TMI Blog2013 (3) TMI 788X X X X Extracts X X X X X X X X Extracts X X X X ..... rtmental Representative was called upon to make specific submission on the miscellaneous application instead of only reading it out. It was pointed out that from his bare reading it appeared that the Department is trying to reargue the case and as such appeared to be an attempt to seek a review of the interim order in the garb of filing a miscellaneous petition under s. 254(2) which is not permissible under law. 2.2 The learned senior Departmental Representative stated that apart from reading out the miscellaneous petition, he had nothing further to state. 3. Learned Authorised Representative, Shri Rajeev Anand appearing on behalf of the assessee on the said date submitted written submissions dt. 26th April, 2013 running into 20 pages. 3.1 On the basis of these written submissions it was submitted that the AO has obtained a stay of operation of the interim order dt. 10th April, 2013 from the Hon'ble High Court of Punjab Haryana by way of filing a writ petition. It was submitted that in the writ petition the AO has suppressed the fact that an alternative remedy was available to the AO which had been availed of as an application under s. 254(2) had been filed by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artmental Representative for his perusal and reply if need be before any view was taken. The hearing consequently was adjourned to 3rd May, 2013. 4.1 Apart from the above, it was also seen that the order of the Hon'ble jurisdictional High Court staying the operation of the interim order was not available before the Bench and the parties were directed to file a copy of same before the next date. 4.2 It was also observed that surprisingly this fact which was brought to notice by the assessee, ought to have been pointed out by the Department represented by senior. Departmental Representative, Shri Sanjay Pandey, who apparently not being apprised by the AO or the field Staff was in complete ignorance of the said material fact. 5. On 3rd May, 2013, learned CIT Departmental Representative, Shri Peeyush Jain stated that copy of the order of the jurisdictional High Court staying the operation of the interim order had been filed by the Department. 5.1 Again reading out from the miscellaneous application filed it was submitted that the impugned order may be recalled as it suffers from errors apparent on the face of the record as per the miscellaneous application filed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made no efforts to get finalized the appeal as directed by Hon'ble Tribunal and he led the Hon'ble Bench to believe that his case is covered by the case of L.G. Electronics India Ltd. for asst. yr. 2007-08 which is pending before the Hon'ble Special Bench and where order is awaited. Obviously all this was done by the counsel with a view to obtain an adjournment and to delay the finalization of appeal. Thus, by not arguing the case on merits for finalization of appeal and by referring to the pendency of issue before Special Bench the counsel of assessee led the Hon'ble Bench to adjourn the case to 16th April, 2013. Hon'ble Bench did not grant the adjournment on its own motion but on, being led by the counsel of assessee.' 5.3 As per the miscellaneous application relied upon, it was submitted that the recall is prayed for on the following grounds : It is further respectfully submitted that as Hon'ble Tribunal is in the process of final hearing of the appeal on merits and order is awaited the judicial propriety required to await the order and order to refund should not have been made before passing of final order. It is also submitted that Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judication by this Hon'ble Court: (1) Whether the impugned order is sustainable in the eyes of law ? (2) Whether the learned Tribunal had power under s. 151 of CPC ? (3) Whether there is any provision in the IT Act, 1961, empowering the learned Tribunal to pass the impugned order directing the petitioner to refund the legally collected demand during course of pendency of appeal against assessment order ? (4) Whether the petitioner is not entitled to get the relief prayed for ? 1.1 When the aforesaid writ petition came up for admission before the High Court on 22nd April, 2013, the Hon'ble Court was pleased to issue notice and stayed the operation of the order dt. 10th April, 2013 of this Hon'ble Tribunal and posted the matter for hearing on 6th May, 2013. The aforesaid order in the writ petition has been communicated to the assessee by its counsel Mr. Ashim Aggarwal, who was present in the Hon'ble Punjab Haryana High Court, when the said writ petition was taken up for hearing and the aforesaid order was dictated. It is submitted, in the aforesaid writ petition the learned AO has suppressed the material fact, by not disclosing in the writ petition t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce was placed upon the following judgements : (i) Master Construction Co. (P.) Ltd. v. State of Orissa [1966] 17 STC 360 (SC) (ii) Satyanarayan Laxinarayan Hegde v. Mallikarjun Bhavanappa Tirumale AIR 1960 SC 137 (iii) CIT v. ITAT [2006] 155 Taxman 378/[2007] 293 ITR 118 (Delhi) (iv) Karan Co. v. ITAT [2002] 253 ITR 131/[2001] 118 Taxman 473 (Delhi) (v) CIT v. Krishna Gupta [2011] 202 Taxman 257/12 taxmann.com 43a (vi) CIT v. K.L. Bhatia [1990] 182 ITR 361/51 Taxman 436 (Delhi) (vii) CIT v. Pearl Woollen Mills [2010] 191 Taxman 286/[2011] 330 ITR 164 (Punj Har.) (viii) CIT v. Earnest Export Ltd. [2010] 323 ITR 577/8 taxmann.com 302 (Bom.) (ix) CIT v. Shashi Modi [2005] 277 ITR 355/[2006] 155 Taxman 144 (All) (x) Patel Narshi Thakershi v. Pradyumansinghji AIR 1970 SC 1273; (xi) Dr. Smt. Kuntesh Gupta v. Management of Hindu Kanya AIR 1987 SC 2186; (xii) CIT v. Kedia Leather Liquor Ltd. [2007] 293 ITR 95 (MP) (xiii) Raja Malwinder Singh v. CWT [2011] 334 ITR 115/[2013] 212 Taxman 17/[2012] 18 taxmann.com 271 (Punj Har.) (xiv) CIT v. K.D. Wires (P.) Ltd. [2010] 323 ITR 257 (MP) (xv) Dr. Hukumchand Marothi v. CIT [2002] 254 ITR 602 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s as the very purpose of the interim order would be defeated and the Department is attempting to ensure that the wrong committed by it in collecting the amounts stayed by the Tribunal should not be corrected. 6.4 These arguments it was submitted, do not bring out any error apparent on the face of the record and is an attempt to insist that the capricious Departmental action of collecting the funds stayed by the Tribunal should be left untouched. 6.5 It was submitted that the averments of the Department that the Tribunal was in the process of hearing the appeal of 2008-09 assessment year, is factually incorrect as the Tribunal is in the process of hearing of 2007-08 assessment year i.e. immediately preceding assessment year. It was further submitted that in the said appeal of 2007-08 assessment year, half a dozen hearings on different dates had already taken place and about an equal amount of time may still be required in order to conclude the hearing in the said year and only after that the hearings in 2008-09 assessment year can commence. 6.5.1 Accordingly, it was his submission that knowingly wrong facts have been alleged in the miscellaneous petition and it is merely an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Department, the assertions made in the miscellaneous application dt. 12th April, 2013 that the bank guarantee had been returned on 8th April, 2013 (which in fact was 9th April, 2013) and then that too was returned back on the same date was knowingly a factually incorrect statement deliberately made in pleadings by the Department. 6.8 Accordingly, it was his submission that on facts and law, the Departmental miscellaneous application deserved to be rejected. 7. The learned CIT Departmental Representative was required to address the factum of return of bank guarantee or anything else which Department would care to state in support of their petition or assailing the written submissions etc. of the assessee. The learned CIT Departmental Representative relied only upon the miscellaneous application. The assertion of the assessee were not disputed. 8. We have heard the rival submissions and perused the material available on record. In order to address the issue arising in the present MA, it is considered necessary to first address the specific provisions of the Act under which we have been moved in the present proceedings : 254(1) ** ** ** (2) The Tribunal may, at any t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cope of s. 254(2) of the IT Act, 1961 is concerned is very clear that it does not empower the Tribunal to review its own order. Perusing the contents of the miscellaneous application reproduced in para 6.1, we hold that it is merely an attempt to reargue the same facts which led the Department to conclude that the stay stood automatically vacated and the reasons resulting in violating the stay order dt. 13th Dec., 2012. To reagitate the same reasons in order to seek a review of the finding is not permissible in the present proceedings before this forum on the miscellaneous application filed and it cannot be overemphasized that in case the Department is aggrieved by the said findings, the appropriate course of action would have been to move a higher forum which has already been done and the remedy if any lies there. As far as the Tribunal is concerned, the present exercise in the garb of pointing out error apparent on the face of the record on the facts pointed in the miscellaneous application is trying to reargue for a review and as such is a wasted exercise. 9.2.3 The settled legal position addressing the scope of s. 254(2) of the IT Act under which the present petition has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the following two circumstances : (a) if rectification is called for, then such an order can be passed under s. 254(2); and (b) a reference can be made on questions of law arising out of this order under the provisions of s. 256. Accordingly, it is evident that s. 254(4) provides that the orders passed by the Tribunal in appeal are final and power to review has not been granted to the Tribunal. 9.2.5 As addressed, the foundation for exercising the jurisdiction under s. 254(2) is any mistake apparent on the record and the object is achieved by rectifying the mistake by amending the order passed by it. The power so conferred does not contemplate a rehearing which would have the effect of rewriting the order affecting the merits of the case. In the facts of the present case, rectification is sought relying upon the interim order that the action of the AO is bona fide where as per record, the Department was sleeping over the status quo position from 16th Jan., 2013 (date of adjournment) till they took the impugned action of recovery in the last few days of March 2013, during the holiday week and that too where as per record on the date of adjournment, no objections had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns are not applicable to the facts of the present case. 9.3.1 As referred to earlier, the assessee's stand based on the judgement of the Hon'ble Bombay High Court in the case of Earnest Exports Ltd. (supra) is that it is an attempt to raise disingenuous arguments for seeking a review. 9.3.2 On a perusal of the case of Earnest Exports Ltd. (supra) we hold that it is an attempt to seek a review by resorting to new arguments as no such arguments were advanced by the Department at the time the impugned order was passed. Even in the present proceedings, the Department has not cared to refer to any legal position or statutory provision on the basis of which it is asserted that the Tribunal did not have the power to pass the interim order which was passed on the petition moved by the assessee or could now be said that the Tribunal was restrained from passing an interim order. It may be referred to for the record that the Hon'ble Vice President (Delhi Zone) preponed the hearing of ITA No. 5797/Del/2012 wherein petition had been moved wherein the interim order was passed. The jurisdiction by the Bench was derived from the fixation of the appeal of the assessee by way of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Department on the said date was represented by CIT (Adm.), Faridabad, Smt. Neena Kumar; Shri Sampoorna Anand, Jt. CIT; Smt. Shashi Kajle, Dy. CIT, Circle-II, Gurgaon, the concerned officers were heard. The sum total of their submissions were that the action was taken on a strong bona fide belief that the amounts were recoverable as the order in the stay petition in clear terms mandated that in the event the assessee seeks adjournment, the stay will be automatically cancelled and the efforts of the Department showed that on 16th Jan., 2013 adjournment was 'prompted by' the assessee, 3.5 Time was given to the parties on the said date to arrive at a mutually acceptable solution since bona fide belief was pleaded by the Revenue. However it did not yield any result. The petition 273/Del/2013 was declared non-maintainable. 9.3.6 As such no judicial impropriety was either pointed out on the different dates, the issue of refund was heard before the passing of the impugned order nor has it been pointed out in the miscellaneous application. 9.4 Addressing the assertions that the Tribunal was in the process of final hearing of the appeal on merits, we are pained to observe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt year) is a call which will be taken only after hearings are concluded and parties are heard on the issue when the event occurs. 9.4.2 Hence the AO was fully aware that the hearings in ITA No. 5797/Del/2012, asst. yr. 2008-09 are yet to start. Judicial propriety in deciding an appeal of an earlier year before the subsequent year on same issues is well accepted and understood. Consequently it alarms us that unfortunately with complete impunity and disregard of the factual position, the AO repeatedly makes apparently naive, misplaced, misguiding and factually incorrect assertions that the Tribunal was in the process of final hearing of the appeal. 9.4.3 These assertions indicate either a gross ignorance or ineptitude of the Department or a deliberately calculated belief that even misstatement of facts before the Tribunal could be accepted as gospel truth on a mere assertions of the Government officers. Both or either of these situations are equally dangerous and fraught of dangers as vast powers have been given by the Act to the AO in order to exercise its powers and discharge the functions under the IT Act. Evidently the AO has not bothered even to find out as to which appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by CIT Departmental Representative (Transfer Pricing) on 8th May, 2012 on the following grounds : The above matter is fixed for hearing before your kindselves on 8th May, 2012. The applicant most respectfully submits that the issue of AMP expenses and definition preference of international transaction for purposes of transfer pricing is clarified and elaborated in favour of Revenue as per amendment(s) in Finance Bill, 2012. It is requested that the appeal may please be adjourned, till passing of Finance Bill, 2012. The petitioner shall be ever grateful for this act of kindness. Petitioner Sd/- (Peeyush Jain) CIT (DR) (TP), ITAT, New Delhi. (Emphasis supplied) 9.4.5.2 The appeal was adjourned to 6th Aug., 2012. On 6th Aug., 2012, another adjournment was moved by CIT (Departmental Representative) (Transfer Pricing) on the following grounds : The above matter is fixed for hearing before your kindselves on 6th Aug., 2012. The applicant most respectfully submits : That the CIT Departmental Representative is occupied with preparation arguing the case of M/s Calt Technologies Services (S/G) before Hon'ble D Bench. As such an adjournment is praye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unfortunately as an illustration are being mentioned in the miscellaneous application in the face of the repeated obdurate stand of the Department to re-argue for a review by feigning ignorance of material facts in the present proceedings and making misleading averments. The findings arrived at in the impugned order in paras 11.2, 11.3 and 11.4 are thus based on this accepted position and which was unanimously followed by all Benches of the Tribunal on the said issue and very well-known to the Department. 9.4.7 An AO cannot claim to be in constant and perpetual ignorance nor can the officers under whom she was functioning themselves feign ignorance of this actual factual position on the issue where on the grounds of judicial propriety the Department was constantly seeking adjournments in almost all stay granted appeals on the said issue over the years. As per accepted procedures and conventions as well as practice prevalent on the issue, where a Special Bench is seized of a particular question, the AO cannot claim to be in ignorance of the fact that the said issue in transfer pricing was not of such a magnitude and importance, both to the Department and the assessees at large, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng a bank guarantee of the remaining amount was considered to be not sufficient for her to meet her targets, then there were legitimate and fair ways open to her to achieve that objective. Her alertness and efficiency in protecting the interests of Revenue could have been achieved through legitimate and legal courses available to her. To resorting to illegitimate and illegal ways of achieving the alleged avowed/ laudable purposes of achieving targets cannot be given judicial acceptance. It is not for us to inform that the AO could very well have moved a miscellaneous application in the stay petition dt. 13th Dec, 2012 praying for a higher payment by the assessee than the ₹ 2.50 crores ordered. Unfortunately no such legitimate ways were resorted to and instead funds to the tune of ₹ 208 crores were collected in violation of the stay order within the financial year 31st March, 2013 and that too when the Department's interest already stood covered by way of a bank guarantee in its favour of the said amount. The actions in these circumstances were extremely high-handed and arbitrary. The taxpayer can only be taxed and if so warranted, penalized under the statute for its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the stay order, were actually serious acts of malfeasance. In our adversarial system, one or the other side will probably be lying, if only to exaggerate their position and hence perjury is likely to be far more commonplace than we would choose to admit. In either case and especially in the case of the Revenue, apparently when swearing falsely or referring to wrong facts, the concerned officers may be under the belief that he or she is doing so in a good cause that is protecting the interest of Revenue. In the miscellaneous applications filed by the Department/assessee, the party may be required to support the same by an affidavit and both our system of justice and the position of the Court/Tribunal are dependent on treating as much of the pleadings on affidavit and verifications etc. as possible as truthful and deponents as having been respectful of their oaths and affirmations. Judges and judicial authorities are not so unrealistic that they do not recognize that a substantive portion of the population displays a lack of respect for or otherwise merely pays lip service on oath to tell the truth. But unlike in the Courts having lay litigants, the litigants in tax matters ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t would still want to press the petition moved for refund of the amounts collected in violation of the stay. Since admittedly no such offer was made, no arguments on the aspect were addressed. The assessee on the other hand contended that despite sitting with the outstanding dues protected by way of a bank guarantee, the AO again collected ₹ 208 crores from the assessee thus causing financial loss to it by way of arbitrary high handed actions. The assertion in the present miscellaneous application that the bank guarantee was returned on 8th April, 2013 is factually incorrect and unfortunately the Department has not cared to bring these relevant facts to the notice of the Tribunal despite the fact the miscellaneous application is filed and dt. 12th April, 2013. 9.6 Apart from that we are also of the view that the misleading assertions of return of bank guarantee cannot be considered to be a compliance of the order of the Tribunal wherein a refund of the amounts collected in violation of the stay has been directed. Thus we hold that it cannot now be claimed that it amounts to compliance as no such argument has been advanced by the Department either during the hearing of asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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