2019 (4) TMI 1227 - AT - Income Tax

Tribunal lacks authority to modify order after High Court admission

The Tribunal dismissed the Miscellaneous Application seeking rectification/modification of its order, emphasizing its lack of authority to review its ... Rectification u/s 254 - capital expenditure on CSR allowance - HELD THAT:- We notice that ld. AR submits that ITAT in its order ignored the decision of coordinate bench in assessee’s own case decided in its favour, where the capital expenditure on CSR was allowed. He basically presses the point that ITAT should have followed the earlier orders but rather ITAT has distinguished the earlier order and discussed the issue in detail. The bench has discussed the relevant issue at length before coming to the conclusion, in our view, the argument of assessee suggest that we technically review the findings in the order passed. We do not think, we have right/power u/s 254(2) to review any of our order. Disallowance u/s 40(a)(ia) for non-deduction of tax on commission paid - HELD THAT:- Assessee came up on appeal objecting to the CIT(A)’s order even though CIT(A) has given relief to the assessee but heavily relying on the decision of Merilyn Shipping [ 2012 (4) TMI 290 - ITAT VISAKHAPATNAM] . Ld. AR argued that the basic payment itself is not commission. Therefore, ITAT cannot take a view in line with AO. But, we notice that ld. CIT(A) has given relief to assessee relying on Merilyn Shipping decision and the Bench has adjudicated considering the recent development on the subject of paid/payable issue. Further, Bench has discussed at length before coming to the conclusion at variance with earlier years orders. Thus, the argument of the ld. AR suggest that we sit and review our own order. From the above, it is clear that ld. AR argues before us to review our own order. We do not have any right/power u/s 254(2) to review our order and we have not noticed any mistake apparent from record to modify anything u/s 254(2) of the Act. Therefore, the MA filed by the assessee is dismissed. Issues:1. Rectification/modification of the Tribunal's order under section 254(2) of the Income Tax Act.2. Tribunal's authority to revisit its order when a case is admitted by the High Court.3. Allowability of capital expenditure on Corporate Social Responsibility (CSR).4. Disallowance under section 40(a)(ia) for non-deduction of tax on commission paid.Analysis:Issue 1: Rectification/Modification of Tribunal's OrderThe Miscellaneous Application sought rectification/modification of the Tribunal's order dated 07/09/2017 in ITA No. 194/Hyd/2017 under section 254(2) of the Income Tax Act. The crux of the matter was whether the Tribunal could revisit its order after the case was admitted by the High Court. The counsel cited a decision of the Mumbai High Court and Mumbai ITAT to support the Tribunal's authority to rectify any apparent mistakes in its order under section 254(2). The High Court clarified that the Tribunal could rectify mistakes even after disposing of the main matter, emphasizing that the Tribunal's power should not be restricted when a case is pending for admission before a higher forum.Issue 2: Tribunal's Authority to Revisit OrderThe Tribunal deliberated on whether it could adjudicate on an issue admitted by the High Court when a mistake in the order was apparent on record. The Tribunal referred to the Mumbai High Court's observation that the ITAT could indeed address issues admitted by the High Court if mistakes were evident. Consequently, the Tribunal proceeded to hear the Miscellaneous Application on its merits.Issue 3: Capital Expenditure on CSRRegarding the addition of &8377;17,39,00,000 on CSR, the Assessing Officer contended that these expenses were not related to the business and were akin to donations, thus not allowable under the Income Tax Act. The counsel argued that the ITAT overlooked a previous decision in the assessee's favor and should have followed it. However, the Tribunal found that it did not have the authority to review its order and dismissed the Miscellaneous Application.Issue 4: Disallowance under Section 40(a)(ia)The dispute over disallowance under section 40(a)(ia) for non-deduction of tax on commission paid was also raised. The counsel argued that the ITAT should not pass counter judgments for the same issue already decided by coordinate benches. However, the Tribunal found that it did not have the power to review its order, as it did not identify any apparent mistake warranting modification under section 254(2) of the Act.In conclusion, the Tribunal dismissed the Miscellaneous Application, emphasizing that it lacked the authority to review its own orders and did not find any apparent mistakes in the records that would justify modification under section 254(2) of the Income Tax Act.