ASHISH GANDHI BUILDERS AND DEVELOPERS PVT. LTD., MUMBAI v. ITO 10(2)(3), MUMBAI

MA 97/MUM/2016 | 2002-2003
Pronouncement Date: 28-09-2016 | Result: Dismissed

Appeal Details

RSA Number 9719924 RSA 2016
Assessee PAN AACCA3552A
Bench Mumbai
Appeal Number MA 97/MUM/2016
Duration Of Justice 4 month(s) 26 day(s)
Appellant ASHISH GANDHI BUILDERS AND DEVELOPERS PVT. LTD., MUMBAI
Respondent ITO 10(2)(3), MUMBAI
Appeal Type Miscellaneous Application
Pronouncement Date 28-09-2016
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 28-09-2016
Assessment Year 2002-2003
Appeal Filed On 02-05-2016
Judgment Text
IN THE INCOME-TAX APPELLATE TRIBUNAL - A BENCH MUMBAI BEFORE SH.SHRI RAJENDRA ACCOUNTANT MEMBER AND SANJAY GARG JUDICIAL MEMBER (M.A. NO.97/MUM/2016-ARISING OUT OF ITA NO .6337/MUM/2011-ASSESSMENT YEAR 2002-03) M/S. ASHISH GANDHI BUILDERS & DEVELOPERS B-11/188 MATRU ASHISH RAJAWADI CHS GHATKOPAR EAST MUMBAI-400 077. PAN: AACCA 3552 A VS. INCOME TAX OFFICER WARD-10(2)(3) ROOM NO.431 AAYAKAR BHAVAN M.K. ROAD MUMBAI-400 020. ( / APPLICANT) ( / RESPONDENT) / APPELLANT BY :SHRI D.C. SEJPAL /RESPONDENT BY :SHRI. AIRIJU JAIKARAN / DATE OF HEARING :16.09.2016 / DATE OF PRONOUNCEMENT :28.09.2016 1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT 1961(ACT) PER RAJENDRA A.M. VIDE ITS MISCELLANEOUS APPLICATION DATED 02.05.2016 THE ASSESSEE-COMPANY HAS STATED THAT CERTAIN MISTAKES WERE APPARENT IN THE ORDER OF THE TRIBUNAL DATED 14.09.2015 THAT THE SAME NEED TO BE RECTIFIED AS PER THE PROVISIONS OF SECTI ON 254(2)OF THE ACT. 2. IN ITS APPLICATION THE ASSESSEE HAS SUBMITTED THAT IT HAD NOT FILED ANY INACCURATE PARTICULARS OF INCOME NEITHER CONCEALED ITS INCOME THAT IT HAD DULY DISCLOSED ALL MATERIAL FACTS WITH REGARD TO THE FILING OF THE INCOME THAT THE AUDITED FINANCIAL STATEMENTS DISCLOSED THE FIGURE OF WIP ALONG WITH THE RETURN OF INCOME FILED THAT THE INCOME IN QUESTION HAD ALREADY BEEN OFFERED TO TAX IN ASSESSMENT YEAR 2007-08 THAT THE ONLY DISPUTE IN THE QUANTUM APPEAL WAS WITH RESPECT TO THE YEAR IN WHICH THE INCOME SHOULD BE TAXED THAT EVEN THOUGH IT HAD OFFERED ITS INCOME FOR TAXATION BY FOLLOWING A CONSISTENT M ETHOD OF ACCOUNTING (PCM) THE AO BY FOLLOWING A DIFFERENT APPROACH HAD DETERMINED THE I NCOME AS TAXABLE I.E. THE AO HAD RE- CALCULATED THE INCOME BY USING A DIFFERENT METHOD O F ACCOUNTING (WIP) AND HAD TAXED THE INCOME IN THE YEAR UNDER APPEAL THAT THE JUDGMENT OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF MANILAL TARACHAND (120 TAXMANN 678) RELIED UPON BY THE ASSESSEE HAD NOT BEEN TAKEN INTO CONSIDERATION BY THE TRIBUNAL WHILE DECIDING THE A PPEAL THAT THE NOTICE U/S. 274 R.W.S. 271(1)(C ) SENT BY THE AO WAS VERY VAGUE AND HAD N O CLARITY WHETHER THE PENALTY LEVIED WAS FOR FILING OF INACCURATE PARTICULARS OF INCOME OR C ONCEALMENT OF INCOME. MA-97/M/16-ASHISH GANDHI BUILDERS & DEVELOPERS 2 3. DURING THE COURSE OF HEARING BEFORE US THE AUTHORIS ED REPRESENTATIVE (AR) REITERATED THE CONTENTIONS RAISED IN THE MISCELLANEOUS APPLICATION .HE ARGUED THAT THE ASSESSEE HAD NOT CONCEALED THE PARTICULARS OF INCOME THAT AO HAD NO T MENTIONED AS TO WHETHER THE ASSESSEE HAD CONCEALED THE PARTICULARS OR HAD FURNISHED INAC CURATE PARTICULARS.ON A QUERY BY THE BENCH HE ADMITTED THAT THE SAID ISSUE WAS NOT RAIS ED BEFORE AO/FAA/TRIBUNAL. THE DEPARTMENTAL REPRESENTATIVE (DR) STATED THAT THERE WAS NO MISTAKE IN THE ORDER OF THE TRIBUNAL THAT THE ASSESSEE WANTS REVIEW OF THE ORDE R DECIDED AGAINST IT IN THE GARB OF MISCELLANEOUS APPLICATION. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US. BEFORE PROCEEDING FURTHER WE WOULD LIKE TO REPRODUCE THE OPERATIVE PA RT OF THE ORDER OF THE TRIBUNAL. 5.WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERU S ED THE MATERIAL . WE FIND THAT THE ASSESSEE HAD F IL E D THE DEATH CERTIFICATE OF THE ACCOUNTANT AND WE HO LD THAT THERE WA S A REASONABLE CAU S E FOR N O T FILING THE APPEAL IN T I ME . WE FIND THAT THE FAA HAD DI S MI S SED THE APPEAL N O T ONLY BECAUSE IT WA S FILED L A T BUT HE H A D DELIBERATED UPON THE I S SUE ON MERIT S AL S O.THEREFORE IN OUR O PINION THE IS S UE OF DELAY IN FILING R ETURN IS ACADEMIC IN NATURE . C O MING TO THE MER I T S O F THE PENALT Y ORDER S IT I S FOUND THAT THE AO HAD RE-CAL C ULATED THE WIP AND HAD T A XED IT IN THE YEAR UNDER APPEAL THAT THE FAA HAD PARTLY A LLOWED THE APPE A L IN QUANTUM PR O CEEDING S THAT THE ASS E SS EE HAD NOT DI S PUTED THAT THE AC AND THE CC WERE I SS UED B Y THE MUNICIP A L AUTHORITIE S WITH REGARD TO THE PROJECT S COMPLETED BY IT TH A T IT W AS AW A RE THAT T HE TENANT S HAD O C C UPIED THE F LAT S . IN S PITE OF THE S E F A C T S IT WA S C LAIMING THAT W O RK WA S GO IN G O N I .E.THE PR O JECT S WERE INCOMPLETE A ND THAT THE INCOME WA S NOT TAXABLE IN THA T YE A R . EACH ACC O UNTING Y E A R I S A DI F FERENT UNIT A ND INCOME ARI S ING A C C RUING OR R ECEI V ED IN A PARTICUL A R Y E A R HA S TO BE OFFERED F OR T AX ATION IN TH A T PARTICULAR Y EAR UNLE SS AND UNLE SS THERE EXIT S S OME REA S ONABLE C A U S E FOR DEFERR I NG TH E SA ME TO O THER YEAR/ (S) . IN THE CA S E BEF O RE U S .THE A SSESS EE HA S N O T PR O VED DURING THE A SS E SS MENT AND APPELLATE PROCEEDING S. THAT THE INCOME HAD NOT ACCRUED TO IT- E V E N A F TER R ECE IV ING THE OC AND CC . IT HAD TO PRODUCE DOCUMENTAR Y EVIDENCE THAT EVEN AFTER G ETT I N G THE CER TI FI CAT ES TH E PR O JE C TS REMAINED INC O MPLETE AND IT HAD TO INCUR S UBSTANTIAL EXPENDITURE FOR COMPL E TING THEM.WE DO NOT F IND AN Y S UCH E X ERCISE WA S DONE BY IT . THEREF O RE IF THE AO A ND THE FAA HELD TH A T THE A SSES SEE HAD COMPLETED THE PROJE C T S IN THE YE A R UNDER APPEAL A ND H A D NOT OFF ERED THE CO RRE S PONDING INCOME IN THE Y EAR IN WHICH IT S HOULD HA V E BEEN OFFERED THEN THEY W E R E N O T UNJU S TI F IED.WHILE DECIDING THE CONCEALMENT PENALTY CASE S WHAT I S T O BE C O N S IDERED I S THE E X PLANATI O N FI LED B Y THE A SS E SSE E IN RE S P O N S E T O THE N O TICE I SS UED BY THE AO FOR LEV Y ING PENALT Y. DURING THE COUR S E OF S UR V E Y PROCEEDING S AND ENQUIRIES MADE B Y THE DEP A RTMENT IT WA S F O UND THAT TH E PR O JECT S UNDERTAKEN BY THE A SS E SS EE HAD ALREADY C O MPLETED A ND W ERE O CCUPIED BY THE PUR C H AS ER S. IN THE S E CIRCUM S TANCE S IN ABSENCE OF AN Y CONTRARY E V IDENCE IT C OULD NOT B E S AID THAT PROJ EC T S W E R E I N TH E S T A GE OF WORK IN PROGRE SS . IT I S A F A CT THAT THE A SS E SS EE WA S F O LL O WIN G METH O D O F PR O JECT CO MPLETI O N . THE FAA H AS GI V EN C A T E G O RI CA L F INDING O F F ACT TH A T AF TER 3 1 . 3 . 2002 V ERY LITTL E EXPENSES W A S INCURRED BY THE A SSESSEE FOR C O MPL ET IN G THE SO C ALL E D PR O JECT S AND T HA T I T H A D INC O RR E CTLY CL A IM E D IN THE RETURN OF INCOME THAT THE PR O JECT S W ERE INCOMPLETE . HERE W E WOULD A L S O LIKE T O DI S CU SS THE CA S E S RELIED UP O N BY THE ASS E SS EE . IN THE C AS E OF RELI A NC E PETROPRODUCT S P V T . LTD. (S UPR A) THE COURT HA S HELD THAT NO I NFORMATION GIVEN IN THE RETURN WAS F OUND TO BE I NCORRECT OR IN A CCUR A TE THAT THE CA S E OF THE AO WAS TH A T S UBMITTING AN IN C ORRE C T C LAIM IN L AW A M O UNTED IN F URNI S HING INACCU R ATE P A RTI C ULAR S THAT THE INTERPRETATI O N ADOPTED BY THE AO WAS NOT A S PER LAW . THE HON ' BLE COURT HAD HELD THAT M A KING AN INCORRECT MA-97/M/16-ASHISH GANDHI BUILDERS & DEVELOPERS 3 C LAIM IN LAW DID N O T TA NTAMOUNT T O FURNI S HING O F INA CC URATE P A RTICULAR S IN T HE CA S E BEF O RE U S THE FACT S ARE TOTALLY DI F FERENT-THE S UR V EY PROCEEDING S A S S TATED E A RLIER BROUGHT CERTAIN FACT S AND IT W AS F OUND THAT TH E ASS E SS EE HAD NOT OFFERED THE INCOME THAT WAS TO BE OFFER E D FOR THE YE AR UNDER APPEAL . THEREF O R E IN O UR OPINI O N THE CA S E RELIED UPON BY THE AS S E SS EE I S OF NO HELP . IN C AS E O F GIRI S H DEVCHAND RAJ A NI (S UPR A) IT WAS FOUND TH A T THE ASS E SS EE HAD REVI S ED THE RETURN AFTER THE DEATH O F HI S BR O THER WH O WA S LO O KING AF TER THE BU S INE SS . THE HON ' BLE COURT HAD HELD THAT IT WA S NOT THE C A S E OF THE REVENUE THAT THE A SS E S SEE FILED REVI S ED RETURN A S SOME INACCURATE PARTI C ULAR S O F INC O M E W E R E DETECT E D BY TH E AO DURIN G TH E C O UR S E O F A SS E SS MENT . IN O UR OPINION F ACT S OF THE CA S E O F GIRI S H DE V CHAND RAJANI HA V E NOT RELE V ANCE TO THE CA S E BEFORE U S . IN THE CASE OF NAVRANG INTERNSTIONAL HOTELS(SUPRA) IT WAS FOUND THAT THE ASSESSEE HAD MADE PAYMENTS IN TERMS OF A CONSENT DECREE ON EARLIER OC CASIONS AS PER THE ORDER OF THE HIGH COURT THAT THE PAYMENTS MADE BY IT WERE ALLOWED. CONSIDER ING THOSE PECULIAR FACTS PENALTY LEVIED U/S. 271(1)(C ) OF THE ACT WAS DELETED BY THE TRIBUNAL . IN OUR OPINION THE FACTS OF BOTH THE CASES ARE TOTALLY DIFFERENT IN THESE CIRCUMSTANCES WE ARE OF THE OPINION THAT THE ORDER OF THE FAA DOES NOT SUFFER FROM ANY LEGAL OR FACTUAL INFIRMITY. CON FIRMING HIS ORDER WE DECIDE THE EFFECTIVE GROUND OF APPEAL AGAINST THE ASSESSEE . 4.1. WE HAVE REFERRED TO THE LOG BOOK OF THE 9.9.2015 AN D FIND THAT ALL THE CASES REFERRED BY THE ASSESSEE HAVE BEEN DEALT WITH.THE TRIBUNAL HAD AFTER CONSIDERING THE FACTS OF THE CASE AND THE PENALTY ORDER UPHELD THE ORDER OF THE FAA GIVING DETAILED REASONS.AS PER THE ESTABLISHED PRINCIPLES OF TAXATION SCOPE OF SECTION 254(2) OF THE ACT IS VERY LIMITED AND SPECIFIC.IF A MISTAKE IS SO GLARING THAT ON THE FAC E OF IT SAME HAS TO BE AMENDED THEN ONLY THE PROVISIONS OF SECTION 254(2)CAN BE INVOKED.IT IS SA ID THAT THE SECTION IS LIMITED TO MISTAKE APPARENT FROM RECORD LIKE ARITHMETICAL ERRORS TYPOG RAPHICAL MISTAKES NON-ADJUDICATION OF GROUND 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 -CONDITION. THE TRIBUNAL IN ITS ORDER REFERRED TO THE CONTROVERSY IN QUESTION RELATING TO THE DISALLOWANCE MADE ON ACCOUNT OF SHORT- TERM CAPITAL LOSS AND LONG-TERM CAPITAL LOSS. THE E NTIRE ISSUE WAS EXAMINED ON THE MERITS INCLUDING THE JUDGMENTS RELIED UPON BY THE ASSESSEE . AFTER EXAMINING THE MATTER IN DETAIL IT ALLOWED THE APPEAL FILED BY THE REVENUE. (348ITR118). FOLLOWING IS THE DECISION OF THE HONBLE JURISDICTI ONAL HIGH COURT HAS IN THE CASE OF RAMESH ELECTRICALS (203ITR497): 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' AMEND ANY ORDER PASSED BY IT UNDER SUB- SECTION (1) WITHIN THE TIME PRESCRIBED THEREIN. IT IS AN ACCEPTED POSITION THAT THE APPELLATE TRIBUNAL DOES NOT HAVE ANY POWER TO REVIEW ITS OWN ORDERS UNDER THE PROVISIONS 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. THIS IS MERELY A POWER OF AMENDING ITS ORDER. THE POWER 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 MISTAKE WHICH REQUIRES TO BE ESTABLISHED BY ARGUMEN TS AND A LONG DRAWN PROCESS OF MA-97/M/16-ASHISH GANDHI BUILDERS & DEVELOPERS 4 REASONING ON POINTS ON WHICH THERE MAY CONCEIVABLY BE TWO OPINIONS.FAILURE OF THE TRIBUNAL TO CONSIDER AN ARGUMENT ADVANCED BY EITHER PARTY FO R ARRIVING AT A CONCLUSION IS NOT AN ERROR APPARENT ON THE RECORD ALTHOUGH IT MAY BE AN ERROR OF JUDGMENT. THE TRIBUNAL CANNOT IN THE EXERCISE OF ITS POWER OF RECTIFICATION LOOK INTO S OME OTHER CIRCUMSTANCES WHICH WOULD SUPPORT OR NOT SUPPORT ITS 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 TAKEN BY THE TRIBUNAL HAS ALTERED BECAUSE OF SUBSEQUENT JUDGMENT OF THE JURISDICTIONA L HIGH COURT OR THE APEX COURT.THE TRIBUNAL HAS DECIDED THE ISSUE AFTER CONSIDERING AL L THE FACTS AND PROVISIONS OF LAW.IN OUR OPINION NO MISTAKE IS APPARENT IN THE IMPUGNED ORD ER OF THE TRIBUNAL.THEREFORE WE ARE OF THE OPINION THAT APPLICATION FILED BY THE ASSESSEE DESERVES TO BE REJECTED. IN THE RESULT MISCELLANEOUS APPLICATIO N FILED BY THE ASSESSEE STANDS DISMISSED. . ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH SEPTEMBER 2016. 28 2016 SD/- SD /- ( /SANJAY GARG ) ( / RAJENDRA ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER MUMBAI DATE: 28.09 2016. . . . JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ 4. THE CONCERNED CIT / 5. DR A BENCH ITAT MUMBAI / . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER / DY./ASST. REGISTRAR /ITAT MUMBAI.