Income Tax Appellate Tribunal - Delhi
Sunil Sahni vs Income-Tax Officer on 30 October, 1998
Equivalent citations: [1999]70ITD481(DELHI)
ORDER
U.B.S. Bedi, JM
1. This is assessee's appeal against the order of CIT(A) - XIII, New Delhi, dated 22-11-1990 passed under section 154 of the Income-tax Act, 1961 in Appeal No. 517/88-89 for assessment year 1985-86. Following grounds have been raised :
"1. That the learned CIT(A) has erred in upholding the addition of Rs. 47,006 which is reflected as deposit in the bank account being amount received from LIC as income of the appellant without appreciating the fact that confirmation for the above deposit was filed before the same Assessing Officer during the assessment proceedings for the asst. year 1984-85.
2. That the learned CIT(A) has erred in arbitrarily rejecting the information, explanation and evidence furnished by the assessee to establish that the evidence in support of the source of deposit of Rs. 47,006 had already existed on the records of the Assessing Officer, the same having been filed by the appellant during the assessment proceedings for the asst. year 1984-85.
3. That the learned CIT(A) has failed to appreciate that in a situation where the evidence in support of deposit of Rs. 47,006 in the bank account of the assessee had already been filed during the assessment proceedings of the immediate preceding year, the addition of the amount for want of an already existing evidence is a mistake apparent on record which has to be rectified under section 154 of the Income-tax Act. It is thus prayed that the addition of Rs. 47,006 sustained as above may kindly be deleted."
2. Facts are like this that assessee's appeal in this case was decided ex parte and came to be dismissed vide order dated 28-2-1989 in the absence of assessee. Assessee moved an application for rectification of the appellate order dated 28-2-1989 on 4th October, 1990 and following grounds were raised :
"An appeal was filed by me against the order of the Income-tax Officer, Central Circle-16, New Delhi, passed on 8-3-1988 under section 143(3) for the assessment year 1985-86 (Annex-I). The said appeal was decided ex parte by your honour on 28-2-1989 (Annex-11) as the undersigned could not appear before your honour and the appeal was dismissed.
One of the grounds of appeal reads as under : 'ITO erred in holding the following amount which are reflected as deposits in the bank account as income of the appellant.
(a) ** ** **
(b) Amount received from LIC on maturity of policy of Late Shri A. L. Sahni - Rs. 47,006 (Annex. III)'
3. As the appellant could not lay his hands on the record i.e. payment vouchers dated 29-1-1985 (Annex IV & V) and the same was not presented as the time of hearing of the assessment and appellate proceedings.
4. Now, the appellant had traced the said payment vouchers dated 29-1-1985 and furnished the same to the concerned ITO for carrying out the rectification under section 154 since the amount of Rs. 47,006 was created after receipt of the amount in lieu of surrender of Policy 'Nos. 27504979 and 27557605. The appellant had also collected a confirmatory certificate from the LIC which reads as under :
This is to certify that we have made a payment of Rs. 23,090.80 and Rs. 23,915 as surrender value under Policy Nos. 27504979 and 27557605 respectively to Shri Sunil Sahni vide our cheque No. 166534 dated 29-1-1985 (Annex-VI)'."
3. The following observations and findings have been recorded by CIT(A) in his appellate order dated 28-2-1989 on the point which is sought to be rectified through application of rectification under section 154 of the Act :
"The point regarding the another credit of Rs. 47,006 appearing on 12-1-1985 in bank account No. 7009 with Union Bank of India. The ITO stated that the assessee was called upon to give evidence regarding the genuineness of this credit also and the appellant had taken shifting stand inasmuch as first it was stated that the amount represented a receipt from LIC but no evidence to support of this claim was filed till 7-3-1988, the last date of hearing and secondly, it was contended that this amount was transferred from the accounts of Mrs. Shakuntala Sahni by the A/R was told during the course of assessment proceedings that there was no such debit in the bank account of Mrs. Shakuntala Sahni for the relevant period and therefore, he was required to show cause why this amount be not treated as unexplained and credit and added to the assessable income. In the letter dated 7-3-1988 it was stated on behalf of the appellant that regarding this credit the assessee will submit a certificate from the LIC but obviously the ITO rejected this request as the appellant had failed to do so in spite of opportunity already availed. Thus the ITO treated the amount of Rs. 47,006 as also unexplained credit in the bank account and added to the assessable income. It is clear that before me neither any one appeared on behalf of the appellant nor any written arguments submitted to rebut the facts stated in the assessment order concerning these two bank credits and therefore, obviously I have to accept the facts stated in the preceding para. It is clear that I have also allowed the appellant reasonable opportunity of hearing of this appeal and placing of appellant's defence if any, before me but the appellant had failed to do so. Thus, in the light of above stated facts I would uphold the ITO's finding with regard to both the credit amounts that they had remained unexplained for want of evidence in support of stand taken on behalf of the appellant or in the alternative the source of funds utilised for these credits was not satisfactorily explained and thus law had to take its course. Thus disputed additions of Rs. 6,602 and Rs. 47,006 are confirmed and ground No. 1 is rejected. In the result, the appeal stands dismissed."
4. CIT(A) while deliberating upon issue raised in rectification application has observed that there is no mistake in the appellate order which is apparent from the record and can be rectified under section 154 of the Act. Further observed that the point sought to be rectified is regarding the addition of Rs. 47,006 towards income of the assessee. This addition has already been confirmed for detailed reasons given in the appellate order. Hence he observed that there is no mistake apparent from the record of the case as such submission made in application under section 154 of the Act cannot be considered at this stage inasmuch as there is found no mistake apparent from the record. Application moved by the assessee came to be rejected. Assessee aggrieved by this action of CIT(A) has come up in appeal and while reiterating the submissions as made before the first appellate authority has pleaded for deletion of addition of Rs. 47,006 made by Assessing Officer and confirmed by CIT(A) as this is a mistake apparent from the record and CIT(A) ought to have rectified its order and deleted the addition because same is not warranted in view of facts and circumstances. It was further submitted that the amount in question was on account of receipts from LIC on maturity of policies received by the assessee through cheques from LIC and at the time of assessment or appellate stage assessee was unable to lay hands on certificate issued by the LIC though claim for the same was duly made but Assessing Officer made the addition and same came to be confirmed by CIT(A) for want of evidence. Whereas certificate dated 25-2-1987 stood already issued by LIC, the surrender value with respect to three policies against which aggregate sum of two payments of Rs. 23,915 and Rs. 23,090.80 was credited in the bank account of the assessee on 29-1-1985 in bank account No. 7009 with Union Bank of India and third payment shown in the said certificate was with respect to an amount of Rs. 3,21,971 received by the assessee vide cheque dated 5-5-1983 and this pertained to assessment year 1984-85. At the time of assessment for the assessment year 1984-85 assessee filed this certificate in response to query of the assessing authority in respect of assessment proceedings for asst. year 1984-85. Therefore, the evidence regarding amount credited in the bank account of the assessee during the year under consideration was already on record in assessment proceedings for asst. year 1984-85 and so there was no point for CIT(A) to reject the claim of the assessee made in application under section 154 as 'record' as mentioned in the relevant provision cannot be said to be record for the relevant assessment year only but record for earlier year also. Since claim of the assessee was not considered as regards receipt of amount from LIC on maturity of policies for which evidence was already on record and request under section 154 of the Act was made to rectify the mistake, therefore, CIT(A) should have accepted the plea of the assessee and by passing order of rectification should have allowed the relief. Since same has not been done, it was urged for acceptance of request of the assessee and urged for deletion of addition.
5. The learned DR while relying upon the orders of authorities below has pleaded for its confirmation. It was strongly pleaded that ample opportunities were granted to the assessee at the assessment stage and due opportunity was also granted at appeal stage but assessee failed to avail either of the opportunities to produce necessary evidence in respect of his contention. The Assessing Officer was justified in treating the amount credited in the bank account as income of the assessee in the absence of any documentary evidence and CIT(A) was justified in not accepting the plea of,,the assessee on the same reasons. It was also submitted that since nothing was placed on record for the assessment year 1985-86 which is relevant period under consideration, CIT(A) was fully justified in holding that there is no mistake apparent from record for invoking provisions of section 154 with respect to appellate order. There has been change in stand of the assessee as mentioned in detail in the order impugned and so documentary evidence filed in assessment proceedings for any other assessment year then under consideration cannot be held to be record pertaining to the assessment year under consideration. Action of Assessing Officer in rejecting the claim of the assessee in the absence of documentary evidence is valid and similar action of CIT(A) in dismissing the appeal on same reasons is justified and his action in not accepting the request under section 154 is also justified. It was thus pleaded for confirmation of order of ld. CIT(A) passed under section 154 in rejecting the application.
6. We have heard the rival submissions, perused the record, gone through the documentary evidence to which our attention was drawn. We have also carefully gone through the relevant provisions of law relating to section 154. Since the term 'record' has not been defined in the Act, therefore, it would not be justified to give narrow meaning to the term 'record'. Similar situation arose before the Hon'ble Supreme Court to interpret term 'record' as contained in section 263 of the Income-tax Act, where the issue related to the exercise of the revisionary jurisdiction of the Commissioner in the case of CIT v. Shri Arbuda Mills Ltd. [1998] 231 ITR 50/98 Taxman 457 and CIT v. Shree Manjunadhesware Packing Products & Camphor Works [1998] 96 Taxman 1 wherein Hon'ble Supreme Court has sought to interpret the meaning of the word 'record' to hold that for the purposes of jurisdiction being exercised by the Commissioner, the term 'record' would include within its scope all records and documents forming part of the case upto the time the Commissioner looks into the file and forms an opinion to consider whether the order already passed is erroneous and prejudicial to the interest of revenue warranting the exercise of revisionary jurisdiction by him under section 263 of the Income-tax Act. Since the term 'record' has come to be widely interpreted in scope and amplitude the same logic should follow for the purpose of rectification of mistakes apparent from record because when once something which was not on record at the time of assessment or intimation and the same is placed on record by the assessee subsequent thereto with a request for rectification of mistake apparent from record, the Assessing Officer would be obliged to rectify the mistakes in the order already passed and modify the same suitably in exercise of the power of rectification. He cannot plead that the document/report/statement etc. had not been on record at the time of issue of intimation or passing of the assessment order and, therefore, the application for rectification cannot be justified or acted upon. The view taken by the Supreme Court in the context of revision in regard to the meaning of 'record' should equally apply for the purpose of rectification of mistakes apparent from record under sections 154 and 155 by the authorities and in any case the plea for rectification and consequent relief cannot be rejected on the ground of the record, document, etc. coming into existence in the file of the authority concerned subsequent to the passing of the earlier order which gave rise to the need for rectification or modification or revision, as the case may be, particularly in a case where authenticity, reliability and correctness of the documents cannot be doubted. The judicial controversy being set at rest in regard to the meaning of "record" for the purpose of revision under section 263 should also be regarded as entitling the taxpayer concerned to agitate the claims through rectification proceedings wherever appropriate by placing the relevant records and documents in the file of the authority concerned for passing appropriate orders of rectification.
7. In the case in hand here document i.e. certificate from LIC was already on record in the assessment proceedings for assessment year 1984-85 and one payment out of three in this certificate has already been accepted, moreover as this fact has not been disputed by the Department at the time of hearing, therefore, in our considered view when assessee brought this fact into the notice of first appellate authority by moving proper application for rectification under section 154, he was duty bound to act upon the same treating the documentary evidence already on the file of assessee for earlier assessment Year i.e., asst. year 1984-85 to be a part of record to correct the mistake and modify his order. Since same was not done, we hold his order to be not proper and also not in confirmity with the provisions of law. While accepting the appeal of the assessee, we set aside the order of authorities below and direct the Assessing Officer to delete the addition made.
8. As a result, appeal of the assessee gets accepted.