DEVANG LALJI SHAH, v. DCIT 18(3),

MA 356/MUM/2014 | 2006-2007
Pronouncement Date: 26-11-2014 | Result: Dismissed

Appeal Details

RSA Number 35619924 RSA 2014
Assessee PAN AAMPS4024Q
Bench Mumbai
Appeal Number MA 356/MUM/2014
Duration Of Justice 3 month(s) 29 day(s)
Appellant DEVANG LALJI SHAH,
Respondent DCIT 18(3),
Appeal Type Miscellaneous Application
Pronouncement Date 26-11-2014
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 26-11-2014
Assessment Year 2006-2007
Appeal Filed On 28-07-2014
Judgment Text
INCOME TAX APPELLATE TRIBUNAL MUMBAI - D BENCH . . BEFORE S/SH. I.P. BANSAL JUDICIAL ME MBER & SHRI RAJENDRA ACCOUNTANT MEMBER MA NO.356/MUM/2014 (ARISING OUT OF ITA NO.8345/MU M/2010)-ASSESSMENT YEAR 2006-07 DEVANG LALJI SHAH 315 KEWAL INDUSTRIAL ESTATE S.B. ROAD LOWER PAREL MUMBAI-400013 PAN:AAMPS4024Q VS. DCIT 18(3) PRATYASHKAR BHAVAN BKC C- 10 7TH FLOOR MUMBAI. ( / APPELLANT) ( / RESPONDENT) APPELLANT BY : SHRI NISHIT GANDHI RESPONDENT BY : SHRI M. PADMANABAN ! ' / DATE OF HEARING : 17-10-2014 #$%& ! ' / DATE OF PRONOUNCEMENT : 26-11-2014 ' / O R D E R PER RAJENDRA A.M. : VIDE HIS APPLICATION DATED 28.07.2014 THE ASSESSEE AN INDIVIDUAL HAS STATED THAT THERE WERE MISTAKES APPARENT IN THE ORDER PASSED BY THE TRIBUN AL THAT SAME HAVE TO BE RECTIFIED AS PER THE PROVISIONS OF SECTION 254(2) OF THE ACT.IN HIS APPL ICATION THE ASSESSEE HAS STATED THAT THAT THE ASSESSEE WAS ENGAGED IN THE MANUFACTURE OF GARMENTS THAT FOR THAT PURPOSE HE WOULD OUTSOURCES CERTAIN PART OF HIS WORK TO OUTSIDE CONTRACTORS THA T THE AO HAD MADE CERTAIN ADDITIONS TO THE INCOME OF THE ASSESSEE THAT HE FILED AN APPEAL BEFO RE FIRST APPELLATE AUTHORITY(FAA) THAT ONE OF THE GROUNDS FILED BEFORE THE FAA DEALT WITH DISALLO WANCE U/S 40(A)(IA) OF CERTAIN EXPENSES PAID BY THE APPLICANT FOR NON-DEDUCTION OF TAX U/S 194C TH AT THE FAA UPHELD THE ORDER OF THE AO ABOUT NON DEDUCTION OF TAX AT SOURCE THAT THE FAA HELD TH AT THE APPLICANT'S TURNOVER IN THE IMMEDIATELY PRECEDING PREVIOUS YEAR WAS MORE THAN THE LIMITS SP ECIFIED U/S 44AB THAT HE WAS LIABLE TO DEDUCT TAX AT SOURCE BY VIRTUE OF PROVISO TO SUB-SECTION ( 2) OF SECTION 194C THAT THE ASSESSEE PREFERRED AN APPEAL BEFORE THE TRIBUNAL THAT DURING THE COURSE O F HEARING THE AR OF THE ASSESSEE ARGUED THAT SECTION 194 AS IT STOOD THEN DID NOT COVER PAYMENTS MADE BY INDIVIDUALS TO CONTRACTORS THAT IT WAS ALSO ARGUED THAT SUB- SECTION (2) OF SECTION 194C C OVERED ONLY CASES WHERE PAYMENTS WERE MADE BY CONTRACTORS TO SUB-CONTRACTORS AND NOT BY MANUFA CTURERS / INDIVIDUALS TO CONTRACTORS THAT THE APPLICANT WAS NOT LIABLE TO DEDUCT TAX AT SOURCE U/ S 194C AND HENCE THERE COULD NOT BE ANY DISALLOWANCE U/S 40(A)(IA) THAT THE AR CITED THE JU DGEMENT OF A CO-ORDINATE BENCH OF THE HON'BLE ITAT MUMBAI IN THE CASE OF RAJIV KISHORILAL PATODI A ITA NO.8967 / MUM / 2010 THAT THE TRIBUNAL RELYING UPON THE PROVISO TO SUB-SECTION (2 ) OF SECTION 194C CONFIRMED THE ORDER OF THE CIT(A)TAKING A VIEW THAT THE SAID PROVISO TO SUB-SE CTION (2) WAS APPLICABLE TO THE ENTIRE SECTION IT WAS ALSO HOLD THAT SINCE IN THE IMMEDIATELY PRECEDI NG PREVIOUS YEAR THE ASSESSEE HAD A TURNOVER MORE THAN THE LIMITS SPECIFIED U/S 44AB HENCE THE S AID PROVISO WAS APPLICABLE TO HIS CASE THAT THE ASSESSEES CASE WAS COVERED BY SECTION 194C (L) AND THE PAYMENTS WERE MADE BY HIM TO CONTRACTORS AND NOT SUB-CONTRACTORS AND THAT THE PR OVISO INVOKED TO CONFIRM' THE DISALLOWANCE APPLIED ONLY TO SUB-SECTION (2) OF SECTION 194C THA T THE ITAT HAD CONFIRMED AN ERRONEOUS APPLICATION OF PROVISO TO SUB- SECTION (2) OF SECTI ON 194C TO THE CASE OF THE ASSESSEE THAT EVEN IN THE CASE OF RAJIV KISHORILAL PATODIA (SUPRA) THE I TAT ACCEPTED THE CONTENTION OF THE ASSESSEE THAT 2 M.A.NO.356/MUM/2014 DEVANG LALJI SHAH THE PROVISIONS OF SECTION 194C (1) WERE NOT APPLICA BLE TO INDIVIDUALS FOR A Y 2007-08 AND THAT THE SAME WERE APPLICABLE ONLY BY VIRTUE OF INCORPORATIO N OF CLAUSE (K) IN SECTION 194C (1) BY THE FINANCE ACT 2007 W.E.F. 01.06.2007 THAT THE PROVISI ONS OF SECTION 194C (1)WERE NOT APPLICABLE TO INDIVIDUALS FOR THE PERIOD PRIOR TO THE SAID DATE. THE APPLICATION IS NOT ACCOMPANIED BY ANY AFFIDAVIT. 2. BEFORE US AUTHORIESED REPRESENTATIVE(AR) SUBMITTED THAT THE PROVISIONS OF SECTION 194C (1) WERE NOT APPLICABLE TO INDIVIDUALS FOR THE IMPUGNED ASSESSMENT YEAR I.E. A Y 2006-07 THAT IN THE MATTER OF RAJIV KISHORILAL PATODIA (SUPRA)THE ISSUE WAS DECIDED IN FAVOUR OF THAT ASSESSEE THAT THE FACTS OF BOTH THE CASES WERE ALMOST SIMILAR THAT MI STAKES WERE APPARENT FROM THE REOCRED.HE ALSO RELIED UPON THE CASE OF RINKU MALLICK DELIVERED BY THE HONBLE KOLKATA HIGH COURT(GA NO.1368OF 2O12 DATED 15.06.2012).IN SHORT HE REITER ATED THE ARGUMENTS RAISED IN THE APPLICATION FILED BY THE ASSESSEE.DEPARTMENTAL REPRESENTATIVE(D R) ARGUED THAT THE ASSESSEE WAS SEEKING RE- ADJUDICATION OF THE ISSUE AND SAME WAS NOT PERMISSI BLE AS PER THE PROVISIONS OF SECTION 254(2) OF THE ACT. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT WHILE DECIDING THE APPEAL THE TRIBUNAL HAD NOT ONLY DELIB ERATED UPON ALL THE ARGUMENTS TAKEN BY THE ASSESSEE BUT HAD ALSO CONSIDERED THE MATTER OF RAJI V KISHORILAL PATODIA(SUPRA).IN PARAGRAPH 4.3 THE TRIBUNAL HAS ANALYSED THE VARIOUS PROVISIONS OF SEC TION 194C INCLUDING SUB SECTION K.AFTER CONSIDERING THE PROVISO TO THE SECTION THE TRIBUNAL HAD DECIDED THE ISSUE AGAINST THE ASSESSEE. THUS NO MISTAKE IS APPARENT IN OUR OPINION IN THE IMPUGNED ORDER OF THE TRIBUNAL. THE SCOPE OF SECTION 254(2) OF THE ACT IS VERY LIMI TED AND SPECIFIC.IF A MISTAKE IS SO GLARING THAT ON THE FACE OF IT SAME HAS TO BE AMENDED THEN ONLY THE PROVISIONS OF SECTION 254(2)CAN BE INVOKED.IT IS SAID THAT THE SECTION IS LIMITED TO M ISTAKE APPARENT FROM RECORD LIKE ARITHMETICAL ERRORS TYPOGRAPHICAL MISTAKES NON-ADJUDICATION OF G ROUND OF APPEAL OR NON-CONSIDERATION OF A JUDGMENT OF HONBLE SUPREME COURT OR JURISDICTIONAL HIGH COURT HAVING DIRECT BEARING ON THE CASE.HONBLE DELHI HIGH COURT HAS IN THE MATTER OF GEOFIN INVESTMENT (P.) LTD. DESCRIBED THE CONCEPT OF MISTAKE APPARENT FROM RECORD AS UNDER: THE POWER IS CIRCUMSCRIBED AND LIMITED. THERE SHOUL D BE A MISTAKE WHICH IS APPARENT BEFORE THE POWER CAN BE EXERCISED. THIS IS A MANDATORY PRE-CON DITION. THE TRIBUNAL IN ITS ORDER REFERRED TO THE CONTROVERSY IN QUESTION RELATING TO THE DISALLO WANCE MADE ON ACCOUNT OF SHORT-TERM CAPITAL LOSS AND LONG-TERM CAPITAL LOSS. THE ENTIRE ISSUE WAS EX AMINED ON THE MERITS INCLUDING THE JUDGMENTS RELIED UPON BY THE ASSESSEE. AFTER EXAMINING THE MA TTER IN DETAIL IT ALLOWED THE APPEAL FILED BY THE REVENUE. (348ITR118). IN THE CASE OF BHAGWATI DEVELOPERS (P.) LTD.(261 IT R 658) HONBLE CALCUTTA HIGH COURT HAS HELD AS UNDER : UNDER SECTION 254(2) THE APPELLATE TRIBUNAL IS CL OTHED WITH THE POWER TO AMEND WITH A VIEW TO RECTIF Y ANY MISTAKE APPARENT FROM THE RECORD EITHER ON ITS OWN MOTION OR ON AN APPLICATION BY THE ASSESSEE OR THE ASSESSING OFFICER CONCERNED. THE LAW BY NOW IS WELL -SETTLED. SECTION 254(2) DOES NOT CONFER A POWER ON THE TRIBUNAL TO REVIEW ITS EARLIER ORDER. A MISTAKE APP ARENT FROM THE RECORD MUST BE AN OBVIOUS AND PATENT MISTAKE AND NOT SOMETHING WHICH COULD BE ESTABLISHE D BY A LONG DRAWN PROCESS OF REASONING ON POINTS ON WHICH THERE MAY BE CONCEIVABLY TWO OPINIONS. FOLLOWING IS THE DECISION OF THE HONBLE JURISDICTI ONAL HIGH COURT HAS IN THE CASE OF RAMESH ELECTRICALS (203ITR497): 3 M.A.NO.356/MUM/2014 DEVANG LALJI SHAH UNDER SECTION 254(2) OF THE INCOME-TAX ACT 1961 THE APPELLATE TRIBUNAL MAY 'WITH A VIEW TO RECTIFYING ANY MISTAKE APPARENT FROM THE RECORD' A MEND ANY ORDER PASSED BY IT UNDER SUB-SECTION (1) WITHIN THE TIME PRESCRIBED THEREIN. IT IS AN AC CEPTED POSITION THAT THE APPELLATE TRIBUNAL DOES NOT HAVE ANY POWER TO REVIEW ITS OWN ORDERS UNDER T HE PROVISIONS OF THE ACT. THE ONLY POWER WHICH THE TRIBUNAL POSSESSES IS TO RECTIFY ANY MISTAKE IN ITS OWN ORDER WHICH IS APPARENT FROM THE RECORD. THIS IS MERELY A POWER OF AMENDING ITS ORDER. THE P OWER OF RECTIFICATION UNDER SECTION 254(2) CAN BE EXERCISED ONLY WHEN THE MISTAKE WHICH IS SOUGHT TO BE RECTIFIED IS AN OBVIOUS AND PATENT MISTAKE WHICH IS APPARENT FROM THE RECORD AND NOT A MISTAK E WHICH REQUIRES TO BE ESTABLISHED BY ARGUMENTS AND A LONG DRAWN PROCESS OF REASONING ON POINTS ON WHICH THERE MAY CONCEIVABLY BE TWO OPINIONS. FAILURE OF THE TRIBUNAL TO CONSIDER A N ARGUMENT ADVANCED BY EITHER PARTY FOR ARRIVING AT A CONCLUSION IS NOT AN ERROR APPARENT O N THE RECORD ALTHOUGH IT MAY BE AN ERROR OF JUDGMENT. THE TRIBUNAL CANNOT IN THE EXERCISE OF I TS POWER OF RECTIFICATION LOOK INTO SOME OTHER CIRCUMSTANCES WHICH WOULD SUPPORT OR NOT SUPPORT IT S CONCLUSION. FROM THE ABOVE IT IS CLEAR THAT TRIBUNAL HAS GOT LI MITED POWER TO RECTIFY MISTAKE U/S.254(2) OF THE ACT. IN THE CASE BEFORE US THE ASSESSEE HAS NOT POINTED OUT ANY ARITHMETICAL MISTAKE IN THE ORDER OF THE TRIBUNAL NOR HAS HE PROVED THAT LEGAL POSITION TAKE N BY THE TRIBUNAL HAS ALTERED BECAUSE OF SUBSEQUENT JUDGMENT OF THE JURISDICTIONAL HIGH COUR T OR THE APEX COURT.THE TRIBUNAL HAS DECIDED THE ISSUE AFTER CONSIDERING ALL THE FACTS AND PROVI SIONS OF LAW.THE ASSESSEE IS AGGRIEVED BY THE DECISION TAKEN BY IT.IS SUCH A CASE PROPER COURSE O F ACTION IS TO CHALLENGE THE ORDER OF THE TRIBUNAL BEFORE THE HONBLE HIGH COURT.THE ASSESSEE IN THE MATTER UNDER CONSIDERATION WANTS THE TRIBUNAL TO REVIEW ITS ORDER.BUT SAME IS NOT PERMISSIBLE.THE REFORE WE ARE OF THE OPINION THAT APPLICATION FILED BY THE ASSESSEE DESERVES TO BE REJECTED. AS A RESULT MISCELLANEOUS APPLICA TION FILED BY THE ASSESSEE DISMISSED. (& )!* (& )!* (& )!* (& )!* + (! + (! + (! + (! - - - - . . . . / / / / 00+ 00+ 00+ 00+ 1 11 1 2! 2! 2! 2! . . . . ! ! ! ! 34 3434 34 . ORDER PRONOUNCED IN THE OPEN COURT ON 26TH NOVEMBER 2014. ' #$%& )5 . 26 UKOACJ UKOACJ UKOACJ UKOACJ 201 4 $ / 6 SD/- SD/- ( . . / I.P.BANSAL) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER ) / MUMBAI . /DATE: 26.11.2014 SK ' ' ' ' ! 0 ! 0 ! 0 ! 0 70%! 70%! 70%! 70%! / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ 8 9 4. THE CONCERNED CIT / 8 9 5. DR D BENCH ITAT MUMBAI / 0: / !+ MH MHMH MH ;< . . . ) 6. GUARD FILE/ / ; = 0! ! //TRUE COPY// ' / BY ORDER > / 3 DY./ASST. REGISTRAR +& ) /ITAT MUMBAI