M/S Goel Die Cast Ltd v. The Commissioner Of Income Tax

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH. I.T.A. No.223 of 2010 Date of decision: 10.11.2010 M/s Goel Die Cast Ltd. Vs. The Commissioner of Income Tax. -----Appellant. -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOELHON'BLE MR. JUSTICE AJAY KUMAR MITTALHON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:-Mr. Sanjay Bansal, Sr.Advocate withMs. Ashima Bindlish, Advocatefor the appellant. Ms. Ashima Bindlish, Advocatefor the appellant. Mr. I.P. Singh, Standing Counselfor the respondent. --- ADARSH KUMAR GOEL, J. 1. This appeal has been preferred by the assesseeunder Section 260-A of the Income Tax Act, 1961 (for short, “theAct”) against order dated 29.1.2010 of the Income Tax AppellateTribunal, New Delhi in I.T.A. No.1247/DEL/2009 proposing toraise following substantial questions of law:- “(i)Whether on the facts and in the circumstances of thecase, the Tribunal acted illegally and perversely inreversing the Order passed by the CIT(A) underSection 154 of the Income Tax Act, 1961 which was inconformity with the judgment rendered by the Hon’bleSupreme Court in the case of CIT vs. Lovely ExportsP. Ltd. (2008) 216 CTR 195 as well as the Tribunal’scase, the Tribunal acted illegally and perversely inreversing the Order passed by the CIT(A) underSection 154 of the Income Tax Act, 1961 which was inconformity with the judgment rendered by the Hon’bleSupreme Court in the case of CIT vs. Lovely ExportsP. Ltd. (2008) 216 CTR 195 as well as the Tribunal’s own Order in the case of the appellant for theassessment year 2003-04? (ii)Whether on the facts and in the circumstances of thecase, the Tribunal was legally correct in reversing theOrder of the CIT(A) passed under Section 154 of theIncome Tax Act, 1961 thereby sustaining the additionon account of the amount of share capital beingincome from undisclosed sources of the appellantcontrary to the stand of the appellant which standhaving been accepted by the Department/Revenue forthe assessment year 2003-04 in view of the Order ofthe Tribunal for the said assessment year havingattained finality? (iii)Whether the impugned Order passed by the Tribunalreversing the Order of CIT(A) is not sustainable inview of the applicability of principle of judicialconsistency and judicial discipline? (iv) Whether the impugned Order passed by the Tribunalreversing the Order of CIT(A) thereby having theeffect of sustaining the addition under Section 68 ofthe Income Tax Act, 1961 is based on irrelevantfindings, illegal, perverse and a result of whollyerroneous approach not permitted by law?” 2. During the course of assessment, the AssessingOfficer made addition to the declared income of the assessee,holding that the amount representing share capital wasundisclosed income of the assessee. The said finding wasaffirmed by the CIT(A), against which, the assessee filed appealbefore the Tribunal. During the pendency of the appeal, theassessee filed an application for rectification before the CIT(A) on the basis of observations in the judgment of the Hon’ble SupremeCourt CITv. Lovely Exports (P) Ltd.[2008] 216 CTR 195. Thesaid application was allowed by the CIT(A), but the Tribunalaccepted the plea of the revenue that there was no case forrectification. The finding recorded by the Tribunal is as under:- 2. During the course of assessment, the AssessingOfficer made addition to the declared income of the assessee,holding that the amount representing share capital wasundisclosed income of the assessee. The said finding wasaffirmed by the CIT(A), against which, the assessee filed appealbefore the Tribunal. During the pendency of the appeal, theassessee filed an application for rectification before the CIT(A) on the basis of observations in the judgment of the Hon’ble SupremeCourt CITv. Lovely Exports (P) Ltd.[2008] 216 CTR 195. Thesaid application was allowed by the CIT(A), but the Tribunalaccepted the plea of the revenue that there was no case forrectification. The finding recorded by the Tribunal is as under:- “.......We also found that in the original appellateorder of the CIT(A) has confirmed the addition notonly on the basis of creditworthiness but also on thebasis of identity as well as genuineness of thetransaction, however, in the order passed u/s 154,the CIT(A) has just observed that in view of thedecision in the case of Lovely Exports (supra), theaddition and enhancement made in the hands of theassessee on account of lack of creditworthiness ofshare applicants, cannot be made. Whereas in theoriginal appellate order addition was confirmed notonly on the basis of creditworthiness but also on thebasis of identity and genuineness of the transactionsof the share applicants. There was no change in thefacts insofar as identity and genuineness of thetransaction which was held to be not proved by theCIT(A) during the course of original appellateproceedings. In the order u/s 154, the CIT(A) has notspoken about the identity of share applicants and thegenuiness of the transaction. Since the identity itselfhas not been established, there is no reason to applythe proposition of law laid down in the case of LovelyExports (supra). Under Section 154, only mistakeapparent on record can be rectified and theconsidered decision taken on facts cannot bereversed unless wrong recording of facts are foundsubsequently. Change in the conclusion amounts to review of the order passed earlier and which is notempowered u/s 154 of the Act.” 3. We have heard learned counsel for the parties. 4. In view of the finding of fact recorded by the Tribunal,reproduced above, which is not shown to be perverse, nosubstantial question of law arises and this appeal cannot beentertained against the impugned order and is disposed ofaccordingly. 5. It is, however, made clear that this order will not affectthe remedy of the assessee in appeal against the order of the CIT(A) dated 28.11.2007, which was earlier dismissed only on theground that during pendency thereof, the assessee hadsucceeded in the rectification proceedings. While dismissing theappeal, the Tribunal itself had observed in its order dated16.2.2009 that if appeal of the revenue succeeds against order ofrectification, the assessee would be at liberty to revive its appeal.Learned counsel for the assessee points out that in pursuance ofthe said liberty, the assessee has already filed Misc. ApplicationNo.122 of 2010. If that is so, the Tribunal may consider the saidapplication in accordance with the liberty already granted. (ADARSH KUMAR GOEL) JUDGE November 10, 2010ashwani ( AJAY KUMAR MITTAL ) JUDGE