TMI Blog2020 (8) TMI 802X X X X Extracts X X X X X X X X Extracts X X X X ..... has not exercised the option under clause (2) of the Explanation to section 11(1) of the Act. Thus we concluded that the grounds of appeal filed by the assessee can be seen through the lens of deductive inference, in which it is asserted that the conclusion is guaranteed to be true if the premises are true. In the present case, it is the contention of the assessee vide the 2nd ground of appeal that the Ld. CIT(A) failed to note that the amount of ₹ 3,55,45,600/- was not factually received during the year under appeal. This premise is not true as evident from the finding above that the assessee has received ₹ 3,55,45,600/- during the financial year 2010-11 relevant to the impugned assessment year. The inference drawn by the assessee is not a correct one as it is based on wrong premise. In view of the above facts and position of law, we upheld the order of the Ld. CIT(A). We find that the arguments of the assessee during the course of hearing in [ 2019 (7) TMI 429 - ITAT MUMBAI] 6 for the impugned assessment year have been examined at length and then the order has been passed. No fact has been lost sight of. No argument has been lost sight of. Applican ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19.01.2011 ; the subsequent addendum dated 20.01.2011 implying the payment was not made is not to be believed as the addendum was not registered, (b) secondly, the applicant has not exercised the option as per Explanation 2 of Section 11(1) of the Income Tax Act, 1961 (the Act) ; this is because the applicant has stated in his submission to the AO that since there is no definite possibility that receipt will be received, the consideration was not taxed in AY 2011-12. The Ld. counsel submits that the above two findings are contrary to the facts apart from record on the ground that it had shown to the Tribunal in the course of hearing that the consideration of ₹ 3,55,45,600/- was received in the financial year ended 31.03.2015 ; this receipt was shown to the Tribunal from the copy of the audited Income and Expenditure Account of the applicant for the year ended 31.03.2015 ; the amount of ₹ 3,55,45,400/- is reflected in Note No. 15 (other Incomes) to the Accounts Lease Hold Rights-₹ 3,55,45,000/-. It is stated by him that this fact has been lost sight by the Tribunal in its order dated 26.06.2019 and accordingly this constitutes a mistake apparent from record d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. Also, there was no definite possibility of receipt of the same in future. The agreement of Assignment will be terminated if the payment is not received in time. (b) The order of the Tribunal does not refer to the crucial para no. 8 of the Applicant's submissions recorded by the Assessing Officer in his assessment order i.e. 8. Assessee is committed to make payment in the year of receipt. We are not denying the agreement of assignment. The receipt will be offered for taxation in the year of receipt. Since there is no definite possibility that receipt will be received, the consideration was not taxed in AY 2011-12. Also it is stated that that the Tribunal, in its order, has lost sight of the writings in para No. 8. It is explained by him that for the year under appeal there was no provision in the Explanation to Section 11(1) that the option was to be exercised in any prescribed form or manner and all that was required was that option must be in writing ; the requirement for option to be furnished in prescribed form or manner was brought on the statute only subsequently by the Finance Act, 2015 w.e.f. 01.04.2016. In summary, it is stated by the Ld. counsel th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submissions and perused the relevant materials on record. The reasons for our decisions are given below. In the instant case, the Assessing Officer (AO) completed the assessment u/s 143 (3) on 25.03.2014 on a total income of ₹ 2,03,37,630/-. In appeal, the Ld. Commissioner of Income Tax (Appeals)-1, Mumbai [ in short CIT (A) ] confirmed the assessment made by the AO. Aggrieved by the order of the Ld. CIT (A), the assessee filed an appeal before the Tribunal. The ITAT F Bench, Mumbai (ITA No. 1097/Mum/2016) vide order dated 25.05.2017 dismissed the appeal filed by the assessee. Thereafter, the assessee filed a Miscellaneous Application (MA) before the Tribunal seeking rectification/recalling of the order dated 25.05.2017 u/s 254 (2) of the Income Tax Act, 1961 [in short the Act ]. The ITAT F Bench, Mumbai vide order dated 16.01.2018 dismissed the MA filed by the assessee. Thereafter, the assessee filed a Writ Petition before the Hon ble Bombay High Court challenging the order dated 16.01.2018 passed by the Tribunal rejecting the application for rectification. The Hon ble High Court vide order dated 28.06.2018 held: 3. The primary grievance of the peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee before the Tribunal which are as under:- 1. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in holding that the amount of ₹ 3,55,45,600 accrued to the Appellant as income for the year under appeal and was also received. 2. The Ld. CIT(A) failed to note that the amount of ₹ 3,55,45,600 was not factually received during the year under appeal and that in this circumstances the same should be deemed to be applied towards charitable purposes in terms of clause (2) of Explanation to Section 11(1) of the Income Tax 1961. This is more particularly so because the provision, for exercising option in writing under the said Explanation before the expiry of time allowed for furnishing return u/s 139 (1) is not mandatory, but directory in nature and must therefore be liberally interpreted to confer exemption u/s 11 and not deny it. 3. Both the lower authorities erred in passing their respective orders without granting your appellant adequate opportunity of being heard. The order passed by them are in contravention of the principles of natural justice and hence, bad in law. 4.2 During the course of hearing before the Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the previous year in which the income is received or during the previous year immediately following, as the case may be, and, in the case referred to in sub-clause ( ii ), during the previous year immediately following the previous year in which the income was derived. The Ld. counsel filed a copy and referred to the decision in CIT vs. Shivanand Electronics (1994) 75 TAXMANN 93 (Bom), CIT vs. Smt. Archana R. Dhanwatey (1981) 7 Taxman 121 (Bom), Balmukund Acharya vs. DCIT (2009) 176 TAXMAN 316 (Bom), CIT vs. Ziarat Mir Syed Ali Hamdani (2001) 248 ITR 769 (J K), CIT vs. G.M. Knitting Industries (P.) Ltd. (2016) 71 taxman.com 36 (SC) and the order of the Tribunal dated 30.11.2016 in M/s Whistling Woods International Ltd. vs. ITO (ITA No. 556/Mum/2015 for AY 2004-05). Further reference was made by him to the Circular No. 14 (XI- 35) of 1955, dated 11.04.1955. 4.3 The above facts are part of the impugned order passed by the Tribunal. We have discussed at length in the impugned order the facts of the case and the case laws relied on by the Ld. counsel and the reasons for our decision. One may refer to para 12 to 17 (page 13 to 22) of the impugned order. It has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion was Since there is no definite possibility that receipt will be received the consideration was not taxed in AY 2011-12 . A reading of the said written submission which we have extracted at para 6 of the impugned order, clearly indicates that the appellant has not exercised the option under clause (2) of the Explanation to section 11(1) of the Act. Thus we concluded that the grounds of appeal filed by the assessee can be seen through the lens of deductive inference, in which it is asserted that the conclusion is guaranteed to be true if the premises are true. In the present case, it is the contention of the assessee vide the 2nd ground of appeal that the Ld. CIT(A) failed to note that the amount of ₹ 3,55,45,600/- was not factually received during the year under appeal. This premise is not true as evident from the finding above that the assessee has received ₹ 3,55,45,600/- during the financial year 2010-11 relevant to the impugned assessment year. The inference drawn by the assessee is not a correct one as it is based on wrong premise. In view of the above facts and position of law, we upheld the order of the Ld. CIT(A). 4.5 We may discuss here the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. In Honda Siel Power Products Ltd . (supra), the Hon ble Supreme Court held that non-consideration of a decision of co-ordinate Bench placed before the Tribunal amounts to mistake apparent from record within the meaning of s. 254(2); Tribunal was therefore justified in exercising its powers under s. 254(2) when it was pointed out that an order of the coordinate Bench placed before the Tribunal was not considered by it while passing the original order. Further, it held that : The purpose behind enactment of s. 254(2) is based on the fundamental principle that no party appearing before the Tribunal, be it an assessee or the Department, should suffer on account of any mistake committed by the Tribunal. This fundamental principle has nothing to do with the inherent powers of the Tribunal. One of the important reasons for giving the power of rectification to the Tribunal is to see that no prejudice is caused to either of the parties appearing before it by its decision based on a mistake apparent from the record. Rule of precedent is an important aspect of legal certainty in rule of law. That principle is not obliterated by s. 254(2). When prejudice results from an orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, and the Tribunal has committed a gross and inexplicable error. Failure by 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. 4.7 As narrated hereinabove at para 4 to 4.4, we find that the arguments of the assessee during the course of hearing in ITA No. 1097/Mum/2016 for the impugned assessment year have been examined at length and then the order has been passed. No fact has been lost sight of. No argument has been lost sight of. We refer here to the order dated 26.06.2019 passed by Tribunal. Therefore the instant case is distinguishable from the case-laws relied on by the applicant, narrated at para 4.5.1 hereinbefore. In Padmasundra Rao v. State of TN 255 ITR 147 (SC ); CIT v. Ram Narain 227 ITR 401; Govt. of India v. Jagadish 221 ITR 338, it has been held that reliance should not be placed on a decision without discussing how the factual situation fits in with the factual situation of the decision on which reliance is placed. Also it is held in Padmasundra Rao (supra) that circumstantial flexibility, e.g. one additional or different fact, may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a review of the order passed by the Tribunal. The Tribunal is a creature of the statute. The Tribunal cannot review its own decision unless it is permitted to do so by the statute. The Hon ble Supreme Court has held in Patel Narshi Thakershi v. Pradyumansinghji Arjunsinghji [AIR 1970 SC 1273] that the power to review is not an inherent power. It must be conferred by law either specifically or by necessary implication. It is a settled law that the Tribunal has no power to review its order in the garb of section 254(2) of the Act as held in CIT v. Globe Transport Corpn. [1992] 195 ITR 311 (Raj) (HC), CIT v. Roop Narain Sardar Mal [2004] 267 ITR 601 (Raj) (HC), CIT v. Devilal Soni [2004] 271 ITR 566 (Raj) (HC), Jainarain Jeevraj v. CIT [1980] 121 ITR 358 (Raj.) (HC), Prajatantra Prachar Samiti v. CIT [2003] 264 ITR 160 (Orissa) (HC), CIT v. Jagabandhu Roul [1984] 145 ITR 153 (Orissa) (HC), CIT Anr. v. ITAT Anr. [1992] 196 ITR 640 (Orissa) (HC), Shaw Wallace Co. Ltd. v. ITAT Others [1999] 240 ITR 579 (Cal) (HC), CIT v. Suman Tea Plywood Industries Pvt. Ltd. [1997] 226 ITR 34 (Cal) (HC), ITO v. ITAT Anr. [1998] 229 ITR 651 (Pat.) (HC), CIT Anr. v. IT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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