AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (8) TMI 1657
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....ER DR. A. L. SAINI, AM: By way of these 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 no....
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....Assessee by Shri Hiren Vepari, CA Respondent by Shri H. P. Meena, CIT(DR) and Shri Vinod Kumar, Sr. DR Date of Hearing 26/05/2022 Date of Pronouncement 28/06/2022 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 reco....
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.... of the appeal clearly spell that officer did not apply his mind. Grounds 3 of the MA: Appeal Ground No.(III) on validity of the assessment not dealt with. In paragraph 13 of the order of the Tribunal, it dealt with the ground on validity of reopening (ground No.(II) but did not deal with the Ground on 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 nu....
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....of computation of income and audit report. We have also gone through the documentary evidences furnished in all cases. Ground No.1 in assessee's appeal relates to the validity of reopening. The ld AR for the assessee vehemently argued that the AO reopened the case of the assessee on the basis of third party information, and without making any preliminary investigation, which was vague about the alleged accommodation entry by Bhanwarlal Jain Group. And 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 wi....
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....s of the assessee accepted the lapses on the part of the AO and noted that no sale is possible in absence of purchases. The Books of the assessee was not rejected by the AO. The ld CIT(A) on further examination of the facts and various legal submissions find that Ahmedabad Tribunal in Bholanath Poly Fab Private Limited (supra) held that in the such cases the addition of bogus purchases was sustained to the extent of 12%, on the observation that the assessee may 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....
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....icient to meet the possibility of revenue leakage. In the result the ground No. 2 of appeal raised by the assessee is partly allowed and the grounds of appeal raised by revenue are dismissed. 22. In the result the appeal of revenue is dismissed and the appeal of the assessee is partly allowed." 8. These appeals filed by the Revenue and Assessee, relate to Bhanwarlal Jain ground cases. The Assessing Officer made 100% addition of bogus purchases. On appeal by assessee, 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 o....
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....ccommodation entry on bogus purchases, and therefore bogus, (clearly meaning that what was disclosed was false and untruthful). The Hon'ble Supreme Court in the case of Phul Chand BajrangLal and another vs. ITO 203 ITR 456, was considering the question of reassessment beyond the period of four years in the case of an assessee firm; and had held that in case of acquiring fresh information specific in nature and reliable, relating to the concluded assessment, which went to falsify the statement made by the assessee at the time 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 t....
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....at the purchases claimed were non-genuine/bogus and therefore bogus, (clearly meaning that what was disclosed was false and untruthful). The requirements of section 147 r.w.s. 148 have clearly been met; and the reopening is held justified and legal. Therefore, we dismiss the ground raised by the assessee challenging the validity of reassessment. 19. In the result, appeals filed by assessees (ITA Nos. 889 to 893/AHD/2017 and ITA Nos. 761 to 762/SRT/2018) are dismissed, whereas the appeal filed by the Revenue (ITA No.916 to 920/AHD/2017 and ITA Nos. 753 to 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 is....
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....t does not extend to correcting errors of law, or re-appreciating factual findings. 12. We note that the conclusion reached by the Tribunal is the ratio of the decision of the Tribunal, which cannot be reviewed or rectified by the Tribunal. The said conclusion/decision (ratio) may be reviewed or rectified by the Hon`ble High Court or Hon`ble Supreme Court. The Tribunal cannot sit again to review or to examine its own conclusion, as it is not permitted by the provisions of section 254(2) of the Act, as narrated above. 13. On the identical facts, our view is fortified by the judgment of the 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 mist....
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....herently indefinite in scope, as what may be a mistake for one may not be one for another. It is mostly subjective and the dividing line in border areas is thin and indiscernible. It is something which a duly and judiciously instructed mind can find out from the record. In order to attract the power to rectify under section 254(2) it is not sufficient if there is merely a mistake in the orders sought to be rectified. The mistake to be rectified must be one apparent from the record. A decision on the debatable point of law or undisputed question of fact is not a mistake apparent from the record. The plain 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 assesse....
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....rectification which is specifically conferred on the Tribunal has to be exercised in terms of that provision. It cannot be enlarged on any assumption that the Tribunal has got an inherent power of rectification or review or revision. It is axiomatic that such power of review or revision has to be specifically conferred, it cannot be inferred. Unless there is a mistake apparent from the record in the sense of patent, obvious and clear error or mistake, the Tribunal cannot recall its previous order. If the error or mistake is one which could be established only by long drawn arguments or by a process of investigation and research, it is 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....
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....nation of the judgments of the Tribunal, we could not find a single reason in the whole order as to how the Tribunal is justified and for what reasons. There is no apparent error on the face of the record and thereby the Tribunal sat as an appellate authority over its own order. It is completely impermissible and the Tribunal has traveled out of its jurisdiction to allow a Miscellaneous Petition in the name of reviewing its own order. In the present case, in the guise of rectification, the Tribunal reviewed its earlier order and allowed the Miscellaneous Petition which is not in accordance with law. Section 254(2) of the Act does not contemplate rehearing of the appeal 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 ....