TMI Blog2019 (4) TMI 2056X X X X Extracts X X X X X X X X Extracts X X X X ..... far as ground no.4 is concerned, this ground is relevant only if the assessee s changed method of accounting from this year is found to be acceptable. Since the changed method of accounting has not been accepted by the lower authorities and the assessee has not challenged this action of the lower authorities on this issue before us, we find no merit in this ground taken by the assessee before us and the same is also dismissed - in that view of the matter, we are of the considered view that question no.4 is not raised in its proper form. - I.T.A. Nos. 58, 59, 60, 62, 63 and 64 of 2010 - - - Dated:- 24-4-2019 - K.S. Jhaveri, Chief Justice And K.R. Mohapatra, J. For the Petitioner : M/s. Sanjay K. Acharya, P. Mohapatrap, Mohapatra P. Mohapatra, Advocate. For the Respondent : None. ORDER Heard learned counsel for the parties. 2. By way of the above appeals, the appellant has challenged the order passed by the Income Tax Appellate Tribunal, Cuttack Bench, Cuttack, dated 31.3.2010, dismissing the appeals preferred by the appellant-assessee. 3. The first three appeals i.e. I.T.A. Nos.58, 59 and 60 of 2010 are against the quantum of assessment for the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount receivable from sundry debtors was added to the figure of loss disclosed. The exclusion of this amount from the turnover was concluded to be improper. The assessee challenged the assessment in appeal before the CIT, (A), Orissa, who affirmed the addition. The matter was carried in appeal before the Tribunal. By order dated 19 th January, 1990, the Tribunal upheld the assessment. An application was filed by the assessee purported to be one under Section 254(2) alleging that certain mistakes apparent from the record needed rectification. The primary grounds indicated in support of the application were that (i) the assessee was not engaged in any business in the commercial sense, and, therefore, the observation of the Tribunal that the assessee was running a business is patently erroneous; (ii) applicability of s.11(4A) was not in issue before the Tribunal and, therefore, the Tribunal was wrong in invoking the provision and making out a new case which was not urged by any of the parties before the lower forums; and even before framing the issue, the Tribunal had prejudged the matter; (iii) the assessee had pleaded its case with reference to a decision reported in CIT v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ged. The Tribunal in deciding the appeal is not restricted to the grounds set forth in the memorandum of appeal or taken by the leave of the Tribunal provided the party who is affected by the consideration of new issues is afforded sufficient opportunity of being heard in the matter. The Tribunal in its wisdom thought that on the facts, this provision of law had application. Whether in reality it had application or not, cannot be decided in an application for rectification under s.254(2). It involves detailed analysis of factual aspects which is outside the scope of application of s. 254(2). Where an issue has not been raised by the parties and yet the Tribunal has recorded a finding or a conclusion in respect thereof a question of law referable under s.256(1) arises. This position has been succinctly stated in CIT v. Scindia Steam Navigation Co. Ltd. (1961) 42 ITR 589 (SC). Therefore, the exercise of power under s.254(2) in such a case would be inappropriate. The so-called mistakes highlighted by the assessee in its application for rectification related to certain alleged erroneous conclusions. The conclusions may be inappropriate, but they per se do not constitute mistakes appare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted the Tribunal to consider the case on all the points arising out of the CIT s order dated 28.11.1988 and directed that while doing so the Tribunal will also keep in view the provision of Section 11 (4A) of the Income Tax Act (for short the Act ) which came to be inserted by the Finance Act, 1983, w.e.f. 1st April, 1984. Accordingly, this Court while answering the above question no.3 in favour of the assessee and against the Revenue, returned the reference unanswered in respect of the questions nos.1 and 2 to the learned Tribunal for fresh consideration. Learned Tribunal vide its order dated 17.06.2004 restored the matter back to the Assessing Officer for deciding afresh on question Nos.1 and 2 and further observed that the Assessing Officer should take into consideration the fact that the question no.3 had been decided in favour of the assessee and also take into consideration the provision of Section 11 (4A) of the Act which came into effect from 01.04.1984. The AO vide its order dated 28.03.2006 did not accept the hybrid system of accountancy adopted by the assessee and denied the exemption under Section 11 of the Act, which was confirmed by the learned CIT(A) vide its order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... articular years have subsequently been accounted by the assessee in other assessment years on cash basis or not. Hence, we direct both the parties to bring on record whether the accrued income has been assessed by the Revenue in these years are accounted by the assessee in subsequent years or not. We direct both the parties to furnish the required information within a reasonable time. The assessee is specifically directed to cooperate with the Department in getting the materials required for the purpose. The cases are adjourned accordingly. Copy of this order be supplied to both the parties. 7. Learned counsel for the appellants-assessee in support of his contention that the receipts of bill for the year 1985-86 are accounted in the subsequent years, has taken us first to the order of 1st Assessment order dated 28.03.1988, more particularly paragraph-2 and the Rule- 12 of the Income Tax Rules. For ready reference, the relevant portion of said paragraph-2, which has been relied upon by the assessee and Rule-12 of the Income Tax Rules are reproduced hereunder: 2. The contention of the assessee that new system of accountings has been followed by the assessee for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the head Profits or gains of business or profession , be in Form No. ITR-2 and be verified in the manner indicated therein; (c) in the case of a person being an individual or a Hindu undivided family who is a partner in a firm and where income chargeable to income-tax under the head Profits or gains of business or profession does not include any income except the income by way of any interest, salary, bonus, commission or remuneration, by whatever name called, due to, or received by him from such firm, be in Form No. ITR-3 and be verified in the manner indicated therein; [(ca) in the case of a person being an individual or a Hindu undivided family deriving business income and such income is computed in accordance with special provisions referred to in section 44AD and section 44AE of the Act for computation of business income, be in Form SUGAM (ITR- 4S) and be verified in the manner indicated therein:] [Provided that the provisions of this clause shall not apply to a person who,- (I) is a resident, other than not ordinarily resident in India within the meaning of subsection (6) of section 6 and has,- (i) assets (including financial interest in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per form; (ii) furnishing the return electronically under digital signature; (iii) transmitting the data in the return electronically and thereafter submitting the verification of the return in Form ITR-V; (iv) furnishing a bar-coded return in a paper form: Provided that- [(a) [ a person, other than a company and a person required to furnish the return in Form ITR-7 ] if his or its total income, or the total income in respect of which he is or it is assessable under the Act during the previous year, exceed [five lakh rupees], shall furnish the return for the assessment year [2013-14]and subsequent assessment years in the manner specified in clause (ii) or clause (iii); (aa) an individual or a Hindu undivided family, being a resident, [ other than not ordinarily resident in India within the meaning of sub-section (6) of section 6 ] having assets (including financial interest in any entity) located outside India or signing authority in any account located outside India and required to furnish the return in Form ITR-2 or ITR-3 or ITR-4, as the case may be, shall furnish the return for assessment year 2012-13 and subsequent assessment years in the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 and thereafter while discussing the law has taken into consideration the submission made by the Department representative in Paragraph-2.7 and has rightly come to the conclusion in paragraph-5. For ready reference, the above said Paragraphs are reproduced hereunder: 1. Paragraphs-2.3. The Hon ble High Court vide its order dated 15th January, 2003 held that order of the Tribunal dated 19th January, 1990 dismissing the assesee s appeal suffered from the mistake apparent from the record and, therefore, the application made u/s.254(2) of the Act for rectification of the order dated 19th January, 1990 was rightly accepted by the Tribunal by its order date 13th December, 1990. As far as the substantive order passed by the Tribunal on 10th May, 1991 is concerned, the Hon ble High Court held as under: 11. Sub-s.(2) of s.254 of the Act states that the Tribunal while rectifying mistake apparent from the record may amend any order passed by it under sub-s (I). We have already noted that in exercise of that power the Tribunal can only make changes in the original order consequent on the rectification and it cannot go further and deal with the entire appeal afresh. A perus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, ground nos.2 and 3 are dismissed. 10. While going through Section 11 (4A) of the Act, which clearly barred that sub-Section (1) or sub-Section(2) or sub-Section (3) or sub-Section 3(A) shall not apply in relation to any income of a trust or an institution, being profits and gains of business, unless the business is incidental to the attainment of the objectives of the trust or, as the case may be, institution, and separate books of account are maintained by such trust or institution in respect of such business. 11. In our considered opinion, although the separate books of account is attempted to be maintained for the business of the trust, but there is no material to show that it was incidental to the trust objective. In that view of the matter, the provisions of Section 11 (4A) of the Act will not be applicable to the case of the assessee. 12. As regard to the question no.4 to the substantial questions of law as has been framed by learned counsel for the appellant-assessee with regard to hybrid system of accounting adopted by the assessee, the learned Tribunal has rightly come to the conclusion in the last paragraph of the impugned order i.e. paragraph-6, which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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