TaxTMI 
TaxTMI 
2024 (5) TMI 1556
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....PER RAVISH SOOD, JM The captioned miscellaneous applications filed by the revenue on 09.11.2023 arises from the consolidated order passed by the Tribunal in ITA No.152/RPR/2014 & 12 Others dated 09.06.2023. As the facts and issues involved in the captioned applications are identical and arises from a consolidated order passed by the Tribunal, therefore, the same are being taken up and disposed off by way of a common order. 2. We shall first take up the application filed by the revenue in MA No.108/RPR/2023 (arising out of ITA No.170/RPR/2018) as the lead matter for adjudication, and the order therein passed shall mutatis-mutandis apply to the remaining miscellaneous applications. For the sake of clarity, the grievance of the department by filing the present application is culled out as under: (relevant extract) " 6. The Hon'ble ITAT in its order has held that the penalty imposed on the assessee violation of the mandate of Sec. 274(1) of the Act as the AO fail to clearly put the assess to notice as regards the default for which penalty u/s.271(1)(c) was sought to be imposed. i.e. 'concealment of income' or 'furnishing of inaccurate particulars of incom....
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....nded that notice issued under section 274 read with section 271(1)(c) was defective as it stated that it appeared to Assessing Officer that assessee concealed particulars of income or furnished inaccurate particulars of income and word 'or' had been used and not 'and'. In support of the contentions the learned counsel of the assessee referred to the following decisions for invoking two limbs of Section 271(1)(c) of IT Act by AO which are enumerated below: 1. CIT v. SSA's Emerald Meadows [2016] 73 taxmann.com 248/242 Taxman 180 (SC) 2. CIT v. Manjunatha Cotton & Ginning Factory [2013] 35 taxmann.com 250/218 Taxman 423/359 ITR 565 (Kar.) 3. CIT v. SSA's Emerald Meadows [2016] 73 taxmann. com 241 (Kar.) 4. Ventura Textiles v. CIT [2020] 117 taxmann.com 182 (Bom.) 5. S. Chandrasekar v. Asstt. CIT [2017] 88 taxmann.com 459/396 ITR 538 (Kar.) 6. Gayathri Exports v, Asstt. CIT [IT Appeal No. 640 of 2015, dated 24-4-2018] 7. S.P. Prasad v. Asstt. CIT [IT Appeal No. 170 of 2010, dated 20- 11-2018] 8. CIT v. Virgo Marketing (P.) Ltd. [2008] 171 Taxman 156 (Delhi) 9. CIT v. Manu Engg. Work....
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....if according to the assessee wo result in a jurisdictional error, is not merely a pure question of law, but a mixed question fact and law. If such is the position, the vigilant assessee, more particularly, a listed company like the assessee before us should point out the factual issue at the very first instance. If that was not done by the assessee, then it goes to show that the assessee not prejudiced by the use of the expression 'or'." 9. This very question was considered in the case of Sundaram Finance Ltd., wherein an identical submission was made by the assessee by placing reliance on Manjunatha Cotton and Ginning Factory. The Court taking note of the fact that the authorities concurrently rejected the explanation offered by the assessee and refused to interfere with the factual finding. In paragraph 16 of the judgment, the argument regarding defective notice was considered and answered against the assessee which is quoted herein below: 16. We have perused the notices and we find that the relevant columns have been marked, more particularly, when the case against the assessee is that they have concealed particulars of income and furnished inaccurate p....
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.... we have rejected it. The learned counsel relied on the decision of the Hon'ble Supreme Court in the case of K Lubna to submit that if the factual foundation for a case has been laid and the legal consequences of the same having been examined, the examination of such legal consequences would be a pure question of law. We have noted the factual position. The assessee understood the notice to be under both heads, namely, furnishing of inaccurate particulars and concealment of income. This is evident from the assessee's reply dated 8-4-2015 to the show cause notice dated 12-3-2015. Therefore, the decision in the case of K. Lubna does not help the assessee, as there is no substantial question of law arising from such contention. 19. In the result, the tax case appeal is dismissed and the Substantial Questions of law are answered against the assessee. No costs. Consequently, connected miscellaneous petitions are closed." The Special Leave Petition (SLP) filed by the assessee against the aforesaid order has been I dismissed by the Hon'ble Apex Court in Gangotri Textiles Ltd. vs. Deputy Commissioner of Income Tax, Corporate Circle 2, Coimbatore [2022] 137 tax....
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....Considering the above facts, Miscellaneous Application u/s 254(2) of the Income Tax 1961 before the Hon'ble ITAT, Raipur Is required to be filed with a request to consider the case Merits rather than dismissing the appeal of the department merely on the basis non-striking relevant limb in the show-cause notice as the Hon'ble ITAT was not justified in dismissing the appeal filed by the Department and allowing the appeal of the assessee." 3. The Ld. Departmental Representative (for short 'DR') has filed before us written submissions/report which reads as under: " The consolidated order in the case for AYs 2009- 10 to 2016- 17 has quashed penalty orders passed by the AO in these years considering the fact that by not clearly pointing out whether the penalty was being initiated for concealment of income or for furnishing of inaccurate particulars in the notice, the AO had failed to assume jurisdiction. Revenue has argued, following the principle set in the case of Sundaram Finance Ltd., [2018] 403 ITR 407 (Madras), upheld in [2018] 99 taxmann.com 152 (SC), that the issue herein is principally a question of putting the assessee to prejudice or not. I....
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....ld not be rendered as invalid simply because the A.O had failed to strike-off the irrelevant limb in the body of the said show cause notice. Also, the revenue by drawing support from judicial pronouncements had stated that no prejudice was caused to the assessee by the defective nature of notice as it had full opportunity before the A.O to set out its defense against the levy of penalty u/s. 271(1)(c) of the Act. It is, thus, the claim of the revenue that the failure of the Tribunal to consider the aforesaid material facts had rendered its order as suffering from a mistake apparent from record making it amenable for rectification under sub-section (2) of Section 254 of the Act. 5. Shri Ajit Korde, Ld. Authorized Representative (for short 'AR') for the assessee company at the threshold submitted that as the Tribunal after deliberating at length on the issue, had dismissed the appeal of the revenue, based on a well-reasoned order and the department had failed to point out any mistake apparent from record emanating therefrom, thus, the same falls beyond the scope and ken of the power vested with the Tribunal u/s. 254(2) of the Act which is confined only to rectification of ....
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.... The core issue, therefore, is whether non-consideration of a decision of Jurisdictional Court (in this case a decision of the High Court of Gujarat) or of the Supreme Court can be said to be a "mistake apparent from the record"? In our opinion, both - the Tribunal and the High Court - were right in holding that such a mistake can be said to be a "mistake apparent from the record" which could be rectified under Section 254(2)." Although the judgment of the Hon'ble non-jurisdictional High Courts are binding on the Tribunal in the course of the appellate proceedings, but the same as observed by us hereinabove, cannot form a basis for seeking u/s. 254(2) of the Act a rectification of the order passed by the Tribunal. 8. We are of the view that that in the garb of the aforesaid miscellaneous application the revenue is seeking a review of the order of the Tribunal, which is beyond the scope of its powers as envisaged u/s. 254(2) of the Act. Our aforesaid view is supported by the judgment of the Hon'ble Supreme Court in the case of T.S. Balaram, ITO v. Volkart Bros., (1971) 82 ITR 50 (SC), wherein the Hon'ble Apex Court had held as under: " ....A mistake ap....
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....ved hereinabove, if the order passed by the ITAT was erroneous on merits, in that case, the remedy available to the Assessee was to prefer an appeal before the High Court, which in fact was filed by the Assessee before the High Court, but later on the Assessee withdrew the same in the instant case." (emphasis supplied by us) 9. Also, we find that the Hon'ble High Court of Bombay in the case of CIT Vs. Ramesh Electric & Trading Company, (1993) 203 ITR 497 (Bom.) had held that the scope of section 254(2) is limited to rectification of a mistake apparent from record itself and not rectification in error of judgment. The relevant observations of the Hon'ble High Court are as under: "Under s. 254(2) of the IT Act, 1961, the Tribunal may, 'with a view to rectifying any mistake apparent from the record', amend any order passed by it under subs (1) within the time prescribed therein. It is an accepted position that the Tribunal does not have any power to review its own orders under the provisions of the IT Act, 1961. The only power which the Tribunal possesses is to rectify any mistake in its own order which is apparent from the record. This is merely a powe....
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....ined to exercise its discretion so as to allow the appeal being filed. It was further observed that whatever be the phraseology employed in the order of dismissal, if it is a nonspeaking order, i.e. it does not assign reasons for dismissing the special leave petition, it would neither attract the doctrine of merger so as to stand substituted in place of the order put in issue before it nor would it be a declaration of law by the Supreme Court under Article 141 of the Constitution for there is no law which has been declared. For the sake of clarity the observations of the Hon'ble Apex Court are culled out as under: "Dismissal at stage of special leave - without reasons - no res judicata, no merger Having so analysed and defined the two stages of the jurisdiction conferred by Article 136, now we proceed to deal with a number of decisions cited at the Bar during the course of hearing and dealing with the legal tenor of an order of Supreme Court dismissing a special leave petition. In Workmen of Cochin Port Trust Vs. Board of Trustees of the Cochin Port Trust and Another 1978 (3) SCC 119, a Three-Judges Bench of this Court has held that dismissal of special leave petition ....
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....is decision of the High Court was put in issue before the Supreme Court. This Court held that the view taken by the High Court was not right and that the High Court should have gone into the merits of the writ petition. Referring to two earlier decisions of this Court, it was further held :- the effect of a non-speaking order of dismissal of a special leave petition, without anything more indicating the grounds or reasons of its dismissal must, by necessary implication, be taken to be that this Court had decided only that it was not a fit case where special leave should be granted. This conclusion may have been reached by this Court due to several reasons. When the order passed by this Court was not a speaking one, it is not correct to assume that this Court had necessarily decided implicitly all the questions in relation to the merits of the award, which was under challenge before this Court in the special leave petition. A writ proceeding is a wholly different and distinct proceeding. Questions which can be said to have been decided by this Court expressly, implicity or even constructively while dismissing the special leave petition cannot, of course, be re- opened in a ....
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.... Court by moving a petition for review. May be that the Supreme Court was not inclined to exercise its discretionary jurisdiction under Article 136 probably because it felt that it was open to the applicant to move the High Court itself. As nothing has been said specifically in the order dismissing the special leave petition one is left merely guessing. We do not think it would be just to deprive the aggrieved person of the statutory right of seeking relief in review jurisdiction of the High Court if a case for relief in that jurisdiction could be made out merely because a special leave petition under Article 136 of the Constitution had already stood rejected by the Supreme Court by a non-speaking order. In M/s. Rup Diamonds and others Vs. Union of India and others AIR 1989 SC 674, the law declared by this Court is that it cannot be said that the mere rejection of special leave petition could, by itself, be construed as the imprimatur of this Court on the correctness of the decision sought to be appealed against. In Wilson Vs. Colchester Justices 1985 (2) All England Law Reports 97, the House of Lords stated; There are a multitude of reasons why, in a par....
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....anda and Others 1997 (6) SCC 78, it was held that a revisional order of the High Court against which a petition for special leave to appeal was dismissed in limine could not have been reviewed by the High Court subsequent to dismissal of S.L.P. by Supreme Court. This decision proceeds on the premises, as stated in para 6 of the order, that It is settled law that even the dismissal of special leave petition in limine operates as a final order between the parties. In our opinion, the order is final in the sense that once a special leave petition is dismissed, whether by a speaking or non- speaking order or whether in limine or on contest, second special leave petition would not lie. However, this statement cannot be stretched and applied to hold that such an order attracts applicability of doctrine of merger and excludes the jurisdiction of the Court or authority passing the order to review the same. In State of Maharashtra and Anr. Vs. Prabhakar Bhikaji Ingle 1996 (3) SCC 463, the view taken by a Two-Judges Bench of this Court is that the dismissal of special leave petition without a speaking order does not constitute res judicata but the order dealt with in S.L.P., dispose....
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....ble on facts. The Hon'ble High Court had dismissed the appeal of the assessee primarily for the reason that the assessee appellant had raised the contention qua validity of the jurisdiction assumed by the A.O in absence of striking off the irrelevant default in the body of the show cause notice issued u/s. 274 of the Act for the first time before the Court. It was observed by the Hon'ble Court that as the aforesaid issue was not merely a pure question of law but a mixed question of facts and law which the assessee ought to have raised at the very first instance before the lower authorities, therefore, it could not be raised for the first time before the Court. Accordingly, as the facts involved in the present case are distinguishable as against those involved in the aforementioned case, therefore, on the said count also, support drawn by the department in the aforesaid case, would not carry its case any further. C) State of Karnataka Vs. Selvi J. Jaylalitha and others (2017) 392 ITR 97 (SC), 13. On a perusal of the aforesaid order of the Hon'ble Apex Court, we find that the same was rendered in context of the issue that income tax returns and order passed in the i....