Wp/266/2020 Of Pr. Commissioner Of Income Tax8- Mumbai v. Shree Sai Steel Industries India Pvt. Ltd

Digitally signedShalikramby Shalikram P.BoreyP. BoreyDate: 2020.03.0211:51:20 +0530 19wp266-20.doc spb/ IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO. 266 OF 2020 Pr. Commissioner of Income Tax-8,Mumbai -20. … Petitioner. V/s. Shree Sai Steel Industries India Pvt. Ltd., ... Respondent. --- Mr. Sham Walve, Advocate a/w. Mr. Pritish Chatterjee forthe Petitioner. --- CORAM : UJJAL BHUYAN AND MILIND N. JADHAV,JJ. DATE : FEBRUARY 14, 2020. PC : 1Heard Mr. Sham Walve, learned standingcounsel Revenue for the Petitioner. 2Principal Commissioner of Income Tax-8,Mumbai, Petitioner in this Petition filed under Article226 of the Constitution of India, is assailing the orderdated 05.07.2019 passed by the Income Tax AppellateTribunal, “G” Bench, Mumbai (briefly, the Tribunalhereinafter), rejecting the Misc. Application filed by theRevenue. 1/5 3Respondent is an income tax assessee. Forthe assessment year 2009-10, assessment order waspassed on 27.02.2015 under section 143 (3) read withsection 147 of the Income Tax Act, 1961 (briefly, “theAct” hereinafter). 4In the assessment proceedings, AssessingOfÏcer noticed certain bogus purchases and ultimatelyadded the amount covered by the bogus purchases tothe total income of the assessee. Assessee questionedsuch addition by filing appeal before the Commissionerof Income Tax (Appeals)-14, Mumbai, also referred to asthe first appellate authority. The first appellateauthority by the appellate order dated 18.05.2017,modified the assessment order by holding that the onlyprofit derived out of the said tainted transactionsshould be assessed to tax. Accordingly, the profit out ofsuch transaction was assessed at 12.5% which wastreated as the suppressed profit element embedded insuch purchases while directing deletion of the remainingamount. 5Aggrieved by the said order of the firstappellate authority, the assessee preferred furtherappeal before the Tribunal which was registered as ITA 2/5 spb/ 19wp266-20.doc No. 4576/Mum/2017. It appears that the Revenue alsofiled an appeal against the said order of the firstappellate authority, limiting the addition to only theprofit quotient, which was registered as ITA No.5132/Mum/2017. 6Though ideally both the appeals ought tohave been taken up and heard together, in the instantcase, the appeal of the assesee was taken up forconsideration by the Tribunal. By the order dated20.12.2017, Tribunal dismissed the appeal of theassessee by holding that Revenue is not entitled tobring the entire sale consideration to tax but only theprofit attributable to the sale consideration alone.Tribunal noted that the first appellate authority afterrelying on various decisions restricted the dis-allowance at 12.5% of the tainted/ bogus purchases.While dismissing the appeal of the assessee, Tribunalrecorded a finding that it did not find any illegality orinfirmity in the order passed by the first appellateauthority. 7On the ground that Revenue’s appeal was notheard by the Tribunal which remained pending, Misc.Application No. 88/Mum/ 2019 was filed on behalf of 3/5 spb/ 19wp266-20.doc the Revenue for recall of the order dated 20.12.2017and for hearing both the appeals together. 8Tribunal by the order dated 05.07.2019 tookthe view that such Misc. Application was beyond thescope of section 254(2) of the Act and accordingly, theMisc. Application was dismissed. 9Hence the writ petition. 7On the ground that Revenue’s appeal was notheard by the Tribunal which remained pending, Misc.Application No. 88/Mum/ 2019 was filed on behalf of 3/5 spb/ 19wp266-20.doc the Revenue for recall of the order dated 20.12.2017and for hearing both the appeals together. 8Tribunal by the order dated 05.07.2019 tookthe view that such Misc. Application was beyond thescope of section 254(2) of the Act and accordingly, theMisc. Application was dismissed. 9Hence the writ petition. 10We have heard Shri Sham Walve, learnedstanding counsel Revenue for the Petitioner andperused the materials on record. We are of theconsidered view that when the Tribunal had dismissedthe appeal of the assessee holding that there was noillegality or infirmity in the order passed by the firstappellate authority which the Tribunal afÏrmed, bynecessary implication it would mean that the appealfiled by the Revenue had become redundantinasmuch as it had challenged the same order of thefirst appellate authority which the Tribunal hasafÏrmed. Therefore, not on the ground mentioned bythe Tribunal in the impugned order dated 05.07.2019but on the above ground, we feel that filing of the Misc.Application by the Revenue was wholly unwarranted. 4/5 spb/ 19wp266-20.doc 11Appeal filed by the Revenue stated to bepending before the Tribunal would be covered by thedecision rendered by the Tribunal in the appeal of theassessee unless reversed in subsequent proceedingsby the High Court. 12Therefore, we do not find any merit in the Writ Petition. 13 Writ Petition is accordingly dismissed. (MILIND N. JADHAV, J.) (UJJAL BHUYAN, J.)….. 5/5