TMI Blog2011 (3) TMI 1735X X X X Extracts X X X X X X X X Extracts X X X X ..... placed reliance on the decision of the Hon ble Supreme Court in the case of Goetz (India) Ltd.[ 2006 (3) TMI 75 - SUPREME COURT] . The learned counsel for the Assessee relied on the decision of the Hon ble Delhi High Court in the case of Jai Parobolic Springs Ltd. [ 2008 (4) TMI 3 - DELHI HIGH COURT] wherein the Hon ble Delhi High Court after considering the decision of the Hon ble Supreme Court in the case of NTPC [ 1996 (12) TMI 7 - SUPREME COURT] and Goetz (India) held that power of the tribunal to entertain additional ground is not in any way restricted by the ruling of the Hon ble Supreme Court in the case of Goetz (India) Ltd. In these circumstances, it is not open to the revenue to raise by way of an application u/s.254(2), a new argument which was never advanced when the appeal was heard. It is not open to the revenue to urge an argument by way of application u/s.254(2) of the Act, which was never urged when the appeal was heard. On this short ground the application u/s.254(2) is liable to be dismissed. Where the Tribunal has overlooked the relevant material on record, there would be an error apparent from record which can be rectified by setting aside the order for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion was received by the assessee has to be analysed and to find if the subsidy in question is capital receipt or revenue receipt. It was also submitted that on identical scheme, various decisions of Hon ble High Courts exist and the issue can be adjudicated on the basis of the ratios laid down in the aforesaid decisions, the case laws of which are as under:- i) Reliance Industries Ld., 88 ITD 272 (Mum)(SB) ii) Pony sugar, 308 ITR 392 (SC) iii) Pony Sugar, 260 ITR 605(Mad) iv) PJ Chemical, 210 ITR 830 v) Sadichha Chitra, 189 ITR 774(Bom) vi) CIT V. Ruby Rubber Works, 178 ITR 181 (Kerala)(SB) vii) CIT Vs. Plastichem, 174 ITR 546 (MP) viii) CIT Vs. Dusad Inds., 162 ITR 784(MP) ix) Asbestos Cement, 203 ITR 358 35.1 The learned DR opposed the prayer for admission of the additional ground on the ground that the assessee has not revised its return of income making the aforesaid claim and in view of the decision of the Hon ble Supreme Court in the case of Goetz India Ltd., Vs. CIT, 284 ITR 323 (SC), such plea cannot be entertained at the instance of the assessee. 35.2 On this objection, the learned counsel for the assessee brought to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls of the sales made and sales tax collected are not available on record to determine the amount of sales tax exemption, if any, as claimed by the Assessee. 3. The Hon ble ITAT has admitted the additional ground of the assesse on the above issue and set aside the issue to the file of AO to examine the issue afresh after affording opportunity of being heard to the Assessee and decide the issue. The ITAT while giving the above direction has not recorded any finding that all the facts and details or sufficient evidence, necessary to decide the claim of the Assessee, raised in the additional ground, are available on records of the AO or that the facts necessary to decide the question of law have been found by the revenue authorities during the course of assessment or thereafter in appellate proceedings before CIT(A) and are duly recorded. This is a condition precedent before additional ground is admitted. According to the revenue the condition precedent to admit an additional ground of appeal raised for the first time before Tribunal is that all facts and details necessary to decide the claim are found on the records of the revenue authorities. 4. The Assessee had filed additiona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11. Entry Tax Assessment Order for F.Y 1995 83-87 PAC 12. Entry Tax Assessment order for FY 1995 88-92 CSA 13. New Industry Notification No.A-3-24- 94-ST-V(112) dated 6/10/1994 under Madhya Pradesh Sthaniya Khhetra Me Mal Ke Pravesh Par Kar Adhiniyam , 1976 93-96 Membrane 14. Entry Tax Assessment Order for FY 1995 97-102 Membrane The above documents were not submitted before the lower authorities. It has been clarified by the Assessee that these were not filed before the lower authorities. Out of the above, page-1 contains the following details: Name of Unit Sales Tax Amount Vikram Ispat alibaug 107,21,823 Chemical Division Nagda Poly Aluminium Chloride CST 1,162,868 Poly aluminium Chloride-State 375,026 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e tribunal, because as per the decision of the Hon ble Supreme Court in the case of NTPC Ltd. 229 ITR 283 (SC) additional ground raised for the first time before Tribunal can be admitted provided the facts necessary for adjudication of the additional ground are available on record. 6. The further contention of the learned D.R. was that the decision of the Hon ble Supreme Court in the case of NTPC Ltd. (supra) was rendered in the context of the law as it stood at the relevant point of time. In this regard, he first pointed out that the decision in the case of NTPC(supra) was rendered by the Hon ble Supreme Court with reference to a dispute relating to AY 78- 79. According to him the scheme of law with regard to assessment of income, as it prevailed prior to its substitution by the Direct Tax Laws (Amendment) Act, 1987 w.e.f. 1-4-1989 was that u/s.143(2) of the Act, the Assessing Officer, if he was not satisfied without requiring the presence of the assesse or the production of evidence that the return is correct and complete he could require presence of Assessee and production of evidence in support of claim made in a return of income. According to him w.e.f. 1-4- 89, u/s.143(2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accordance with law and that the decision of the Hon ble Supreme Court in the case of Goetze (India) Ltd.(supra) is limited to the power of the assessing authority to entertain claim for deduction otherwise than by a revised return, and did not impinge on the power of the Tribunal. According to him the facts in the case of Goetz (India) Ltd., were that 1/5th of expenditure which was admitted revenue in nature was claimed as deduction in the return of income but in the assessment the entire expenditure was claimed as deduction. Thus according to the learned D.R. facts necessary for adjudication were available on record and therefore the Hon ble Delhi High Court made the aforesaid observations. According to him, the decision of the Hon ble Delhi High Court has to be considered as having been rendered on the facts of that case and cannot be applied to the facts of the case decided by the Tribunal which is subject matter of the present application. 7. The learned D.R. relied on the following decisions where the Tribunal has refused to admit an additional ground for adjudication on the ground that facts necessary for adjudication of additional ground were not available on record. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of CIT Vs. Smt.Kamal C.Mahboobbani 214 ITR 15 (Bom) wherein the above proposition of law was laid down in the context of Rule 29 of the ITAT Rules, 1963. Further reference was also made to the decision of the Hon ble Bombay High Court in the case of Velji Deoraj Co. Vs. CIT 68 ITR 708 (Bom) and Hon ble M.P.High Court in the case of CIT Vs. Babulal Nim 47 ITR 864 (M.P.) laying down identical proposition of law. In this regard he submitted that in the present case, the Tribunal did not call for any additional evidence nor did it admit additional evidence or reject additional evidence filed by the Assessee before the Tribunal. 11. The learned counsel for the Assessee submitted that from the fact that the learned D.R. had to make such lengthy submissions by itself would go to show that the issue sought to be canvassed by the learned D.R. is highly debatable issue, involving dealing with long drawn process of reasoning and issues on which possibly there could be two views. In such cases, application u/s.254(2) is not appropriate remedy. This submission was made without prejudice to the submission that even otherwise there is no merit in the application filed by the rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of Balmukund Acharya Vs. DCIT 310 ITR 310 (Bom) wherein in para-31 of its judgment, the Hon ble Court has held that authorities under the Income Tax Act, 1961 are under an obligation to act in accordance with law. Tax can be collected only as provided under the Act. If any assesse, under a mistake, misconception or not being properly instructed is over-assessed, the authorities under the Act are required to assist him and ensure that only legitimate taxes due are collected. Further reference was also made to the decision of the Hon ble Delhi High Court in the case of DCM Benetton 173 Taxman 283 (Delhi) laying down identical proposition. 14. It was also submitted by him that the Hon ble Supreme Court in the case of NTPC (supra) has emphasised the need for facts on record being available on record only because of the question that it framed for consideration in that case. In the decision of the Hon ble Supreme Court in the case of NTPC (Supra), the Tribunal had framed as many as five questions while making a reference to Hon ble Supreme Court. Since the Tribunal had not examined the additional grounds raised by the assessee on the merits, the Hon ble Suprme Court did not pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the assessment proceedings then such a question should be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee. Thereafter the Hon ble Court observed as follows: The reframed question, therefore, is answered in the affirmative, i.e., the Tribunal has jurisdiction to examine a question of law which arises from the facts as found by the authorities below and having a bearing on the tax liability of the assessee. We remand the proceedings to the Tribunal for consideration of the new grounds raised by the assessee on the merits. 15. According to the learned counsel for the Assessee the observation of the Hon ble Supreme Court about the need for facts being on record to adjudicate the additional ground, is only because of the reframed question in that case but the principle reason given by the Hon ble Supreme Court is the need to determine tax liability in accordance with law. According to him it would be proper to interpret the decision of Hon ble Supreme Court as not restricting the power of tribunal to admit additional ground only where facts necessary for adjudication of the additional ground i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, investigation of facts is not involved in deciding the issue as alleged by the learned D.R. 19. In this regard, the learned counsel for the Assessee filed before us a copy of the order of the ITAT Mumbai in the case of M/S.Aditya Birla Nuvo Ltd. Vs. ACIT ITA No.3207/Mum/02 wherein identical argument based on the same case laws were advanced by the Revenue but rejected by the Tribunal. 20. The learned D.R. in his rejoinder submitted that at the stage of admission of additional ground the merits of the claim made by the Assessee should not influence the mind of the Court. He also submitted that in the event of an apparent error in the order of the Tribunal, such orders can be recalled or the order of the tribunal modified and in this regard relied on the decision of the Full Bench of the Delhi High Court in the case of M/S.Lachman Dass Bhatia Hingwala Pvt. Ltd. Vs. ACIT WP (C) 6460 to 6465 of 2010 judgment dated 24.12.2010. It was also submitted that any apparent error has to be rectified as laid down by the Hon ble Supreme Court in the case of ACIT Vs. Saurastra Kutch Stock Exchange Ltd. 305 ITR 227 (SC). 21. We have considered the rival submissions. At the outset, we h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pra) is that the purpose of the assessment proceedings before the taxing authorities is to assess correctly the tax liability of an assessee in accordance with law and therefore the Tribunal should not be prevented from considering questions of law arising in assessment proceedings although not raised earlier. The question whether a subsidy received by an Assessee is a capital receipt not chargeable to tax or a revenue receipt chargeable to tax has to be ascertained by looking into the Scheme under which the subsidy is received. The subsidy schemes are all framed by State Governments and one has to take judicial notice of the same. The receipt of subsidy is imbedded in the sales, which is already disclosed by the Assessee in its books of accounts. The orders of assessment and other orders allowing relief to the Assessee under the relevant Sales Tax Laws are all documents, the authenticity of which cannot be doubted. We fail to see what fresh facts need to be examined by the AO. We are surprised at the stand taken by the Revenue that they would refuse to examine the issue because of technicalities. The claim of the Assessee is that the scheme under which subsidy was received by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee is not liable to tax, the Revenue can not have grievance. Art.265 of the Constitution of India provides that no tax shall be levied and collected except by authority of law. If ultimately the assessee is found to be liable to tax, he compensates the Revenue in the form of interest. Therefore the Tribunal can even think of a remand of the case for a finding on facts or can adjudicate on facts itself. On the other hand the Revenue has other options open to it under the Act. If the order of an Assessing Officer is erroneous and prejudicial to the interests of the Revenue the same can be revised by the CIT u/s 263 of the Act. If income chargeable to tax escapes assessment, proceedings u/s 147 can be initiated to bring to tax such escaped income. In an appeal by an assessee against the order of the Assessing Officer, the CIT(A) has power of enhancement u/s 251(1) of the Act. 26. The next argument put forth by the learned D.R. before us that the powers of the AO prior to 1-4-89 to call upon the Assessee to produce evidence in support of the claim in the return of income was much wider viz., to ensure that the return is correct and complete whereas after 1-4- 89, such p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rightly contended by the learned counsel for the Assessee, the power of the Tribunal under s. 254(2) of the Act is confined to rectifying any mistake apparent from the record. The Tribunal does not have inherent power of rectification or review or revision. Unless there is mistake apparent from the record in the sense of patent, obvious, clear error or mistake, the Tribunal cannot recall its previous order. If the error or mistake is one which could be established only by long-drawn arguments or by way of process of investigation and research, it is not a mistake apparent from the record. Unless there is manifest errors which are obvious, clear and selfevident, the Tribunal cannot recall its previous order in an attempt to rewrite the same. Failure of the Tribunal to consider an argument advanced by either party for arriving at a conclusion is not an error apparent on the record, although it may be an error of judgment. The Tribunal cannot in exercise of its power of rectification look into some other circumstances which would support or not support its conclusion. The Tribunal cannot redecide the matter and it has no power to review its order. The Tribunal has no power to rectify ..... X X X X Extracts X X X X X X X X Extracts X X X X
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