TaxTMI 
TaxTMI 
2018 (6) TMI 446
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....al or not while passing the impugned order on 13.12.2013. We think it appropriate to bear in mind certain basic principles for exercising powers contemplated in section 254(2) of the Income Tax Act, 1961. 4. There are series of decisions at the end of the Hon'ble Supreme Court as well as Hon'ble High Court expounding scope of exercising powers under section 254(2) of the Act. We do not deem it necessary to recite and recapitulate all of them, but suffice to say that core of all these authoritative pronouncements is that power for rectification under section 254(2) of the Act can be exercised only when mistake, which is sought to be rectified, is an obvious and patent mistake, which is apparent from the record and not a mistake, which is required to be established by arguments and long drawn process of reasoning on points, on which there may conceivably be two opinions. For fortifying this view, we make reference to the decision of the Hon'ble jurisdictional High Court in the case of ACIT Vs. Saurashtra Kutch Stock Exchange Ld., 262 ITR 146 which has been upheld by the Hon'ble Supreme Court reported in 305 ITR 227. The Hon'ble Court has laid down following proposition while conclud....
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....ence of opinion qua result. But if incorrect facts and incorrect provisions are considered, then that would come in the ambit of apparent error. 6. Apart from above, at the time of hearing, the ld.DR relied un two judgments of the Hon'ble High Court rendered in the case of CIT Vs. Gujarat Institute of Housing Estate Developers, and Pr.CIT Vs. Nirma Limited both reported in 84 taxmann.com 148 and 188 (Guj). He has placed on record copies of both these judgments. In the case of Gujarat Institute of Housing Estate Developers (supra), the assessee received contributions from its members. It claimed non-taxability of such contributions on the principle of mutuality. However, the AO did not concur with the view of the assessee and dispute travelled upto the Tribunal. The Tribunal passed a common order dated 29.9.2015 confirming the view of the AO and the CIT(A) holding that such income was taxable. In such order, Tribunal referred to the latest decision of Hon'ble supreme Court in the case of Bangalore Club Vs. CIT, 350 ITR 509 and noted that as per decision of the Hon'ble Supreme Court there are three basic features, which would have to be tested viz. complete identity between the clas....
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....ion was made for adjudicating the MA. After hearing the assessee the Tribunal recalled its order. Dissatisfied with the order of the Tribunal, the Revenue went in appeal before the Hon'ble High Court, and the Hon'ble Court has vacated the order of the ITAT. Finding recorded by the Hon'ble High Court explaining the power of the Tribunal under section 254(2) is worth to note. It reads as under: "4. We have heard learned counsel for the parties. We have perused the documents on record. We are of the view that the Tribunal committed a legal error in recalling its earlier detailed judgement. As noted, there was a raging controversy between the Revenue and the assessee regarding the assessce company's claim of deduction of interest expenditure at all stages before the Assessing Officer. Commissioner (Appeals) and the Tribunal. This issue received minute scrutiny. The Tribunal in particular had referred to the facts on record, findings and the observations of the Assessing Officer and the Commissioner (Appeals) and ultimately gave its own reasoning for coming to the conclusion that the transaction leading to the assessee's claim of interest expenditure was not genuine and it ult....
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....para 8.10 to 8.11, while recording the findings has drawn presumptions u/s 132(4) in the case of appellant Jivraj V. Desai and recorded the following findings: "In the present case, we have noted that learned CIT(A) has overlooked the statement recorded u/s 132(4) of IT Act and given undue weightage to the statement recorded u/s 131 of IT Act which were otherwise not supported by evidence. At this juncture we may like to further clarify that the evidence are those evidences which are found at the time of search in search related matters. The entire proceeding revolved around the evidences or documents found in the possession, and unearthed at the time of search; so as to demonstrate that the diary A-l was belonging to the assessee and not to any third person". (iii) Observation in Asst. Order : Since the issue was not raised by AO during the course of assessment proceedings, there is no discussion in the assessment order on presumption u/s 132(4). (iv) Observation in CIT(A)'s Order : On page No.68 in para 13, the issue relating to presumption u/s 132(4) has been discussed and while recording the findings on page 69 under para 5.11, the Ld.CIT(A) has recorded the findings ....
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.... of Rs. 23,43,08,700/- with respect to Manoj Vadodaria has altogether been ignored by the Hon'ble ITAT while dealing with the ground of appeal No.1 of the Revenue's appeal and only facts relating to the amount of Jignesh V. Desai & Vikasbhai Shah has been discussed in para 4.4, immediately after reproducing the table in para 4.3. 3. (i) Issue : Written submission of D.R. considered by Hon'ble ITAT was not made available to the A.R. of the appellant, (ii) Observation of Hon'ble ITAT : The Hon'ble ITAT on page nos. 22 to 25 in para 5.1 while considering the side of the Revenue has reproduced the relevant portion of the so called written submission of DR. (iii) Observation in Asst. Order : (iv) Observation in CIT(A)'s Order : (v) Conclusion : Neither the said written submission was filed during the course of appeal hearing, nor copy of the same has been provided to the A.R. of the appellant. Two written submissions have been filed by the D.R. viz. dated 9/4/2013 (which has been replaced by new submission dated 9/4/2013) and 10/4/2013 which has been provided to the A.R. of the appellant. Submission which has been reproduced by the Hon'ble ITAT ....
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....erein while answering to question No.6, the loose page No.93 to 99 were clearly explained as relating the said land. Accordingly, the conclusion has been drawn only on the basis of Statement dated 20/10/2000, ignoring Statement dated 24/9/2002. 6. (i) Issue Finding of the Hon'ble Tribunal that no supporting evidences were furnished. (ii) Observation of Hon'ble ITAT : Hon'ble ITAT after discussing the Statements recorded u/s 132(4) and 131 in para No.8.5 & 8.6 has come to the conclusion in para No.8.8 that assessee has changed the statement and no corroborative documentary evidences were submitted by the assessee to substantiate the said claim. (iii) Observation in Asst. Order : (iv) Observation in CIT(A)'s Order : On page no.70 to 73 under para 5.12 while recording findings by Cir(A), reference has been made to the following loose papers: Page Loose Papers 71 A-3 Page 35-36 being MOU 72 A-3 Page 82 73 A-3 Pages 26, 30, 31, 32, 49 to 52 74 A-3 Page 1 A-3 Page 7 & 8 A-4 Page 91 A-3 Page 2 Conclusion: In this respect, attention is drawn to the elaborate arguments which has taken placed during the course of appeal hearing by the A.....
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.... has given finding as under: "Therefore, the conclusion is that the Thaltej land was also connected with the sharafi business and the assessee was monitoring the land transaction so as to secure his loan advanced to the parties as noted in the diary. Learned CIT(A) has not looked in this aspect and unilaterally held that the amount which was recorded was required to be considered in the case of one Sri Manoj Vadodaria". (iii) Observation in Asst. Order : (iv) Observation in CITf AVs Order : (v) Conclusion : It is respectfully submitted that the said observation of the Hon'ble ITAT that Thaltej land was connected with the sharafi business and assessee was monitoring the land transaction to secure his loan advanced to the parties noted in the diary, is contrary to the facts and records. It was not the finding of both the lower authorities that Thaltej land has been taken as security by the appellant for his financing business; rather issue before both the lower authorities was that the Diary inter alia includes transactions relating to the Thaltej land in which appellant was not involved as per documentary evidence in the form of MOU dated 5/7/1998. Therefore, the CIT(A....
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....0.2000. A notice under section 158BC was issued and served upon the assessee. He has filed his return of income on 14.10.2002 declaring NIL income for the block period starting from the assessment year 1991-92 and ending on 2001-02. According to the AO, the assessee is the main person of Master Group which is engaged in the development of residential and commercial blocks. Group is also in the business of land transaction and hotel business. The AO further noticed that the assessee was doing business of cash finance. During the course of search certain documents were found showing sharafi business. The AO has made an addition of Rs. 27,32,38,000/- in respect of sharafi business. On appeal, the ld.CIT(A) restricted this addition to Rs. 52,29,000/-. Revenue in its appeal i.e. IT(SS)A.No.99/Ahd/2004 challenged this part of deletion. The Tribunal made detailed analysis of the material available on record and reversed the finding of the ld.CIT(A) major error according to the assessee crept in the finding of the Tribunal while dealing with this ground of appeal. It is pertinent to observe that a diary, annexure A/1 was found from the residential premises of one Shri Arvindbhai Shah who h....
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....Shah was accountant working with the assessee and used to write diary under the instructions of the assessee. Statement given at the time of search is the first statement which otherwise also admissible as provided in section 132(4), but that was also, according to the rule of prudence that once the first statement given by a person without any consultancy, the statement given after two years of search is being presumed to be given after due deliberations and consultation. We are not here to explain the order of the ITAT as to what operated in the minds of Hon'ble Members while appreciating the controversy, our concern is whether any apparent error has been committed which goad the Tribunal to reach wrong conclusions. To our mind there is no such error. The Tribunal has appreciated the evidence according to its understanding and taken one of the possible opinions. 12. In the next issue it has been pleaded that no discussion was made about the amount of Rs. 23,43,08,700/- deleted by the ld.CIT(A). Again to our mind, it is very minor peripheral issue. At the time of hearing Tribunal took into cognizance bifurcation of Rs. 27,32,38,000/-. While taking cognizance of the statements mad....
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....as discussed during the course of hearing. On verification of record, we find that copy of this written submission is available, but it is without signature of any authority and without any date. The above plea taken by the assessee has raised a doubt about sanctity of proceedings before the Tribunal, and if on verification of record, it is found to be correct, then proceedings would be construed as vitiated. Thus, assessee cannot be permitted to raise a bald allegation on the proceedings for conducting a roving inquiry without any consequence for the allegator. The assessee should atleast file an affidavit in support of such allegations so that a report from DR's office could be called for exhibiting under whose signature and on which date such submissions were filed before the Tribunal. It is also pertinent to observe that after hearing these MAs., in the last one-and-half months Judicial Member remained either on tour or on leave. Therefore, MAs., could not be disposed within time limit stipulated in Rule 34 of Income Tax (Appellate Tribunal) Rules, 1963. Thus, on account of this cumulative effect i.e. non-adjudication of the MAs., within time limit coupled with fact that the as....