M/S Everest Education Society v. Assistant Commissioner Of Income Tax,Exemption Circle, Aurangabad

1 RA / 24 / 2024 IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD REVIEW APPLICATION NO. 24 OF 2024 INIINCOME TAX APPEAL NO. 7 OF 2023 M/s Everest Education Society,C/o Seema Nursing Home,Roshan Gate, Aurangabad – 431 001PAN :- AAATE2231P.. Applicant (Orig. Appellant) Versus Assistant Commissioner of Income Tax,Exemption Circle, Aurangabad.. Respondent (Orig. Respondent) ... Advocate for applicant : Mr. Mahesh S. Deshmukh along with Mr. Shailendra S. Gangakhedkar i/b. Mr. S.S. KaziStanding Counsel for the respondent : Mr. Alok Sharma ... CORAM : MANGESH S. PATIL & SHAILESH P. BRAHME, JJ. DATE : 24 APRIL 2024 ORDER (MANGESH S. PATIL, J.) : This is an application purportedly under section 114 of the Code of Civil Procedure by the assessee, which is a trust and theoriginal appellant, seeking review of the order passed by this Court inits Income Tax Appeal no. 7 of 2023 preferred under section 260-A ofthe Income tax Act, 1961 (the Act). 2.It is necessary to note that though the learned advocate Mr. Sharma for the respondent – revenue initially raised objection as tothe maintainability of application for review, with a common 2 RA / 24 / 2024 understanding we have heard the review application in its entirety andare passing the order. 3.Shortly stated, the facts leading to the filing of this reviewapplication are to the effect that the applicant is a trust engaged inrunning educational institutions. The assessment officer served it anotice under section 143(2) of the Act on 03-02-2014. On enquiry, heconcluded that it had received the donations from 7145 donors to thetune in aggregate of Rs.2,89,20,995/- and reached a conclusion thatthose donations were anonymous, under section 115 BBC of the Act.The applicant challenged that decision before the Commissioner ofIncome Tax (Appeal) in a statutory appeal which modified the decisionand held that the donations only to the tune of Rs.82,600/- wereanonymous. The Revenue challenged that order before the ITAT.Even the applicant preferred an appeal, however, it was beyondlimitation and requested for condoning the delay. By a common order,the ITAT refused to condone the delay in preferring appeal by theapplicant and allowed Revenue’s appeal and restored the findings ofthe Assessment Officer. By the order under review, we dismissed theapplicant’s appeal preferred under section 260-A of the Act. 4.The reasoning resorted to by us while dismissing theapplicant’s appeal was on the ground that this Court had inherentlimitations while deciding the appeal preferred under section 260-A of 3 RA / 24 / 2024 the Act. The exemption being claimed by the application under section11 of the Act was not a pure question of law which alone could havebeen gone into in the appeal. By virtue of section 68 of the Act readwith Rule 46A of the Income Tax Rules, 1962, the onus was on theapplicant to satisfy that the donations received by it were notanonymous. It had failed to discharge the onus. It had not even filedany return. Only an attempt was made to furnish some record.Exercise of verifying genuineness by sample check was resorted to.Except few, the donors could not be identified. 3 RA / 24 / 2024 the Act. The exemption being claimed by the application under section11 of the Act was not a pure question of law which alone could havebeen gone into in the appeal. By virtue of section 68 of the Act readwith Rule 46A of the Income Tax Rules, 1962, the onus was on theapplicant to satisfy that the donations received by it were notanonymous. It had failed to discharge the onus. It had not even filedany return. Only an attempt was made to furnish some record.Exercise of verifying genuineness by sample check was resorted to.Except few, the donors could not be identified. 5.We had also observed that in the light of section 133(6) ofthe Act, donors’ list was produced before the CIT (A) in the appealunder the pretext that the first list produced by it was erroneous, still,enquiry was undertaken by resorting to sample check to identify thedonors. Identity of the donors could not be established. Eight donorsflatly denied to have paid any donation. Notices / letters sent to manyof the donors from the list furnished by the applicant under section133(6) had returned unserved with the remarks ‘address not found’,‘insufficient address’, ‘addressee left’. Consequently, we held that thedecision of the ITAT of holding the conclusion drawn by theAssessment Officer being plausible, no substantial question of law wasbeing raised and the appeal was dismissed. 4 RA / 24 / 2024 6.The learned advocate Mr. Deshmukh for the applicantwould submit that the applicant was entitled to derive the benefit ofcircular issued by the Central Board of Direct Taxes (CBDT) as hasbeen held in the matter of Navnit Lal C. Zaveri V. K.K. Sen; AIR 1965SC 1375 and C. B. Gautam V. Union of India; 1993(1) SCC 78 andUCO Bank Calcutta Vs. Commissioner of Income Tax; 1999 (4)SCC 599.He submits that in view of circular no. 10 and 13 of 2013issued by the CBDT, no notice issued under section 143 (2) could havebeen issued. 7.Section 68 of the Act was not applicable since theapplicant had disclosed the income from donation. The applicant is acharitable institution registered under section 12A of the Act but the factwas overlooked. The notice issued to the applicant under section142(1) of the Act was premature since the period for filing the returnwas still to get over. Subsequently, return was also filed on 09-11-2013accompanied by all the relevant documents. Verification in respect ofall the 7145 donors was not undertaken. Though the list of donors wasproduced, it was produced by the employees in the absence of thechairman. There was no intention or deliberate attempt to mislead theRevenue. The list was prepared by the clerk without verification fromthe original record but the Assessment Officer had failed to appreciatethe fact and passed the order on 27-03-2014 ignoring that there is no 5 RA / 24 / 2024 provision obligating the applicant to maintain record regarding identityof donors. Affidavits of a trustee and a clerk were also filed ascontemplated under Rule 46-A to clarify the error in preparing the list. 8.While the appeal was pending before the CIT (A), therewere as many as 770 notarized affidavits and still erroneously, doubtwas raised about the identity. It was a plausible explanation but thisCourt had overlooked all these circumstances. The CIT (A) after duescrutiny of the affidavits and after summoning the two other witnessesfrom the trust under section 131 of the Act had correctly observed thatthe first list produced by the clerk was an error and accordingly, theonus was discharged by the applicant, still, a perverse finding wasrecorded by the ITAT. provision obligating the applicant to maintain record regarding identityof donors. Affidavits of a trustee and a clerk were also filed ascontemplated under Rule 46-A to clarify the error in preparing the list. 8.While the appeal was pending before the CIT (A), therewere as many as 770 notarized affidavits and still erroneously, doubtwas raised about the identity. It was a plausible explanation but thisCourt had overlooked all these circumstances. The CIT (A) after duescrutiny of the affidavits and after summoning the two other witnessesfrom the trust under section 131 of the Act had correctly observed thatthe first list produced by the clerk was an error and accordingly, theonus was discharged by the applicant, still, a perverse finding wasrecorded by the ITAT. 9.Learned advocate Mr. Deshmukh would further submit thatthe appeal before the ITAT by the Revenue itself was not maintainableas the appeal decided by the CIT (A) was in respect of remand report.Even this aspect was not considered by this Court, as has been held inthe matter of Jivatlal Purtapshi Vs. CIT; [1967] 65 ITR 261 (Bom) andB. Jayalakshmi Vs. Assistant Commissioner of Income Tax; 2018Online Mad 13746. 10.Learned advocate would submit that observations inparagraph no. 13 and 15 of the order under review are contrary to the 6 RA / 24 / 2024 record. He would submit that the applicant had disclosed thedonations together with the list and merely because it was not acomplete list of donors, should not have necessarily been resorted todraw inference that it was trying to introduce unaccounted money. 11.Apart from these submissions touching to the facts,learned advocate Mr. Deshmukh for the applicant would submit that inthe light of observations of the Supreme Court in the matter ofCommissioner of Income Tax, Guwahati-I V. Meghalaya SteelsLtd.; (2015) 17 SCC 647 and Commissioner of Income Tax, PanajiV. Automobile Corporation of Goa Limited; (2017) 11 SCC 315, thisCourt has the power to undertake review in respect of the order passedin an appeal under section 260-A of the Act. 12.Learned advocate Mr. Deshmukh would further rely upon following decisions to substantiate his arguments: i) Director of Income Tax V. Keshav Social and Charitablefoundation; 2005 SCC OnLine Del 1487,foundation; 2005 SCC OnLine Del 1487, ii) Director of Income Tax V. Hans Raj Samarak Society; 2012 SCCOnLine Del 4916,OnLine Del 4916, iii) Commissioner of Income-Tax and another Vs. MBA NahataCharitble Trust; 2014 SCC OnLine Kar 12351.Charitble Trust; 2014 SCC OnLine Kar 12351. 13.Per Contra, learned advocate Mr. Sharma for the revenuewould raise a preliminary objection regarding maintainability of theapplication for review. He would submit that review is a statutorypower and cannot be assumed to inhere in this Court. There is no 7 RA / 24 / 2024 provision in the Act conferring such power. Even if the High Court is acourt of record, it can merely correct its mistake or error which powerwould be independent and referable to Article 215 of the Constitution ofIndia and in the absence of any statutory provision, this court cannotundertake review. iii) Commissioner of Income-Tax and another Vs. MBA NahataCharitble Trust; 2014 SCC OnLine Kar 12351.Charitble Trust; 2014 SCC OnLine Kar 12351. 13.Per Contra, learned advocate Mr. Sharma for the revenuewould raise a preliminary objection regarding maintainability of theapplication for review. He would submit that review is a statutorypower and cannot be assumed to inhere in this Court. There is no 7 RA / 24 / 2024 provision in the Act conferring such power. Even if the High Court is acourt of record, it can merely correct its mistake or error which powerwould be independent and referable to Article 215 of the Constitution ofIndia and in the absence of any statutory provision, this court cannotundertake review. 14.As far as the merits of the review application areconcerned, Mr. Sharma would submit that this Court can undertakereview only within the parameters laid down by the catena of decisions.Appeal cannot be heard again under the guise of review application.There is no error apparent on the face of the record. Though asubmission was made on behalf of the Revenue that circular no. 10and 13 of CBDT would not be applicable to the fact situation of thematter in hand, this Court had not recorded any finding thereon. ThisCourt had merely demonstrated as to how the observations of the ITATwere plausible, inasmuch as there was no authenticity of the donors.No authentic record was produced. Even the list of donors waschanged and burden was not discharged by the applicant. Since theapplicant’s appeal was decided by this Court by pointing out as to howno substantial question of law was arising, there is no error much lessapparent on the face of the record. Applicant cannot be allowed to putup a challenge to the order as if review jurisdiction can be exercised fordeciding the matter afresh. The submissions made on behalf of the 8 RA / 24 / 2024 applicant would require this Court to undertake a re-hearing of theappeal which cannot be allowed. 15.Mr. Sharma would also endeavour to demonstrate as tohow the CBDT circulars no. 10 and 13 are not applicable to theapplicant’s case even on facts. 16.As far as maintainability of the review application isconcerned, in our considered view, the decision of the Supreme Courtin the matter of Meghalaya Steel and Automobile Corporation ofGoa (supra) needs to be followed wherein it has been expressly laiddown that by virtue of the High Court being a Court of record, in view ofArticle 215 and 226 of the Constitution of India, it will have inherentpower and jurisdiction to undertake a review in the light of sub-section7 of section 260-A of the Act. 17.So far as the merits of the review application areconcerned, a bare look at the submissions of the learned advocate forthe applicant incorporated herein-above, which we have deliberatelydone, would demonstrate that all the submissions are befitting thearguments in the appeal against the order under review rather than anendeavour to point out any error apparent on the face of the record.The argument is targeted in demonstrating as to how the appeal hasbeen wrongly decided, which is not the purport of review jurisdiction. 9 RA / 24 / 2024 17.So far as the merits of the review application areconcerned, a bare look at the submissions of the learned advocate forthe applicant incorporated herein-above, which we have deliberatelydone, would demonstrate that all the submissions are befitting thearguments in the appeal against the order under review rather than anendeavour to point out any error apparent on the face of the record.The argument is targeted in demonstrating as to how the appeal hasbeen wrongly decided, which is not the purport of review jurisdiction. 9 RA / 24 / 2024 18.As we have demonstrated, it cannot be an appeal indisguise which precisely seems to be the case in the matter in hand.We avoid to burden this order by citing several decisions on this aspectof the matter. Suffice for the purpose to observe that the powers ofreview are circumscribed by well settled norms. It is only an errorwhich can be rectified. If, as is being submitted on behalf of theapplicants, every point is to be decided afresh, it would tantamount tore-hearing of the appeal. The whole attempt on behalf of the applicantseems to be to point out as to how this Court had committed illegality indeciding the appeal rather than making any attempt to point out anyerror apparent on the fact of the record. Suffice for the purpose to referto the decision in the matter of Shanti Conductors Pvt. Ltd. V. AssamState Electricity Board and others; (2020) 2 SCC 677, wherein it hasbeen observed that the scope of review is limited and a party cannot bepermitted to re-agitate and re-argue a question under the guise ofreview. The error should be evident and if it requires a process ofreasoning to be undertaken to detect it, it can hardly be said to be anerror apparent on the face of record. 19.As laid down in the matter of Arun Dev Upadhyaya Vs.Integrated Sales Services Ltd.; (2023) 8 SCC 11, an error on the faceof the record must be such an error which merely looking at the record 10 RA / 24 / 2024 should strike and it should not require any long drawn procedure on thepoints where there may be two opinions. 20.Bearing in mind these principles, the whole submissionsmade by Mr. Deshmukh on behalf of the applicant would clearlydemonstrate that every attempt has been made to re-argue the appealwhich cannot be permitted to be done. 21.It is admitted that no concrete record of the donors wasproduced. Even a list which was initially produced, was subsequentlyreplaced and that was not even a complete list of donors as is beingsubmitted on behalf of the applicant. If such is the state-of-affairs,when the ITAT has, for the elaborate reasons, demonstrated as to howthe applicant had not been able to discharge the burden, by producingindependent material in respect of the 7145 donors who had inaggregate paid the donations to the tune of Rs.2,89,20,955/- and wheneven an attempt to resort to random check had grossly failed and 8 ofthe donors even denied to have paid any donation, we had dismissedthe appeal by pointing out as to how the observations and theconclusion of the ITAT was a plausible one and as to how nosubstantial question of law was arising. 22.In our considered view, there are no sufficient and cogentgrounds and reasons for exercising the review jurisdiction. 11 RA / 24 / 2024 23.The application is rejected. [ SHAILESH P. BRAHME ] [ MANGESH S. PATIL ] JUDGE JUDGE arp/