TaxTMI 
TaxTMI 
2025 (10) TMI 436
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....f the Constitution of India challenge the orders dated 30th July 2025 passed by the Income-Tax Appellate Tribunal ("the Tribunal"). The impugned orders dated 30th July 2025 dismissed the Petitioner's Miscellaneous Applications for rectification [under Section 254(2) of the Income-tax Act, 1961 ("the Act")] of the orders dated 29th January 2025 passed under Section 254(1) of the Act for the assessment years 2017-18 and 2018-19. 5. The Petitioner is an un-incorporated joint venture between Gulermak Agir Sanayi Insaat Ve Taahhut Sirketi, a company incorporated under the laws of Turkey, and registered in India under Section 380 of the Companies Act, 2013, and Tata Projects Limited, a company incorporated under the Companies Act, 1956. The joint venture was formed by the parties to obtain and execute a contract with Lucknow Metro Rail Corporation Limited ("LMRCL"), a nodal agency established for the purpose of administering and regulating the Lucknow Metro Rail to be constructed in the city of Lucknow. 6. On 27th May 2016, the Petitioner entered into a contract with LMRCL under which the Petitioner was to design and construct an underground tunnel and 3 underground metro stati....
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.... accordingly to the Petitioner, would irrefutably lead to the conclusion that the Petitioner was a developer entitled to the deduction under Section 80-IA of the Act. The said note is annexed to the Petition and contains reference to 30 clauses of the said Agreement, 14 decisions of the High Court and Tribunal and a circular issued by the Central Board of Direct Taxes on the subject. The Petitioner also pointed out (and cited authority on the subject) that the statute had been amended w.e.f. 1st April 2002 and it had been made clear that an assessee was entitled to a deduction under Section 80-IA, even if it's business was merely developing an infrastructure facility, as opposed to developing operating and maintaining the said facility. In the above Petition, the Petitioner avers that the Tribunal was satisfied with these contentions and required the Petitioner's counsel to move on to other grounds in the cross appeals before it. The said note also set out the various decisions including the decision of the Gujarat High Court in CIT V/S Ranjit Projects Pvt Ltd [(2018) 94 taxmann.com 320 (Guj)], SLP dismissed in CIT V/S Ranjit Projects Pvt Ltd [(2019) 105 taxmann.com 126 (SC....
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.... mistakes apparent from record. However, the Tribunal, vide order dated 30th July 2025, dismissed the Miscellaneous Application on, inter alia, the ground that it was not necessary to deal with each and every clause of the contract entered into with LMRCL or the judicial decisions relied upon by the Petitioner, which were all ignored stating that the same were "fact specific" without in any manner setting out how this conclusion was arrived at. The Tribunal further held that merely because it has not specifically discussed various clauses of the agreement or the judicial precedents cited in the body of the order, there was no mistake apparent from the record. In this regard, the Tribunal relied on the judgment of this Court in CIT V/S Ramesh Electric and Trading Co. [(1994) 203 ITR 497 (Bom.)] and the judgment of the Supreme Court in case of CIT V/S Reliance Telecom Limited [(2022) 440 ITR 1 (SC)]. 12. We have heard the learned counsel for the parties and perused the material on record. Before delving into the issues involved in the present Petitions, we may re-iterate that the Income-tax Appellate Tribunal is the last fact finding authority under the Act. Therefore, it is neces....
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....esumptions may supply gaps in the evidence which may not, on account of delay or the nature of the transactions or for other reasons, be supplied from independent sources. But the Tribunal cannot make arbitrary decisions: it cannot found its judgment on conjectures, surmises or speculation. Between the claims of the public revenue and of the taxpayers, the Tribunal must maintain a judicial balance. The order passed by the Tribunal without recording any reasons in support of the estimate of unaccounted income cannot, thereof, be sustained." 15. Also, in the case of Killick Nixon & Co. vs. [CIT (1967) 66 ITR 714 (SC)] wherein again the Apex Court held as under: "Under the Scheme of the Income-tax Act, the Tribunal is the final fact-finding authority on question of fact. The Tribunal in deciding an appeal is bound to consider all the evidence, and the arguments raised by the parties. The Tribunal apparently did not consider the evidence; it merely recorded a bare conclusion without setting out any reasons in support thereof. It is therefore no possible to say whether the Tribunal considered the evidence and the contentions raised by the assessee; it cannot be assumed merel....
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....on the judgments of the co-ordinate benches of the Tribunal and the High Courts to support its contention that it was a developer of the infrastructure facility. However, (apart from a single decision noted by the Tribunal in an erroneous context), none of the judgments relied upon by the Petitioner have been referred to, much less considered, by the Tribunal in the order dated 29th January 2025. In fact, when the Petitioner in the Miscellaneous Application [filed under section 254(2) of the Act] pointed out that the Tribunal has failed to consider the various clauses in the agreement and the judicial pronouncements on the subject, the Tribunal dismissed the Application of the Petitioner holding that it was not necessary to refer to each and every clause of the agreement and that judgments filed by the Petitioner were fact specific without pointing out as to what are the distinguishing facts. We are, therefore, of the opinion that the order of the Tribunal dated 29th January 2025 passed under section 254(1) of the Act clearly suffers from a mistake apparent from the record. 19. We further find that the Tribunal in the order dated 29th January 2025 had also held that the agreemen....
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.... dated 13th February 2015 does render a finding that no positive material was brought on record, there is no discussion whatsoever of the various case laws detailed in the submissions which according to the Petitioner clinches the issues in support of its case that the shareholding investment by the five companies was genuine. In the above view, the Tribunal ought to have allowed the Petitioner's rectification application and considered the petitioner's appeal before it on merits, inter alia, taking into account the material and case laws which has been already filed by the Petitioner's during the hearing leading to the order dated 13th February 2015" 22. Similarly, in the case of Sony Pictures Networks India (P.) Ltd. vs. ITAT [(2023) 156 taxmann.com 443 (Bom.)], this Court has held that the failure of the Tribunal to decide a fundamental submission of an assessee in an appeal is a mistake apparent from record. The relevant portion of the judgment is extracted as under: "9 ... The reliance upon an observation in the decision of this Court in Ramesh Electrical (supra) (without consideration of the context) to conclude that in every case, where a submission/argument is n....
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....rusal of the judgment in the case of Ramesh Electric (supra), this Court has noted that the Tribunal, in purported exercise of power under section 254(2) of the Act, had reheard the entire appeal, reassessed all the circumstances and reversed the conclusion which was reached in the order passed under section 254(1) of the Act. It was in that context that the aforesaid observation was made by this Court. Further, the judgment in case of Sony Pictures (supra) has already clarified that the ratio laid down in the case of Ramesh Electric (supra) is not applicable in cases such as the present one, where the entire arguments, materials and judicial precedent have not been considered by the Tribunal. Therefore, we reject the reliance placed by the counsel for the revenue on the judgment of Ramesh Electric (supra). 25. The learned counsel for the Respondent Revenue thereafter placed reliance on the judgment of the Supreme Court in case of CIT vs. Reliance Telecom Limited [(2022) 440 ITR 1 (SC)] to contend that when there is a mistake in the order of the Tribunal then, the proper course of action is to file an appeal under section 260A of the Act. On perusal of the above judgment, we fin....