1. These miscellaneous applications filed by the appellant have arisen out of the Tribunal order dt. 25th July, 2005 in ITA Nos. 207 and 208/Jp/2003 for the asst. yrs. 1994-95 and 1995-96.
2. The learned Counsel for the assessee has pointed out vide MA Nos. 96 and 97/Jp/2005 that number of contentions in written submissions and decisions were referred during the course of hearing of the appeal and the Tribunal has not considered the contentions and has not cited or considered any of the decisions in ITA Nos. 207 and 208/Jp/2005. The second argument of learned Counsel for the assessee was with regard to the applicability of Section 148 of the Act in the asst. yr. 1994-95 and the learned Counsel for the assessee argued that provisions of Section 147 were not applicable in view of proviso to Section 147 since the assessment has been made under Section 143(3) and no action shall be taken under the proviso of this section after expiry of four years from the end of the assessment year, unless the income chargeable to tax escaped assessment by reason of failure on the part of the assessee to disclose fully and truly the material facts necessary for the assessment for that assessment year. The third grievance of the assessee was that in para 14 of the Tribunal order, it has been mentioned as under: limitation period under Section 149(1)(a) will not apply but limitation period under Section 149(1)(b) of the Act shall apply, i.e., notice under Section 148 of the Act could be issued within six years from the end of the relevant assessment year.Ess Ess Kay Engg.
Co. (P) Ltd. v. CIT (2001) 166 CTR (SC) 396 : (2002) 124 Taxman 491 (SC) has been relied upon by the Tribunal which was not referred to by the assessee or the Department and the Tribunal has not given any opportunity to the assessee to rebut the same. Therefore, no notice under Section 148 could be issued by the AO and the Tribunal is not justified in upholding the validity of (notice under) Section 148 of the Act. Therefore, this is a mistake apparent from record and the same is required to be rectified under Section 254(2) of the Act. On the other hand, the learned Departmental Representative opposed the miscellaneous applications filed by the assessee.
3. We have heard the parties and perused the materials available on record. The first objection of the assessee was that the contentions made by the assessee in her written submissions and the decisions referred to by the assessee during the hearing of the appeal have not been cited or considered in the order of the Tribunal. The arguments of learned Counsel for the assessee are not maintainable in this regard because all the submissions made by the assessee including the decisions referred to and all the relevant materials have been considered before deciding the appeal and the same have been mentioned in para 8 of Tribunal order. The learned Departmental Representative has relied upon various judgments in this regard as under:CIT v. Kaiamchand Thapar & Brothers (P) Ltd. 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 have been set out in detail by the Tribunal or whether some incidental fact which appears on the record has not been noticed by the Tribunal in its judgment. If the Court, on a fair reading of the judgment of the Tribunal, finds that it has taken into account all relevant material and has not taken into account any irrelevant material in basing its conclusions, the decision of the Tribunal is not liable to be interfered with, unless, of course, the conclusions arrived at by the Tribunal are perverse.
It is not necessary for the Tribunal to state in its judgment specifically or in express words that it has taken into account the cumulative effect of the circumstances or has considered the totality of the facts, as if that were a magic formula; if the judgment of the Tribunal shows that it has, in fact done so, there is no reason to interfere with the decision of the Tribunal.
2. CIT v. Ramesh Electric & Trading Co. , where it has been held as under: The power of rectification under Section 254(2) can be exercised only when the mistake which is sought to be rectified as an obvious and patent mistake which is apparent from the record, and not a mistake which requires to be established by arguments and a long drawn process of reasoning on points on which there may conceivably be two opinions. Failure of the Tribunal to consider an argument advanced by either party for arriving at a conclusion is not an error apparent on the record, although it may be an error of judgment. The Tribunal cannot, in the exercise of its power of rectification, look into some other circumstances, which would support or not support its conclusion.
3. Shakti Savanta v. ITO (1983) 5 ITD 713 (Bom)(TM) where it has been held as under: It is not always necessary that even in a speaking order the Tribunal should put down every argument of the assessee in a detailed manner as he has made it and that too in an equally detailed manner as he would like to have it. What is important is whether the argument has been heard and grasped by Tribunal and the decision bears the stamp of such grasp.
As regards interpretation of Rule 9A, the Tribunal adopted what it considered to be a rational method of computation, and this could be said either to be an interpretation of the rules given by the Tribunal or certainly a view which it holds on the particular question. Merely because its opinion differs from that of the assessee, the Tribunal's view cannot be said to be a mistake either of law or of fact. In effect what the assessee wants is a review of the Tribunal's order on this point adopting the interpretation which he would give to these provisions. This cannot be done by a rectification.
4. CIT & Am. v. ITAT & Am. where it has been held as under: The scope and ambit of an application of Section 254(2) of the IT Act, 1961, is very limited. The same is restricted to rectification of mistakes apparent from the record. Recalling the entire order, would mean passing a fresh order. That does not appear to be the legislative intent. The order passed by the Tribunal under Section 254(1) is the effective order so far as the appeal is concerned. Any order passed under Section 254(2) either allowing the amendment or refusing to amend gets merged with the original order passed. The order as amended or remaining unamended is the effective order for all practical purposes. The same continues to be an order under Section 254(1). That is the final order in the appeal. An order under Section 254(2) does not have existence de holes the order under Section 254(1). Recalling the order is not permissible under Section 254(1). Recalling the order automatically necessitates rehearing and re-adjudication of the entire subject-matter of appeal. The dispute no longer remains restricted to any mistake sought to be rectified. Power to recall an order is prescribed in terms of r. 24 of the ITAT Rules, 1963, and that too only in cases where the assessee shows that it had a reasonable cause for being absent at a time when the appeal was taken up and was decided ex parte.
4. As regards objection of the learned Counsel for the assessee that Section 147 is not applicable to the assessee in view of proviso to Section 147. This argument of the learned Counsel for the assessee is not maintainable because Section 147 is applicable in the present case in view of proviso to Section 147, since in the present case, we have upheld that income chargeable to tax has escaped assessment by reason of the failure on the part of the assessee to disclose fully and truly all material facts necessary for her assessment, for that assessment year. The next objection raised by the learned Counsel for the assessee was that the Tribunal while deciding the appeal had relied upon the decision in the case of Ess Ess Kay Engg. Co. Ltd. v. CTF (supra) for which no opportunity for rebuttal has been given to the assessee. We are of the view that the Tribunal is under no obligation to give such opportunity to the assessee while deciding an appeal. The learned Counsel for the assessee had further raised an objection that the Tribunal in para 14 of its order has mentioned that: limitation period under Section 149(1)(a) will not apply but limitation period under Section 149(1)(b) of the Act shall apply, i.e., notice under Section 148 of the Act could be issued within six years, from the end of the relevant assessment year.
5. We have perused the Tribunal order and facts of the case and we find a mistake in the order which is rectified as under: limitation period under Section 149(1)(a) will apply but limitation period under Section 149(1)(b) of the Act shall not apply. As the income chargeable to tax which has escaped assessment amounts Rs. 1,00,000 or more, the notice under Section 148 could be issued by the AO beyond four years as provided in Section 149(1)(a) of the Act.
6. Similarly wherever this mistake is there, same is rectified and para 14 for the sake of convenience is reproduced, after the rectification of mistake, as under: We have heard the rival submissions and perused the material on record. The AO vide his order dt. 28th Feb., 2001 has found the deposit of Rs. 4 lakhs and interest thereon as bogus while framing the assessment for the asst. yr. 1995-96. Now the issue before us is to adjudicate upon, whether the AO is authorized to issue notice under Section 148 for the asst. yr. 1994-95 of the Act or not on the basis of information obtained while framing assessment for the asst.
yr. 1995-96. The learned CIT(A) has quashed the assessment being barred by limitation since the assessee has disclosed fully and truly all material facts in the original assessment, whereas the AO while framing assessment of asst. yr. 1995-96 has found out the impugned deposit of Rs. 4,00,000 and interest thereon as bogus, then the assessee, in the opinion of AO, has not disclosed fully and truly all material facts necessary for his assessment for the asst.
yr. 1994-95 and income chargeable to tax for that year has been underassessed. When the assessee has not disclosed fully and truly all material facts necessary for her assessment then as per proviso to Section 147 limitation period under Section 149(1)(a) will apply but limitation period under Section 149(1)(b) of the Act shall not apply. As the income chargeable to tax which has escaped assessment amounts Rs. 1,00,000 or more, the notice under Section 148 could be issued by the AO beyond four years as provided in Section 149(1)(a) of the Act. Merely because the case of assessee was accepted as correct in the original assessment, it does not preclude the AO to reopen the assessment of an earlier year on the basis of his findings of fact on the basis of fresh materials in the course of assessment of next year. Such view has been taken by the Hon'ble Supreme Court in the case of Ess Ess Kay Engg, Co. (P) Ltd. v. CIT (2001) 166 CTR (SC) 396 : (2002) 124 Taxman 491 (SC). Therefore, the learned CIT(A) has wrongly ignored the findings by AO during the assessment of following assessment year, i.e., 1995-96 vide order dt. 28th Feb., 2001, that the deposit of Rs. 4,00,000 and interest thereon are bogus. Therefore, the notice issued by the AO under Section 148 is well within time and we reverse the order of the learned CIT(A) dt. 26th March, 2002 and direct the learned CIT(A) to decide the case on merit. Hence, this appeal of the Revenue is allowed.
7. Hence, the mistake apparent from record is rectified under Section 254(2) of the Act but the substance of the decision remains unchanged, even after the said rectification, as discussed above.
8. In the result, the miscellaneous application filed by the assessee are disposed of accordingly.