2021 (3) TMI 887 - AT - Income Tax

Tribunal rectifies erroneous dismissal of cross objection, orders hearing.

M/s. Modern Home Care Products Ltd. Versus ITO, Ward: 5 (4) New Delhi.

The tribunal found that the coordinate bench's dismissal of the cross objection by the assessee was erroneous due to the failure to consider a binding ... Rectification u/s 254 - decision of the honourable jurisdictional High Court was not considered - HELD THAT:- The answer has been already rendered by the Honourable Supreme Court in Asst Commissioner of Income Tax versus Saurashtra Kutch stock exchange Ltd [2008 (9) TMI 11 - SUPREME COURT] wherein the coordinate bench passed an order u/s 254 (2) where a decision of the honourable Gujarat High Court, though not cited before the coordinate bench, was ignored. The coordinate bench recalled that order holding that a binding decision has not been considered by ITAT. Such order of the ITAT was challenged before the The honourable Supreme Court has dealt with this issue and held that the non-consideration of a decision of jurisdictional High Court or of the Supreme Court can be said to be a mistake apparent from the record. Therefore in the present case the decision of the honourable Delhi High Court in case of Principal Commissioner of income tax versus silver line [2015 (11) TMI 809 - DELHI HIGH COURT]was not at all considered and therefore the order passed by the coordinate bench in dismissing the cross objection of the assessee suffers from a mistake apparent from record. Hence the cross objection of the assessee is recalled, registry is directed to fix the same for hearing in due course. Issues Involved:1. Maintainability of the cross objection filed by the assessee.2. Consideration of binding judicial precedents and apparent error in the judgment.Issue-wise Detailed Analysis:1. Maintainability of the Cross Objection Filed by the Assessee:The primary issue addressed in the judgment is whether the cross objection filed by the assessee was maintainable. According to the order dated 13/11/2018, the coordinate bench dismissed the cross objection on the grounds that it was not maintainable as it did not arise from the order of the learned CIT – A. The coordinate bench held that the cross objection was not related to any part of the order of the Commissioner (Appeals) and thus could not be considered. Specifically, the assessee had raised an issue regarding the taxability of Rs. 1.5 crores, which was not disputed before the assessing officer or the Commissioner (Appeals). The bench emphasized that the provisions of Section 253(4) of the Act allow cross objections only against any part of the order of the Commissioner (Appeals). Therefore, since the taxability of the Rs. 1.5 crores was not part of the order of the Commissioner (Appeals), it could not be raised in the cross objection.2. Consideration of Binding Judicial Precedents and Apparent Error in the Judgment:The assessee argued that there was an apparent error in the order of the coordinate bench as it was contrary to the provisions of Section 253(4) of the Act and Rule 22 of the Income Tax (Appellate Tribunals) Rules, 1963. The assessee contended that the coordinate bench did not consider the decision of the Delhi High Court in PRINCIPLE COMMISSIONER OF INCOME TAX VERSUS SILVER LINE 383 ITR 455, which allowed the tribunal to permit the assessee to raise an additional ground challenging the validity of the reassessment order for the first time in a cross objection. The assessee highlighted that the non-consideration of this binding decision rendered the order erroneous.The judgment further discussed the rival contentions and referred to the Supreme Court's decision in National Thermal Power Co Ltd versus Commissioner of Income Tax 229 ITR 383, which supported the view that purely legal issues could be raised for the first time before the tribunal. The judgment also cited the Supreme Court's ruling in Asst Commissioner of Income Tax versus Saurashtra Kutch Stock Exchange Ltd 305 ITR 227, which held that non-consideration of a decision of the jurisdictional High Court or the Supreme Court constitutes a mistake apparent from the record.Conclusion:The tribunal concluded that the order passed by the coordinate bench dismissing the cross objection suffered from a mistake apparent from the record due to the non-consideration of the binding decision of the Delhi High Court in PRINCIPLE COMMISSIONER OF INCOME TAX VERSUS SILVER LINE. Consequently, the cross objection of the assessee was recalled, and the registry was directed to fix the same for hearing in due course. The miscellaneous application filed by the assessee was allowed, and the order was pronounced in the open court on 22 March 2021.