v. M/s. Sri. ADHIKARI BROS. TELEVISION NETWORK LTD., MUMBAI

ITA 4348/MUM/2008 | 2000-2001
Pronouncement Date: 21-05-2010 | Result: Dismissed

Appeal Details

RSA Number 434819914 RSA 2008
Assessee PAN AAACS7546Q
Bench Mumbai
Appeal Number ITA 4348/MUM/2008
Duration Of Justice 1 year(s) 10 month(s) 28 day(s)
Appellant ACIT CIR. - 11(1), MUMBAI
Respondent M/s. Sri. ADHIKARI BROS. TELEVISION NETWORK LTD., MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 21-05-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted J
Tribunal Order Date 21-05-2010
Date Of Final Hearing 10-05-2010
Next Hearing Date 10-05-2010
Assessment Year 2000-2001
Appeal Filed On 23-06-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH J : MUMBAI BEFORE SHRI D.K. AGARWAL (JM) AND SHRI B. RAMAKOT AIAH (AM) ITA NO.4348/MUM/2008 ASSESSMENT YEAR : 2000-01 ITA NO.4349/MUM/2008 ASSESSMENT YEAR : 2001-02 ASSTT. COMMISSIONER OF INCOME TAX RANGE-11(1) ROOM NO.439 AAYAKAR BHAVAN M.K. MARG MUMBAI-400 020. ..( APPELLANT ) VS. M/S. SRI ADHIKARI BROTHERS TELEVISION NETWORK LTD. ADHIKARI CHAMBERS OBEROI COMPLEX NEW LINK ROAD ANDHERI (W) MUMBAI. ..( RESPONDENT ) P.A. NO. (AAACS 7546 Q) APPELLANT BY : SHRI RAJNEESH ARVIND RESPONDENT BY : SHRI MA DHUR AGARWAL O R D E R PER D.K. AGARWAL (JM). THESE TWO APPEALS PREFERRED BY THE REVENUE ARE DIRECTE D AGAINST THE SEPARATE ORDERS DATED 8.4.2008 PASSED BY THE LD. CI T(A) FOR THE ASSESSMENT YEARS 2000-01 AND 2001-02. SINCE FACTS ARE IDEN TICAL AND ISSUE INVOLVED IS COMMON BOTH THESE APPEALS ARE DISPOSED O F BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NO.4348 & 49/M/08 A.Y:00-01 & 01-02 2 2. FOR THE SAKE OF BREVITY THE FACTS EXTRACTED FROM ITA NO.4348/M/2008 FOR ASSESSMENT YEAR 2000-01 ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF PRODUCTION OF TELE VISION SERIALS AND ITS TELECAST. THE RETURN WAS FILED DECLARING A TOTA L INCOME OF RS.9 75 307/-. THE ORIGINAL ASSESSMENT U/S.143(3) OF THE INCOME TAX ACT 1961 (THE ACT) WAS COMPLETED ON A TOTAL INCOME OF RS.10 09 23 600/- WHICH WAS SUBSEQUENTLY REVISED BY AN O RDER GIVING EFFECT TO THE CIT(A)S ORDER TO RS.2 27 26 200/-. ON G OING THROUGH THE RECORDS IT WAS OBSERVED BY THE ASSESSING OFFICER THAT WHILE PASSING ORDER U/S.143(3) THE ASSESSEE WAS ALLOWED A DEDUCTION OF RS.79 79 314/- U/S.35D OF THE ACT. IT WAS ALSO OBSERVED FROM THE DETAILS THAT THE EXPENDITURE OF RS.77 05 341/- ALLOWE D U/S.35D WAS ON ACCOUNT OF EXPENSES INCURRED IN CONNECTION WITH PRIVATE PL ACEMENT OF EQUITY SHARES. ACCORDING TO THE ASSESSING OFFICER THE DEDUCT ION U/S.35D IS AVAILABLE ONLY WITH RESPECT TO SHARE ISSUE EXPE NSES INCURRED IN CONNECTION WITH PUBLIC ISSUE OF SHARES THE ALLOWANCE GI VEN TO THE ASSESSEE BEING A MISTAKE APPARENT FROM RECORD A NOTICE U/ S.154 DATED 25.1.2007 WAS ISSUED SEEKING OBJECTIONS IF ANY T O THE PROPOSED RECTIFICATION. IN THE ABSENCE OF ANY COMPLIANCE THE ASSESSING OFFICER PRESUMED THAT THE ASSESSEE DOES NOT HAVE ANY OBJECTION TO THE PROPOSED RECTIFICATION AND ACCORDINGLY H E RECTIFIED THE ORDER U/S.154 WITHDRAWING THE DEDUCTION U/S.35D RS.77 05 341/- FROM ITA NO.4348 & 49/M/08 A.Y:00-01 & 01-02 3 THE TOTAL INCOME ASSESSED AS PER ORDER GIVING EFFECT TO CI T(A)S ORDER DATED 19.3.2004 RS.2 27 26 198/- AND ACCORDINGLY DETER MINED THE TOTAL INCOME AT RS.3 04 31 540/- VIDE ORDER DATED 8. 3.2007 PASSED U/S.154 OF THE ACT. 3. ON APPEAL BEFORE THE LD. CIT(A) THE ASSESSEE CONTE NDED THAT (I) THERE WAS AN AUDIT QUERY BECAUSE OF WHICH ACTION U/S.263 WAS PROPOSED. THE AUDIT QUERY RELATED TO THE SAID MISTAK E WHICH HAS BEEN SOUGHT TO BE RECTIFIED BY THE ASSESSING OFFICER IN TH E ORDER UNDER CONSIDERATION; (II) AFTER CONSIDERING THE ASSESSEES CONTENTI ONS THE CIT-11 DROPPED THE PROPOSED PROCEEDINGS U/S.263. THE A SSESSEE ALSO FILED A COPY OF SUCH ORDER DATED 29.03.2005; (III) SUB SEQUENTLY THE CASE WAS RE-OPENED U/S.147 AND THE SAME ISSUE REGARDING D EDUCTION U/S.35D WAS SOUGHT TO BE BROUGHT TO TAXATION; (IV) THE CIT(A) DECIDED IN FAVOUR OF THE ASSESSEE HOLDING THE INITIATION OF PR OCEEDINGS U/S.147 NOT VALID. A COPY OF SUCH ORDER OF THE CIT(A) DATED 03.05.2006 WAS ALSO FILED; (V) THE SAME ISSUE HAS BEEN SOUGHT TO BE NOW RECTIFIED U/S.154; (VI) ONLY A MISTAKE APPARENT FROM RECORD CAN B E RECTIFIED U/S.154; (VII) A CHANGE OF OPINION DOES NOT CONSTITUTE S UCH MISTAKE; (VIII) IN THE STATEMENT OF FACTS IT HAS BEEN MENTIONED THAT THE ASSESSING OFFICERS NOTICE U/S.154 DATED 25.01.2007 WAS SER VED ON THE ASSESSEE ON 01.02.2007 ALLOWING SEVEN DAYS TIME FOR COMPLIANCE; ITA NO.4348 & 49/M/08 A.Y:00-01 & 01-02 4 AND (IX) THE ASSESSEE SOUGHT TIME ORALLY AND ON 16.03.2 007 THE WRITTEN SUBMISSION WAS FILED. 4. THE LD. CIT(A) AFTER CONSIDERING THE ASSESSEES SUBMISSIO NS WHILE OBSERVING THAT A RECTIFIABLE MISTAKE U/S.154 WOULD BE SUCH AS WOULD NOT ENTAIL MORE THAN ONE OPINION AND ONLY A MISTAK E PATENT ON THE FACE OF RECORD CAN BE RECTIFIED U/S.154 HELD THAT IN THI S CASE ALREADY MORE THAN ONE VIEW IS ON RECORD THEREFORE IT COULD N OT HAVE BEEN RECTIFIED U/S.154 AND ACCORDINGLY DELETED THE ADDITION MADE BY THE ASSESSING OFFICER . 5. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) T HE REVENUE IS IN APPEAL BEFORE US TAKING FOLLOWING COMMON GROUNDS OF A PPEAL. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LEARNED CIT(A) ERRED IN DELETING TH E ADDITION MADE IN THE RECTIFICATION ORDER U/S.154 HO LDING THAT MORE THAN ONE VIEW ON THIS ISSUE IS ON RECORD AND PROVISIONS OF SECTION 154 DO NOT APPLY ON THE FACTS OF THIS CASE. 2. THE APPELLANT PRAYS THAT THE ORDER OF CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSIN G OFFICER RESTORED. 6. AT THE TIME OF HEARING THE LD. DR SUBMITS THAT FOR THE REASONS AS DISCUSSED IN THE ORDER PASSED U/S.154 THE LD. CIT(A) HAS E RRED IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER. HE THEREFORE SUBMITS THAT THE ORDER PASSED BY THE ASSESSING OFFICER BE RE STORED. ITA NO.4348 & 49/M/08 A.Y:00-01 & 01-02 5 7. ON THE OTHER HAND THE LD. COUNSEL FOR THE ASSESSEE WH ILE REITERATING THE SAME SUBMISSIONS AS SUBMITTED BEFORE THE LD. CIT(A) FURTHER SUBMITS THAT ON THE SAME ISSUE OF ALLOWABILITY OF DEDUCTION U/S.35D RS.79 79 314/- THE CIT VIDE NOTICE DATED 17.3 .2005 INITIATED PROCEEDINGS U/S.263 OF THE ACT AND AFTER CONSIDERING THE ASSESSEE'S SUBMISSIONS HE DROPPED THE PROCEEDINGS INITIATED U/S.263 V IDE ORDER DATED 29.3.2005 PASSED U/S.263 OF THE ACT. HE ALSO PLACED ON RECORD THE COPY OF THE SAID NOTICE AND ORDER PASSED U/S.263 OF T HE ACT. HE FURTHER SUBMITS THAT SUBSEQUENTLY ON THE SAME ISSUE THE CASE WAS RE- OPENED U/S.147 OF THE ACT AND THE ASSESSING OFFICER INTERALIA DISALLOWED DEDUCTION U/S.35D RS.77 05 341/- VIDE ORDER DATED 30.01.2006 PASSED U/S.143(3) R.W.S. 147 OF THE ACT. HOW EVER ON APPEAL THE LD. CIT(A) VIDE ORDER DATED 15.6.2006 HE LD THAT THE INITIATION OF PROCEEDINGS U/S.147 IS NOT VALID. HE FURT HER SUBMITS THAT AGAINST THE SAID ORDER PASSED BY THE LD. CIT(A) THE RE VENUE IS IN APPEAL BEFORE THE TRIBUNAL WHICH IS PENDING. HE FUR THER SUBMITS THAT ACCORDING TO SECTION 154(1A) OF THE ACT ONLY THE MATTER WHICH HAS NOT BEEN CONSIDERED AND DECIDED IN ANY PROCEEDING BY WAY OF APPEAL OR REVISION MAY BE RECTIFIED U/S.154. IN THE PRESENT CASE IN VIEW OF THE ORDER PASSED U/S.263 BY THE LD. CIT THE ORDER CANNOT BE RECTIFIED U/S.154 OF THE ACT AND FOR THIS PROPOSITION THE RELIANCE WAS ALSO PLACED ON THE DECISION IN RAMESH J. SHAH VS. ITO (1992) 41 ITD 257(AHD.) ITA NO.4348 & 49/M/08 A.Y:00-01 & 01-02 6 (SMC). HE FURTHER SUBMITS THAT SINCE ON THE SAME ISSUE TH E ASSESSING OFFICER HAS PASSED ORDER U/S.147 R.W.S.143(3) OF THE ACT RECOURSE TO RECTIFICATION PROCEEDING WOULD NOT BE VALID AND FOR TH IS PROPOSITION THE RELIANCE WAS ALSO PLACED IN CIT VS. E.I.D PARRY LIMITED (1995) 216 ITR 489( MAD.). HE THEREFORE SUBMITS THAT THE ORDER P ASSED BY THE LD. CIT(A) BE UPHELD. 8. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RI VAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE FACTS ARE NOT IN DISPUTE INASMUCH AS IT IS ALSO NOT IN DISPUTE THAT INITIALLY THE ASSESSING OFFICER HAS ALLOWED DEDUCTION U/S.35D RS.79 79 31 4/- BY AN ORDER PASSED U/S.143(3) OF THE ACT AND SUBSEQUENTLY THE LD. CIT IN EXERCISE OF HIS POWERS U/S.263 AFTER ISSUING SHOW CAUSE NOTI CE INTERALIA RAISING THE SAME ISSUE HAS DROPPED THE PROCEEDING U/S. 263 OF THE ACT VIDE ORDER DATED 29.3.2005 AND THEREAFT ER THE ASSESSING OFFICER RE-OPENED THE ASSESSMENT U/S.147 AND DISALLOWED TH E DEDUCTION U/S.35D RS.77 05 341/- HOWEVER ON APPEAL T HE LD. CIT(A) HELD THAT INITIATION OF PROCEEDING U/S.147 IS NOT VALI D. THUS IT IS CLEAR THAT IT IS A CASE OF CHANGE OF OPINION. 9. IN T.S. BALARAM ITO VS. VOLKART BROTHERS (1971) 8 2 ITR 50(SC) THE HONBLE SUPREME COURT WAS CONSIDERING THE SCOPE OF SE CTION 154 ITA NO.4348 & 49/M/08 A.Y:00-01 & 01-02 7 OF THE INCOME-TAX ACT 1961 MADE THE FOLLOWING OBSERV ATIONS (HEADNOTE) : ' A MISTAKE APPARENT ON THE RECORD MUST BE AN OBVIO US AND PATENT MISTAKE AND NOT SOMETHING WHICH CAN BE ESTABLISHED BY A LONG DRAWN PROCESS OF REASONING ON POINTS ON WHICH THERE MAY BE CONCEIVABLY TWO OPINIO NS. A DECISION ON A DEBATABLE POINT OF LAW IS NOT A MISTA KE APPARENT FROM THE RECORD.' 10. IN ASST. CIT VS SAURASHTRA KUTCH STOCK EXCHANGE LTD. (2008) 305 ITR 227(SC) THE HONBLE SUPREME COURT HAS BEEN PL EASED TO HOLD THAT A PATENT MANIFEST AND SELF-EVIDENT ERROR WHICH D OES NOT REQUIRE ELABORATE DISCUSSION OF EVIDENCE OR ARGUMENTS TO ESTABLIS H IT CAN BE SAID TO BE AN ERROR APPARENT ON THE FACE OF THE RECORD . THE SUPREME COURT FURTHER WAS PLEASED TO OBSERVE THAT TO PUT IT DI FFERENTLY IT SHOULD BE SO MANIFEST AND CLEAR THAT NO COURT WOULD PERMIT IT TO REMAIN ON RECORD. 11. IN MEPCO INDUSTRIES LTD. VS. CIT AND ANOTHER (2009 ) 319 ITR 208(SC) IT HAS BEEN HELD (HEADNOTE) : HELD REVERSING THE DECISION OF THE HIGH COURT THAT THE RIGHT TO RECTIFY MISTAKES UNDER SECTION 154 COULD N OT BE INVOKED IN A CASE OF MERE CHANGE OF OPINION. A RECT IFIABLE MISTAKE WAS A MISTAKE WHICH WAS OBVIOUS AND NOT SOMETHING WHICH HAD TO BE ESTABLISHED BY A LONG DRA WN PROCESS OF REASONING OR WHERE TWO OPINIONS WERE POS SIBLE. A DECISION ON A DEBATABLE POINT OF LAW COULD NOT BE TREATED AS A 'MISTAKE APPARENT FROM THE RECORD'. ITA NO.4348 & 49/M/08 A.Y:00-01 & 01-02 8 12. IN GRASIM INDUSTRIES LTD. VS. CIT (2009) 317 ITR 2 41 (BOM.) IT HAS BEEN HELD (PLACITUM 11 PAGE 248) .IT MUST THEREFORE BE HELD THAT THE MISTAKE WH ICH WAS RECTIFIED BY THE INCOME-TAX OFFICER COULD NOT B E SAID TO BE A ' MISTAKE APPARENT ON THE RECORD' . WE THE REFORE CONCLUDE THAT THE RECTIFICATION SOUGHT TO BE DONE I N THIS CASE BY ADDITION OF CERTAIN LIABILITIES COULD NOT B E SAID TO BE A MISTAKE APPARENT ON THE RECORD. 13. APPLYING THE RATIO OF THE ABOVE DECISIONS TO THE F ACTS OF THE PRESENT CASE WE ARE OF THE VIEW THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE IT IS A CASE OF MERE CHANGE OF OPIN ION AND THE DECISION ON A DEBATABLE POINT OF LAW IS NOT A MI STAKE APPARENT FROM THE RECORD THEREFORE THE ASSESSING OFFICER HAS ERRE D IN INVOKING THE PROVISIONS OF SECTION 154 OF THE ACT AND ACCORDINGLY W E ARE INCLINED TO UPHOLD THE ORDER OF THE LD. CIT(A) IN HOLDING T HAT THE MATTER COULD NOT HAVE BEEN RECTIFIED U/S.154 AND IN DELETING THE A DDITION MADE BY THE ASSESSING OFFICER. THE COMMON GROUNDS TAKEN BY THE RE VENUE FOR THE ASSESSMENT YEARS 2000-01 AND 2001-02 ARE THEREFORE REJECTED. 14. IN THE RESULT REVENUES APPEALS STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21.5.2010. SD/- SD/- (B. RAMAKOTAIAH) ( D.K. AGARWAL ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED: 21.5.2010. JV. ITA NO.4348 & 49/M/08 A.Y:00-01 & 01-02 9 COPY TO: THE APPELLANT THE RESPONDENT THE CIT CONCERNED MUMBAI THE CIT(A) CONCERNED MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR ITAT MUMBAI. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON (10.5.)/11.5. SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 12.5.10 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON 21.5.10 SR.PS/PS 7. FILE SENT TO THE BENCH CLERK 24.5.10 SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER