ITO, Trichy v. Sri K.Thanabalan, Trichy

MA 332/CHNY/2009 | misc
Pronouncement Date: 23-08-2010 | Result: Dismissed

Appeal Details

RSA Number 33221724 RSA 2009
Bench Chennai
Appeal Number MA 332/CHNY/2009
Duration Of Justice 1 year(s) 1 month(s) 3 day(s)
Appellant ITO, Trichy
Respondent Sri K.Thanabalan, Trichy
Appeal Type Miscellaneous Application
Pronouncement Date 23-08-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 23-08-2010
Date Of Final Hearing 06-08-2010
Next Hearing Date 06-08-2010
Assessment Year misc
Appeal Filed On 20-07-2009
Judgment Text
IN THE INCOME-TAX APPELLATE TRIBUNAL CHENNAI D BENCH CHENNAI. (BEFORE SHRI.U.B.S. BEDI J.M. & SHRI. ABRAHAM P. GE ORGE A.M.) M.A. NO. 332/MDS/2009 [IN I.T.(SS)A. NO. 68/MDS/2002] BLOCK ASSESSMENT PERIOD: 1989-90 TO 1998-99 AND 199 9-2000(P) THE DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE I(3) CHENNAI. NOW THE INCOME TAX OFFICER WARD I(2) TRICHIRAPALLI. VS. SRI K. THANABALAN 4-A CAUVERY ROAD DEVADHANAM TIRUCHIRAPALLI. [PAN/G.I.NO.: 111-T] (APPELLANT) (RESPONDENT) REVENUE BY : SHRI B. SRINIVAS ASSESSEE BY : SHRI V.D. GOPAL ORDER PER U.B.S. BEDI J.M. BY MEANS OF PRESENT MISCELLANEOUS APPLICATION THE DEPARTMENT SEEKS TO GET RECTIFIED THE ORDER OF THE TRIBUNAL IN REVENUE S APPEAL IN I.T.(SS)A. NO. 68/MDS/2002 DATED 31.12.2008 BY CONTENDING THAT FOR THE BLOCK PERIOD THE ASSESSING OFFICER ASSESSED UNDISCLOSED INCOME OF ` .33 86 628/- AND IN APPEAL THE LD. CIT(A) GAVE RELIEF OF ` .14 26 235/- OUT OF ADDITION OF ` .20 06 635/- MADE ON ACCOUNT OF UNEXPLAINED CREDITS. THE UNEXPLAINED INVESTMENTS (CREDITS) AMOUNT TO ` .20 06 635/- WERE ASSESSED ON PROTECTIVE BASIS IN T HE HANDS OF THE ASSESSEE (ADDITIONS WERE MADE FOR THESE CASH CREDITS ON SUBS TANTIVE BASIS IN THE HANDS OF THE FIRMS) AS THESE CREDITS APPEARED IN THE CAPITAL AND CURRENT ACCOUNT OF THE ASSESSEE (PARTNER) IN THE BOOKS OF THE FIRMS FOR WH ICH NO SATISFACTORY EXPLANATION WAS GIVEN BY THE PARTNER. THE ADDITIONS WERE THEREF ORE MADE IN THE HANDS OF THE ASSESSEE UNDER SECTION 69 OF THE ACT. THE LD. CIT(A ) DELETED THE ADDITION WITH REGARD TO THE UNEXPLAINED INVESTMENTS (CREDITS) IN THE CAPITAL AND CURRENT ACCOUNT MA MAMA MA NO. NO. NO. NO.332 332332 332/MDS/0 /MDS/0 /MDS/0 /MDS/09 99 9 2 OF THE ASSESSEE (PARTNER) IN THE BOOKS OF THE FIRM ON THE GROUND THAT PEAK CREDIT ALONE SHOULD BE ASSESSED IN THE CASE OF AMOUNTS CRE DITED AND DEBITED ON VARIOUS DATES IN CAPITAL AND CURRENT ACCOUNT OF THE PARTNER IN THE BOOKS OF THE FIRM AND ARRIVED AT A PEAK CREDIT OF ` .5 80 400/- WHICH WAS CONFIRMED WHILE GIVING RELIEF OF ` .14 26 235/- AGAINST WHICH THE DEPARTMENT FILED AN APPEAL BEFORE THE ITAT AGAINST GRANTING THE RELIEF TO THE EXTENT OF ` 14 26 235/- AND THE TRIBUNAL FAILED TO TAKE NOTE OF THE RETROSPECTIVE AMENDMENT IN THE EXPLANATION TO SECTION 158BB WHEREBY THE WORDS CHAPTER IV WERE SUBSTITU TED BY THE WORDS THIS ACT WHICH MEANT THAT TOTAL INCOME UNDER CHAPTER XIV-B W AS TO BE COMPUTED W.E.F. 01.07.1995 IN ACCORDANCE WITH THE PROVISIONS OF THE ACT WHICH ALSO INCLUDES DEEMING PROVISIONS OF SECTIONS 68 69 69B AND 69C. HOWEVER THE TRIBUNAL ALSO FAILED TO TAKE NOTE THAT SECTION 158BH WHICH IS ON STATUTE W.E.F. 01.07.1995 CLEARLY STATE THAT SAVE AS OTHERWISE PROVIDED IN C HAPTER XIV-B ALL OTHER PROVISIONS OF THE ACT SHALL APPLY TO THE ASSESSMENT MADE UNDER CHAPTER XIV-B. THEREFORE THE TRIBUNAL OUGHT TO HAVE APPLIED THE D EEMING PROVISIONS OF SECTION 69 TO THE FACTS OF THE CASE AND CONFIRMED THE ORDER S OF THE ASSESSING OFFICER. SINCE THIS IS A MISTAKE APPARENT FROM THE RECORD T HEREFORE IT WAS PRAYED FOR CARRYING OUT NECESSARY RECTIFICATION OF THE ABOVE M ISTAKE AND RENDER JUSTICE. 2. SHRI B. SRINIVAS LD. DR RELIED UPON THE ORDER OF THE ASSESSING OFFICER AND THE GROUNDS RAISED IN THE APPLICATION HAS PLEADED F OR CARRYING OUT NECESSARY RECTIFICATION AND RESTORING THE ORDER OF THE ASSESS ING OFFICER BECAUSE EXPLANATION TO SECTION 158BB HAS BEEN INSERTED W.E.F. 01.07.199 5 AND BY VIRTUE OF THE SAID INSERTION ADDITION COULD BE MADE EVEN UNDER DEEMIN G PROVISION WHILE MAKING THE ASSESSMENT UNDER CHAPTER XIV-B. THEREFORE THE TRIBUNAL OUGHT NOT TO HAVE MA MAMA MA NO. NO. NO. NO.332 332332 332/MDS/0 /MDS/0 /MDS/0 /MDS/09 99 9 3 CONFIRMED THE ORDER OF THE LD. CIT(A) AND RESTORED THE ORDER OF THE ASSESSING OFFICER. THIS CONSTITUTE MISTAKE WHICH SHOULD BE RE CTIFIED. 3. SHRI V.D. GOPAL LD. COUNSEL FOR THE ASSESSEE WHILE MAKING REFERENCE TO PAGES 4 AND 5 OF THE ASSESSMENT ORDER AND PAGE 28 O F THE ITAT ORDER HAS PLEADED THAT THERE IS NO MISTAKE EITHER OF LAW OR F ACT IN THE ORDER OF THE TRIBUNAL WHICH COULD BE STATED TO BE A MISTAKE APPARENT FROM THE RECORD. THEREFORE APPLICATION OF THE DEPARTMENT SHOULD NOT BE ACCEPTE D AND OTHERWISE ERROR OF JUDGMENT CANNOT BE A MISTAKE AS HELD BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V. RAMESH ELECTRIC AND TRADING CO. 203 ITR 497 (BOM.) BECAUSE CLEAR FINDING HAS BEEN GIVEN BY THE TRIBUNAL CONSID ERING THE ENTIRETY OF FACTS AND MATERIAL ON RECORD AND SINCE THE LD. DR COULD NOT B E ABLE TO POINT OUT ANY MISTAKE APPARENT FROM THE RECORD AND AS SUCH NO ACT ION IS CALLED FOR AND APPLICATION OF THE DEPARTMENT SHOULD BE DISMISSED. IT WAS ALSO SUBMITTED THAT DEPARTMENT HAS ALSO FILED A TCA IN THE HONBLE MADR AS HIGH COURT CHALLENGING THE ORDER OF THE TRIBUNAL AND TO THIS SUBMISSION T HE LD. DR SUBMITTED THAT HE DOES NOTE KNOW WHETHER ANY TCA HAS BEEN FILED OR NO T. 4. WE HAVE HEARD BOTH THE SIDES CONSIDERED THE MA TERIAL ON RECORD AS WELL AS CASE LAW CITED BY RIVAL SIDES AND FIND THAT THE DEPARTMENT HAS NOT BEEN ABLE TO POINT OUT ANY MISTAKE IN THE ORDER OF THE TRIBUNAL AND IN CASE THE PLEA OF THE DEPARTMENT IS ACCEPTED THAT WOULD AMOUNT TO REVIEW OF THE ORDER WHICH IS NOT PERMISSIBLE UNDER THE INCOME TAX ACT AND FOR THAT P URPOSE USEFUL REFERENCE CAN BE MADE TO THE FOLLOWING DECISIONS. 4.1 THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS GOKUL CHAND AGARWAL (202 ITR 14) HAS HELD AS UNDER: MA MAMA MA NO. NO. NO. NO.332 332332 332/MDS/0 /MDS/0 /MDS/0 /MDS/09 99 9 4 SECTION 254(2) OF THE INCOME TAX ACT 1961 EMPOWE RS THE TRIBUNAL TO AMEND ITS ORDER PASSED UNDER SECTION 254(1) TO RECT IFY ANY MISTAKE APPARENT FROM THE RECORD EITHER SUO MOTO OR ON AN A PPLICATION. THE JURISDICTION OF THE TRIBUNAL TO AMEND ITS ORDER THU S DEPENDS ON WHETHER OR NOT THERE IS A MISTAKE APPARENT FROM THE RECORD. IF IN ITS ORDER THERE IS NO MISTAKE WHICH IS PATENT AND OBVIOUS ON THE BA SIS OF THE RECORD THE EXERCISE OF THE JURISDICTION BY THE TRIBUNAL UNDER SECTION 254(2) WILL BE ILLEGAL AND IMPROPER. AN OVERSIGHT OF A FACT CANNOT CONSTITUTE AN APPARENT MISTAKE RECTIFIABLE UNDER SECTION 254(2). THIS MIGH T AT THE WORST LEAD TO PERVERSITY OF THE ORDER FOR WHICH THE REMEDY AVAILA BLE TO THE ASSESSEE IS NOT UNDER SECTION 254(2) BUT A REFERENCE PROCEEDING UNDER SECTION 256. THE NORMAL RULE IS THAT THE REMEDY BY WAY OF REVIEW IS A CREATURE OF THE STATUTE AND UNLESS CLOTHED WITH SUCH POWER BY THE STATUTE NO AUTHORITY CAN EXERCISE THE POWER. REVIEW PROCEEDINGS IMPLY PR OCEEDINGS WHERE A PARTY AS OF RIGHT CAN APPLY FOR RECONSIDERATION O F THE MATTER ALREADY DECIDED UPON AFTER A FRESH HEARING ON THE MERITS O THE CONTROVERSY BETWEEN THE PARTIES. SUCH REMEDY IS CERTAINLY NOT P ROVIDED BY THE INCOME TAX ACT 1961 IN RESPECT OF PROCEEDINGS BEFORE THE TRIBUNAL. 4.2 IN SIMILAR SITUATION WHILE DEALING WITH THE RE CTIFICATION THE HON'BLE ANDHRA PRADESH HIGH COURT IN THE CASE OF CIT AND ANOR VS. I.T.A.T AND ANOR (206 ITR 126 HAS HELD AS UNDER: THE APPELLATE TRIBUNAL BEING A CREATURE OF THE ST ATUTE HAS TO CONFINE ITSELF IN THE EXERCISE OF ITS JURISDICTION TO THE E NABLING OR EMPOWERING TERMS OF THE STATUTE. IT HAS NO INHERENT POWER. E VEN OTHERWISE IN CASES WHERE SPECIFIC PROVISION DELINEATES THE POWERS OF T HE COURT OR TRIBUNAL IT CANNOT DRAW UPON ITS ASSUMED INHERENT JURISDICTI ON AND PASS ORDERS AS IT PLEASES. THE POWER OF RECTIFICATION WHICH IS SPECIFICALLY CONFERRED ON THE TRIBUNAL HAS TO BE EXERCISED IN TERMS OF THA T PROVISION. IT CANNOT BE ENLARGED ON ANY ASSUMPTION THAT THE TRIBUNAL HAS GOT AN INHERENT POWER OF RECTIFICATION OR REVIEW OR REVISION. IT IS AXIOMATIC THAT SUCH POWER OF REVIEW OR REVISION HAS TO BE SPECIFICALLY CONFERRED IT CANNOT BE INFERRED. UNLESS THERE IS A MISTAKE APPARENT FR OM THE RECORD IN THE SENSE OF PATENT OBVIOUS AND CLEAR ERROR OR MISTAKE THE TRIBUNAL CANNOT RECALL ITS PREVIOUS ORDER. IF THE ERROR OR MISTAKE IS ONE WHICH COULD BE ESTABLISHED ONLY BY LONG DRAWN ARGUMENTS OR BY A PR OCESS OF INVESTIGATION AND RESEARCH IT IS NOT A MISTAKE APP ARENT FROM THE RECORD. MA MAMA MA NO. NO. NO. NO.332 332332 332/MDS/0 /MDS/0 /MDS/0 /MDS/09 99 9 5 4.3 FURTHER THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS KARAM CHAND THAPAR AND BR.P.LTD. (176 ITR 535) HAS HELD AS UNDE R: APPELLATE TRIBUNAL DUTY TO CONSIDER CUMULATIVE E FFECT OF CIRCUMSTANCES AND TOTALITY OF FACTS NO NEED TO STATE SO IN APPELLATE ORDER SPECIFICALLY INCOME TAX ACT 1961 SEC. 254 FURTHER IT WAS HELD AS UNDER: IT IS EQUALLY WELL SETTLED THAT THE DECISION OF TH E TRIBUNAL HAS NOT TO BE SCRUTINIZED SENTENCE BY SENTENCE MERELY TO FIND OUT WHETHER ALL FACTS HAVE BEEN SET OUT IN DETAIL BY THE TRIBUNAL OR WHET HER SOME INCIDENTAL FACT WHICH APPEARS ON THE RECORD HAS NOT BEEN NOTIC ED BY THE TRIBUNAL IN ITS JUDGMENT. IF THE COURT ON A FAIR READING O F THE JUDGMENT OF THE TRIBUNAL FINDS THAT IT HAS TAKEN INTO ACCOUNT ALL RELEVANT MATERIAL AND HAS NOT TAKEN INTO ACCOUNT ANY IRRELEVANT MATERIAL IN BASING ITS CONCLUSIONS THE DECISION OF THE TRIBUNAL IS NOT LI ABLE TO BE INTERFERED WITH UNLESS OF COURSE THE CONCLUSIONS ARRIVED AT BY THE TRIBUNAL ARE PERVERSE. IT IS NOT NECESSARY FOR THE TRIBUNAL TO STATE IN IT S JUDGEMENT SPECIFICALLY OR IN EXPRESS WORDS THAT IT HAS TAKEN INTO ACCOUNT THE CUMULATIVE EFFECT OF THE CIRCUMSTANCES OR HAS CONSIDERED THE TOTALITY OF THE FACTS AS IF THAT WERE A MAGIC FORMULA; IF THE JUDGMENT OF THE TRIBUN AL SHOWS THAT IT HAS IN FACT DONE SO THERE IS NO REASON TO INTERFERE W ITH THE DECISION OF THE TRIBUNAL. SIMILARLY THE BOMBAY HIGH COURT IN THE CASE OF CIT- VS- RAMESH ELECTRIC AND TRADING CO. (203 ITR 497) .IT IS AN ACCEPTED POSITION THAT THE APPELLATE TRIBUNAL DOES NOT HAVE ANY POWER TO REVIEW ITS OWN ORDERS UNDER THE P ROVISIONS OF THE ACT. THE ONLY POWER WHICH THE TRIBUNAL POSSESSES IS TO R ECTIFY ANY MISTAKE IN ITS OWN ORDER WHICH IS APPARENT FROM THE RECORD.. THE POWER OF RECTIFICATION UNDER SECTION 254(2) CAN BE EXERCISED ONLY WHEN THE MISTAKE WHICH IS SOUGHT TO BE RECTIFIED S AN OBVIOU S AND PATENT MISTAKE WHICH IS APPARENT FROM THE RECORD AND NOT A MISTAKE WHICH REQUIRED TO BE ESTABLISHED BY ARGUMENTS AND A LONG DRAWN PROCES S OF REASONING ON POINTS ON WHICH THERE MAY CONCEIVABLY BE TWO OPINIO N. FAILURE OF THE TRIBUNAL TO CONSIDER AN ARGUMENT ADVANCED BY EITHER PARTY FOR ARRIVING AT A CONCLUSION IS NOT AN ERROR APPARENT ON THE REC ORD ALTHOUGH IT MAY BE AN ERROR OF JUDGMENTS MA MAMA MA NO. NO. NO. NO.332 332332 332/MDS/0 /MDS/0 /MDS/0 /MDS/09 99 9 6 4.4 WE ALSO DRAW SUPPORT HERE FROM HONBLE MADRAS HIGH COURT DECISION IN T.C.(A) NO. 156 OF 2006 DATED 21.08.2007 IN THE CAS E OF CIT VS. TAMIL NADU SMALL INDUSTRIES DEVELOPMENT CORPORATION LTD. WHEREIN THE HONBLE HIGH COURT HELD AS UNDER:- THE TRIBUNAL HAS NO POWER TO REVIEW ITS ORDER. WHE N THE TRIBUNAL HAS ALREADY DECIDED AN ISSUE BY APPLYING ITS MIND AGAIN ST THE ASSESSEE THE SAME CANNOT BE RECTIFIED UNDER SECTION 254 (2) OF T HE ACT. THERE WAS NO NECESSITY WHATSOEVER ON THE PART OF THE TRIBUNAL TO REVIEW ITS OWN ORDER. EVEN AFTER THE EXAMINATION OF THE JUDGMENTS OF THE TRIBUNAL WE COULD NOT FIND A SINGLE REASON IN THE WHOLE ORDER A S TO HOW THE TRIBUNAL IS JUSTIFIED AND FOR WHAT REASONS. THERE IS NO APPA RENT ERROR ON THE FACE OF THE RECORD AND THEREBY THE TRIBUNAL SAT AS AN AP PELLATE AUTHORITY OVER ITS OWN ORDER. IT IS COMPLETELY IMPERMISSIBLE AND THE TRIBUNAL HAS TRAVELED OUT OF ITS JURISDICTION TO ALLOW A MISCELL ANEOUS PETITION IN THE NAME OF REVIEWING ITS OWN ORDER. IN THE PRESENT CASE IN THE GUISE OF RECTIFICATION THE TRIBUNAL REVIEWED ITS EARLIER ORDER AND ALLOWED THE MISCELLANEOUS PET ITION WHICH IS NOT IN ACCORDANCE WITH LAW. SECTION 254(2) OF THE ACT DOE S NOT CONTEMPLATE REHEARING OF THE APPEAL FOR A FRESH DISPOSAL AND DO ING SO WOULD OBLITERATE THE DISTINCTION BETWEEN THE POWER TO REC TIFY MISTAKES AND POWER TO REVIEW THE ORDER MADE BY THE TRIBUNAL. TH E SCOPE AND AMBIT OF THE APPLICATION OF SECTION 254(2) IS LIMITED AND NARROW. IT IS RESTRICTED TO RECTIFICATION OF MISTAKES APPARENT FR OM THE RECORD. RECALLING THE ORDER OBVIOUSLY WOULD MEAN PASSING OF A FRESH ORDER. RECALLING OF THE ORDER IS NOT PERMISSIBLE UNDER SEC TION 254(2) OF THE ACT. ONLY GLARING AND ANY MISTAKE APPARENT ON THE FACE OF THE RECORD ALONE CAN BE RECTIFIED AND HENCE ANYTHING DEBATABLE CANNOT BE A SUBJECT MATTER OF RECTIFICATION. 4.5 FURTHER WE PLACE RELIANCE UPON HONBLE DELHI H IGH COURT EXPOSITION ON THE SCOPE OF RECTIFICATION U/S 254(2) AS REPORTED IN TH E CASE OF RAS BIHARI BANSAL VS. COMMISSIONER OF INCOME TAX (2007) 293 ITR 365:- SECTION 254 OF THE INCOME TAX ACT 1961 ENABLES T HE CONCERNED AUTHORITY TO RECTIFY ANY MISTAKE APPARENT FROM THE RECORD. IT IS WELL SETTLED THAT AN OVERSIGHT OF A FACT CANNOT CONSTITU TE AN APPARENT MISTAKE RECTIFIABLE UNDER THIS SECTION. SIMILARLY FAILURE OF THE TRIBUNAL TO MA MAMA MA NO. NO. NO. NO.332 332332 332/MDS/0 /MDS/0 /MDS/0 /MDS/09 99 9 7 CONSIDER AN ARGUMENT ADVANCED BY EITHER PARTY FOR A RRIVING AT A CONCLUSION IS NOT AN ERROR APPARENT ON THE RECORD ALTHOUGH IT MAY BE AN ERROR OF JUDGMENT. THE MERE FACT THAT THE TRIBUN AL HAD NOT ALLOWED A DEDUCTION EVEN IF THE CONCLUSION IS WRONG WILL BE NO GROUND FOR MOVING AN APPLICATION UNDER SECTION 254(2) OF THE ACT. FUR THER IN THE GARB OF AN APPLICATION FOR RECTIFICATION THE ASSESSEE CANN OT BE PERMITTED TO REOPEN AND RE-ARGUE THE WHOLE MATTER WHICH IS BEYO ND THE SCOPE OF THE SECTION. 5. THEREFORE IN VIEW OF THE FACTS CIRCUMSTANCES IN THE LIGHT OF RATIO OF DECISIONS CITED AND DISCUSSION AS HELD ABOVE WE DO NOT FIND ANY SUBSTANCE IN THE APPLICATION OF THE REVENUE AND DISMISS THE SAME BEING DEVOID OF ANY MERITS. 6. IN THE RESULT THE MISCELLANEOUS APPLICATION OF THE REVENUE STANDS DISMISSED. THE ORDER PRONOUNCED ON 23.08.2010. SD/- SD/- (ABRAHAM P. GEORGE) ACCOUNTANT MEMBER (U.B.S. BEDI) JUDICIAL MEMBER VM/- DATED :. 23.08.2010. COPY TO: THE ASSESSEE//A.O./CIT(A)/CIT/D.R.