Income Tax Appellate Tribunal - Amritsar
Rohit Tandon., Jalandhar vs Department Of Income Tax on 4 March, 2016
i IN THE INCOME TAX APPELLATE TRIBUNAL
AMRITSAR BENCH; AMRITSAR.
BEFORE SH. A.D. JAIN, JUDICIAL MEMBER
AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER
M.A. Nos. 23 to 27(Asr)2015
(Arising out of ITA Nos.345, 55, 410,238 & 284(Asr)/2015, 11, 10, 11 & 12)
Assessment Years:2006-07 to 2009-10
Income Tax Officer, vs. Shri Rohit Tandon Prop.
Ward 1(3), M/s. Prajna (India).
Jalandhar. Jalandhar.
PAN :AAFPT3362Q
(Appellant) (Respondent)
M.A. No.44(Asr)2015
(Arising out of ITA No. 55(Asr)/2011)
Assessment Years:2006-07
Shri Rohit Tandon Prop. Vs. Income Tax Officer,
M/s. Prajna (India). Ward 1(3),
Jalandhar. Jalandhar.
PAN :AAFPT3362Q
(Appellant) (Respondent)
Department by:Sh. R.K. Sharda, DR
Respondent by: Sh. Y.K. Sud, CA
Date of hearing: 26/02/2016
Date of pronouncement: 04/03/2016
ORDER
PER A.D. JAIN, JM
These five Miscellaneous Applications have been filed by the Revenue, whereas one Misc. Application has been filed by the assessee, against the order of the Tribunal dated 05.03.3015.
2. M.A.Nos.23 to 27(Asr)/2015 2 MA No.23 to 27 & 44(Asr)/2015 In all these applications, the Department has raised common issues, contending as follows:
"It is submitted that the Hon'ble Tribunal has passed a common order in ITA No.235/2009,55/2011,410/2010,238/2011 & 284/2012 dated 05.03.2015 in the aforementioned case. The Tribunal had earlier dismissed the assessee's appeal in ITA No.345/ASR/2009 vide its order dated 31.08.2009 and subsequently the said order had been recalled vide its order in MA No.98/ASR/2009 dated 04.03.2010 and reversed its previous order dated 31.08.2009 and allowed the assessee's appeal. The Tribunal has recorded the basis of recalling the said order in its order dated 05.03.2015 at para 8 which is reproduced hereunder:-
"10. Having considered the rival submissions, we find the grievances of the assessee to be correct. A perusal of the order shows that the case laws cited on behalf of the assessee have not been considered. The aforesaid various arguments, stated to have been made before the Tribunal at the time of hearing of the appeal, have also not been disposed of in their right perspective, as pointed out in the application and argued during the hearing of the appeal. This, in our considered opinion, indeed constitutes a rectifiable mistake apparent from record. Therefore, our order dated 31.08.2009 (supra) is hereby recalled. The matter is refixed for hearing on merits afresh under notice to the parties on 8.4.2010."
The Sr.DR's submissions as has been recorded by the Tribunal at para 12 & 13 of its aforesaid order read as under:-
"12. As a counter to the written submissions dated 12.01.2015, the Ld.DR filed written submissions dated 27.01.2015. Therein, it was contended that by passing the order dated 04.03.2010, the Tribunal has caused immense prejudice to the interests of the revenue and as such prejudice required to be done away with in the first instance. Reliance was placed on Honda Siel Power Products Ltd. Vs CIT reported in (2007) 295 ITR 466 (SC). It was contended that the Tribunal erred in holding that nine judgments cited on behalf of the assessee were not considered by the Tribunal while passing its earlier order dated 31.08.2009; that the Tribunal further erred in holding that various arguments advanced on behalf of the assessee at the time of hearing of the appeal had not been disposed of in their right perspective; that in case it were so, such non-consideration of the arguments " in their right perspective' amounted to perversity, which could not be 3 MA No.23 to 27 & 44(Asr)/2015 reviewed by the Tribunal; that the order could have been recalled by invoking the provisions of section 254(2) of the Act only in case the arguments had not been considered at all; that the recalling of the Tribunal's earlier order be treated as vacated; and that thus, there remained nothing to be taken afresh in the appeal, as " when the Tribunal will atone for its wrong, it will only result in restoration of its order dated 31.08.2009 which is humbly prayed for'. Further, a para-wise discussion of the order dated 04.03.3010 was made, challenging the observations made therein and it was reiterated that the Tribunal had caused prejudice to the interests of the revenue by recalling its earlier order. Apropos the issue regarding the power of the Tribunal to recall an order in toto, it was contended that the Tribunal does not have any such power. The laws relied on by the assessee in this behalf were stated to be not applicable.
13. The Ld.DR filed further written submissions dated
03.02.2015, reiterating the request that the prejudice caused to the interests of the revenue be done away with and the issue as to whether the order of the Tribunal allowing the application of the assessee had not caused such prejudice be decided first."
The Tribunal has eminently conceded the mistake which the DR had pointed out as above at para 19 of its order in the following words:
In the order allowing the application, mistakenly, the Tribunal observed that these latter nine judgments had not been considered by the Tribunal while passing its earlier order. This, evidently, was a typographical error since a perusal of the earlier order of the Tribunal shows that the other set of nine judgments relied on by the assessee during the appeal proceedings had not been considered. Therefore, the objection of the department in this regard is not justified.
It is thus manifestly clear that the Tribunal has conceded the mistake in its order. Therefore, in view of the judgment of the Hon'ble Supreme Court in the case of Honda Siel Power Product Ltd. Vs CIT (supra) there was little option with the Tribunal except to first rectify the mistake and then proceed whether the other set of nine judgments were considered or not. It is further seen that the Tribunal's observation in the last two lines of page 8 "since a perusal of the earlier order of the Tribunal shows that the other set of nine judgments relied on by the assessee during the appeal proceedings had not been considered" is also a mistake as the fact is the said set 4 MA No.23 to 27 & 44(Asr)/2015 of nine judgments were duly considered by the Bench at different pages of the operative part of the decision.
It is worthwhile to mention here that first judgment in the set of nine judgement is in the case of Textile Machinery Corporation Ltd Vs CIT (107 ITR 195)(SC) which has been dealt at page 10 of the order. The second judgment in the case of Indian Aluminium Corporation Ltd Vs CIT(108 ITR 367)(SC) has been considered at page 10 itself. Third judgment in the case of CIT Vs Orient Paper Mills (176 ITR 1210) (SC) has been considered at page 11. Fifth judgment in the case of T.Satish.U.Pal Vs. CIT (119 ITR 877) has been considered at page 9.
Sixth judgment in the case of ITO Vs Sarviyon Global Solutions Ltd. (117 TTJ 11) has been considered at page 11. Seventh judgment in the case of ITO Vs DSM Soft Private Ltd (115 TTJ 469) has been considered at page 11. Eighth judgment in the case of Hindustan General Industries Ltd. Vs CIT (137 ITR 851) has been considered at page 10. Ninth judgment in the case of Chanda Diesels Vs CIT (216 ITR 639) has been considered at page 11. Judgment at S.No.4 is not finding mention in the order obviously the same had not been pressed into service by the learned counsel for the assessee. Thus, it is clear that the Tribunal has compounded the prejudice caused to the interests of the revenue by repeating the mistake which it itself concedes that it had committed.
As regards the other reason for recalling the order i.e. " The aforesaid various arguments stated to have been made before the Tribunal at the time of hearing the appeal, have also not been disposed of in their right perspective", the Tribunal has nowhere dealt with the submissions of the Sr.DR dated 27.01.2015 that' if submissions are not considered in their right perspective', it tentamounts to perversity which is beyond the pale of the provisions of section 254(2) of the Income tax Act, 1961. The Tribunal's not dealing with this submission of the department clearly amounts to committing a mistake within the realm of the provisions of section 254(2) of the Income tax Act, 1961 and thus impugned order eminently qualifies to be withdrawn and the Tribunal comes under obligation to rectify its order by the mandate of the Hon'ble Supreme Court in the case of Honda Siel Power Products Ltd (supra). It is pertinent to mention here that the Tribunal has simply observed without adducing any reasoning or any case law at para 22 of its order that 'there is no force in the objection of the department that it was not within the purview of the Tribunal to recall its earlier order on the basis that arguments had not been considered in their right perspective. There is not a whisper in the impugned order that if 'certain arguments are not considered in their right perspective' that constitutes mistake and not perversity. Therefore, it is clear that by reiterating its earlier position, the Tribunal has only compounded the 5 MA No.23 to 27 & 44(Asr)/2015 prejudice caused to the interests of the revenue and as such the impugned order needs to be recalled in toto and the mistakes in the Tribunal's order in MA No.98/ASR/2009 deserve to be rectified first and thus it was eminently a mistake to decide the aforementioned appeals. It is, therefore, prayed that the mistake thus committed in the order dated 05.03.2015 be rectified.
It is further submitted that the Tribunal has taken as heard appeal NO.55/ASR/2011 also which pertain to penalty and as such the said ITA needs to be excluded from the impugned order."
3. The facts are that as per the findings of the AO in the assessment order, as taken note of by the ld. CIT(A) from page 2, para-2.1 to page 5, para 2.5 of the impugned order, the AO refused to allow to the assessee the deduction claimed u/s 10B of the Income Tax Act ('the Act', for short). The Ld. CIT(A), by virtue of his findings contained at page 24, para 6 to page 43 of the impugned order, partly allowed the appeal of the assessee. The Tribunal, vide order dated 31.08.2009 dismissed the assessee's appeal against the aforesaid order passed by the ld. CIT(A). 2.1 The assessee filed M.A. No.98(Asr)/2009 before the Tribunal, pointing out various alleged mistakes apparent from the record in the aforesaid Tribunal order dated 31.08.2009.
2.2. Vide order dated 04.03.2010, the Tribunal allowed the Miscellaneous Application filed by the assessee, observing as follows:
"10. Having considered the rival submissions, we find the grievances of the assessee to be correct. A perusal of the order shows that the case laws cited on behalf of the assessee have not been considered. The aforesaid various arguments, stated to have been made before the Tribunal at the time of hearing of the appeal, have also not been disposed of in their right perspective, as pointed out in the application and argued during the hearing of the appeal. This, in our considered opinion, indeed constitutes a rectifiable 6 MA No.23 to 27 & 44(Asr)/2015 mistake apparent from record. Therefore, our order dated 31.8.2009 (supra) is hereby recalled. The matter is refixed for hearing on merits afresh under notice to the parties on 8.4.2010."
3. By virtue of the composite order dated 05.03.2015, the Tribunal allowed all the five appeals of the assessee, concluding as follows:
"90. To sum up, we hold that:
a) The Tribunal rightly recalled its order dated 31.08.2009 in its entirety, for hearing afresh and no prejudice was caused to any interest of the Revenue thereby.
b) The ld. CIT(A) went wrong in holding it to be a case of transfer of capital from the existing business to the new one.
c) The ld. CIT(A) has erred in holding that orders for manufacture were shifted from the existing business to the new one.
d) The ld. CIT(A) has fallen into error in holding that there was a unity of control in the two businesses.
e) The ld. CIT(A) has wrongly held that there was a shifting of staff from the existing unit to the one newly set up.
f) The ld. CIT(A) has erroneously held that tax evasion was the sole reason for setting up the new unit.
f) The ld. CIT(A) has, on the basis of the above misplaced findings, incorrectly held it to be a case of splitting up of existing business.
91. In view of the above discussion, we hold that the ld. CIT(A) has misdirected himself in sustaining the disallowance of deduction claimed by the assessee u/s 10B of the Act. The grievance of the assessee is accepted. The order of the ld. CIT(A) is reversed.
92. As stated in the beginning of this order, the facts in all the five appeals are, mutatis mutandis, similar. Therefore, our observations will equally apply to the other appeals also.
93. In the result, all the five appeals filed by the assessee are allowed."
4. The Department has now filed the present Misc. Applications.
5. The Ld. DR, reiterating the contents of the applications has contended that the Tribunal has erred in recalling its earlier order dated 31.08.2009, whereby the assessee's appeals have rightly been dismissed; 7 MA No.23 to 27 & 44(Asr)/2015 that in accordance with the decision of the Hon'ble Supreme Court in the case of "Honda Siel Power Products Ltd. vs. CIT", 295 ITR 466 (SC), the Tribunal ought to have first rectified the mistake and then, to have proceeded to decide as to whether the other set of nine judgments had or had not been considered; that the contention of the ld. DR at the relevant time were that if the submissions were not considered in their right perspective, it tantamounted to perversity which is beyond the pale of the provisions of section 254(2) of the Income Tax Act, 1961.
6. On the other hand, the ld. counsel for the assessee, supporting the order of the Tribunal passed on 05.03.2015, has contended that the applications under consideration are misconceived, in as much as the remedy with the department, if any available to it, was to challenge the Tribunal order dated 04.03.2010, whereby its earlier order dated 31.08.2009 was recalled, by way of appeal/writ petition; that however, even though almost five years have elapsed, no such recourse by way of appeal/writ petition has been adopted by the department, as no notice has been served on the assessee in this regard. Reliance has been placed on 'Director of Income Tax (Exemption) vs. All India Personality Enhancement & Cultural Centre for Scholars AIPECCS Society', 281 CTR (Del) 1.
7. Having heard the rival contentions in the light of the material placed on record, we find that the Department has not placed anything on record to show that the Tribunal order dated 04.03.2010, whereby its 8 MA No.23 to 27 & 44(Asr)/2015 earlier order dated 31.08.2009 was recalled, has been challenged by the Department before the Hon'ble High Court by way of appeal/writ petition. Obviously, the remedy, if any available with the Department against the aforesaid Tribunal order dated 04.03.2010, was by way of appeal/writ petition before the Hon'ble High Court, as per advice. Almost a period of five years has expired since the passing of the said order of the Tribunal, this obviously shows that the Department sits satisfied with the Tribunal order dated 04.03.2010. For this very reason, the applications now filed by the Department do not carry any merit.
8. The Hon'ble Delhi High Court, in 'All India Personality Enhancement & Cultural Centre for Scholars AIPECCS Society' (supra), in similar circumstances, has held that once the department had accepted the order passed by the Tribunal, it would not be open for the Revenue to challenge the same, in its appeal against the Tribunal order passed on merit, post recalling its earlier order. Their Lordships referred to the decision of the Full Bench of the Delhi High Court in the case of 'Lachman Dass Bhatia vs. Asstt. CIT', decided vide order dated 06.08.2010 in I.T. Appeal No.724 of 2010, wherein, it was held that an order passed u/s 254(2) of the I.T. Act, recalling an order in its entirety would not be amenable to appeal under section 260A of the Act; that an order rejecting the application under section 254(2) is not appealable; and that if an order is passed under section 254(2) amending the order 9 MA No.23 to 27 & 44(Asr)/2015 passed in appeal, the same can be assailed in further appeal on substantial question of law.
It was further clarified that in cases where an appeal is not maintainable against the order u/s 254(2), the same could be challenged by way of a writ petition under Articles 226 & 227 Of the Constitution of India. The above position is directly applicable to the case at hand. To reiterate, the department, if so advised, ought to have taken appropriate proceedings against the Tribunal's order dated 04.03.2010, before the Hon'ble High Court. This, however, was not done, evincing that the department remained satisfied with the said order of the Tribunal. Almost five years have expired since passing of the said Tribunal order. The present applications filed by the department are, therefore, obviously not maintainable in law. The same are, accordingly, rejected.
9. MA No.44(Asr)/2015 In this application filed by the assessee, it has been contended as follows:
"2. That in para 92 it has been mentioned that "As stated in the beginning of this order, the facts in all the five appeals are, mutatis mutandis, similar. Therefore, our observations will equally apply to the other appeals also". This finding needs modification because this appeal was an appeal against the order of the CIT(A sustaining the penalty imposed by the ITO u/s 271(1)(c) of the Income Tax Act, 1961. The other four appeals which have been consolidated on the order pertain to quantum for assessment years 2006-07, 2007-08, 2008-0-9 & 2009-10. Hence, although the appeal of the assessee has been correctly allowed in view of the fact that quantum appeal i.e. ITA No.345(Asr)2009 has been allowed and hence following that order the penalty appeal is also allowed but to clarify the same it is 10 MA No.23 to 27 & 44(Asr)/2015 prayed that the para 92 of the order may kindly be suitably amended with clarification of deletion of the penalty.
3. That para no.92 has been numbered twice and repeated para no.92 may be altered to para no.93.
4. The address of the assessee has by mistake been mentioned as Prop. Prajna India Limited whereas it should be Prop. Prajna (India)."
10. All these grievances of the assessee are found to be correct. ITA No.345(Asr)/2009 was an appeal against the action of the ld. CIT(A) in sustaining the penalty imposed on the assessee u/s 271(1)(c) of the I.T. Act. The other four appeals, on the other hand, were quantum appeals for the assessment years 2006-07 to 2009-10. As such, there has crept in an inadvertent error in our order dated 05.03.215, wherein, in para no.92, it has been observed that "As stated in the beginning of this order, the facts in all the five appeals are, mutatis mutandis, similar. Therefore, our observations will equally apply to the other appeals also". This sentence shall now stand replaced by the following sentence:
"ITA No.345(Asr)/2009: which is the assessee's appeal against the action of the ld. CIT(A) in sustaining the concealment penalty levied on the assessee, for the assessment year 2006-07, is allowed. ITA No. 55(Asr)/2011, for the A.Y. 2006-07, ITA No.410(Asr)/2010, for A.T. 2007-08, ITA No.238(Asr)/2011, for A.Y. 2008-09 and ITA No.284(Asr)/2012 for A.Y. 2009-10, being the assessee's appeals in the quantum matter, are also allowed."
11. Para-92, being the last para of our order dated 05.03.2015 has inadvertently been mentioned and it shall now be treated as para-93. Lastly, the address of the assessee has also been incorrectly mentioned 11 MA No.23 to 27 & 44(Asr)/2015 as 'Prop. M/s. Prajna (India) Limited., Jalandhar', whereas the correct address is "Prop. Prajna (India), Jalandhar". This mistake is also rectified and the said correct order of the assessee shall now be mentioned instead of the earlier mentioned order.
12. Accordingly, the Misc. Application filed by the assessee is accepted.
13. In the result, all the Misc. Applications filed by the Department are rejected, whereas, the application filed by the assessee is allowed.
Order pronounced in the open court on 04/03/ 2016.
Sd/- Sd/-
(T.S. KAPOOR) (A.D. JAIN)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated: 04/03/2016
Copy of the order forwarded to:
1. The Assessee:Sh. Rohit Tandon, Jalandhar.
2. The ITO Ward 1(3), Jalandhar.
3. The CIT(A) Jalandhar
4. The CIT, Jalandhar.
5. The SR DR, ITAT, Amritsar.
True copy
By order
(Assistant Registrar)
Income Tax Appellate Tribunal,
Amritsar Bench: Amritsar.
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