High Court Of Madhya Pradesh
CIT vs. Income Tax Appellate Tribunal & Anr.
Asst. Year 1975-76, 1976-77, 1977-78
N.D. Ojha, C.J. & K.K. Adhikari, J.
Misc. Petition No. 1395 of 1984
11th November, 1987
B.K.Rawat, for the Revenue : B.L.Nema, for the Respondents
N.D. OJHA, C.J.:
In the proceedings for assessment under the IT Act, 1961 (hereinafter referred to as “the Act”), for the asst. yrs. 1975-76, 1976-77 and 1977-78, certain amounts of cash credits shown in the books of account of the assessees, M/s Gangoomal Contractors, Phaphadih, Raipur, respondent No. 2, were added back as income of the assessee on the ground that it had failed to establish the genuineness of the cash credits in the name of Manubhai Shah. The orders passed by the ITO in this behalf were upheld on appeal by the CIT and on further appeal to the Tribunal, Nagpur by its order dt. 31st March, 1982. Subsequently, three applications were made by the assessee on 20th Jan., 1983, for rectification under s. 254(2) of the Act. The plea raised in these applications was that apart from arguing before the Tribunal at the time of hearing of the second appeal that the cash credits shown in the name of Manubhai Shah were genuine and were erroneously found not to be genuine by the authorities below, it was also argued that in any view of the matter, the amount which had been added back was excessive. According to the assessee, it was the peak amount in each of these cases which was relevant for determining the amount to be added back as also for determining the amount of interest thereon and not the entire cash credit amounts. However, the Tribunal after upholding the finding of the authorities below that the cash credit amounts mentioned in the name of Manubhai Shah were not genuine, did not consider the further question which was argued, namely, that the amount added back was excessive.
These applications were allowed by the Tribunal by order dt. 30th Nov., 1983. The Tribunal has recorded a categorical finding that the issue whether the assessee is liable for assessment on the entire cash credits or only on the peak credits, has not been considered by the Tribunal. It has been urged by learned counsel for the petitioner that the order dt. 30th Nov., 1983, passed by the Tribunal is virtually an order of review and not an order of rectification of mistake under s. 254(2) of the Act and consequently it is without jurisdiction and deserves to be quashed.
Having heard learned counsel for the parties, on the facts of the instant case, we find it difficult to agree with this submission. A perusal of the impugned order dt. 30th Nov., 1983, passed by the Tribunal indicates that in support of the applications made for rectification, an affidavit had been filed by the attorney of the assessee who had appeared in the second appeal before the Tribunal, stating that the point that the amounts added back were excessive, was also argued. It has not been stated in the writ petition that any counter affidavit or affidavit in reply was filed on behalf of the Department asserting that the said point was never argued. In this view of the matter and the law laid down in this behalf by the Supreme Court in Mehta Parikh and Co. vs. CIT (1956) 30 ITR 181 (SC), it has to be accepted that the point was argued, but was not considered by the Tribunal in its appellate order. That apart, we find that Shri P.I. Mohansingh, Judicial Member, who decided the rectification applications along with another Accountant Member, was the Judicial Member even of the Tribunal which decided the second appeal. Had it been a fact that the point aforesaid had not been urged at the time of hearing of the second appeal, the Judicial Member would have pointed out this fact. This circumstance also supports the view that the point aforesaid was argued on behalf of the assessee at the time of hearing of the second appeal, but was not considered. Sec. 254(2) of the Act, inter alia, contemplates that the Tribunal may, at any time within four years from the date of the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub-s. (1) and shall make such amendment if the mistake is brought to its notice by the assessee or the ITO. If a point which is material for determining the amount of tax is pressed and not considered, it would certainly constitute a mistake apparent from the record within the meaning of the aforesaid s. 254(2) of the Act and if on the said mistake being pointed out by the assessee, the Tribunal has, in the circumstances referred to above, amended its order, it is obviously a case of passing an order under s. 254(2) of the Act and cannot be treated to be an order of review.
It was then urged by learned counsel for the petitioner that the Tribunal, at the end of the impugned order dt. 30th Nov., 1983, made on observation that the party shall be at liberty to argue the other aspects of the matter. According to learned counsel, there was no justification for opening the entire controversy raised in the second appeals. We find it difficult to agree with this submission also. The Tribunal has very specifically stated that the finding in respect of non-genuineness of the credit in the name of Shri Manubhai Shah shall remain intact. The observation relied on by the learned counsel for the petitioner has to be read in this background. It is apparent that the Tribunal, in making the aforesaid observation, has not opened any other point for fresh decision which had already been decided in the second appeal except the point in regard to the amount of peak credit and interest thereon and it is only the relevant aspects relating to this limited point which are to be considered in pursuance of the impugned order dt. 30th Nov., 1983. Proceeding on that basis of the finding in respect of non-genuineness of the credits in the name of Manubhai Shah as final and correct, in our opinion, the impugned order does not permit any other point to be raked up in the second appeals except the limited point mentioned above.
In view of the foregoing discussion, we find no merit in this writ petition which fails and is dismissed. No order as to costs. The outstanding amount of security be refunded to the petitioner.
[Citation : 172 ITR 158]