Wp/5655/2014 Of Commissioner Of Income Tax-I, Pune v. The Assistant Registrar, Income Tax Appellate Tribunal And Anr

IN THE HIGH COURT OF JUDICATURE AT BOMBAYCIVIL APPELLATE JURISDICTION WRIT PETITION NO.5655 OF 2014 Commissioner of Income Tax...Petitioner-Versus-The Assistant Registrar, Income TaxAppellate Tribunal...Respondents ........... Mr.Vimal Gupta, Senior Advocate a/w Mr.Vipul Arun Bajpayee, for the Petitioner/ Revenue. Mr.S.E.Dastur, Senior Advocate a/w Mr.R.Murlidharan, Mr.Arun Sivach and Mr.Jay Sanklecha i/by Amarchand & Mangaldas & S.A. Shroff & Company, for the Respondent/ Assessee. ........... CORAM: S.C. DHARMADHIKARIAND B.P. COLABAWALLA, JJ. DATE :- 31[st] July, 2014 P.C.: 1This Writ Petition under Article 226 of the Constitution of India challenges the order passed by the Income Tax Appellate Tribunal on 06.12.2013 in Miscellaneous Application No.119/PN/2010. By a detailed order, copy of which is at Annexure-E to the petition, this Miscellaneous Application of the Revenue has been dismissed.2 Mr.Gupta, learned Senior Counsel appearing for the Revenue, submits that the impugned order is ex-facie erroneous and illegal. He takes us through the petition and all annexures thereto. He submits that the Assessing Officer had disallowed certain claims and arising out of the marketing expenses. An appeal was preferred before the first Appellate Authority, namely, Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) had before him a statement which was not disputed even by the Assessee and which contained the relevant figures. While it is true that part of expenses and which have been allowed by the Commissioner of Income Tax (Appeals) did not show any bifurcation yet throughout the Revenue argued that the sum of Rs.9,97,41,327/- should have been disallowed. The part disallowance and to the extent indicated in the statement, copy of which is at page 187, has been admitted by the Assessee. In that regard, Mr.Gupta invites our attention to the order of the Commissioner of Income Tax (Appeals) and particularly paragraph 7.17 thereof at page 87 of the paper book. He submits that the Income Tax Appellate Tribunal's order insofar as this claim is concerned is to be found at page 175 of the paper book in paragraph 32. It has been urged before the Tribunal as well that the entire disallowance pertaining to expenses of earlier years deserves to be upheld. The arguments as noted in the Tribunal's order and on behalf of the Revenue rely upon certain figures, but which figures do not match with the statement furnished by the Assessee. Apart therefrom the finding rendered by the Tribunal that the Department's representative did not make any particular statement to support the figure of Rs.5,76,75,624/- in place of Rs.4,11,61,718/-, was vitiated by an apparent mistake and which did not require any elaborate reasoning leave alone consideration of detailed arguments. In these circumstances rejection of the Miscellaneous Application by the Tribunal and that too by a cryptic reasoning would enable the Revenue to question the same in writ jurisdiction. All parameters, enabling this Court to interfere in its Writ jurisdiction are satisfied. Mr.Gupta submits that the Writ Petition be allowed and the impugned order on the Miscellaneous Application be quashed and set aside. aside. 3With the able assistance of Mr.Gupta we have perused the Writ Petition and annexures and relevant parts thereof to which our attention has been invited. We need not discuss here the ambit and scope of the proceedings and which are styled as invocation of powers to rectify the mistake. The mistake committed, if any, in the Original Order can be rectified under Section 154(1A) of the Income Tax Act, 1961. But, these proceedings have limited scope. In these proceedings the Tribunal cannot reopen the findings on factual matters and which according to it are conclusive. That would require the Tribunal to go behind its order and consider its legality and validity. That can be done if the findings are questioned in a distinct proceeding. In the present case the Tribunal found that the application of the Revenue is based on the contentions and which are noted in the order of the Tribunal at pages 192 and 193 of the paper book. The Tribunal has virtually reproduced the application of the Revenue for rectification line by line. The submission was that on verification of the admissions mentioned in Annexure-2 forming part of the submissions made by the Assessee Company and the order of the Commissioner of Income Tax (Appeals), the disallowance should have been of Rs.5,62,32,085/- as “prior period expenditures” and Rs.65,64,134/- out of the “differences on account of expenditures claimed and verified”. The Department's Appeal to the Tribunal was dismissed on the ground that the Department's representative did not make any particular submission to support the figure of Rs.5,76,75,624/- in place of Rs.4,11,61,718/-. Further submission was that the Tribunal has not examined Annexure-2 submitted by the Assessee Company. The figures as mentioned in Annexure-2 should have been confirmed by the Tribunal instead of merely rejecting the most optimum figure quoted by the Department. Even if the Department could not support it's claim the Assessee also never made out the case that the figure of expenses to be disallowed pertaining to the earlier year was Rs.4,11,71,718/-. 4Thus, we find that not only did the Revenue request the Tribunal to go behind its order and correct it in the garb of pointing out the mistakes and terming them as apparent. But, what essentially the Revenue was projecting was that the order passed by the Tribunal was erroneous. That it contains certain factual errors and when the Tribunal omits to make reference to Annexure-2. In opposing such an application the Assessee relied on Section 154 (1A) of the Income Tax Act, 1961 and the ambit and scope of powers conferred thereunder. Further, if the Tribunal concludes that some point or issue which may be very debatable, but was not raised or argued before the Tribunal, then, in a limited power it cannot take note of the grievance of the Revenue. That would require it to conduct an exercise of going behind the entire order and record and find out whether it omitted from consideration certain vital factual material or statement or figures therein. This course was clearly impermissible and in the given facts and circumstances. We are, therefore, of the view that the conclusion recorded in paragraph 9 of the order under challenge does not suffer from any perversity nor can be termed as vitiated by any error of law apparent on the face of the record enabling us to exercise our writ jurisdiction. The discretionary and equitable jurisdiction under Article 226 of the Constitution of India is, therefore, not available to question the order passed. We are, therefore, unable to accept any of these contentions and bearing in mind the nature of the proceedings. The Writ Petition is, therefore, dismissed. No costs. (B.P. COLABAWALLA, J.) (S.C. DHARMADHIKARI, J.)