TaxTMI 
TaxTMI 
TaxTMI 
2023 (8) TMI 1657
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.... fourteen Miscellaneous Applications, out of which seven Miscellaneous Applications filed by the Revenue and the other seven Miscellaneous Applications filed by the Assessee, pertaining to different assessment years, wherein the Revenue as well as Assessee have sought to point out that a mistake apparent from record within the meaning of section 254(2) of the Income Tax Act, 1961 (in short 'the Act') has crept in the order of the Tribunal dated 28.06.2022. 2. Since, the issue involved in all these Miscellaneous Applications, are common and identical, therefore these Miscellaneous Applications have been clubbed and heard together and a consolidated order is being passed for the sake of convenience and brevity. 3. So far seven Miscellaneous Applications filed by the Revenue, are concerned, Learned DR for the Revenue pointed out that there is a mistake in quoting the assessment year in the cause title, therefore, the same may be corrected. On the other hand, Learned Counsel for the assessee has fairly agreed that mistake in quoting the assessment year in the title of the order may be corrected. 4. We have heard both the parties. We note that there is mistake apparent from record in....
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....8/06/2022 5. In the result, all miscellaneous applications filed by the Revenue (in MA Nos.60 to 66/SRT/2022), are allowed to the extent indicated above. 6. Now, we shall take assessee's Miscellaneous Application Nos. 7 to 13/SRT/2023. 7. The Learned Counsel for the assessee, submitted written submission, stating that there is mistake apparent from record, in respect of assessee's Miscellaneous Application Nos. 7 to 13/SRT/2023, which is reproduced below: "Grounds 1 of MA: The assessee is not a beneficiary as per the detailed directory of beneficiary of the Investigation Report of the Income-tax Department. 1. Tribunal in paragraph 3 on page 2 of the order - sixth line from the top has held that "... the assessee is a beneficiary of non-genuine transaction..." 2. However, as per the exhaustive list of beneficiaries as per the Investigation Report, the assessee is not a beneficiary. 3. On page 156 of file II of the paper book, in Question 37 of statement recorded of Bhanwarlal Jain, he was asked about the list of beneficiaries of bogus purchases which he stated to be at Annexure D. 4. At Annexure D, on Page No.167 to 180 of file II being paper book, list of 94 be....
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.... validity of assessment (ground No.(III). Second line of paragraph 13 of the Tribunal read as: "13. Before parting, .....challenging the validity of reopening of the assessment order..." (emphasis supplied). Validity of assessment comes after validity of reopening. Ground 4 of the MA: Assessee's case is distinguishable from Pankaj K. Chaudhary (ITA No.1152/A/2017) In the case of the assessee, all suppliers remained present before the CIT(A) and confirmed having supplied goods (paragraph 8.4 - page21 and 22 of the order of the learned CIT(A). A.Y 2008-09 A.Y 2009-10, A.Y 2012-13, A.Y 2013-14 and A.Y 2014-15 Grounds numbers, 1, 2 and 3 of the MA for A.Y 2008-09, A.Y 2009-10, A.Y 2012-13, A.Y 2013-14 and A.Y 2014-15 are identical to grounds of 1, 3 and 4 of MA for the A.Y 2007-08. A.Y 2010-11 Ground numbers, 1,2 and 3 of MA are identical to Grounds of 1, 3 and 4 of MA for the A.Y 2007-08. The Tribunal has not dealt with the following grounds. Ground No.4 of MA * The Tribunal has not dealt with the ground of appeal (IV). * No speaking order is passed against the objection raised for the reopening * Ground of appeal (IV) - this defies Supreme Court....
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....d that there was no specific information about the accommodation entry availed by the assessee. There is no live link between the reasons recorded qua the assessee. We find that the assessee has raised objection against the validity of the reopening before the AO. The objections of the assessee was duly disposed by AO in his order dated 09.02.2015. The assessee raised ground of appeal before ld CIT(A) while assailing the order of AO on reopening. The ld CIT(A) while considering the ground of appeal against the reopening held that the AO has received report from investigation wing Mumbai, which indicate that the assessee is beneficiary of the accommodation entry operators. The accommodation entry provider admitted before investigation wing that he has given such entry to various persons; based on such report the AO has reason to believe that the income of the assessee has escaped assessment and thus the action of AO in reopening is justified. 18. We find that the Hon'ble Jurisdictional High Court in Peass Industrial Engineers (P) Ltd Vs DCIT (supra) while considering the validity of similar notice of reopening, which was also issued on the basis of information of investigation wi....
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....have made purchases from elsewhere and obtained the bills from impugned supplier to inflate Gross Profit Rate. The ld CIT(A) by considering the overall facts, concluded that the 100% disallowance of purchase is not justified. We also find that the ld.CIT(A) also considered the decision of jurisdictional High Court in Mayank Diamonds Pvt. Ltd. (supra) and compared the fact of the present case with the facts in Mayank Diamonds Pvt Ltd (supra) and noted that assessee in that case was also engaged in the trading of polished diamonds. The ld CIT(A) noted that in that case the AO made disallowance of entire bogus purchase and on first appeal before CIT(A) the disallowances were maintained. However, the Tribunal gave partial relief to the assessee directing to sustain the addition @12% of such bogus purchases. And on further appeal, the Hon'ble High Court sustained Gross Profit Rate @ 5% being average rate of profit in industry. 20. Now adverting to the facts of the present case, the ld.CIT(A) held that in some other similar cases; though he had sustain 5% of Gross Profit Rate, considering the fact that where Gross Profit shown by those assessee's are more than 5%. However, in the ....
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....Ld. CIT(A) restricted the addition to 5% of bogus purchases by following the judgment of Hon'ble Gujarat High Court in the case of M/s Mayank Diamond Pvt. Ltd. (2014) (11) TMI 812 (Guj.). 9. The Ld. DR for the Revenue argued before us that assessee was engaged in taking bogus purchase bills/accommodation entry of bogus purchases therefore addition made by the assessing officer should be sustained. 10. Whereas, Ld. Counsel for the assessee contended that addition restricted by Ld. CIT(A) at the rate of 5% of bogus purchase should also be deleted. He also stated that assessee submitted bills, vouchers stock regular and bank statements, so there should not be addition in the hands of assessee. 11. We note that the issue under consideration is squarely covered by the decision of the Co-ordinate Bench in the case of Pankaj K. Choudhary (supra) and there is no change in facts and law, therefore respectfully following the binding precedent, we confirm the addition at the rate of 6% of bogus purchases / accommodation entry in respect of bogus purchases. 12. Learned Counsel for the assessee informs the Bench that assessee does not wish to press ground no.1 relating to reasse....
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....me of original assessment and, therefore, he would be permitted under the law to draw fresh inference from such facts and material. The Court also went to an extent of saying that there are two distinct and different situations where the transaction itself, on the basis of subsequent information is found to be bogus transaction and in such event, mere disclosure of the transaction cannot be said to be true and full disclosure and the Income-tax Officer would have jurisdiction to reopen the concluded assessment. It would be apt to quote some observations of the Apex Court in the case of Phul Chand Bajrang Lal (supra), which read as under: "...one has to look to the purpose and intent of the provisions. One of the purposes of Section 147 appears to be to ensure that a party cannot get away by willfully making a false or untrue statement at the time of original assessment and when that falsity comes to notice to turn around and say 'you accepted my lie, now your hands are tied and you can do nothing'. It would, be travesty of justice to allow the assessee that latitude." 16. The Hon'ble Gujarat High Court in the case of Dishman Pharmaceuticals and Chemicals Ltd. vs. ....
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....o 754/SRT/2018) are partly allowed. 10. From the above judgment of the Tribunal, it is abundantly clear that Tribunal has considered the entire facts of the assessee`s case and adjudicated the issue taking the base of identical case law. The main issue/grievances of the assessee, in the miscellaneous application, which are stated in written submission of the assessee, (reproduced above), are that Tribunal being last fact finding authority has apparently held that assessee as a beneficiary, the same need to be corrected, the Assessee's case is distinguishable from Pankaj K. Chaudhary (ITA No.1152/A/2017), and failure to issue notice u/s 129 of the Act makes the assessment fatal etc. We note that these issues have already been considered by the Bench. In case of Bhanwar lal Jain, Rajendra Jain, Gautom Jain, Dharimechand Jain etc, this Tribunal has consistently been making addition on bogus purchases at the rate of 6% of the total amount of bogus purchases. We note that Tribunal can rectify the order provided it falls within the ambit of provisions of section 254(2) of the Act. That is, a mistake apparent can be rectified under section 254(2) of the Act. Therefore, at this juncture,....
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....he Co-ordinate Bench of ITAT, Delhi in the case of Prem Colonisers Pvt. Ltd. vs. ITO, Ward-14(3) [in MA No. 130/Del/2012 for AY.2002-03] order dated 12.12.2012 wherein it was held as follows: "3. We have heard both the sides, considered the material on record and before reverting to facts, it would be apt to consider the relevant provisions of law relating to section 254(2). A bare look at section 254(2) of the Act, which deals with rectification, makes it amply clear that a 'mistake apparent from the record' is rectifiable. In order to attract the application of section 254(2), a mistake must exist and the same must be apparent from the record. The power to rectify the mistake, however, does not cover cases where a revision or review of the order is intended. 'Mistake' means to take or understand wrongly or inaccurately; to make an error in interpreting, it is an error; a fault, a misunderstanding, a misconception. 'Apparent' means visible; capable of being seen; easily seen; obvious; plain. A mistake which can be rectified under section 254(2) is one which is patent, which is obvious and whose discovery is not dependent on argument or elaboration. The language used in section 2....
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....meaning of the word 'apparent' is that it must be something which appears to be so ex facie and it is incapable of argument or debate. It is therefore, follows that a decision on a debatable point of law or fact or failure to apply the law to a set of facts which remains to be investigated cannot be corrected by way of rectification. 4. As is apparent from the discussion held in the preceding paragraphs, that a rectification application can lie only with regard to an error on the face of the record which has not emerged from the material on record and moreover, the assessee has not been able to point out any apparent mistake in the order passed by the Tribunal and in case application of the assessee is accepted, it would tantamount to review of the order of the Tribunal, as has rightly been pleaded by the ld. DR, that reviewing of the order of the Tribunal is not permissible and for that purpose useful reference can be made to the following decisions. 4.1 The Hon'ble Calcutta High Court in the case of CIT vs Gokul Chand Agarwal (202 ITR 14), has held as under: "Section 254(2) of the Income Tax Act, 1961, empowers the Tribunal to amend its order passed under section 254(1) ....
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.... not a mistake apparent from the record." 4.3 Further, the Hon'ble Supreme Court in the case of CIT vs Karam Chand Thapar and Br.P.Ltd. (176 ITR 535) has held as under: "APPELLATE TRIBUNAL - DUTY TO CONSIDER CUMULATIVE EFFECT OF CIRCUMSTANCES AND TOTALITY OF FACTS - NO NEED TO STATE SO IN APPELLATE ORDER SPECIFICALLY - INCOME TAX ACT, 1961, SEC. 254,Further it was held as under: "It is equally well settled that the decision of the Tribunal has not to be scrutinized sentence by sentence merely to find out whether all facts have been set out in detail by the Tribunal or whether some incidental fact which appears on the record has not been noticed by the Tribunal in its judgment. If the court, on a fair reading of the judgment of the Tribunal, finds that it has taken into account all relevant material and has not taken into account any irrelevant material in basing its conclusions, the decision of the Tribunal is not liable to be interfered with, unless, of course, the conclusions arrived at by the Tribunal are perverse. It is not necessary for the Tribunal to state in its judgement specifically or in express words that it has taken into account the cumulative effect of t....
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....for a fresh disposal and doing so, would obliterate the distinction between the power to rectify mistakes and power to review the order made by the Tribunal. The scope and ambit of the application of Section 254(2) is limited and narrow. It is restricted to rectification of mistakes apparent from the record. Recalling the order obviously would mean passing of a fresh order. Recalling of the order is not permissible under Section 254(2) of the Act. Only glaring and any mistake apparent on the face of the record alone can be rectified and hence anything debatable cannot be a subject matter of rectification." 4.5 Further, we place reliance upon Hon'ble Delhi High Court exposition on the scope of rectification u/s 254(2) as reported in the case of Ras Bihari Bansal Vs. Commissioner of Income Tax (2007) 293 ITR 365: "Section 254 of the Income Tax Act, 1961, enables the concerned authority to rectify any "mistake apparent from the record". It is well settled that an oversight of a fact cannot constitute an apparent mistake rectifiable under this section. Similarly, failure of the Tribunal to consider an argument advanced by either party for arriving at a conclusion, is not an error....