TaxTMI 
TaxTMI 
2015 (12) TMI 768
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....miscellaneous application before the Tribunal. 2. The assessee has further contended that paragraphs 15 to 18 of the order of the Tribunal dealt with validity of assessment, that the Tribunal had dismissed the ground on the basis that the issue had attained finality due to concession by the Counsel in the first round of proceedings, that two important judgments i. e. Sachin S. Hundekari [(2011)(1)ALLMR, 804)] and Central Council for Research in Ayurveda Siddha and Another vs. Dr. K. Santakumari [(AIR)2001/SC-2306)]were not considered by the Bench, that regarding validity of reassess - ment was dismissed by the Tribunal, that the reasons recorded for reopening of assessment contained patently erroneous and fatal assumption, that the reasons recorded did not satisfy the pre-requisite of valid re-opening of assessment, that the ground regarding the validity of reassess -ment was dismissed ignoring the submission of the assessee, that paragraphs 19 and 20 of the order of the Tribunal dealt with lack of jurisdiction in absence of order u/s. 127 of the Act, that Tribunal had wrongly mentioned that assessee had not made specific submission at the time of hearing, that paper book filed be....
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....8 of the Act, the assessee stated that return filed earlier might be treated as fresh return. The AO mentioned that while finalising the assessment of the year 1997-98 that the assessee did not file loan confirmation in respect of unsecured loans for that AY. , that the amount in question was added to the total income of the assessee as unexplained cash credits u/s. 68 of the Act, that the assessee had taken unsecured loan from similar parties for the year under consideration, that the assessment was re-opened by issue of notice u/s. 148 of the Act, that the assessee did not furnish any confirmation, that it only filed a statement of loans and interest, that it had raised loans of Rs. 68. 18 lacs during the year, that he had no alternative but to treat the amount of unsecured loan raised during the AY. under considera -tion as unexplained capital, that the assessee had paid interest of Rs. 13. 08 lacs during the year, He completed the assessment, on 26. 03. 2002 u/s. 143(3) r. w. s. 147 of the Act, determining its income at Rs. 79. 38 lacs after making addition of Rs. 81, 26, 031/-(Rs. 68. 18 lacs +Rs. 13. 08 lacs) on account of unsecured loans and interest. 5. Aggrieved by the or....
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....ny case this cannot be treated as in the hands of the assessee for the year under consideration. " The Tribunal did not grant stay, but the matter was taken up for hearing under the category of 'Early Hearing Case'. 7. In the regular appeal, while challenging the order of the FAA of 11. 6. 2002, before the Tribunal, the assessee raised nine grounds. Out of the nine grounds, first two grounds were about re-opening of assessment by issue of notice u/s. 148 of the Act. The then AR Sh. Shonde did not press the grounds related with re-opening. The Tribunal, in its order dated 29. 9. 2005, held as under : "1. These appeals are preferred by the assessee against the consolidated order of the CIT(A) for the Assessment Years 1994-95, 1995-96 and 1996-97. Since common issues with regard to validity of the re-opening of the assessment under sec. 147 and the additional made under sec. 68 are raised, all these appeals were heard together and these are being disposed off by the single consolidated order for the sake of convenience 2. During the course of hearing, the ld. Counsel for the assessee had opted not to press ground relating to re-opening of the assessment in these appeals. Accor....
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.... The learned Income Tax Officer erred in assessing the total income of the appellant at Rs. 76, 53, 778/- as against returned income of Rs. 17, 361/-. 2. The learned Income Tax Officer erred in treating unsecured loans amounting to Rs. 65, 33, 021/- as income of the appellant u/s. 68. 3. The learned Income Tax Officer failed to appreciate that the said loans were genuine borrowings from lenders who had capacity to lend the loans. 4. The learned Income tax Officer failed to appreciate that the lenders were not co-operating with the appellant and mere non co-operation of lenders does not disprove the genuineness of loans. 5. Without prejudice, the learned Income Tax Officer failed to appreciate that even if assessee has not discharged onus of proof u/s. 68, the said loans were not income of the appellant. 6. The learned Income tax Officer failed to appreciate that the appellant was prevented by a reasonable & sufficient cause from furnishing the evidences in support of genuineness of loans borrowed. 7. The learned Income Tax Officer erred in disallowing Rs. 13, 08, 010/- out of interest paid on account of unsecured loans disbelieved. " Before the FAA, the assessee....
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....mation with the documentary evidences, that summons to 98 parties were not served as claimed by the assessee , that the AO had issued notice where the addresses were provided by the assessee, that it did not mean that notices were served in all the cases. He further held that the assessee had failed to discharge the prime responsibility to establish the identity and credit worthiness of the creditores and genuineness of the transactions, that merely filing of an affidavit of a broker with the names of the lenders could not be called a confirmation, that the confirmation along with the bank statement, mode of payment/receipt were never made available to the AO, that the AO had allowed loans to the extent of Rs. 2. 85 lacs, that some more confirmations were filed without any documentary evidences, that vide his letter dt. 15. 12. 2006 the AO had given another opportunity to the assessee to produce the parties for verification, that assessee failed to produce any of the parties before the AO, that the certificate of the broker had no sanctity as it was not giving details of the basic information. Finally, he held that in the remand report the AO had admitted that assessee had proved g....
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....stion could not be considered afresh. On a reference, the Hon'ble court framed the following question: "Whether, on the facts and in the circumstances of the case, the assessee was entitled to raise the question of the validity of the jurisdiction assumed by the Income-tax Officer under section 147(b) in the course of proceedings taken pursuant to the restoration of the appeals to the first appellate authority by the Tribunal by its earlier order dated July 31, 1978, . . . . . " Before the Hon'ble Court the Counsel for the assessee submitted that the finding of the Tribunal that the earlier order of the Tribunal, dated 31. 07. 1978, had become final and the question could not be considered afresh was not a correct view and that question of reopening should have been considered by the Tribunal. Counsel, appearing for the Revenue, submitted that the Tribunal upheld the jurisdiction and the order of the Tribunal had become final and without challenging the earlier order, the subsequent order could not be challenged. The Hon'ble Court referred to the cases of Seshasayee Paper and Boards Ltd. (157 ITR 342), M. K. Mohammad Kunhi(92 ITR 341)and S. P. Gramophone Co. (160ITR 417)deliver....
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....isposes of the appeal while passing the order of remand and another appeal comes before the Tribunal against the order passed after the remand, it has no power to reconsider the finding or opinion. Questions which have become final and concluded by the remand order cannot be reopened. If the correctness of the remand order was not challenged through appropriate proceedings, it would not be open to review it when the matter comes again before that authority in appeal or revision against the order passed by the authorities below in accordance with the remand order. In the matter of Smt. Gowri Rajes and Others(241 ITR 506)the Hon'ble Madras High Court found that the AO had reopened the assessment of the assessee u/s. 147(b) of the Act and completed the assessments, that the Tribunal had upheld the reopening of the assessment but remitted the matter to the AO to make a fresh assessment in accordance with certain directions given by it, that he completed the assessments in pursuance of the directions of the Tribunal, that the assessee preferred appeal before the FAA and once again questioned the powers of the AO to reopen the assessment, that the FAA and the Tribunal held that same wa....
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....A, after recording the concession, deleted the amount and allowed the appeal. In spite of the concession, the department filed an appeal to the Tribunal challenging the correctness of the deletion. A preliminary objection raised on behalf of the assessee that in view of the concession of the department before the FAA, the appeal was not maintainable was negatived by the Tribunal and the case was remanded. Deciding the matter, the Hon'ble Court held that the department, having agreed to delete the amount from the assessment and having conceded the deletion before the FAA, could not be held to be aggrieved by this part of the order to enable it to file an appeal to the Tribunal; the appeal of the department regarding the deletion of the amount was neither competent nor capable of being entertained by the Tribunal. In the matter of R. K. Sawhney, Executor of the Estate of Late R. B. Nathu Ram(166 ITR 128), the Hon'ble Delhi High Court has also dealt the identical issue. In that matter an assessment which was made in March, 1974, on the assessee for the assessment year 1971-72 after his death, was challenged by his legal representatives in an appeal on the ground that no notice had be....
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....e having been no reference from the order of the Tribunal. To permit the assessee to raise these contentions once again will offend the rule of finality of judicial proceedings. . . . . In M. Syed Alavi v. State of Kerala [1981] 48 STC 150 (Ker) [FB], it was pointed out by the Full Bench of the Kerala High Court that where matters are decided by one appellate authority in the first instance, that appellate authority would be bound by the said order and cannot consider those contentions again when the matter subsequently comes up after remand. In that case, initially, the Appellate Assistant Commissioner had disposed of the appeal. When the same points were urged when the assessment was made on remand, the Kerala High Court pointed out that up to the stage of the Appellate Assistant Commissioner that would be final, but that it would be open to the Tribunal to consider the contentions if raised before it. On the same principle, in the present case, the contentions having been raised and decided by the Tribunal, it was not open to the Tribunal to reconsider these contentions and the proper and appropriate remedy of the assessee was to file a reference application and pursue the same ....
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....ment Ltd. (211 ITR 420), delivered by the Hon'ble Delhi High Court. In that matter the assessee had paid advance tax. The assessment having been completed at a figure where the tax paid came to be more than the tax assessed, the assessee filed an appeal against the assessment order. The appeal filed by it was allowed and the AO was directed to give effect to the said appellate order. The AO gave effect to the order in the appeal and because the tax payable was less than the tax which had been paid, the AO held that the assessee was entitled to interest u/s. 244(1A) of the Act. The AO specifically held that no other interest was allowed to the assessee. The assessee filed an appeal before the FAA and contended that it was entitled to interest under section 214 of the Act, as the amount of advance tax which had been paid was more than the total tax payable by it. The FAA, vide his order dated 09. 07. 1986, allowed this contention and held that the assessee had become entitled to the payment of interest and the FAA then directed the AO to verify the figure of advance tax paid and the income assessed and then to allow the necessary interest to the assessee. The AO by order dated 12. 01....
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....sue raised by it. In short, the litigants, in the appeals before the Tribunal/Hon'ble High Court/Apex Court, are not allowed to re-agitate same issue after conceding before the lower authorities. Approaching a judicial forum is a serious matter and no one can be allowed to take judicial/quasi-judicial proceedings in a light manner. By conceding a point the litigant prevents the Appellate Authority to decide the issue at that point of time and also prevents the respondent to negate the stand taken by it. Person not availing an opportunity cannot complain of injustice. Even if it has some grievance to any order, it has to follow the procedure laid down by law. By, not filing an appeal against the order of the Tribunal, dated 29. 05. 2005, the assessee had allowed it to become final. In our opinion, in the proceedings u/s. 254(2)of the Act, such a finality cannot be disturbed. In the matter under consideration, the assessee has not produced any letter written by it to thethen- AR questioning him as to why did he not press the ground of re-opening. It leads to the only logical conclusion that a conscious decision was taken by the assessee itself about not agitating the ground, related....
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....s, one of the partners was also present during the hearing before the FAA. The assessee has, in the MA filed by it, argued that concession given by Sh. Shonde was not binding on it. But, it has not said anything about the behaviour the CA and the partner who had appeared before the FAA in the second round of litigation and not agitated the issue of re-opening. It is not clear as what prevented them to challenge the reopening, especially when the assessee had agitated the issue in first round of litigation up to the Tribunal. We do not know as to whether both of them did not raise the issue because of misinterpretation of law of ignorance of facts or for any other reasons. The simple logic behind it, according to our understanding of the facts, is that the CA and the partner were very well aware that Sh. Shonde had not pressed the ground before the Tribunal not on his own, but on instruction of the assessee itself. In these circumstances, we are of the opinion that there was no mistake on part of the Tribunal in holding that issue of re-opening had become final and that there is no mistake in its order that could be rectified as per the provisions of section 254 of the Act. 13. Now....
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.... by it, u/s. 254 of the Act for rectifying the mistake. The Tribunal allowed the MA filed by the assessee and granted it relief. Reversing the order of the Tribunal, the Hon'ble court laid down following principles: "Application of the principles laid down by the superior courts to the facts of the case before the Tribunal on erroneous understanding of such principles, recording of an erroneous finding by it based on the facts on record, arriving at a conclusion on erroneous application of provisions of law to the facts of the case, etc. , cannot be held to be "a mistake apparent from the record" warranting any rectification by the Tribunal in exercise of its power under section 254(2) of the Income-tax Act, .......... . Such an exercise of power under section 254(2) of the Act amounts to review of its earlier order on the merits but not"rectification of mistake apparent from the record" and such review would certainly be beyond the scope of section 254(2) of the Income-tax Act. " In the case of Bhagwati Developers (P. ) Ltd. (261 ITR 658), Hon'ble Calcutta High Court has held as under : "Under section 254(2), the Appellate Tribunal is clothed with the power to amend with a v....
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....hat the AO disallowed the deduction after examining evidence and holding that the commission was not paid for business purposes, that the FAA upheld the order of the AO, that in the appellate proceedings, the Tribunal dismissed the appeal filed by the assessee, that the assessee moved a Miscellaneous Application seeking rectification of the order of the Tribunal. In its application the assessee stated that although the appeal memo before the Tribunal contained five different grounds of appeal, the order of the Tribunal did not mention three of these grounds of appeal, that the Tribunal did not consider some of the arguments advanced by the assessee. The Tribunal entertained the application, reheard the matter, reassessed all the circumstances and allowed the MA. Deciding the matter the Hon'ble Court held as under: "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 subsection (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 ....
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....ch an application was not maintainable. On writ petitions the Hon'ble Court set aside the order of the Tribunal and directed it to pass appropriate order correcting the mistakes. Lastly, we would like to refer to the case of Pothina Venkateshwara Swamy(369 ITR 639)of the Hon'ble T&AP High Court has dealt with the similar issue. In that matter it was found that the assessees jointly constructed a godown between 1991 and 1992, that for the AY. 1992-93, they showed the cost of construction at Rs. 25, 50, 853/-each, that the report of the valuer was enclosed with the returns, that the AO accepted the figures and completed the assessments, that thereafter, the assessments were reopened on the ground that the Superintending Engineer, Valuation Cell, found that the cost of the construction was around Rs. 84. 76 lakhs, that the AO made an addition of Rs. 7, 02, 760/-each to the income of the assesses, that the FAA reduced the figures to Rs. 3, 32, 420/-, that in the meanwhile, orders of rectification under section 154 were passed by the AO adding a sum of Rs. 78, 085/- each disallowing the depreciation of 10 %, that the Tribunal reduced the cost by 10 % towards supervisory charges, that t....
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....in such a way as to keep the power of the assessing authority intact, as long as there existed some basis. If the basis as such exists, the exercise thereof becomes non-justiciable. It is only when there is a total absence of any reason or basis whatever, that an attempt to invoke power under section 148 can be found fault. Adequacy of the material that was available with the Assessing Officer cannot be subject matter of the adjudication. " 8. The appellants were granted partial relief by the Commissioner (Appeals) by virtually slashing the added amount, to half. In the further appeals before the Tribunal, relief in the form of reduction of cost by 10 per cent. towards personal maintenance charges was granted. In case, the appellants were not satisfied with the nature of disposal given by the Tribunal, it was open to them to avail of the further remedies. XXXXX 11. The expression "error apparent on the face of the record" occurs even in administrative adjudications. An error can be treated as the one apparent on the face of the record, if only it can be discerned just on perusal of the connected record, without the aid of any external material. To put itconversely, if the er....
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....has to advance long arguments, it will not fall under the category of apparent mistake. Besides, provisions of section 254(2)do not confer power on the Tribunal to review its earlier order or re-appreciate or re-evaluate evidence. The Hon'ble Calcutta High Court in the matter of Shew Paper Exchange(93 ITR 186) has held that the normal rule is that the remedy of review is a creature of a statute and if the statute does not contain powers for review, then the power cannot be exercised. Review proceedings of this kind are those where a party as of right can apply for reconsideration of the matter already decided upon after a fresh hearing on the merits of the controversy between the parties. Such a remedy must be provided by the statute. The inherent power to rectify a wrong committed by itself, by a court or a Tribunal, is not, really speaking, a power to review. The two powers operate in different fields and are different in essential quality or nature. In short, the scope of section 254(2) of the Act is very limited and specific. In our humble opinion, there are no mistakes in the order dtd. 15. 06. 2012 of the Tribunal that could be rectified u/s. 254(2)of the Act. We will discuss....
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....round of reopening is, after 10 years, stating that not pressing the grounds about re-opening was a concession by a counsel in misinterpretation of law of ignorance of facts. The assessee has also not filed any affidavit stating that though it had instructed Sh. Shonde to argue the grounds with regard to re-opening, yet he did not agitate the same before the Tribunal. In short, in our opinion, the arguments advanced by the assessee are not tenable and are devoid of merits. After changing the AR, the assessee is accusing a person to whom he has authorised to represent the case. With change of AR at every stage of proceedings, if the AO/Assessee is allowed to argue that the stand taken by the earlier counsel was result of misrepresentation of law or ignorance of facts, there will never be finality of litigation. The assessee has argued that that there was misrepresentation of law or ignorance of facts, but has not elaborated as how there was misrepresentation of law or ignorance of facts. The AR appearing before us, also relied upon two cases and stated that concession of earlier counsel was not binding. But, how those cases were applicable to the facts of the case was not explained.....
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....is not uncommon that while arguing the cases before the Tribunal, the assessees prefer not to press grounds for various reasons like smallness of tax-effect or issue being decided in early or subsequent AY. s. Sometimes, if the Tribunal decides to admit additional evidence produced by the assessee or admits additional grounds of appeal or decides to remit back the matter to the files of the AO/FAA at the beginning of the hearing the assessees do not press some of the grounds. So, if the assessee in the original appellate proceedings, directed the-then-AR not to press the grounds, it should not have raised the issue now. The assessee had relied upon the cases of Ayurveda and Siddha v. Dr. K. Santhakumari (supra). In that case, issue was as to whether the basis for the promotion to the post of Research Officer should be merit-cum-fitness or merit-cum-seniority. In the writ petition filed by the person, the department stated that criteria was merit-cum-fitness whereas the recruit - ment rules clearly provided that criteria for selection would be merit-cum-senioity. In our humble opinion, the facts of the case are no help to the assessee. Here, the assessee had not pressed the grounds....
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....authorities as it had not taken the said ground. Considering the available material on record the Tribunal had decided the issue. Even if there is an error of judgment on part of the bench, same does not fall under the category of mistake apparent on the record, as held by the Hon'ble Bombay High Court in the case of Ramesh Electricals (supra). The assessee had not brought to our notice any case by which the said judgment has been reversed. We also find that it is not that kind of a mistake that has been dealt with by the Hon'ble jurisdictional High Court in the case of Supreme Industries Ltd. (supra). It is not a case of typographical or arithmetical mistake. It is not the case that the judgment delivered by the Hon'ble Bombay High Court or the Hon'ble Apex Court has been not followed. The so called mistakes pointed out by the assessee are neither patent nor manifest nor self-evident and they require elaborate discussion of evidence or arguments to establish. Therefore, we agree with the argument advanced by the DR that the assessee wants us to review the order dated 15. 06. 2012 and that same is not permissible as per the provisions of section 254(2)of the Act. It would be not o....