ITO, Parwanoo v. M/s Usha Infrasystems, Parwanoo

MA 38/CHANDI/2010 | 2005-2006
Pronouncement Date: 22-10-2010 | Result: Dismissed

Appeal Details

RSA Number 3821524 RSA 2010
Assessee PAN AABFU5560G
Bench Chandigarh
Appeal Number MA 38/CHANDI/2010
Duration Of Justice 5 month(s) 11 day(s)
Appellant ITO, Parwanoo
Respondent M/s Usha Infrasystems, Parwanoo
Appeal Type Miscellaneous Application
Pronouncement Date 22-10-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 22-10-2010
Date Of Final Hearing 03-09-2010
Next Hearing Date 03-09-2010
Assessment Year 2005-2006
Appeal Filed On 11-05-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SHRI G.S.PANNU ACCOUNTANT MEMBER AND MS SUSHMA CHOWLA JUDICIAL MEMBER M.A. NO. 38/CHD/2010 (IN ITA NO.499 /CHD/2009) ASSESSMENT YEAR : 2006-07 THE ITO VS. M/S USHA INFRASYSTEMS PARWANOO. PARWANOO PAN NO. AABFU5560G (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. JAISHREE SHARMA RESPONDENT BY: SHRI Y.K.SUD ORDER PER SUSHMA CHOWLA JM THE APPLICANT REVENUE IS AGGRIEVED BY THE ORDER OF THE TRIBUNAL IN ITA NO. 400/CHD/2009 DATED 30.11.2009. 2. THE OBJECTIONS OF THE APPLICANT IN THE PRESENT M ISC. PETITION ARE THAT WHILE ALLOWING THE CLAIM OF DEDUCTION U/S 80 IC OF THE INCOME TAX ACT THE TRIBUNAL HAD FOLLOWED ITS DECISION RELATING TO ASSESSMENT YEAR 2005- 06. IT IS POINTED OUT THAT THE DEDUCTION U/S 80 IC OF THE ACT WAS DISALLOWED DURING THE ASSESSMENT YEAR 2005-06 ON ON E GROUND THAT THE PROCESS OF THREADING OF BOTH ENDS ON A ROD COULD NO T BE TERMED AS MANUFACTURE. HOWEVER DURING THE YEAR UNDER CONS IDERATION DEDUCTION U/S 80 IC WAS DISALLOWED TO THE ASSESSEE ON TWO GRO UNDS:- 1) THE PROCESS OF THREADING ON BOTH ENDS OF A ROD COUL D NOT BE TERMED AS MANUFACTURE. 2 2) IT WAS A CASE OF SPLITTING UP OF EXISTING BUSINE SS AND THE ASSESSEE HAD VIOLATED THE CONDITIONS LAID DOWN U/S 80 IC (4)(I) OF THE INCOME TAX ACT. 3. AS PER THE APPLICANT THE SAID ISSUE OF SPLITTIN G UP OF BUSINESS ALREADY IN EXISTENCE WHICH LED TO THE DISALLOWANCE OF DEDUCTION U/S 80IC WAS NOT CONSIDERED BY THE TRIBUNAL AND WOULD HAVE A BEARING ON THE ISSUE OF ALLOWABILITY OF DEDUCTION U/S 80 IC OF THE ACT. 4. THE LEARNED DR FOR THE REVENUE POINTED OUT THAT AN APPEAL HAS BEEN FILED BY THE REVENUE BEFORE THE JURISDICTIONAL HIGH COURT AGAINST THE ORDER OF THE TRIBUNAL AND IN THE PETITION FILED U/S 260A OF THE INCOME TAX ACT THE FINDING OF THE ASSESSING OFFICER OF THE UN IT BEING SET UP AS A RESULT OF SPLITTING UP OR RECONSTRUCTION OF THE BUS INESS OF ITS SISTER CONCERN AND THE TRIBUNAL NOT HAVING EXAMINED THE ISSUE WAS REFERRED TO VIDE PARA 7 AT PAGA 11 OF THE APPELLATE PAPERS BUT NO RELIEF ON THE AFORESAID ISSUE HAS BEEN CLAIMED VIDE PARA 12 RELATING THE SUBSTANT IAL QUESTION OF LAW ARISING IN THE PRESENT APPEAL. THE LEARNED DR POIN TED OUT THAT THE TRIBUNAL HAS FAILED TO CONSIDER THE ISSUE OF DISALL OWANCE OF DEDUCTION U/S 80 IC OF THE ACT ON SPLITTING UP AND RECONSTRUCTION OF THE BUSINESS AND HENCE THE MISC. APPLICATION. 5. THE LD. AR FOR THE ASSESSEE IN REPLY POINTED OUT THAT WHILE FILING THE APPEAL BEFORE THE HON'BLE JURISDICTIONAL HIGH COURT THE APPLICANT WAS IN THE KNOWLEDGE OF THE SAID ISSUE NOT BEING AD JUDICATED BY THE TRIBUNAL AND IN CASE THE REVENUE WAS AGGRIEVED A Q UESTION OF LAW SHOULD HAVE BEEN RAISED BEFORE THE HON'BLE HIGH COURT WHI CH HAS NOT BEEN SO RAISED BY THE REVENUE. THE LEARNED AR FURTHER SUBM ITTED THAT THE INITIAL YEAR OF SETTING UP OF BUSINESS WAS ASSESSMENT YEAR 2005-06 IN WHICH NO 3 ISSUE OF SPLITTING UP OF RECONSTRUCTION OF SISTER C ONCERN WAS RAISED. IN THIS YEAR I.E. ASSESSMENT YEAR 2006-07 ALSO NO SUCH ISS UE WAS RAISED IN ANY APPEAL FILED BEFORE THE TRIBUNAL OR BY ANY APPLICAT ION U/S RULE 27 OF THE ITAT RULES BY THE REVENUE OR EVEN IN THE APPEAL BEF ORE THE HON'BLE HIGH COURT. THE LD. AR PLEADED THAT THE TRIBUNAL DECID ED THE APPEAL ON THE BASIS OF ORDER OF CIT(A) WHO IN TURN HAD DECIDED TH E ISSUE FOLLOWING THE ORDER IN THE PRECEDING YEAR. THE SECOND ASPECT OF SPLITTING UP WAS NOT ADDRESSED BY THE CIT(A). THE ASSESSEE WAS IN APPEA L AGAINST THE ORDER OF CIT(A) AND THE TRIBUNAL DECIDED THE PRESENT APPEAL FOLLOWING IT EARLIER ORDER IN THE CASE OF ASSESSEE ITSELF. THE CONTENTI ON OF THE LEARNED AR WAS THAT A NEW PLEA IS BEING RAISED BY WAY OF THIS MISC . PETITION WHICH WAS NEVER RAISED WHILE ARGUING THE APPEAL BEFORE THE TR IBUNAL. THE LEARNED AR PLACED RELIANCE ON THE VARIOUS DECISIONS FOR THE PR OPOSITION THAT NO NEW PLEA CAN BE RAISED BEFORE THE TRIBUNAL BY WAY OF MI SC. APPLICATION. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORDS. THE TRIBUNAL VIDE ORDER DATED 29.1.2010 WITH REGARD TO THE ISSUE IN GROUND NOS. 1 2 & 3 RAISED BY THE ASSESSEE AGAINST DENIAL OF DEDUCTION U/S 80IC OF THE INCOME TAX ACT NOTED THE ARGUMENTS OF THE LD . AR FOR THE ASSESSEE THAT THE ISSUE IN THE PRESENT CASE IS COVERED BY TH E ORDER OF THE TRIBUNAL DATED 30.11.2009 IN ASSESSEES OWN CASE IN ITA NOS. 499/CHD/2009 RELATING TO ASSESSMENT YEAR 2005-06. BEFORE THE TRIBUNAL THE LD. DR FOR THE REVENUE PLACED RELIANCE ON THE ORDER OF THE CIT(A). THE TRIBUNAL FOLLOWING ITS EARLIER ORDER IN THE CASE OF THE ASSE SSEE RELATING TO ASSESSMENT YEAR 2005-06 ALLOWED THE CLAIM OF THE AS SESSEE IN RESPECT OF DEDUCTION U/S 80IC OF THE ACT. THE APPLICANT REVEN UE IS AGGRIEVED BY THE ABOVE SAID FINDINGS OF THE TRIBUNAL. 4 7. THE PRESENT MISCELLANEOUS APPLICATION BEFORE US IS AN APPLICATION MADE UNDER SECTION 254 (2) OF THE I.T.ACT WHEREIN THE POWERS OF THE TRIBUNAL ARE LIMITED TO RECTIFY ANY SUCH MISTAKE WH ICH IS APPARENT FROM RECORD. THE PROVISIONS OF SUB-SECTION 2 TO SECTION 254 OF THE I.T.ACT CATEGORICALLY STATES THAT ORDER PASSED BY THE TRIBUNAL REACHES FINALITY AT THE MOMENT THE SAME IS PASSED. THE SAME ORDER CANNOT BE TOUCHED THEREAFTER EXCEPT WITH A VIEW TO RECTIFY ANY MISTAK E APPARENT FROM RECORD AS PROVIDED IN SUB-SECTION 2 OF SECTION 254 OF THE I.T.ACT. THE POWER OF RECTIFICATION UNDER SECTION 254 (2) OF THE ACT IS L IMITED TO AN ERROR WHICH IS APPARENT ON THE FACE OF THE RECORD BUT WHERE ERR OR IS FAR FROM SELF- EVIDENT RECTIFYING THE SAME CEASES TO BE AN APPARE NT ERROR. THE PLAIN MEANING OF THE WORD APPARENT IS THAT IT MUST BE S OMETHING WHICH APPEARS TO BE SO EX FACIE THAT IT IS INCAPABLE OF A RGUMENT OR DEBATE. THE MISTAKE TO BE DISCOVERED BY A LONG DRAWN PROCESS OF ARGUMENT PROOF OR INVESTIGATION IS NOT A MISTAKE APPARENT FROM RECORD . THEIR LORDSHIPS OF HON'BLE BOMBAY HIGH COURT IN CIT VS. RAMESH ELECTRI C AND TRADING CO. (203 ITR 497) HAD HELD AS UNDER: IT IS AN ACCEPTED POSITION THAT THE APPELLATE TRI BUNAL DOES NOT HAVE ANY POWER TO REVIEW ITS OWN ORDERS UNDER T HE PROVISIONS OF THE ACT. THE ONLY POWER WHICH THE TR IBUNAL POSSESSES IS TO RECTIFY ANY MISTAKE IN ITS OWN ORDE R WHICH IS APPARENT FROM THE RECORD. THIS IS MERELY A POWER O F AMENDING ITS ORDER. THE POWER OF RECTIFICATION UND ER SECTION 254(2) CAN BE EXERCISED ONLY WHEN THE MISTAKE WHICH IS SOUGHT TO BE RECTIFIED IS AN OBVIOUS AND PATENT MIS TAKE WHICH IS APPARENT FROM THE RECORD AND NOT A MISTAKE WHI CH 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 TRIBUN AL TO CONSIDER AN ARGUMENT ADVANCED BY EITHER PARTY FOR A RRIVING AT A CONCLUSION IS NOT AN ERROR APPARENT ON THE REC ORD ALTHOUGH IT MAY BE AN ERROR OF JUDGMENT. THE TRIBU NAL CANNOT IN THE EXERCISE OF ITS POWER OF RECTIFICATI ON LOOK INTO SOME OTHER CIRCUMSTANCES WHICH WOULD SUPPORT OR NOT SUPPORT ITS CONCLUSION. 5 8. THE POWER ENSHRINED UNDER SECTION 254 (2) OF THE I.T.ACT IS LIMITED POWER AND IT DOES NOT CONTEMPLATE A RE-HEARING AND RE-ARGUMENT IN THE CASE WHICH WOULD HAVE THE EFFECT OF RE-WRITING AN O RDER ON THE MERITS OF THE CASE. THE PROVISIONS OF THE STATUTE CONFER LIM ITED POWER ON THE TRIBUNAL TO RECTIFY ANY MISTAKE IN THE ORDER BUT NO POWER IS CONFERRED TO REVIEW THE DECISION MADE IN THE ORDER. THE PROVISI ONS OF SECTION 254 (2) OF THE ACT ARE LIMITED TO ONLY OBVIOUS CLEAR AND S ELF EVIDENT ERRORS IN THE ORDER PASSED. 9. THE ASSESSEE IN THE GARB OF APPLICATION FOR THE RECTIFICATION CANNOT SEEK TO REOPEN AND REARGUE THE MATTER BY MAKING AN APPLICATION UNDER SECTION 254 (2) OF THE I.T.ACT. WE FIND SUPPORT FR OM THE ORDER OF HON'BLE DELHI HIGH COURT IN THE CASE OF PERFETTI VAN MELLE INDIA (P) LTD. VS. CIT (2008) 296 ITR 595 (DEL.) WHEREIN VIDE ORDER DATED 08.05.2007 THEIR LORDSHIPS HAVE HELD THAT THE MERE FACT THAT THE TRIBUNAL HAS NOT ALLOWED A DEDUCTION EVEN IF THE CONCLUSION IS WRONG THAT WILL BE NO GROUND FOR MOVING AN APPLICATION UNDER SECTION 254 (2). FURTH ER IN GARB OF APPLICATION FOR RECTIFICATION THE ASSESSEE CANNOT BE ALLOWED TO BE PERMITTED TO REOPEN AND REARGUE THE WHOLE MATTER W HICH IS BEYOND THE SCOPE OF THIS SECTION. THE ASSESSEE IN THE GARB OF APPLICATION FOR RECTIFICATION HAS SOUGHT TO REOPEN AND REARGUE THE WHOLE MATTER WHICH IS BEYOND THE SCOPE OF SECTION 254 (2). 10. WE ALSO FIND SUPPORT FROM THE DELHI BENCH OF TR IBUNAL IN UZIND CORPORATION VS. ITO [2008] 23 SOT 546 (DEL.) WHERE IN IT HAD HELD AS UNDER: 6 SCOPE OF AN APPLICATION FILED UNDER SECTION 254 (2 ) IS TO MAKE AN AMENDMENT OF AN ORDER PASSED BY TRIBUNAL UN DER SUB-SECTION (1) OF THAT SECTION IN ORDER TO RECTIFY ANY MISTAKE APPARENT FROM RECORD IF SUCH MISTAKE IS BROUGHT TO ITS NOTICE BUT ONE CANNOT GO INTO MERITS OF APPEAL ALL OVER AG AINST. WHILE DECIDING AN APPEAL TRIBUNAL IS TO CONSIDER A RGUMENTS AND CASE LAWS CITED AND REFERRED BY ASSESSEE AND RE VENUE DURING COURSE OF HEARING BUT IT IS NOT OBLIGED TO GIVE DECISIONS ON SO MANY OTHER THINGS AND JUDGMENTS WHI CH ARE JUST NOTED IN PAPER BOOK FILED BEFORE BENCH BUT NE ITHER ARGUED NOR REFERRED DURING COURSE OF HEARING BEFORE BENCH. WHILE DECIDING AN ISSUE TRIBUNAL HAS ALL POWERS TO REFER AND APPLY RATIOS LAID DOWN BY SUPREME COURT AND JURISDI CTIONAL HIGH COURT TO SUPPORT ITS CONCLUSION AND THUS TRI BUNALS RELIANCE ON DECISIONS OF SUPREME COURT AND JURISDIC TIONAL HIGH COURT WHICH WERE NOT ARGUED BY ASSESSEE AND R EVENUE DOES NOT AMOUNT TO A MISTAKE APPARENT FROM RECORD. WHERE WITHOUT PRONOUNCEMENT OF DECISION IF ASSESSE E AT HIS OWN FORMS ANY OPINION REGARDING JUDGMENT OF BENCH SAME CANNOT BE MADE REASON FOR ALLEGING THAT THERE WAS A MISTAKE APPARENT FROM RECORD IN TRIBUNALS ORDER IF FINAL V ERDICT OF TRIBUNAL DOES NOT GO IN FAVOUR OF ASSESSEE. IN VIEW THEREOF THE CONTENTION OF THE ASSESSEE ON THIS ISSUE RAISED IN THE MISCELLANEOUS APPLICATION IS REJECTED. 11. WE FIND THAT THE HONBLE MADYA PRADESH HIGH COU RT IN CIT VS. CHHABRA GINNING UDYOG(SUPRA) HAS HELD AS UNDER:- ALLOWING THE APPEAL THAT A POWER TO RECTIFY THE M ISTAKE IN THE ORDER IS CONFINED TO ONLY THOSE ERRORS WHICH AR E APPARENT FROM THE RECORD OF THE CASE. THE POWERS UN DER SECTION 254(2) CANNOT BE EXERCISED AS A REVIEW COUR T OR AS AN APPELLATE COURT SO AS TO VIRTUALLY CHANGE THE EA RLIER DECISION UNLESS A GRAVE ERROR ON THE FACTS OR AT LA W FROM THE RECORDS IS APPARENT. A WELL REASONED DECISION WHICH HAD GONE IN FAVOUR OF THE REVENUE IN A REGULARLY CONSTI TUTED APPEAL COULD NOT BE UPTURNED BY RECOURSE TO THE PRO VISIONS OF SECTION 254(2) OF THE INCOME-TAX ACT 1961. THE TRIBUNAL WHILE HEARING AN APPLICATION UNDER SECTION 254(2) C OULD NOT ACT AS AN APPELLATE COURT. THE APPLICATION MADE BY THE ASSESSEE UNDER SECTION 254(2) DID NOT CONFORM TO TH E REQUIREMENT OF SECTION 254(2) READ WITH RULE 34A OF THE INCOME-TAX (APPELLATE TRIBUNAL) RULES 1963 AND IT SHOULD HAVE BEEN DISMISSED. 7 12. IN VIEW THEREOF THE CONTENTION OF THE APPLICAN T REVENUE ON THE ISSUE RAISED IN THE PRESENT APPLICATION IS REJECTED . IN VIEW THEREOF THE MISCELLANEOUS APPLICATION FILED BY THE APPLICANT IS DISMISSED. 13. THE LD. AR FOR THE ASSESSEE ALSO ADDRESSED THE ISSUE ON THE MERITS WHICH ARE NOT BEING ADJUDICATED UPON IN VIEW OF OUR DISMISSING THE MISC. APPLICATION FILED BY THE APPLICANT REVENUE. 14. IN THE RESULT THE MISCELLANEOUS APPLICATION FI LED BY THE APPLICANT IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 22 ND DAY OF OCTOBER 2010. SD/- SD/- (G.S.PANNU) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 22 ND OCTOBER 2010 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR