Principal Commissioner Of Income Tax v. M/S D.p. Powerindore, Dated 06.04.2018

HIGH COURT OF MADHYA PRADESH: BENCH AT INDORER.P. No.456/2018 Principal Commissioner of Income Tax v/s M/s D.P. PowerIndore, dated 06.04.2018 Ms. Veena Mandlik, learned counsel for thepetitioner. Shri Sumit Nema, learned senior counsel with ShriGagan Tiwari, learned counsel for the respondent. Heard on I.A. No.2052/2018, which is an applicationfor condonation of delay. The same is allowed. Delay stands condoned. This present Review Petition is filed for reviewingthe order dated 24.10.2017 passed in I.T.A. Nos.106/2018,107/2016 and 108/2016. Learned counsel for the petitioner has argued beforethis Court that the appeals have been decided taking intoaccount the issue of depreciation of assets and othergrounds have not been considered. Shri Sumit Nema, learned senior counsel for therespondent has argued before this Court that other groundshave not at all argued before this Court. He has drawn theattention of this Court towards the judgment delivered inthe case of Thakur Sukhpal Singh v/s Thakur KalyanSingh and Another (1963) 2 SCR 733. The apex Court in the aforesaid case in para-4, 6, 7, 8, 10, 15 and 16 has held as under:- 4. Order 41 Rule 16 of the Code provides theprocedure to be followed by the appellate Court on thehearing of an appeal which has not been dismissedunder sub-r. (1) of r. 11 of that order. Rule 16 reads: "(1) On the day fixed, or on any other day towhich the hearing may be adjourned, theappellant shall be heared in support of the appeal. (2) The Court shall then, if it does not dismiss theappeal at once, hear the respon- dent against theappeal, and in such case the appellant shall beentitled to reply." It is clear from sub-r. (1) that it is the duty ofAppellate Court to hear the appellant in support of theappeal. This however, does not mean that the appellateCourt cannot decide the appeal if the appellant does notmake his submissions to the Court showing that thejudgment and decree under appeal were wrong. Theappellate Court is not to force the appellant to address it.It can, at best, afford him an opportunity to address it. Ifthe appellant does not avail of that opportunity, theappellate Court can decide the appeal. Sub-r. (2)indicates that the appeal can be dismissed withouthearing the respondent. The appellate Court will do so ifit was not satisfied that the judgment under appeal waswrong. 06. The Privy Council observed in Mi. Fakrunisav. Moulvi Izarm (1) "In every appeal it is incumbent upon theappellants to show reason why the judgmentappealed from should be disturbed; there must besome balance in their favour when all thecircumstances are considered, to. justify thealteration of the judgment that stands. Their Lord-ships are unable to find that this,duty has beendischarged." With respect, we agree with this and hold that it isthe duty of the appellant to show that the judgment underappeal is erroneous for certain reasons and it is only afterthe appellant has shown this that the appellate Courtwould call upon the respondent to reply to thecontention. It is only then that the judgment of theappellate Court can fully contain all the various mattersmentioned in r. 31, O.XLI. 07. This Court observed in' Sangram Singh v.Election Tribunal, Kotah, Bhurey Lal Baya(2 ) at page 8: "Now a code of procedure must be regarded assuch: It is procedure, something designed tofacilitate justice and further its ends: ... Tootechnical construction of sections that leaves noroom for reasonable elasticity of interpretationshould therefore be guarded against (providedalways that justice is done to boa sides) lest thevery means designed for the furtherance of justicebe used to frustrate it." 08. The provisions of Rule 31 should therefore be 07. This Court observed in' Sangram Singh v.Election Tribunal, Kotah, Bhurey Lal Baya(2 ) at page 8: "Now a code of procedure must be regarded assuch: It is procedure, something designed tofacilitate justice and further its ends: ... Tootechnical construction of sections that leaves noroom for reasonable elasticity of interpretationshould therefore be guarded against (providedalways that justice is done to boa sides) lest thevery means designed for the furtherance of justicebe used to frustrate it." 08. The provisions of Rule 31 should therefore be reasonably construed and should held to require thevarious particulars to be mentioned in the judgment onlywhen the appellate has actually raised certain points fordetermination by the appellate Court, and not when nosuch points have been raised as had been the case in thepresent instance when the appellant did not address theCourt at all. The provisions of r.30 of O.XLI support ourconstruction of r.31. This rule reads: "The Appellate Court, after hearing the parties ortheir pleaders and referring to any part of theproceeding, whether on appeal or in the Court fromwhose decree the appeal is preferred to whichreference may be considered necessary, shallpronounce judgment in open Court, either at onceor on some future day of which notice shall begiven to the parties or their pleaders." It is to be noticed that this rule does not make itincumbent on the appellate Court to refer to any part ofthe proceedings in the Court from whose decree theappeal is preferred The appellate Court can refer, afterhearing the parties and their pleaders, to any part of theseproceedings to which reference be considered necessary.It is in the discretion of the appellate Court to refer to theproceedings. It is competent to pronounce judgment afterhearing what the parties or their pleaders submit to it forconsideration. It follows therefore that if the appellantsubmits nothing for its consideration, the appellate Courtcan decide the appeal without any reference to anyproceed- ings of the Courts below and, in doing so, it cansimply say that the appellants have not urged anythingwhich would tend to show that the judgment and decreeunder appeal were wrong. 10. The view that we take, also finds support fromthe object which the Legislature probably had inproviding that the judgment must contain the mattersmentioned in r.31. The object seems to be that the partiesshould know for what reasons the decision has goneagainst them and thereby be in a position to decidewhether they should go up in appeal or revision againstthe judgment. If they do not know the decision and thereasons therefore they cannot make up their mind and,even if they have no intention to go up in appeal, theymay not even be satisfied about the Court consideringthe matter for determination properly. 15. In Barkat Ali v. Gujrat Municipalityobservations similar to those made in Baldeo Prasad v. Kunwar Bahadur(3) were made. No reference was madeto the provisions of the Code of Civil Proceedure in thatconnection. Rather, it appears from the followingobservation that the view was expressed on generalgrounds : "The case is an important one from 'the point ofview of all concerned and it is not desirable that acase of this description should go practically indefault". There is little support for this basis of decision inthe Codeof Civil Procedure and the Privy Council haspronounced against it. We find it difficult to uphold theview that even when no arguments art urged and noreasons put forward in arguments against the correctnessof the decision appealed against, the appellate Courtshould peruse the record and find out for itself whetherthe judgment is right or wrong. Kunwar Bahadur(3) were made. No reference was madeto the provisions of the Code of Civil Proceedure in thatconnection. Rather, it appears from the followingobservation that the view was expressed on generalgrounds : "The case is an important one from 'the point ofview of all concerned and it is not desirable that acase of this description should go practically indefault". There is little support for this basis of decision inthe Codeof Civil Procedure and the Privy Council haspronounced against it. We find it difficult to uphold theview that even when no arguments art urged and noreasons put forward in arguments against the correctnessof the decision appealed against, the appellate Courtshould peruse the record and find out for itself whetherthe judgment is right or wrong. 16. We therefore repel the contention for theappellant that the High Court had to decide the appealafter going through the record of the case and thejudgment of the Court below and must have compliedwith the provisions of r. 31 of O.XLI C.P.C., when theappellant did not address the Court. In light of the aforesaid judgment, when theappellant has not addressed this Court on the issue, thisCourt has passed an order on the issue of depreciation ofassets. There is no error apparent on face of recordwarranting review. The Apex Court in the case of Haridas Das Vs.Usha Rani Bank (Smt) and Ors.,reported in(2006) 4SCC 78 in paragraph 13 and 20 has held as under :- “13. In order to appreciate the scope of a review,Section 114 CPC has to be read, but this sectiondoes not even adumbrate the ambit of interferenceexpected of the court since it merely states that it“may make such order thereon as it thinks fit”. Theparameters are prescribed in Order 47 CPC and forthe purposes of this lis, permit the defendant topress for a rehearing “on account of some mistakeor error apparent on the face of the records or forany other sufficient reason”. The former part of the rule deals with a situation attributable to theapplicant, and the latter to a jural action which ismanifestly incorrect or on which two conclusionsare not possible. Neither of them postulate arehearing of the dispute because a party had nothighlighted all the aspects of the case or couldperhaps have argued them more forcefully and/orcited binding precedents to the court and therebyenjoyed a favourable verdict. This is amply evidentfrom the Explanation to Rule 1 of Order 47 whichstates that the fact that the decision on a question oflaw on which the judgment of the court is based hasbeen reversed or modified by the subsequentdecision of a superior court in any other case, shallnot be a ground for the review of such judgment.Where the order in question is appealable theaggrieved party has adequate and efficaciousremedy and the court should exercise the power toreview its order with the greatest circumspection.This Court in Thungabhadra Industries Ltd. v.Govt. of A.P.[1]held as follows: (SCR p. 186)“[T]here is a distinction which is real, though itmight not always be capable of exposition, betweena mere erroneous decision and a decision whichcould be characterised as vitiated by ‘errorapparent’. A review is by no means an appeal indisguise whereby an erroneous decision is reheardand corrected, but lies only for patent error. …where without any elaborate argument one couldpoint to the error and say here is a substantial pointof law which stares one in the face, and there couldreasonably be no two opinions entertained about it,a clear case of error apparent on the face of therecord would be made out.” 20. When the aforesaid principles are applied to thebackground facts of the present case, the position isclear that the High Court had clearly fallen in errorin accepting the prayer for review. First, the crucialquestion which according to the High Court wasnecessary to be adjudicated was the questionwhether Title Suit No. 201 of 1985 (sic 1 of 1986)was barred by the provisions of Order 2 Rule 2CPC. This question arose in Title Suit No. 1 of1986 and was irrelevant so far as Title Suit No. 2 of1987 is concerned. Additionally, the High Courterred in holding that no prayer for leave underOrder 2 Rule 2 CPC was made in the plaint in TitleSuit No. 201 of 1985. The claim of oral agreement dated 19-8-1982 is mentioned in para 7 of theplaint, and at the end of the plaint it has been notedthat the right to institute the suit for specificperformance was reserved. That being so, the HighCourt has erroneously held about infraction ofOrder 2 Rule 2 CPC. This was not a case whereOrder 2 Rule 2 CPC has any application.” In the aforesaid case, the Apex Court has held thatrehearing of a case can be done on account of some mistakeor an error apparent on the face of the record or for any othersufficient reason. In the present case, there is no errorapparent on the face of the record and the petitioner in factunder the guise of review is challenging the order passed bythis Court, which is under review. Similarly the Apex Courtin the case of State of West Bengal and Ors. Vs. KamalSengupta and Anr., reported in (2008) 8 SCC 612 inparagraphs 21, 22 and 35 has held as under:- “21. At this stage it is apposite to observe thatwhere a review is sought on the ground ofdiscovery of new matter or evidence, such matteror evidence must be relevant and must be of such acharacter that if the same had been produced, itmight have altered the judgment. In other words,mere discovery of new or important matter orevidence is not sufficient ground for review exdebito justitiae. Not only this, the party seekingreview has also to show that such additional matteror evidence was not within its knowledge and evenafter the exercise of due diligence, the same couldnot be produced before the court earlier. 22. The term “mistake or error apparent” by itsvery connotation signifies an error which isevident per se from the record of the case and doesnot require detailed examination, scrutiny andelucidation either of the facts or the legal position.If an error is not self-evident and detection thereofrequires long debate and process of reasoning, itcannot be treated as an error apparent on the faceof the record for the purpose of Order 47 Rule 1CPC or Section 22(3)(f) of the Act. To put it differently an order or decision or judgment cannotbe corrected merely because it is erroneous in lawor on the ground that a different view could havebeen taken by the court/tribunal on a point of factor law. In any case, while exercising the power ofreview, the court/tribunal concerned cannot sit inappeal over its judgment/decision. 35. The principles which can be culled out fromthe abovenoted judgments are: (i) The power of the Tribunal to review itsorder/decision under Section 22(3)(f) of the Act isakin/analogous to the power of a civil court underSection 114 read with Order 47 Rule 1 CPC. (ii) The Tribunal can review its decision on eitherof the grounds enumerated in Order 47 Rule 1 andnot otherwise. (iii) The expression “any other sufficient reason”appearing in Order 47 Rule 1 has to be interpretedin the light of other specified grounds. (iv) An error which is not self-evident and whichcan be discovered by a long process of reasoning,cannot be treated as an error apparent on the faceof record justifying exercise of power underSection 22(3)(f). (v) An erroneous order/decision cannot becorrected in the guise of exercise of power ofreview. (i) The power of the Tribunal to review itsorder/decision under Section 22(3)(f) of the Act isakin/analogous to the power of a civil court underSection 114 read with Order 47 Rule 1 CPC. (ii) The Tribunal can review its decision on eitherof the grounds enumerated in Order 47 Rule 1 andnot otherwise. (iii) The expression “any other sufficient reason”appearing in Order 47 Rule 1 has to be interpretedin the light of other specified grounds. (iv) An error which is not self-evident and whichcan be discovered by a long process of reasoning,cannot be treated as an error apparent on the faceof record justifying exercise of power underSection 22(3)(f). (v) An erroneous order/decision cannot becorrected in the guise of exercise of power ofreview. (vi) A decision/order cannot be reviewed underSection 22(3)(f) on the basis of subsequentdecision/judgment of a coordinate or larger Benchof the tribunal or of a superior court. (vii) While considering an application for review,the tribunal must confine its adjudication withreference to material which was available at thetime of initial decision. The happening of somesubsequent event or development cannot be takennote of for declaring the initial order/decision asvitiated by an error apparent. (viii) Mere discovery of new or important matteror evidence is not sufficient ground for review.The party seeking review has also to show thatsuch matter or evidence was not within itsknowledge and even after the exercise of duediligence, the same could not be produced beforethe court/tribunal earlier.” In the aforesaid case the Apex Court has held that a mistake or an error apparent on the face of the record means amistake or an error which is prima-facie visible and does notrequire any detail examination. In the present case thepetitioner has not been able to point out any error apparent onthe face of the record, on the contrary this Court has decidedthe case on merits. The Apex Court again dealing with the scope ofinterference and limitation of review in the case ofInderchand Jain (dead) Through LRs Vs. Motilal (dead)Through LRs, reported in (2009) 14 SCC 663 in paragraphs 7, 22, 24, 29, 31 and 33 has held as under :- “7. Section 114 of the Code of Civil Procedure (forshort “the Code”) provides for a substantive powerof review by a civil court and consequently by theappellate courts. The words “subject as aforesaid”occurring in Section 114 of the Code mean subjectto such conditions and limitations as may beprescribed as appearing in Section 113 thereof andfor the said purpose, the procedural conditionscontained in Order 47 of the Code must be takeninto consideration. Section 114 of the Codealthough does not prescribe any limitation on thepower of the court but such limitations have beenprovided for in Order 47 of the Code; Rule 1whereof reads as under: “17. The power of a civil court to review itsjudgment/decision is traceable in Section 114 CPC.The grounds on which review can be sought areenumerated in Order 47 Rule 1 CPC, which reads asunder: ‘1. Application for review of judgment.—(1) Anyperson considering himself aggrieved— (a) by a decree or order from which an appeal isallowed, but from which no appeal has beenpreferred, (b) by a decree or order from which no appeal isallowed, or(c) by a decision on a reference from a Court ofSmall Causes, and who, from the discovery of new and importantmatter or evidence which, after the exercise of due “17. The power of a civil court to review itsjudgment/decision is traceable in Section 114 CPC.The grounds on which review can be sought areenumerated in Order 47 Rule 1 CPC, which reads asunder: ‘1. Application for review of judgment.—(1) Anyperson considering himself aggrieved— (a) by a decree or order from which an appeal isallowed, but from which no appeal has beenpreferred, (b) by a decree or order from which no appeal isallowed, or(c) by a decision on a reference from a Court ofSmall Causes, and who, from the discovery of new and importantmatter or evidence which, after the exercise of due diligence, was not within his knowledge or couldnot be produced by him at the time when the decreewas passed or order made, or on account of somemistake or error apparent on the face of the record,or for any other sufficient reason, desires to obtain areview of the decree passed or order made againsthim, may apply for a review of judgment of thecourt which passed the decree or made the order.’22. Whereas the appellant-defendant filed a reviewapplication confined to the question that he wasentitled to the restitution of the property and mesneprofit in respect whereof the learned Single Judgeof the High Court did not pass any specific order,the application for review filed by the respondentwas on the merit of the judgment. The relevantgrounds of review which have been placed beforeus relate to: (i) Unconditional withdrawal of some amount byone of the creditors of the defendant as also thedefendant himself. (ii) The defendant's application before the executingcourt that he was ready and willing to get the saledeed executed on receipt of amount in cash and thesaid admission allegedly was not brought to thenotice of the court. (iii) While holding that there was no agreement toreduce the sale consideration, the High Court hadignored the fact that it was an admitted case of theparties, as stipulated in the contract, that thedefendants would get the premises vacated from thetenants within three months. (iv) The appellant had prayed for an alternativerelief viz. that he was ready to get the decree forspecific performance of contract by paying Rs1,15,000. The court did not consider the evidence ofDWs 1 to 6 in their proper perspective. (v) The court did not consider that the propertycould not be restored back to the appellant-defendant and as such the court should haveexercised its discretionary jurisdiction. 24. An appeal is a continuation of the suit. Anydecision taken by the appellate court would relateback, unless a contrary intention is shown, to thedate of institution of the suit. There cannot be anydoubt that the appellate court while exercising itsappellate jurisdiction would be entitled to take intoconsideration the subsequent events for the purposeof moulding the relief as envisaged under Order 7 Rule 7 read with Order 41 Rule 33 of the Code ofCivil Procedure. The same shall, however, not meanthat the court would proceed to do so in a reviewapplication despite holding that the plaintiff was notentitled to grant of a decree for specificperformance of contract. 29. Order 41 Rule 1 of the Code stipulates thatfiling of an appeal would not amount to automaticstay of the execution of the decree. The lawacknowledges that during pendency of the appeal itis possible for the decree-holder to get the decreeexecuted. The execution of the decree duringpendency of the appeal would, thus, be subject tothe restitution of the property in the event theappeal is allowed and the decree is set aside. Thecourt only at the time of passing a judgment anddecree reversing that of the appellate court shouldtake into consideration the subsequent events, but,by no stretch of imagination, can refuse to do sodespite arriving at the findings that the plaintiffwould not be entitled to grant of a decree. 29. Order 41 Rule 1 of the Code stipulates thatfiling of an appeal would not amount to automaticstay of the execution of the decree. The lawacknowledges that during pendency of the appeal itis possible for the decree-holder to get the decreeexecuted. The execution of the decree duringpendency of the appeal would, thus, be subject tothe restitution of the property in the event theappeal is allowed and the decree is set aside. Thecourt only at the time of passing a judgment anddecree reversing that of the appellate court shouldtake into consideration the subsequent events, but,by no stretch of imagination, can refuse to do sodespite arriving at the findings that the plaintiffwould not be entitled to grant of a decree. 31. Contention of Mr Venugopal that the defendanthaving accepted novation of contract but only thequantum of the amount being different, the court could have asked the respondent-plaintiff todeposit a further sum of Rs 24,000 cannot beaccepted for more than one reason. Apart from thefact that such a contention had never been raisedbefore the appellate court, keeping in view thefinding of fact arrived at that there had in fact beenno novation of contract, such a course of action wasnot open. In any view of the matter, the same wouldamount to reappreciation of evidence which wasbeyond the review jurisdiction of the High Court. 33. The High Court had rightly noticed the reviewjurisdiction of the court, which is as under: “The law on the subject—exercise of power ofreview, as propounded by the Apex Court andvarious other High Courts may be summarised ashereunder: (i) Review proceedings are not by way of appealand have to be strictly confined to the scope andambit of Order 47 Rule 1 CPC. (ii) Power of review may be exercised when somemistake or error apparent on the fact of record isfound. But error on the face of record must be suchan error which must strike one on mere looking atthe record and would not require any long-drawn process of reasoning on the points where there mayconceivably be two opinions. (iii) Power of review may not be exercised on theground that the decision was erroneous on merits.(iv) Power of review can also be exercised for anysufficient reason which is wide enough to include amisconception of fact or law by a court or even anadvocate.(v) An application for review may be necessitatedby way of invoking the doctrine actus curiaeneminem gravabit.” In our opinion, the principles of law enumerated byit, in the facts of this case, have wrongly beenapplied.” The Apex Court while dealing with the scope of reviewhas held that re-appreciation of evidence and rehearing ofcase without there being any error apparent on the face of therecord is not permissible in light of provisions as containedU/s 114 and Order 47 Rule 1 of Code of Civil Procedure,1908. The Apex Court in the case of S. Bagirathi Ammal Vs.Palani Roman Catholic Mission, reported in (2009) 10 SCC464 in paragraphs 12 and 26 has held as under :- “12. An error contemplated under the Rule must besuch which is apparent on the face of the record andnot an error which has to be fished out and searched.In other words, it must be an error of inadvertence. Itshould be something more than a mere error and itmust be one which must be manifest on the face of therecord. When does an error cease to be mere error andbecomes an error apparent on the face of the recorddepends upon the materials placed before the court. Ifthe error is so apparent that without furtherinvestigation or enquiry, only one conclusion can bedrawn in favour of the applicant, in suchcircumstances, the review will lie. Under the guise ofreview, the parties are not entitled to rehearing of thesame issue but the issue can be decided just by aperusal of the records and if it is manifest can be setright by reviewing the order. With this background, letus analyse the impugned judgment of the High Court and find out whether it satisfies any of the testsformulated above.26. As held earlier, if the judgment/order is vitiated byan apparent error or it is a palpable wrong and if theerror is self-evident, review is permissible and in thiscase the High Court has rightly applied the saidprinciples as provided under Order 47 Rule 1 CPC. Inview of the same, we are unable to accept thearguments of learned Senior Counsel appearing for theappellant, on the other hand, we are in entireagreement with the view expressed by the HighCourt.” Keeping in view the aforesaid judgment, this courtdoes not find any reason to review the order dated24.10.2017 passed in I.T.A. Nos.106/2018, 107/2016 and108/2016. Resultantly, this Review Petition stands dismissed. Certified copy as per rules. (S.C. Sharma) Judge (S.K. Awasthi)Judge Ravi Digitally signed by Ravi Prakash Date: 2018.04.09 10:42:06 +05'30'