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Income Tax Appellate Tribunal, “B’’ BENCH: BANGALORE
Before: SHRI N.V. VASUDEVAN & SHRI CHANDRA POOJARI
PER CHANDRA POOJARI, ACCOUNTANT MEMBER:
The first four appeals in to 1633 of 2018 by revenue and CO. Nos.112 to 115 of 2018 by assessee are for the assessment years 2008-09, 2009-10, 2010-11 & 2012-13 are directed against the different orders of CIT(A) for the respective assessment years. ITA No.2389 of 2018 by assessee is directed against the order of the CIT(A) dated 29.6.2018 u/s of the Income Tax Act, 1961 (hereinafter called as ‘the Act’).
The brief facts of the case are originally CIT(A)-11, Bengaluru passed order dated 26.06.2016 in all these assessment years dismissing the appeals of the assessee and uphold the order of the A.O. passed under section 143(3) r.w.s. 153A of the Act. The assessee filed appeals in respect of all these assessment years before the Tribunal in to 1581/Bang/2016 and the Tribunal vide order dated 14.07.2017 dismissed the appeals after considering the issues in all these assessment years as follows:-
“Ground Nos. 1 to 3 are regarding the violation of principle of natural justice for want of proper opportunity of hearing to the assessee.
to 1633/Bang/2018 C.O. Nos.112 to 115/Bang/2018 ITANo.2389/Bang/2018 Shri Peter Caddy, Bangalore Page 3 of 19
We have heard the learned Authorised Representative as well as learned Departmental Representative and considered the relevant material on record. The learned Authorised Representative of the assessee has submitted that the CIT (Appeals) has not granted proper opportunity of hearing before passing the impugned order. The learned Authorised Representative of the assessee has referred to the page 3 of the impugned order of the CIT (Appeals) and submitted that the CIT (Appeals) has made an observation that the assessee was not serious in prosecuting the appeal whereas the representative of the assessee appeared before the CIT (Appeals) and made representation with submissions on legal grounds and there was compliance of notice in the appeal proceedings before the CIT(Appeals).
On the other hand, the learned Departmental Representative has referred to the various notices issued by the CIT (Appeals) as given in the table at Page No.3 of the order and thereafter the ACIT was directed to serve the notice on the assessee. Thus the conduct of the assessee was clearly exhibited from the fact that the assessee refused to take notice on various pretexts. He has further contended that the assessee did not co- operate either in the assessment proceedings or before the CIT (Appeals).
Having considered the rival submissions as well as the relevant material on record, at the outset, we note that the CIT (Appeals) has given the details of the various notices on five occasions issued to the assessee which were received back with the postal remark that it was not claimed or not received by the assessee. Finally the notice of hearing was served to the assessee through Income Tax Inspector whose report was also reproduced by the CIT (Appeals). All these details and records as well as the observations of the CIT (Appeals) are given on page Nos.3 & 4 of the impugned order as under: " Before proceeding with the case, it is important to bring out the conduct of the appellant during the course of appellate proceedings. He has refused to take the notice on various pretexts which are part of record. Notices has been issued on many occasions which is presented in a tabular form as below.
to 1633/Bang/2018 C.O. Nos.112 to 115/Bang/2018 ITANo.2389/Bang/2018 Shri Peter Caddy, Bangalore Page 4 of 19
Sl.No. Date of Date of Comments of Postal Remarks issue of Hearing Authorities Notice 1. No 27.11.2015 3.12.2015 Response 2. 3.2.2016 17.2.2016 Not claimed on 4.2.2016 & 5.2.2016 3. 10.3.2016 18.3.2016 Not claimed 11.3.2016. Hence returned on 19.3.2016. 4. 7.4.2016 26.4.2016 Not claimed on 12.4.2016 & 13.4.2016. Hence returned on 20.4.2016 5. 26.4.2016 5.5.2016 Refused, hence returned on 28.4.2016
The address of the appellant was verified from the records of the Assessing Officer and it was found that there was no change in the address of the appellant. A final opportunity was given to the appellant by asking the Assessing Officer to get it served on the appellant. A notice dt.2.6.2016 was given to the Assessing Officer fixing the case for hearing on 14.06.2016. An Inspector, Mr. Haseen Taj went to the premise of the appellant and served the notice. The report given by Mr. Haseen Taj, ITI is being reproduced below:
Inspector's Report on Service of notices in the case of Mr.Peter Caddy
As directed by the Assistant Commissioner of Income Tax, Central Circle-2(1), Bengaluru, I have taken the notices of hearing issued by the Commissioner of Income Tax (Appeal)-11, Bengaluru in the case of Mr.Amit Caddy and Mr.Peter Caddy, on 03/06/2016. As the assessee was not present in the office at the time of serving. I enquired with the office receptionist, she said that Mr, Amit Caddy has not come to office from to 1633/Bang/2018 C.O. Nos.112 to 115/Bang/2018 ITANo.2389/Bang/2018 Shri Peter Caddy, Bangalore past six months as he is not keeping good health. Later she introduced one Mr.Chandru, Office Caretaker (Mob:-09980506455), who tried calling assessee, but could not reach as the mobile was switched off. Subsequently he called up to the assessee's auditor Mr.Altaf Hussain (Mob:-984505400) and letter agreed to accept the notice of hearing of Mr. Amit Caddy and Mr.Peter Caddy also, as the case was handled by the same auditor. Hence the notices were served in the office wherein Mr.Chandru, received the notices and gave the acknowledgement. The original notice with acknowledgment on it is submitted. Dated: 10/03/2016 (HASSEN TAJ) ITI Thus it is apparent that the notices issued by the CIT(Appeals) for the dates of hearing were received unserved with the reason that the assessee did not claim on four occasions and it was received on the fifth occasion. Thereafter, the notice was served through the Inspector whose report also reveals that the assessee was avoiding the notice after filing the appeals before the CIT(Appeals). Even otherwise, subsequently the learned Authorised Representative of the assessee appeared before the CIT (Appeals) on 14.6.2016 and filed written submissions which were duly reproduced by the CIT (Appeals) and after considering the submissions of the assessee the impugned orders were passed. Hence it is manifest from the record that sufficient opportunities were given by the CIT (Appeals) to the assessee but the conduct of the assessee clearly shows that the assessee was avoiding the notices and was not serious in presenting its case before the CIT (Appeals). Finally the learned Authorised Representative of the assessee appeared only when the notice was served through Inspector. Though the assessee has pointed out that a petition under Section 154 of the Act has been filed before the CIT (Appeals) for seeking a fresh opportunity and the same is stated to be pending adjudication however we do not find it appropriate to comment or express any view when the said petition is still pending under Section 154 of the Act for adjudication. Accordingly, we do not find any substance or merit in these grounds raised by the assessee rather we concur with the view of the CIT(A) that the assessee’s conduct was to avoid the proceedings and to delay the adjudication of the appeals.
Ground Nos.4 to 6 are regarding validity of proceedings initiated under Section 153A of the Act. to 1633/Bang/2018 C.O. Nos.112 to 115/Bang/2018 ITANo.2389/Bang/2018 Shri Peter Caddy, Bangalore
A search and seizure operation under Section 132 of the Act was conducted in case of M M Prasanna Kumar on 6.2.2012. The assessee was also covered by the said search conducted under Section 132. During the course of search the case of the assessee was centralized and sent to DCIT, Central Circle, Bangalore vide order of CIT dt.17.5.2012 to facilitate effective co-ordination in this connection. Accordingly, Notice under Section 153A of the Act dt.28.8.2012 issued and served on the assessee by the DCIT, Central Circle 2(1), Bangalore calling for return of income. In response to the Notice under Section 153A, the assessee filed his return of income and copies of returns of income earlier filed. The Assessing Officer consequently completed assessment under Section 143(3) r.w.s 153A of the Act and made the addition on account of unexplained investment on the basis of MOU between Mr. Shanta Kumar (vendor) and the assessee along with Mr. Cherian Abraham (purchaser) which was found and seized during the course of search under Section 132 of the Act. The said MOU was seized vide Annexure A/PC-1/5. Except for the Assessment Year 2007- 08, the additions are made by the Assessing Officer on the basis of seized document for all other assessments. The assessee challenged the action of the Assessing Officer before the CIT (Appeals) and raised the issue of validity of proceedings under Section 153A of the Act. The CIT (Appeals) did not accept the contention of the assessee and rejected the said ground of validity of proceedings under Section 153A of the Act.
9. Before us, the learned Authorised Representative of the assessee has submitted that there was no incriminating document found during the search under Section 132, therefore the proceedings under Section 153A cannot be initiated. Further the learned Authorised Representative of the assessee has submitted that the search was conducted in the case of one Sri M M Prasanna Kumar and there is no satisfaction recorded by the Assessing Officer before issuing the Notice under Section 153C / 153A of the Act. Therefore she has contended that the proceedings initiated under section 153A are misconceived as the assessee’s case does not fall under the purview of Section 153A of the Act. She has further pointed out that the Assessing. Officer has stated in the assessment order that search and seizure operation under Section 132 of the Act was conducted in the case of Shri M M Prasanna Kumar and therefore in the absence of search in the case of the assessee the proceedings under Section 153A are not valid. Further the proceedings under Section 153C are also not valid for want of satisfaction recorded by the Assessing Officer having jurisdiction of the searched person and further by the Assessing Officer having to 1633/Bang/2018 C.O. Nos.112 to 115/Bang/2018 ITANo.2389/Bang/2018 Shri Peter Caddy, Bangalore jurisdiction over the assessee. The learned Authorised Representative of the assessee has referred to the CBDT Circular No.24 of 2015 dt.31.12.2015 and submitted that the Assessing Officer cannot invoke the provisions of Section 153C in the absence of satisfaction as contemplated and there is no material brought out in the assessment order to show that the proceedings are validly initiated in accordance with the CBDT Circular Dt.31.12.2015. In support of her contention, the learned Authorised Representative has relied upon the decision of Delhi Tribunal in the case of ACIT Vs. PACL India Limited t.30/CCH 516 (Delhi-Trib). The learned Authorised Representative has also relied upon the decision of the Hon'ble jurisdictional High Court in the case of CIT Vs. Lancy Constructions 237 Taxman 728 and submitted that no addition can be made in the proceedings under Section 153A/153C when there is no incriminating material found during the search.
On the other hand, the learned Departmental Representative has submitted that the Assessing Officer has duly recorded in the assessment order that MOU as well as other incriminating documents were found during the search. Further during the enquiry the other partner of the assessee in the purchase transaction denied the signature on the MOU therefore, the payment for purchase of the land/properties were made by the assessee. He has further contended that when the various incriminating documents were found and seized during the search disclosing the income in the hand of the assessee then it was the burden on the assessee to prove on record that the payment for purchase of the properties under these seized documents were not made by the assessee but by somebody else. In the absence of such material, record or fact brought on record, the document found during the search remain uncontroverted and therefore the Assessing Officer has established the case that undisclosed income in the hand of the assessee was disclosed by the seized material found during the search. He has relied upon the orders of the authorities below.
We have considered the rival submissions as well as the relevant material on record. The assessee is challenging the proceedings initiated under Section 153A on two grounds. Firstly, the search and seizure action was not conducted in the case of the assessee and therefore in the absence of satisfaction recorded by the Assessing Officer in the proceedings under Section 153A/153C are not valid. Secondly, the assessee challenged the validity of the to 1633/Bang/2018 C.O. Nos.112 to 115/Bang/2018 ITANo.2389/Bang/2018 Shri Peter Caddy, Bangalore proceedings on the ground that no incriminating material belonging to the assessee was found during the search and seizure action.
As regards the first contention of the assessee that the search was not conducted in the case of the assessee, we find that the CIT (Appeals) has verified this fact from the Assessing Officer and after considering the reply of the Assessing Officer vide letter dt.20.06.2016 found that as per the order sheet dt.22.8.2012 a search under Section 132 was initiated in the case of the assessee at the premises No.859,4th A Cross, 11th Main, Koramangala, Bangalore-560 034. The learned Authorised Representative of the assessee has not disputed this fact recorded by the CIT (Appeals) that the search was conducted at the premises of the assessee at the given address. Thus, it is clear the search was conducted in the case of the assessee as well as other persons covered under search. We further note that the assessee did not raise any objection on this point during the assessment proceedings and in response to the notice issued by the Assessing Officer filed the return of income or copies of the return of income earlier filed. Thus, the assessee allowed the Assessing Officer to complete the assessment under Section 153A r.w.s. 143(3) and thereafter raised this objection before the CIT (Appeals). Once the fact of the initiation / conduct of search under Section 132 at the premises of the assessee is not disputed then we do not find any substance or merit in this objection of the assessee.
Therefore, once search was conducted in the case of the assessee then the second contention of the assessee has no leg to stand as for initiating the proceedings under section 153A because there is no requirement of recording any satisfaction or incriminating seized material. As per the provisions of Section 132 r.w.s. 153A once a search and seizure action is carried out, the Assessing Officer is bound to issue Notice to the assessee to furnish returns for each assessment year falling within the six assessment years immediately preceding the assessment year relevant to the previous year in which the search or requisition was made. Therefore the Assessing Officer is empowered to assess or reassess the total income of these six years. For the year the assessment was already completed on the date of search the income has to be reassessed under Section 153A whereas, the assessment pending on the date of search shall abate and the assessment under Section 153A will be considered as a regular assessment. Hence for initiating the proceedings under Section to 1633/Bang/2018 C.O. Nos.112 to 115/Bang/2018 ITANo.2389/Bang/2018 Shri Peter Caddy, Bangalore 153A the only requirement is a search and seizure action under Section 132 of the Act conducted in the case of the assessee. The seizure of incriminating material is not at all relevant so far as the initiation of proceedings under Section 153A are concerned. However in the case of reassessment of those assessment whether the assessment was already completed on the date of 'search .the Assessing Officer cannot reassess the income by making any addition as assessed in the original assessment without any incriminating material found during the search which unearth undisclosed income of the assessee. Hence the relevance of the incriminating material is only for reassessment framed under Section 153A in respect of those assessment years which were already completed on the date of search. As far as the assessment under Section 153A in respect of the year(supra)) the assessment got abated due to the search and seizure action under Section 132, the proceedings under Section 153A would be in the nature of regular assessment and therefore the existence of incriminating material is not at all relevant.
In the case before us, the Assessing Officer has clearly recorded in the assessment order that an MOU dt.18.01.2008 was found and seized which reveals that the assessee along with one Mr. Cherian Abraham purchased the property from Mr. Shanta Kumar for a consideration of Rs.8,75,00,000. Out of which a sum of Rs.2,75,00,000 was paid at the time of MOU. Therefore, the Assessing Officer has considered the said amount of Rs.2,75,00,000 as unexplained investment of the assessee for the assessment year 2008- 09. The assessee has not disputed the signing of the said MOU and the payment of Rs.2.75 Crores at the time of MOU. However the assessee claimed before the Assessing Officer that the entire payment was made by another partner Shri Cherian Abraham and not by him. The Assessing Officer recorded the statement of Shri Cherian Abraham who has even refused his signature to the MOU and therefore the claim of the assessee that payments were made by Shri Cherian Abraham was patently denied by the said person. Since the document was found at the premises of the assessee therefore, the Assessing Officer considered the entire investment by the assessee and accordingly made the addition. In view of the above fact when the MOU is not in dispute then the claim and stand of the assessee fall flat that there was no incriminating document found or seized during the search.
Similarly, in other assessment years, the Assessing Officer has made the addition on the basis of the seized documents therefore, to 1633/Bang/2018 C.O. Nos.112 to 115/Bang/2018 ITANo.2389/Bang/2018 Shri Peter Caddy, Bangalore we do not find any substance in the contention of the assessee against the validity of initiation of proceedings under section 153A on the ground that no incriminating material found during the course of search and seizure action. The initiation of proceedings under section 153A is mandatory once a search and seizure action is carried out under Section 132 and therefore even if there is no incriminating material found during the search to indicate any undisclosed income or income escaped assessment the Assessing Officer is bound to proceed under Section 153A for all six years. The only difference is that those assessment years which are falling in the category of reassessment due to the reason that the assessment was already completed on the date of initiation of search under Section 132 of the Act the incriminating material is required for making addition / reassessment. The decisions relied upon by the assessee are all on the point that the Assessing Officer cannot make an addition in the reassessment proceedings under Section 153A / 153C of the Act in the absence of incriminating material disclosing the income in the hand of the assessee. Therefore, those decisions are not relevant on the point of validity of initiation of proceedings under Section 153A of the Act. Hence, we do not find any error or illegality in the action of the Assessing Officer in initiating the proceedings under Section 153A and consequently we uphold the impugned order of CIT(Appeals) qua this issue.
Ground Nos.7 to 12 are regarding the additions/reassessments made by the Assessing Officer.
We have heard the learned Authorised Representative as well as learned Departmental Representative and considered the relevant material on record. The only submission made before us on behalf of the assessee is that the assessee was not given a proper opportunity by the CIT (Appeals) to present the case and made the submission on the merits of the issue. The CIT (Appeals) has considered only the submissions made by the assessee on the legal objection. It was also contended that the assessee sought another opportunity of presenting the case on merits which was not granted by the CIT (Appeals). Therefore, the assessee filed a petition under Section 154 of the Act which is pending adjudication before the CIT (Appeals).
On the other hand, the learned Departmental Representative has relied upon the orders of the authorities below and submitted that the assessee’s conduct was non-co-operative during the assessment to 1633/Bang/2018 C.O. Nos.112 to 115/Bang/2018 ITANo.2389/Bang/2018 Shri Peter Caddy, Bangalore proceedings as well as the proceedings before the CIT(A). It is apparent from the record that despite the sufficient opportunities the assessee did not respond to the notices issued by the CIT (Appeals). The Assessing Officer has also recorded in the assessment order that the assessee did not file the requisite record for examination of the Assessing Officer. Hence the assessee itself was avoiding proceedings before the authorities below with the motive to delay the proceedings.
We have considered the rival submissions as well as the relevant material on record. We have earlier considered this point while dealing with the Ground Nos.1 to 3 and found that the CIT (Appears) granted more than sufficient opportunities to the assessee however the conduct of the assessee is manifest from the fact that on five occasions the assessee avoided the service of the notices issued by the CIT (Appeals) by not claiming as well as refusing the same. Finally, the notice was effected through the Income Tax Inspector who has also given its report that the assessee even refuse to give the acknowledgement of the service of the notice. Therefore, in view of the fact that the assessee's conduct was non-co-operative and causing delay in the proceedings the assessee has failed to make out the cause that there was a violation of principle of natural justice. Apart from seeking one more opportunity of being heard before the CIT(A), the assessee has not produced before us any material, record or facts to controvert the findings of the Assessing Officer on merits of the addition except a copy of MOU dt. 7.11.2011 which was not either claimed or filed before the authorities below. Even otherwise when the assessee has already filed a petition under section 154 which is pending adjudication then it is up to the wisdom of the CIT(Appeals) to consider the plea of the assessee as made in the petition filed under section 154. We make it clear that our observation in the present order shall have no bearing on the petition filed by the assessee under section 154 of the Act.
So far as the Assessment year 2007-08 is concerned, since there is no addition by the Assessing Officer therefore there is no grievance of the assessee on merits. 21. In the result, the appeals of the assessee are dismissed.”
3. In the meanwhile the petition filed by the assessee u/s 154 of the Act were pending before the CIT(A), he disposed of the petition filed u/s 154 of the act for these assessment years by deleting the to 1633/Bang/2018 C.O. Nos.112 to 115/Bang/2018 ITANo.2389/Bang/2018 Shri Peter Caddy, Bangalore additions made by A.O. in assessment years 2008-09, 2009-10, 2010-11 & 2012-13. Against this the revenue is in appeal before us by way of following grounds and there is only change in figures in respect of each assessment year:
1. In the facts and circumstances of the case, order passed by the CIT(A) u/s 154 of the IT Act is beyond jurisdiction as the CIT(A) has resorted to review of the earlier appellate order in the garb of rectification.
2. In the facts and circumstances of the case, the CIT(A) exceeded his jurisdiction by deciding the issues relating to additions made in assessment order despite the fact that the appeal filed by the assessee against the earlier appellate order upholding the additions had been already dismissed by the ITAT vide order dated 14/07/2017.
3. In the facts and circumstances of the case, the CIT(A) erred in admitting the Misc. Petition filed u/s 154 by the assessee ignoring the fact that there is no mistake apparent from the record as the earlier CIT(A) had fully applied his mind and had passed speaking order considering all the facts and circumstances of the case which remained unchanged even at the time of disposing of 154 petition.
4. In the facts and circumstances of the case, the CIT(A) erred in ignoring the fact that the contents of MOU were also examined by the earlier CIT(A) in his order dated 25/06/2016 and as such there was no mistake apparent from the record and hence order passed u/s 154 rws 250(1) by the CIT(A) amounts to re- adjudication.
4. Assessee filed C.O. for the assessment years 2008-09, 2009- 10, 2010-11 & 2012-13 supporting order of CIT(A) by way of common grounds as follows: to 1633/Bang/2018 C.O. Nos.112 to 115/Bang/2018 ITANo.2389/Bang/2018 Shri Peter Caddy, Bangalore Page 13 of 19
On the facts and circumstances of the case, the order of the CIT(A) passed u/s 154 of the Act is correct and the same does not require any interference.
2. The Ld. CIT(A) had considered the plea made by the Respondent and also submissions and evidence furnished, appreciated that the impugned additions were uncalled for. Thus, the additions were deleted as per the material available on the record and no interference is called for.
3. The learned CIT(A) has appreciated that the transactions were genuine and the MOU filed was also examined and which were fully supported by documents and financial transactions and accordingly, he accepted the explanation offered by the Respondent and evidence provided by the respondent and deleted the impugned addition.
4. The Ld. CIT(A) appreciated that the investment was made amounting to Rs.2,75,00,000/- by Mr. Cheriyan and not by the respondent after considering the all the documentary evidences filed by the respondent.
5. Without prejudice, the addition made by the A.O. is uncalled for and the opportunity to cross-examine of Mr. Cherian was not given to the respondent. Accordingly, the CIT(A) has rightly deleted the addition.
6. For these and other grounds that may be urged at the time of hearing of the appeal the appellant prays that the appeal may be allowed.”
5. Further, CIT(A) in assessment year 2012-13 suo-moto recalled his earlier order dated 29.12.2017 by his order dated 29.6.2018 by observing that he had made a mistake in going through the binding order of the Tribunal dated 14.7.2017. Accordingly, he confirmed the additions made by A.O. in his order for assessment year 2012-13 vide order dated 29.6.2018. Against this assessee once again filed appeal before us. Since this issue in all the appeals are common in nature, we heard all these appeals collectively and disposed of these appeals by way of this common order. to 1633/Bang/2018 C.O. Nos.112 to 115/Bang/2018 ITANo.2389/Bang/2018 Shri Peter Caddy, Bangalore
6. The contention of the Ld. D.R. is that assessee in earlier occasion came with an appeal before this Tribunal. The Tribunal vide order dated 14.7.2017 decided the issue both on legally and on merit of the additions against the assessee. At that point of time, the assessee’s petition filed u/s 154 of the Act was pending before CIT(A). The ld. CIT(A) ought not to have entertained such application under the provision of section 154 of the Act as there was no error in his earlier order so as to rectify the same. According to the Ld D.R., the CIT(A) on earlier occasion rightly dealt all the issues and decided the same against the assessee. Now considering the same issue by CIT(A) in the proceedings u/s 154 of the Act which amount to review of earlier order of his own, which is not permitted under provisions of section 154 of the Act. He submitted that there is no error, which prima facie on the record so as to rectify the same.
7. On the other hand, Ld. A.R. submitted that there was a pending petition filed u/s 154 of the Act before CIT(A) at the time of adjudication of the appeals by Tribunal vide order dated 14.7.2017. This was clearly brought to the notice of the Tribunal at the time of hearing of the appeals by the Tribunal and the Tribunal rightly observed in its order in para 19 at page 21 as follows: “Even otherwise when the assessee has already filed a petition under section 154 which is pending adjudication then it is up to the wisdom of the CIT(A) to consider the plea of the assessee as made in the petition filed under section 154. We make it clear that our observation in the present order shall have no bearing on the petition filed by the assessee under section 154 of the Act.” 8. Further, it was submitted that the CIT(A) not committed any error in entertaining the claim of the assessee by way of proceedings u/s 154 of the Act. Since earlier order of the CIT(A) is ex-parte to 1633/Bang/2018 C.O. Nos.112 to 115/Bang/2018 ITANo.2389/Bang/2018 Shri Peter Caddy, Bangalore without giving any opportunity of hearing to the assessee, Act in all these assessment years. She supported the order of CIT(A).
We have heard the parties, perused the materials available on record and gone through the orders of the authorities below. In these assessment years, the assessment taken up by assessing officer consequent to search action u/s 132 of the Act in the case of M.M. Prasanna Kumara and Others on 6.2.2012. The assessee also covered u/s 132 r.w.s. 153A of the Act. Consequent to search action, a notice was issued u/s 153A of the Act and assessments were completed u/s 143(3) r.w.s. 153A of the Act, wherein the A.O. made the addition as follows: Substantive Head Amount (Rs.) assessment year 2008-09 Unexplained investment Rs.2.75 crores 2009-10 Unexplained investment Rs.6.90 crores 2010-11 Unexplained investment Rs.5.59 crores 2012-13 Unexplained investment Rs.12.10 crores
10. The assessee challenged the merit of the additions and also validity of the assessment passed u/s 153A of the Act before CIT(A). Before CIT(A) the assessee has not cooperated and as such the CIT(A) decided the issue against the assessee both validity of the assessment u/s 153A of the Act as well as merit of the additions and sustained the order of the A.O. Once again the assessee went in appeal before the Tribunal. The Tribunal also upheld the order of the lower authorities vide order cited (supra). In the first round at the time of hearing before the Tribunal, the assessee made a point that the assessee’s petition filed u/s 154 of the Act in these assessment years were pending before the CIT(A). The Tribunal observed that observations of the Tribunal shall not have any bearing in deciding the pending petitions filed by assessee u/s 154 of the Act. In the to 1633/Bang/2018 C.O. Nos.112 to 115/Bang/2018 ITANo.2389/Bang/2018 Shri Peter Caddy, Bangalore meanwhile, the CIT(A) in all these assessment years decided the petition filed u/s 154 of the Act in favour of the assessee deleting addition made towards unexplained investment in all the assessment years i.e. 2008-09, 200910, 2010-11 & 2012-13. However, the CIT(A) once again recalled his own order for assessment year 2012-13 vide order dated 29.6.2018 stating that there was inadvertent error in considering the finding of the Tribunal in passing the earlier order dated 29.12.2017 for A.Y. 2012-13. Now the contention of the Ld. D.R. is that the CIT(A) has no power u/s 154 of the Act so as to recall the his own order for all these assessment years u/s 154 of the Act and he relied on the judgement of Hon’ble Supreme Court in the case of CIT Vs. Hero Cycles Pvt. Ltd. 228 ITR 463 and also Mepco Industries Ltd. Vs. CIT 319 ITR 409 (SC) and in the case of T.S. Balaram, ITO Vs. Volkart Brothers 82 ITR 50 (SC) and also order of the Tribunal in the case of Chandigarh bench in dated 8.11.2011 in the case of Shri Harinder Singh Vs. ITO.
11. After going through the facts and circumstances of the case, we are of the opinion that the CIT(A) on earlier occasion in first round taken into all the relevant facts and considered the argument of the assessee and came to the conclusion that there was no necessity of interference into the order of the A.O. in all these assessment years and rejected the claim of the assessee. This was also confirmed by the Tribunal in its order dated 14.7.2017 in para 19 in page 21 observing that assessee apart from seeking one more opportunity of being heard before CIT(A), it has not produced any material, record or facts to controvert the finding of the A.O. on merits of the addition except the copy of the MOU dated 7.11.2011 which was not either claimed or filed before the authorities below. In such circumstances, to 1633/Bang/2018 C.O. Nos.112 to 115/Bang/2018 ITANo.2389/Bang/2018 Shri Peter Caddy, Bangalore the CIT(A) not justified in allowing the claim of the assessee in deleting the addition made by A.O. towards unexplained investment in these assessment years under the provisions of section 154 of the Act. In view of this finding, it is observed that the merit of the additions made by the A.O. was rejected by the Tribunal by a finding that there was no sufficient evidence to support the claim of the assessee. Merely CIT(A)/Tribunal not allowed the claim of the assessee on merit and in the opinion of the assessee it was wrong, that will not entail the assessee to form a ground and adjudicate before the CIT(A) by himself of proceedings u/s 154 of the Act. Unless it can be said that there is a blatant and apparent mistake that has crept in the order of the CIT(A), purely based on material facts on record. In the garb of proceedings u/s 154 of the Act, it was not open to the assessee to seek reopening of the order of the CIT(A) by re- arguing whole matter on merit. Unless there is a manifest error which is obvious, clear and evident, the provisions u/s 154 of the Act cannot be resorted to. What can be rectified u/s 154 of the Act is a mistake, which is apparent and blatant. The mistake has to be such for which no elaborate reasons or enquiry is necessary. What is not permitted to be done by the statute having been deliberately omitted to confer review jurisdiction on the CIT(A), cannot be indirectly achieved by recourse to rectification proceedings contains in section 154 of the Act. When error was far from self-evident it ceases to be apparent error. The so called inaccuracies or wrong recording of the facts as alleged were not blatant mistakes which constitute sina-qua- non for exercise of power u/s 154 of the Act by CIT(A). Further, it is seen that the powers conferred by the statute u/s 154 of the Act on the CIT(A) are very limited and are circumscribed by the restrictions mentioned therein. In the case on hand, on earlier occasion, the to 1633/Bang/2018 C.O. Nos.112 to 115/Bang/2018 ITANo.2389/Bang/2018 Shri Peter Caddy, Bangalore CIT(A) has passed his order purely based on facts and material produced before us which alone forms basis for the CIT(A) to decide the issue, where the decision of the CIT(A) is right or wrong is a different issue which cannot be adjudicated by way of proceedings u/s 154 of the Act. However, the facts remain that the CIT(A) after duly considering all aspects and applying his mind, has taken conclusive and conscious view though in the opinion of the assessee is wrong, cannot be said to be mistake apparent from record since the said view has been arrived at after due application of mind to the facts and circumstances of the case and the relevant material on record. More so, the view of the CIT(A) was confirmed by the Tribunal vide their order dated 14.7.2017.
12. Further, it is well settled that a mistake apparent on record must be an obvious and blatant mistake and not something which could be arrived by a long drawn process of reasoning on accounts on which there may be conceivably two opinions. In the present case, the CIT(A) have categorically decided the issue against the assessee in first round that also confirmed by the Tribunal after considering the materials available on record and applying the mind such finding of the CIT(A) cannot be challenged by way of proceedings u/s 154 of the Act. Entertaining the application filed by assessee u/s 154 of the Act would only amounting to review of the earlier order of the CIT(A) for which the CIT(A) has no power as discussed earlier. In case the assessee is aggrieved against the decision of the CIT(A), the remedy de-facto does not allow by way of proceedings u/s 154 of the Act before CIT(A) to readdress the grievance of the assessee but elsewhere. In view of the above discussion, we are of the opinion that there is no mistake apparent on record in the order of the CIT(A) which can be legally rectified by way of proceedings u/s 154 of the to 1633/Bang/2018 C.O. Nos.112 to 115/Bang/2018 ITANo.2389/Bang/2018 Shri Peter Caddy, Bangalore Page 19 of 19 Act by the assessee. Therefore, we are unable to agree with the finding of the CIT(A) in his proceedings u/s 154 of the Act in all the A.Ys. The grounds raised
by revenue in to 1633/Bang/2018 are allowed.
13. In the result, all the appeals filed by the revenue in ITA Nos.1630 to 1633/Bang/2018 are allowed. Since we have allowed the appeals of the revenue, the COs filed by the assessee in C.O. Nos.112 to 115/Bang/2018 are dismissed as infructuous. The appeal filed by assessee in 2012-13 in ITA No.1633/Bang/2018 on same issue. Order pronounced in the open court on 3rd Mar, 2021 Sd/- Sd/- (N.V. Vasudevan) (Chandra Poojari) Vice President Accountant Member Bangalore, Dated 3rd Mar, 2021. VG/SPS Copy to: