TMI Blog2021 (1) TMI 244X X X X Extracts X X X X X X X X Extracts X X X X ..... aw is raised from the original order in appeal, it can only be one against refusal of the Tribunal to admit the additional ground. If the High Court finds it in favour of the assessee then what remains is only the examination of records. The Tribunal has found; which cannot be otherwise, that the satisfaction has to be recorded as per the statutory provision. What remained was only examination of the records; which refusal makes it an error apparent from the face of the record. There can arise no contrary or conflicting opinion on this since the interpretation of the provision, as to the satisfaction being mandatory is crystal clear. We fail to understand what evidence requires to be produced by the assessee to substantiate their ground. The Tribunals should be more pragmatic and the recording of the satisfaction could have been verified with lesser effort than that involved in making copious extracts from the original order; in the order impugned. Matter restored before the tribunal. - WA.No.1418 of 2020 - - - Dated:- 8-12-2020 - Honourable Mr. Justice K. Vinod Chandran And The Honourable Mr. Justice T.R. Ravi For the Petitioner : Advs. Sri. Santhosh P. Abraham, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Others v. Income-Tax Appellate Tribunal and Others [(1998) 232 ITR 395] to remind us of the confined jurisdiction under rectification. 4. Two questions arise in the appeal. One as to whether there could be an appeal filed under Section 260A against the rejection of an application under Section 254(2) of the I.T. Act. If it is not permissible, then the writ petition would be maintainable, as has been found in the concurring judgment in Deeksha Suri and the next question would be whether the ground raised is a mistake, which could be rectified under Section 254(2) of the I.T. Act; to be answered in these proceedings under Article 226 itself. 5. The first question we are required to answer is as to whether an appeal would lie against an order rejecting a rectification application. We have gone through the judgments of the Karnataka High Court, which only refused jurisdiction under Article 226 on the well entrenched principle of self-restraint exercised in invoking the extraordinary remedy under Article 226, when there is an appeal provided by the statute, which is an equally efficacious remedy. The provision under Section 260A though discussed was not looked at in the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Appellate Tribunal, but instead used the expression as is used in Section 256 that an appeal shall lie to the High Court from every order passed under Section 254. The expression an appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal in Section 260A cannot be equated with the expression an appeal shall lie to the High Court from every order passed under Section 254 . In Durga Engineering and Foundry Works [200] 245 ITR 272], also the Supreme Court observed that Section 256 contemplates the reference of the question of law arising out of an order passed under Section 254; that is to say, an order passed both under Section 254(4) and Section 254(2) . We have already highlighted the departure of the language in Section 260A from the language occurring in Section 256. 7. In a given case where as the consequence of an order passed on the rectification application under Section 254(2), the amendment in the order passed in appeal under Section 254(1) takes place, such amended order in appeal as a consequence of the order passed in the rectification application, however, shall, be amenable to appeal under Section 260A. In so far as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich writ petitions were filed by all the appellants, which stood rejected by two concurring judgments of the Bombay High Court. 9. The first of such judgments in Deeksha Suri noticed the Tribunal's finding that when the appeal was finally heard, the assessees never referred to the application under Rule 29. More importantly, it was found that an application under Section 256(1) was pending before the Tribunal, wherein one of the questions of law raised was with respect to the non-consideration of the application for accepting additional evidence. It was also noticed that one of the assessees had approached the High Court with a writ petition earlier, challenging the order of the Tribunal rejecting her appeal on the very same grounds, which writ petition was rejected for reason of the alternative remedy under Section 256. This order was found to be binding on all the assessees, who were husband, wife and minor children. The assessees were left to agitate their cause under Section 256 and the writ petition stood dismissed. 10. In the concurring judgment, the statutory authorities were faulted for being obsessed with extraneous and procedural considerations, when even the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant for the assessment year was seized or requisitioned. He should have appreciated that nothing has been brought on record by the AO and no reference has been made to such material relating to the appellant for the assessment year being unearthed. In the absence of any incriminating evidence or any money, bullion, jewellery or valuable article or things etc. the assessment u/s.153A r.w.s. 153C is not valid. 13. The Tribunal has considered in detail the requirement under Section 153C in the paragraphs numbered as 8 to 8.4. It has been categorically found that Section 153C of the I.T. Act can be invoked only when there is a satisfaction recorded by the Assessing Officer having jurisdiction over the persons searched or requisitioned under Section 132A of the I.T. Act, that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs to a person other than that referred to in Section 153A. Without recording such satisfaction, no proceeding can be initiated under Section 153C in the case of such other person, a third party, who has not been subjected to a search. What remained was only a verification of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the appellant. We are hence satisfied that the ground necessarily has to be admitted and the Tribunal committed a mistake in refusing the admission of such ground. We hence set aside the impugned order and direct the Tribunal to call for the assessment proceedings from the Department and ensure that the satisfaction is recorded under Section 153C by the AO of the persons searched. 16. Here we have to observe that if at all a question of law is raised from the original order in appeal, it can only be one against refusal of the Tribunal to admit the additional ground. If the High Court finds it in favour of the assessee then what remains is only the examination of records. The Tribunal has found; which cannot be otherwise, that the satisfaction has to be recorded as per the statutory provision. What remained was only examination of the records; which refusal makes it an error apparent from the face of the record. There can arise no contrary or conflicting opinion on this since the interpretation of the provision, as to the satisfaction being mandatory is crystal clear. We fail to understand what evidence requires to be produced by the assessee to substantiate their ground. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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