Income Tax Appellate Tribunal - Jaipur
Shiv Edibles Ltd., Kota vs Assistant Commissioner Of Income Tax, ... on 5 April, 2021
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IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES 'A' JAIPUR
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BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI VIKRAM SINGH YADAV, AM
M.A. No. 66/JP/2020
(Arising out of ITA No. 479/JP/2019)
fu/kZkj.k o"kZ@Assessment Years : 2015-16
M/s Shiv Edibles Limited, cuke ACIT,
237/A, Talwandi, Vs. Circle-1,
Kota Kota
LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAICS 0274 K
vihykFkhZ@Appellant izR;FkhZ@Respondent
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s Assessee by : Sh. Mahendra Gargieya (Adv.)
jktLo dh vksj ls@ Revenue by : Smt. Monisha Choudhary (Jt. CIT)
lquokbZ dh rkjh[k@ Date of Hearing : 16/03/2021
mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 05/04/2021
vkns'k@ ORDER
PER: VIKRAM SINGH YADAV, A.M. The present miscellaneous application has been filed by the assessee against the order passed by the Co-ordinate Bench in ITA No. 479/JP/2019 dated 09/12/2019.
2. At the outset, it is noted that there is a delay in filing present miscellaneous application by 89 days as pointed out by the Registry. In this regard, the ld. AR submitted that due to the COVID-19 pandemic and consequent lock down, the miscellaneous application could not be filed within original stipulated period, however, where the period of lockdown 2 M.A. No. 66/JP/2020 M/s Shiv Edibles Limited, Kota vs. ACIT, Cirlce-1, Kota is excluded, the misc. application has been filed within the stipulated time period. In support, reliance was placed on the Hon'ble Supreme Court decision dated 23.03.2020 wherein the limitation period in all such proceedings, irrespective of limitation prescribed under the general law or under any special laws, whether compoundable or not, shall stand extend w.e.f 15.03.2020 till further orders. It was further submitted that in terms of subsequent order dated 22.05.2020, the Hon'ble Supreme Court has held that in the case where the limitation expired after 15.03.2020, than the period from 15.03.2020 till the date on which the lock down is lifted in the jurisdictional area where dispute lies or where the cause of action arises shall be extended for a period of 15 days after lifting of the lockdown. It was submitted that in the present case, the assessee being resident of Kota only partial lockdown was lifted by the Rajasthan Government and complete lockdown only on 18.01.2021. It was accordingly submitted that where the said period of lock down is excluded, the miscellaneous application has been filed without any delay and the same may be admitted for necessary adjudication.
3. Per contra, the ld. DR fairly submitted that as per the orders passed by the Hon'ble Supreme Court, the period of lockdown may be excluded and the Revenue has no objection where the miscellaneous application is admitted by the Bench.
4. Heard both the parties and purused the material available on record. We respectfully note that the Hon'ble Supreme in aforesaid suo- moto matter has laid down that period of limitation in all such proceedings, irrespective of the limitation prescribed under the general law or Special Laws whether condonable or not shall stand extended 3 M.A. No. 66/JP/2020 M/s Shiv Edibles Limited, Kota vs. ACIT, Cirlce-1, Kota w.e.f 15th March 2020 till further orders. Thereafter, the Hon'ble Supreme Court in terms of subsequent order dated 22.05.2020 has held that in the cases where the limitation expired after 15.03.2020, than the period from 15.03.2020 till the date on which the lock down is lifted in the jurisdictional area where dispute lies or where the cause of action arises shall be extended for a period of 15 days after lifting of the lockdown. We also take note of the fact that the Ministry of Law and Justice, Govt. of India has also issued a notification dated 31.03.2020 wherein the due dates which falls during the period 20.03.2020 to 29.06.2020 has been extended to 30th June, 2020 in respect of appeals and applications under the specified Act which includes the Income Tax Act and which has further been extended up to 31st December, 2020. In the present case, due date for filing the miscellaneous applications u/s 254(2) being 30.06.2020 that is, within six months from the end of the month in which the order was pronounced on 28.09.2020 and the fact that the miscellaneous application has been filed with the Registry on 28.09.2020, respectfully following the decisions of the Hon'ble Supreme Court and the Taxation and other Laws (relaxation of certain provisions) Ordinance, 2020 as notified in the Gazette of India dated 31st March, 2020, the same is hereby admitted as filed within the extended due date in terms of section 254(2) of the Act.
5. Now coming to the subject matter of the miscellaneous application so filed by the assessee. During the course of hearing, the ld. AR submitted that there are certain glaring and patent mistakes apparent from the face of the record which requires appropriate rectification u/s section 254(2) of the Act. In this regard, it was submitted that the Tribunal at page 12 of its order has held that the ld. CIT(A) has has 4 M.A. No. 66/JP/2020 M/s Shiv Edibles Limited, Kota vs. ACIT, Cirlce-1, Kota discussed general principles for estimating the income by applying G.P rate however he has not considered the relevant specific facts having influenced the business/trading of the assessee. In this regard, the ld. AR taken us through the findings of the ld. CIT(A) and submitted that the findings of the Tribunal are completely contrary to the facts available on record and infact, the ld CIT(A) has recorded a detailed finding with regard to the fall in G.P rate in case of the assessee. It was further submitted that the assessee has submitted a detailed comparative charts before the Tribunal as part of its written submission showing that average cost of purchase increased by Rs 19.47 per kg, however, the selling price has increased only by Rs 6.50 kgs which has resulted in loss in the year under consideration and therefore, immediately past A.Y 2014-15 is not comparable. It was further submitted that the Tribunal has relied on the decisions of the Hon'ble Rajasthan High Court in case of CIT vs. Gupta K. N. Construction Co. (2015) 116 DTR 377 (Raj) and Clarity Gold Pvt. Ltd vs. Principal CIT, 102 taxmann.com 421 (Raj.) while passing the impugned order. However, these decisions were not cited and argued upon by the either side at the time of hearing before Tribunal and therefore, where the Tribunal has relied on the said decisions even though the decisions are of the Jurisdictional High Court, given the fact that the assessee has not been provided an opportunity to present its case and the fact that the said decisions doesn't lay a legal proposition that only past history has to be considered as wrongly appreciated by the Tribunal rather it has held that either the past history of the assessee or history of similarly situated other businesses to be considered and are therefore distinguishable, there is a clear violation of principle of natural justice where the assessee has not been provided an opportunity to rebut the same. In support, reliance was placed on the Hon'ble Bombay 5 M.A. No. 66/JP/2020 M/s Shiv Edibles Limited, Kota vs. ACIT, Cirlce-1, Kota High Court decision in case of Inventure Growth and Securities Ltd vs ITAT [2010] 324 ITR 319. It was further submitted that even the past history of the assessee has not been correctly appreciated while estimating the GP rate and the Tribunal has completely overlooked the declining trend in the GP rate given the specific facts and circumstances of the case and has simply applied average G.P rate. It was accordingly submitted that these apparent mistakes on face of the record have resulted in a great miscarriage of justice and therefore, the order so passed may be recalled and heard afresh.
6. Per contra, the ld. DR submitted that in the present case, the AO after rejection of books of accounts u/s 145(3) has estimated the income by applying G.P rate of 3.03% as against declared G.P rate of 2.57% resulting in trading addition of Rs 2,28,55,077/-. On appeal, the ld CIT(A) has upheld the rejection of books of accounts and has applied the G.P rate of 2.65% and sustained the addition to the extent of Rs 39,74,797/- and has deleted the addition to the extent of Rs 1,88,80,279/-. Against the order of the ld CIT(A), the department has filed an appeal before the Tribunal challenging the deletion of addition of Rs 1,88,80,279/- and the assessee in its cross objection has raised the grounds challenging the rejection of books of accounts u/s 145(3) and sustenance of addition of Rs 39,74,797/-. It was submitted that the assessee's cross objection was dismissed by the Tribunal being not maintainable as well as barred by limitation and our reference was drawn to the findings of the Tribunal at para 4 of its order where the Tribunal has recorded a detailed finding dismissing the assessee's cross objection and thereafter, at para 9 where the Tribunal has held that issue of rejection of books of accounts and part addition sustained by the ld 6 M.A. No. 66/JP/2020 M/s Shiv Edibles Limited, Kota vs. ACIT, Cirlce-1, Kota CIT(A) whereby he has considered the increase in the GP rate by 0.08% is not before it and not in dispute so far as appeal of the Revenue is concerned. It was accordingly submitted that so far as the rejection of books of accounts u/s 145(3) and sustenance of addition of Rs 39,74,797/- by the ld CIT(A) is concerned, the same has attained finality and the subject matter of the present misc. application is thus limited to the appeal filed by the department where it has challenged the findings of the ld CIT(A) in deleting the addition of Rs 1,88,80,279/- and which has been sustained by the Tribunal vide the impugned order dated 9.12.2019. In this regard, the ld DR taken us through the findings of the Tribunal at para 9 of its order and submitted that the Tribunal has passed a detailed speaking order considering the decisions of the Hon'ble Jurisdictional High Court, the findings of the ld CIT(A) as well as past history of the assessee for determining reasonable basis for estimating the G.P rate and therefore, there is no mistake which is apparent on the face of the order so passed by the Tribunal and the miscellaneous application so filed by the assessee deserve to be dismissed.
7. We have heard the rival contentions and perused the material available on record. The subject matter of the present misc. application is limited to the appeal filed by the department where it has challenged the findings of the ld CIT(A) in deleting the addition of Rs 1,88,80,279/- and which has been sustained by the Coordinate Bench vide the impugned order dated 9.12.2019 and in particular, the findings at para 9 of the said order where it has discussed the basis for estimation of G.P rate after the rejection of the books of accounts. We have carefully gone through the said findings of the Coordinate Bench and note that the Coordinate Bench has referred and relied on two decisions of the Hon'ble Rajasthan High Court in case of CIT vs Gupta KN Constructions (supra) 7 M.A. No. 66/JP/2020 M/s Shiv Edibles Limited, Kota vs. ACIT, Cirlce-1, Kota and Clarity Gold Pvt ltd (supra). Though it is not unusual for the Bench to refer and rely on the decisions after doing its own research and especially where the decisions are that of the Hon'ble Jurisdictional High Court, at the same time, where the reliance on the said decisions have influenced and resulted in arriving at a finding in favour of one party and against the other party and a prima facie case has been build that the facts in those cases are distinguishable, the Courts have held that it is advisable that both the parties be confronted with the said decisions and allowed an opportunity to deal with the decisions relied upon by the Tribunal and after hearing both the parties, the matter may be decided. In this regard, we refer to the decision of the Hon'ble Bombay High Court in case of Inventure Growth and Securities Ltd vs ITAT (supra) where the Hon'ble High Court has held as under:
"7. We have adverted to this submission since we had called upon the Counsel appearing on behalf of the assessee to at least prima facie indicate to this Court as to whether there were grounds for urging that the decision in Khandwala Finance Ltd.'s case (supra) is distinguishable. We do not propose to render any conclusive finding or even an opinion of this Court on that aspect of the matter. However, it would be necessary to note that the distinguishing features in the case of Khandwala Finance Ltd. (supra) which have been pointed out during the course of submissions by Counsel for the assessee are sufficient for this Court to hold that an opportunity should be granted to the petitioner to place its case on the applicability or otherwise of the decision in Khandwala Finance Ltd.'s case (supra) before the Tribunal.
8. It is in these circumstances that we are inclined to allow the Miscellaneous Application and to restore the appeal and the cross-objections for fresh consideration before the Tribunal. We clarify that it cannot be laid down as an inflexible proposition of law that an order of remand on a Miscellaneous Application under section 254(2) would be warranted merely because the Tribunal has relied upon a judgment which was not cited by either party before it. In each case, it is for the Court to consider as to whether a prima facie or arguable distinction has been made and which should have been considered by the Tribunal. It is in this view of the matter that we had called upon Counsel appearing on behalf of the assessee to at least prima facie indicate before this Court the grounds on which the decision in Khandwala Finance Ltd.'s case (supra) was sought to be distinguished. If we were to be of the view that the decision in Khandwala Finance Ltd.'s case (supra) was squarely attracted to the facts of the present case, we may not have been inclined to remand the 8 M.A. No. 66/JP/2020 M/s Shiv Edibles Limited, Kota vs. ACIT, Cirlce-1, Kota proceedings. An order of remand cannot be an exercise in futility. However, for the reasons which we have already indicated, we find prima facie that prejudice would be sustained by the petitioner by denying him an opportunity to deal with the distinguishing features in the case of Khandwala Finance Ltd. (supra).
9. For all these reasons, we allow the petition by setting aside the impugned order of the Tribunal dated 20-11-2009. Miscellaneous Application No. 515/Mum./09 is accordingly allowed. The order of the Tribunal dated 30-5-
2008 on this issue is accordingly recalled and both the appeal and the cross- objections shall stand restored to the file of the Tribunal for a fresh decision on merits. All the rights and contentions of the parties on merits are kept open to be urged in the appeal and the cross-objections."
8. In the aforesaid decision, the Hon'ble High Court has held that it cannot be laid down as an inflexible proposition of law that an order of remand on a misc. application under section 254(2) would be warranted merely because the Tribunal has relied upon a judgment which was not cited by either party before it. In each case, it is for the Court to consider as to whether a prima facie or arguable distinction has been made and which should have been considered by the Tribunal. In the present case, we find that the Coordinate Bench has referred and relied upon the aforesaid two decisions of the Hon'ble Rajasthan High Court which have not been relied upon or quoted by either of the parties. The ld AR has contended that said decisions doesn't lay a general legal proposition that only past history has to be considered rather it has held that either the past history of the assessee or history of similarly situated other businesses to be considered and we therefore prima facie find that such distinguishing features as pointed out by the ld AR has escaped the attention of the Coordinate Bench and which could have been considered had the said decisions being confronted to both the parties and an opportunity been given to them to file their respective submissions on applicability or distinguishing features of the said decisions. Further, the ld AR has submitted some distinguishing features which has resulted in fall in G.P rate during the year under consideration and non-comparability 9 M.A. No. 66/JP/2020 M/s Shiv Edibles Limited, Kota vs. ACIT, Cirlce-1, Kota with the past years which also seems to have escaped the attention of the Coordinate Bench.
9. In view of the aforesaid discussions and in the entirety of facts and circumstances of the case, we deem it appropriate that the order so passed by the Coordinate Bench in ITA No. 479/JP/2019 be recalled and matter be heard afresh for the purposes of adjudication of ground of appeal taken by the Revenue relating to deletion of addition of Rs 1,88,80,279 out of total addition of Rs 2,28,55,077 after providing opportunity to both the parties to present its case.
10. The Registry is directed to list the matter in due course. Issue notice.
In the result, miscellaneous application so filed by the assessee is disposed off in light of aforesaid directions.
Order pronounced in the Open Court on 05/04/2021.
Sd/- Sd/-
¼lanhi xkslkbZ½ ¼foØe flag ;kno½
(Sandeep Gosain) (Vikram Singh Yadav)
U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member
Tk;iqj@Jaipur
fnukad@Dated:- 05/04/2021.
*Ganesh Kr.
vkns'k dh izfrfyfi vxzfs 'kr@Copy of the order forwarded to:
1. vihykFkhZ@The Appellant- M/s Shiv Edibles Limited, Kota
2. izR;FkhZ@ The Respondent- ACIT, Circle-1, Kota
3. vk;dj vk;qDr@ CIT
4. vk;dj vk;qDr@ CIT(A)
5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur.10 M.A. No. 66/JP/2020
M/s Shiv Edibles Limited, Kota vs. ACIT, Cirlce-1, Kota
6. xkMZ QkbZy@ Guard File {M.A No. 66/JP/2020} vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar