Shri Ajit Pulp & Paper Ltd.,, Vapi v. The Dy.CIT, Central Circle-3,, Surat

MA 2/AHD/2014 | 2010-2011
Pronouncement Date: 13-10-2016 | Result: Allowed

Appeal Details

RSA Number 220524 RSA 2014
Assessee PAN AADCS3903Q
Bench Ahmedabad
Appeal Number MA 2/AHD/2014
Duration Of Justice 2 year(s) 9 month(s) 9 day(s)
Appellant Shri Ajit Pulp & Paper Ltd.,, Vapi
Respondent The Dy.CIT, Central Circle-3,, Surat
Appeal Type Miscellaneous Application
Pronouncement Date 13-10-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 13-10-2016
Assessment Year 2010-2011
Appeal Filed On 03-01-2014
Judgment Text
MA NO. 2/AHD/2014 ARISING OUT OF I.T.(SS) A NO. 12/AHD/ 2013 ASSESSMENT YEAR: 2010 - 11 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD [CORAM: PRAMOD KUMAR AM AND RAJPAL YADAV JM ] MA NO. 2/AHD/2014 ARISING OUT OF I.T.(SS) A NO. 12/AHD/2013 ASSESSMENT YEAR: 2010 - 11 SHRI AJIT PULP & PAPER LTD ............. ... .. APP LICANT SURVEY NO. 239 NEAR MORAL RAILWAY CROSSING VILLAGE SALVAV VIA VAPI VAPI 396 191 [PAN: AADCS3903Q] VS. DY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 3 SURAT . . RESPONDENT APPEARANCES BY: TUSHAR P HEMANI FOR THE APPLICANT PRASOON KABRA FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : JULY 15 2016 DATE OF PRONOUNC ING THE ORDER : OCTOBER 13 2016 O R D E R PER PRAMOD KUMAR AM : [1] BY WAY OF THIS APPLICATION THE ASSESSEE APPLICANT SEEKS RECTIFICATION OF CERTAIN MISTAKE S APPARENT ON RECORD ALLEGED TO HAVE CREPT IN THE ORDER DATED 5 TH JULY 2013 PASSED BY THIS TRIBUNAL. [2] THE FIRST MISTAKE APPARENT ON RECORD ALLEGED TO HAVE VITIATED THE ORDER DATED 5 TH JULY 2013 IS THIS. THE ORDER WAS PASSED ON A DEPARTMENTAL APPEAL F ILED AGAINST THE RELIEF GRANTED BY THE CIT(A). GROUNDS OF APPEAL AS SET OUT IN THE MEMORANDUM OF APPEAL WERE AS FOLLOWS: 1) THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN ADMITTING THE ADDITIONAL EVIDENCE IN RELATION TO THE SHORTAGE OF STOCK WITHO UT GIVING THE AO AN OPPORTUNITY TO OFFER HIS COMMENTS IN CONTRAVENTION OF RULE 46A OF THE IT RULES. MA NO. 2/AHD/2014 ARISING OUT OF I.T.(SS) A NO. 12/AHD/ 2013 ASSESSMENT YEAR: 2010 - 11 PAGE 2 OF 5 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE AO. 3) IT IS THEREFORE PRAYED THAT TH E ORDER OF THE LEARNED CIT(A) BE SET ASIDE AND THAT OF THE AO BE RESTORED TO THE ABOVE EXTENT . [3] AS THE RECTIFICATION APPLICATION STATES THE ONLY SUBSTANTIVE GROUND BEFORE THE TRIBUNAL WAS WITH RESPECT TO VIOLATION OF RULE 46A. THIS GROUND OF APPEAL WA S DISMISSED BY THE TRIBUNAL AND YET THE TRIBUNAL PROCEEDED TO ADJUDICATE THE GRANT OF RELIEF BY THE CIT(A) ON MERITS. THE STAND OF THE APPLICANT IS THAT IF SUCH GENERAL GROUNDS (AS IN GROUND NO. 2 AND 3) ARE REQUIRED TO BE TREATED AS SUBSTANTIVE GROUNDS THEN THERE IS NO NEED TO RAISE SPECIFIC GROUNDS AT ALL . IT IS IN THIS CONTEXT THAT THE APPLICANT POINTS OUT THAT ONCE THE TRIBUNAL DISMISSED THE FIRST GROUND OF APPEAL IN RESPECT OF ADMISSION OF ADDITIONAL EVIDENCE THE TRIBUNAL PROCEEDING TO DECIDING T HE MATTER ON MERITS WAS A MISTAKE APPARENT ON RECORD. [4] WE HAVE HEARD THE RIVAL CONTENTIONS PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. [5] IT IS ONLY ELEMENTARY THAT THE POWER O F THE TRIBUNAL IN DISPOSING OF AN APPEAL ARE CONFINED THE POINTS OR GROUNDS RAISED BEFORE IT . IN THIS CONTEXT IT IS USEFUL TO REFER TO THE FOLLOWING OBSERVATIONS MADE BY THE HON BLE GAUHATI HIGH COURT IN THE CASE OF JEYPORE TIMBER & VENEER MILLS (P) L TD VS. CIT (1982) 137 ITR 415 (GAU) : 'PARLIAMENT IN ITS WISDOM HAS CONFERRED UPON THE TRIBUNAL BROAD AND SWEEPING POWERS BUT AT THE SAME TIME CONTROLLED THE POWERS BY REQUISITE CONSTRICTION. THE PROVISION OF S. 254 OF THE ACT IS AN ENABLING AS WELL AS DI SABLING PROVISION. A PASSING GLANCE CREATES AN IMPRESSION THAT THE TRIBUNAL HAS BEEN ENDOWED WITH PLENARY POWER UNDER S. 254 OF THE ACT TO PASS ANY ORDER AS IT THINKS FIT. HOWEVER IT IS NOT SO AS IT WILL APPEAR IN THE EXPRESSION SUCH ORDERS THEREON AS I T THINKS FIT IN S. 254 . THE WORD THEREON IN THE EXPRESSION IS A SERIOUS CONSTRICTION ON THE EXERCISE OF POWER BY THE TRIBUNAL. IT CAN DECIDE ONLY THE POINTS OR GROUNDS RAISED BEFORE IT WHEREAS THE IT AUTHORITIES CAN TRAVEL BEYOND THE GROUNDS AND CONSID ER THE ENTIRE ASSESSMENT. ' [EMPHASIS BY UNDERLINING SUPPLIED BY US] [6] THE POWERS OF THE TRIBUNAL ARE THUS CLEARLY RESTRICTED BY THE GROUNDS OF APPEAL AS SET OUT IN THE MEMORANDUM OF APPEAL. WHAT IS NOT PROPERLY RAISED AS A GROUND BEFORE THE TRIBUNAL CANNOT BE A SUBJECT MATTER OF ADJUDICATION BEFORE THE TRIBUNAL. WHEN IT COMES TO RAISING A GROUND BEFORE THE TRIBUNAL IT HAS TO BE A SPECIFIC AND CONCISE GROUND OF APPEAL. IT CANNOT BE AN OMNIBUS OR VAGUE GROUND OF APPEAL. RULE 10 SPECIFICALLY REQUIRES TH AT EVERY MEMORANDUM OF APPEAL SHALL BE WRITTEN IN ENGLISH AND SHALL SET FORTH CONCISELY AND UNDER DISTINCT HEADS THE GROUNDS OF APPEAL WITHOUT ANY ARGUMENT OR NARRATIVE; AND SUCH GROUNDS SHALL BE MA NO. 2/AHD/2014 ARISING OUT OF I.T.(SS) A NO. 12/AHD/ 2013 ASSESSMENT YEAR: 2010 - 11 PAGE 3 OF 5 NUMBERED CONSECUTIVELY . A GROUND OF APPEAL IN PLAIN WO RDS IS THE GROUND ON WHICH THE IMPUGNED ORDER IS APPEALED AGAINST. IN EFFECT THUS IT IS THE GROUND ON ACCOUNT OF WHICH THE IMPUGNED ORDER IS VITIATED IN LAW OR ON FACTS. [7] IT IS IN THIS LIGHT THAT WE HAVE TO LOOK AT THE GROUNDS OF APPEAL BEFORE THE TRIBUNAL. WHAT IS TERMED AS FIRST GROUND OF APPEAL IS INDEED A SUBSTANTIVE GROUND OF APPEAL AND THERE IS NO DISPUTE ABOUT THAT THAT ASPECT. IT DOES POINT OUT WHY EXACTLY THE ORDER OF THE CIT(A) WAS INCORRECT IN LAW INASMUCH AS IT CONSTITUTED VIOLATION OF RULE 46A AND TO THAT EXTENT THE ORDER PASSED BY THE CIT(A) COULD NOT BE HELD TO BE LEGALLY SUSTAINABLE IN LAW. THE TRIBUNAL REJECTED THIS GROUND OF APPEAL. WHAT FOLLOWED THEREAFTER WAS THAT THE TRIBUNAL PROCEEDED TO DECIDE THE MATTER ON MERITS UNDER AS I T IS STATED NOW SECOND GROUND OF APPEAL. THE SECOND GROUND OF APPEAL AS WE HAVE NOTED ABOVE STATES THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE AO BUT THEN IT DOES NOT REALLY POINT OUT THE GROUND ON WHICH THE APPELLANT STATES SO AND THEREFORE IT IS REQUIRED TO BE READ IN CONJUNCTION WITH THE FIRST GROUND OF APPEAL AS A MATTER OF FACT ONLY SUBSTANTIVE GROUND OF APPEAL IN THIS APPEAL RATHER THAN ON STANDALONE BASIS. CLEARLY THI S CANNOT BE A GROUND OF APPEAL THAT THE CIT(A) DID NOT UPHOLD THE AO S ORDER BECAUSE THERE CANNOT BE AN INDEPENDENT ERROR IN NOT UPHOLDING THE ORDER OF THE AO. IT IS ONLY THE ERROR IN THE STAND TAKEN IN THE IMPUGNED ORDER WHICH CAN BE A GROUND OF APPEAL. A S WE HAVE NOTED EARLIER A GROUND OF APPEAL IS THE GROUND OR THE BASIS ON WHICH THE ORDER APPEALED AGAINST IS SAID TO BE VITIATED IN LAW OR ON FACTS. THAT S THE CAUSE OF ERROR RATHER THAN EFFECT OF ERROR. THE ORDER OF THE AO NOT BEING UPHELD IS NOT THE C AUSE OR THE BASIS OF THE ERROR BUT IT IS IMPAC T OF THE ERROR AND THAT CANNOT IN OUR HUMBLE UNDERSTANDING BE A GROUND OF APPEAL. GROUND NO. 3 MAKES IT EVEN MORE CLEAR WHEN IT STATES THAT IT IS THEREFORE PRAYED THAT THE ORDER OF THE LEARNED CIT(A) BE SET ASIDE AND THAT OF THE AO BE RESTORED TO THE ABOVE EXTENT . THIS IS ALSO NOT A GROUND OF APPEAL EITHER. IT IS AT BEST THE RELIEF SOUGHT IN THE APPEAL WHICH CAN ONLY BE READ IN CONJUNCTION WITH THE FIRST TWO GROUNDS OF APPEAL. CLEARLY JUST BECAUSE SOM ETHING IS STATED UNDER THE GROUND OF APPEAL EVEN WHEN IT IS NOT DE FACTO AND DE JURE A GROUND OF APPEAL IT DOES NOT BECOME A GROUND OF APPEAL OR IS REQUIRED TO BE TREATED FOR THE PURPOSE OF OUR ADJUDICATION A GROUND OF APPEAL. QUITE CLEARLY ON THE FA CTS OF THIS CASE THE ONLY GROUND OF APPEAL WHICH WAS REQUIRED TO BE ADJUDICATED BY THE TRIBUNAL WAS THE FIRST GROUND OF APPEAL WHICH WAS THE ONLY SUBSTANTIVE GROUND OF APPEAL I.E. T HE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN ADMITTING THE ADDITI ONAL EVIDENCE IN RELATION TO THE SHORTAGE OF STOCK WITHOUT GIVING THE AO AN OPPORTUNITY TO OFFER HIS COMMENTS IN CONTRAVENTION OF RULE 46A OF THE IT RULES AND ONCE THIS GROUND OF APPEAL WAS DECIDED AGAINST THE APPELLANT THERE WAS NO OCCASION FOR THE T RIBUNAL TO DEAL WITH THE MERITS OF THE CASE. SECOND AND THIRD GROUNDS OF APPEAL I.E. O N THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE AO AND I T IS THEREFORE PRAYED THAT THE ORDER OF THE LE ARNED CIT(A) BE SET ASIDE AND THAT OF THE AO BE RESTORED TO THE ABOVE EXTENT WERE REQUIRED TO BE READ IN CONJUNCTION WITH THE FIRST GROUND OF APPEAL WHICH WAS THE ONLY SUBSTANTIVE GROUND OF APPEAL AND NOT AS INDEPENDENT GROUNDS GIVING POWERS TO THE TRIB UNAL TO DECIDE THE MATTER ON MERITS. IN ANY EVENT THE SECOND GROUND OF APPEAL DID NOT BRING OUT ANY INFIRMITY OR THE BASIS ON WHICH THE ORDER WAS VITIATED ON MERITS MA NO. 2/AHD/2014 ARISING OUT OF I.T.(SS) A NO. 12/AHD/ 2013 ASSESSMENT YEAR: 2010 - 11 PAGE 4 OF 5 AND BY NO STRETCH OF LOGIC IT COULD BE TREATED AS AN INDEPENDENT GROUND OF APPEAL CALLIN G FOR A SPECIFIC ADJUDICATION BY US LEAVE ASIDE BEING TREATED AS A CONCISE GROUND OF APPEAL UNDER RULE 10. WHICHEVER WAY ONE LOOKS AT IT ADJUDICATION ON THIS APPEAL BY PROCEEDING ON THE BASIS THAT IT REQUIRED THE ACTION OF THE CIT(A) GRANTING THE RELIEF ON MERITS TO BE EXAMINED WAS CLEARLY CONTRARY TO THE CORRECT LEGAL POSITION AND A GLARING MISTAKE APPARENT ON RECORD . ANY OTHER VIEW OF THE MATTER WILL RESULT IN SANCTIONING SELF - AGGRANDIZEMENT OF POWE RS BY THE JUDICIAL FORUMS LIKE THIS TRIBUNAL WHICH AR E CREATURES OF THE STATUTE. UNLIKE CONSTITUTIONAL COURTS THE SCOPE OF OUR POWERS ARE STRICTLY LIMITED ARE WE MUST REMAIN HAPPILY CONFINED IN THOSE INHERENT LIMITATIONS. TO ERR IS HUMAN BUT THERE CANNOT BE ANY JUSTIFICATION FOR PERPETUATING AN ERROR. IN HI S INIMITABLE WORDS JUSTICE BHAGWATI IN THE CASE OF DISTRIBUTORS (BARODA) (P) LTD. VS. UNION OF INDIA (1985) 155 I TR 120 (SC) HAD OBSERVED THUS: 'TO PERPETUATE AN ERROR IS NO HEROISM. TO RECTIFY IT IS THE COMPULSION OF JUDICIAL CONSCIENCE. IN THIS WE DE RIVE COMFORT AND STRENGTH FROM WISE AND INSPIRING WORDS OF JUSTICE BRONSON IN PIERCE VS. DELAMETER : A JUDGE OUGHT TO BE WISE ENOUGH TO KNOW THAT HE IS FALLIBLE AND THEREFORE EVER READY TO LEARN; GREAT AND HONEST ENOUGH TO DISCARD ALL MERE PRIDE OF OPIN ION AND FOLLOW THE TRUTH WHEREVER IT MAY LEAD; AND COURAGEOUS ENOUGH TO ACKNOWLEDGE HIS ERRORS. ' [8] AS WE TAKE NOTE OF THE ABOVE LEGAL POSITION WE MAY ALSO DEAL WITH THE ARGUMENTS OF THE LEARNED DEPARTMENTAL REPRESENTATIVE THAT IN ANY EVENT IT IS CAP ABLE OF TWO VIEWS BEING TAKEN AS TO WHETHER OR NOT ON THESE FACTS THE TRIBUNAL COULD HAVE EXAMINED THE MATTER ON MERITS AND FOR THIS REASON ALONE THIS MISTAKE EVEN IF THAT BE SO IS OUTSIDE THE SCOPE OF MISTAKE APPARENT ON RECORD. NO DOUBT AS HELD B Y HON BLE SUPREME COURT IN THE LANDMARK CASE OF ITO VS VOLKART BROS [(1971) 82 ITR 50 (SC)] 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 O N WHICH THERE MAY CONCEIVABLY BE TWO OPINIONS AND THAT 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 . HOWE VER IT IS ALSO IMPORTANT TO BEAR IN MIND THE FACT THAT ELABORATING UPON THE SCOPE OF THE EXPRESSION MISTAKE APPARENT FROM RECORD AND EXPLAINING THE IMPORT OF HON BLE SUPREME COURT S AFORESAID LANDMARK JUDGMENT A FULL BENCH OF HON BLE PUNJAB & HARYANA H IGH COURT IN THE CASE OF R.A. BOGA VS. AAC (1977) 110 ITR 1 (P&H)(FB) HAS OBSERVED THAT THE BASIC PRINCIPLE IS THUS CLEAR. A MISTAKE APPARENT FROM RECORD MEANS AN OBVIOUS OR PATENT MISTAKE OR A GLARING AND OBVIOUS MISTAKE . HOTLY DEBATABLE ISSUES ARE EXCLUDED; HARDLY DEBATABLE ISSUES ARE INCLUDED. THE ISSUE MAY BE COMPLICATED YET THE MISTAKE MAY BE SIMPLE. IT IS A MISTAKE APPARENT FROM RECORD. THE TEST IS NOT COMPLEXITY OF THE ISSUE BUT SIMPLICITY OF THE MISTAKE .' IN OUR HUMBLE UNDERSTANDING T HERE IS NOTHING CONTRARY TO THIS DECISION BY HON BLE JURISDICTIONAL HIGH COURT. WHAT FOLLOWS IS THAT AS LONG AS THE MISTAKE IS SIMPLE EVEN THOUGH THE ISSUE MAYBE COMPLICATED IT WILL BE COVERED BY THE SCOPE OF MISTAKE APPARENT ON RECORD . THE MERE COMPLEXITY OF ISSUE EVEN IF THAT BE SO CANNOT BE AN EXCUSE ENOUGH TO DENY RECTIFY A SIMPLE MISTAKE APPARENT ON RECORD. IN THE PRESENT CASE THE MISTAKE IS SIMPLE. THE MISTAKE IS THAT MA NO. 2/AHD/2014 ARISING OUT OF I.T.(SS) A NO. 12/AHD/ 2013 ASSESSMENT YEAR: 2010 - 11 PAGE 5 OF 5 THE TRIBUNAL TOO LIBERAL A VIEW OF ITS OWN POWERS AND PROCEEDED TO ADJUDICA TE UPON SOMETHING WHICH IT WAS NOT CALLED UPON TO ADJUDICATE. THIS ASPECT OF THE MATTER IN OUR HUMBLE UNDERSTANDING AND FOR THE DETAILED REASONS SET OUT EARLIER IS NOT CAPABLE OF TWO VIEWS BEING TAKEN. THE LEGAL POSITION IS CLEAR AND UNAMBIGUOUS. AS FOR THE LE ARNED DR S POINTING OUT THAT IN ANY EVENT THE MATTER WAS HEARD ON MERITS AND ARGUMENTS WERE ADVANCED BY BOTH THE PARTIES INCLUDING COUNSEL FOR THE ASSESSEE ON MERITS IT IS AN UNDISPUTED LEGAL PROPOSITION THAT ACQUIESCENCE DOES NOT CONFER THE JURISDICTI ON. WHAT IS MATERIAL IS THE ANSWER TO QUESTION WHETHER GIVEN THE GROUNDS OF APPEAL SET OUT EARLIER IN THIS ORDER WHETHER THE TRIBUNAL COULD HAVE AT ALL ADJUDICATED UPON ON THE MERITS AND IN OUR HUMBLE UNDERSTANDING THE ANSWER IS AN EMPHATIC NO . SUCH BEING THE POSITION IT IS CLEARLY A MISTAKE APPARENT ON RECORD WHICH INDEED DESERVES TO BE RECTIFIED. [ 9 ] IN VIEW OF THE ABOVE DISCUSSIONS IN OUR CONSIDERED VIEW THE SECOND AND THIRD GROUND S OF APPEAL BEING TREATED AS INDEPENDENT GROUND S OF APPEAL DEALI NG WITH THE MATTER ON MERITS GIVING POWERS TO THE TRIBUNAL TO ADJUDICATE UPON CORRECTNESS OF THE RELIEF GRANTED BY THE CIT(A) ON MERITS WAS CLEARLY A MISTAKE APPARENT ON RECORD. ONCE THE GROUND OF APPEAL AGAINST VIOLATION OF RULE 46A WAS DISMISSED BY THE TRIBUNAL THE MATTER SHOULD HAVE RESTED AT THAT BECAUSE THE SUBSEQUENT TWO GROUNDS OF APPEAL AS TAKEN IN THE MEMORANDUM OF APPEAL DID NOT HAVE AN INDEPENDENT EXISTENCE AT ALL. THE DECISION OF THE TRIBUNAL ON MERITS THUS MUST STAND VACATED. IN THE R ESULT AND CONSEQUENTLY THE OUTCOME OF THE APPEAL MUST ALSO STAND ALTERED TO DISMISSED . TO THIS EXTENT THE ORDER DATED 5 TH JULY 2013 STANDS RECTIFIED. [10] AS WE HAVE ALLOWED THIS RECTIFICATION APPLICATION ON THE FIRST ISSUE RAISED BY THE ASSESSEE AP PLICANT WE SEE NO REASONS TO TAKE WITH OTHER ISSUES RAISED BY US. ALL THESE ISSUES ARE GIVEN OUR ABOVE DECISION ACADEMIC AND INFRUCTUOUS AT THIS STAGE. [11] IN THE RESULT THE MISCELLANEOUS APPLICATION IS ALLOWED IN THE TERMS INDICATED ABOVE. PRONOUNCE D IN THE OPEN COURT TODAY ON 13 TH DAY OF OCTOBER 2016. SD/ - SD/ - RAJPAL YADAV PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) DATED: 13 TH DAY OF OCTOBER 2016. COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES AHMEDABAD