TMI Blog2010 (1) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... ts on record; and (b) vital issues/grounds and legal contentions which go to the root of the very addition are remained to be dealt with and/or considered." 3. Thereafter, the applicant in para 7.1 has elaborated on the facts of the case, which are as under: "(A) One of the main basis for confirming the action of the AO is that the appellant had balance at Rs. 98 only which, according to the Hon'ble Tribunal, disproved the claim of the applicant regarding the availability of cash in hand. Here, the point that has been missed is that the claim of the appellant was that he had about Rs. 11 lakhs balance available with him on the basis of which he had made the estimates for future years, after demise of his father. In other words, the issue was regarding the availability of money with the applicant at a particular point of time when he set out to chalk out his future planning. It was nobody's case that this cash balance remained with the applicant throughout the period of two years. What was crucial and important was the starting point on the basis of which the applicant started his planning and availability of money at that point of time. The financial statement attached to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... important legal issue was legality of invoking the presumption under s. 132(4A) of the Act at the time of framing the assessment. The applicant also pointed out that the earlier miscellaneous application moved by the assessee was rejected by the Tribunal vide order dt. 12th Dec., 2006. The applicant further submits that the points and issues raised in the present application was not dealt in the earlier order. The plea of the assessee was to rectify the mistakes which had crept in the order of the Tribunal. 5. The learned Authorised Representative for the assessee submitted that the present miscellaneous application is the second miscellaneous application filed against the order itself, which is permissible in law. The learned Authorised Representative further submitted that during the course of search certain loose papers were found and a presumption was drawn under s. 132(4A) of the Act on the basis of which addition was made. The learned Authorised Representative pointed out that the so-called presumption under s. 132(4A) of the Act is only available for the purpose of seizure and is not available as a basis for making the addition on account on undisclosed income. Reliance w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vered by an error apparent on the face of the record." 7. Regarding the power to rectify the mistakes, their Lordships of Hon'ble Bombay High Court in CIT vs. Ramesh Electric Trading Co. (1993) 203 ITR 497 (Bom) had held as under: "It is an accepted position that the Tribunal does not have any power to review its own orders under the provisions of the Act. The only power which the Tribunal possesses is to rectify any mistake in its own order which is apparent from the record. This is merely a power of amending its order. The power of rectification under s. 254(2) can be exercised only when the mistake which is sought to be rectified is an obvious and patent mistake which is apparent from the record, and not a mistake which requires to be established by arguments and a long drawn process of reasoning on points on which there may conceivably be two opinions. 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 the exercise of its power of rectification, look into some other circumstances which would support or not support its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... document being the page No. 18 of Annex. A-1 was found from the residence of the assessee and seized on 16th Dec., 1997. The said document a copy of which has been produced at p. 3 of the assessment order contained entry for availability of cash balance of Rs. 11 lacs giving the details of currency notes of different denominations. Thereafter datewise incurring of expenses starting from 1st April, 1995 had been given upto June, 1996. In between, periodically, the assessee after considering the expenses incurred had also drawn balances such as balance as on 1st Aug., 1995 was shown at Rs. 6,41,000 and final balance as on 19th Sept., 1997 had been shown at Rs. 2 lacs. This document was admittedly in the handwriting of the assessee. The assessee explained that the entries were part of the future planning regarding various exigencies to be made according to his own expectation and did not contain any actual expenditure. The AO however did not accept the explanation and treated the sum of Rs. 11 lacs as undisclosed income of the assessee. The AO gave the following reasons for rejecting the explanation of the assessee: "(a) Details relate to expenditure made by the appellant out of an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further noted that the document found was in the assessee's own handwriting. The Tribunal therefore concluded that no satisfactory explanation had been given by the assessee regarding the notings on the document found and addition was confirmed. The Tribunal had however also observed that the presumption under s. 132(4A) of the IT Act about the contents of the seized documents stood established in the absence of assessee proving otherwise. 4. On receipt of the order of the Tribunal, the assessee filed miscellaneous application being the MA No. 307/Mum/2006 on 28th May, 2006 requesting for rectification of order of Tribunal in relation to the addition of Rs. 11 lacs. The assessee at the time of hearing of the application submitted that in the interest of justice, equity, and fairness the issue be adjudicated afresh to consider the various factual and legal aspects. The Tribunal however did not accept the plea of the assessee and observed that under s. 254(2) only apparent mistakes could be rectified and not mistakes to be discovered after a long drawn process of argument, probe or investigation. The Tribunal referred to the judgment of the jurisdictional High Court of Mumbai in ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that were a magic formula, if the judgment of the Tribunal shows that it has, in fact, done so, there is no reason to interfere with the decision of the Tribunal. 4.2 The Tribunal after considering the facts and circumstances as mentioned above rejected the miscellaneous application moved by the assessee. 5. Thereafter the assessee has filed a fresh miscellaneous application on 2nd April, 2007 being the MA No. 246/Mum/2007 on the same issue of addition of Rs. 11 lacs. A perusal of the said miscellaneous application shows that the paras 1 to 8 are just copies of the miscellaneous application dt. 28th May, 2006 filed earlier. In subsequent paras the assessee has only mentioned that the Tribunal had dismissed the petition without considering the point or mistakes. However the petition does not specify such points. The assessee has also referred to some judgments in support of the case that in case of mistakes the order could be recalled. It is thus clear that the second miscellaneous application is on the same issue on which the assessee had already filed a miscellaneous application and which had been dismissed by the Tribunal after detailed discussion vide order dt. 12th Dec., 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lar assessment as held by Hon'ble Supreme Court in case of P.R. Metrani. As per the said judgment, presumption under s. 132(4A) is restricted to the summary assessment, for retention of sufficient assets to meet tax and penalty and the presumption does not pertain to regular assessment. It has therefore been argued that since the decision of the Tribunal to rely on presumption under s. 132(4A) was contrary to the judgment of apex Court, decision suffered from a mistake apparent from record. Reliance has been placed on the judgment of Hon'ble Supreme Court in case of Saurashtra Kutch Stock Exchange Ltd. in which it has been held that failure to apply the judgment of jurisdictional High Court is a mistake apparent from record. 6.1 It may be appropriate in this context to reproduce the provisions of s. 132(4A) for the sake of clarity: "(4A) Where any books of accounts, other documents, money, bullion, jewellery or other valuable article or thing or is fol1nd in the possession or control of any person in the course of search, it may be presumed (i) that such books of accounts, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is error in the order of Tribunal particularly when the Tribunal decided the issue on merit after considering the explanation of the assessee. In other words, even after considering the judgment of Hon'ble Supreme Court relied upon by the assessee, there will be no change in the decision taken by the Tribunal as the decision was not based only on presumption. Thus there is no apparent mistake which requires rectification. The non-consideration of the judgment of the apex Court would have resulted into an apparent mistake provided consideration of the judgment would have led to a different conclusion by the Tribunal, which is not so in this case. The judgment is not applicable to the facts of the present case as there is no dispute in this case either about the ownership or the contents of the document. 6.3 The above judgment of the Hon'ble Supreme Court is also not applicable to the facts of the present case for the reasons that said judgment related to the regular assessment whereas in the present case we are concerned with block assessment in which undisclosed income has to be determined on the basis of material found during search. Sec. 158B(b) defines the undisclosed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of Evidence Act which he could always apply. In any case, such presumption as pointed out earlier in this case is not relevant as the assessee raised no disputes regarding the ownership of document which was admittedly in his own handwriting and the contents were also not denied. The AO also did not apply the provisions of s. 132 (4A) and decided the matter under the specific provisions of block assessment. The assessee had given certain explanation regarding the entries in the documents which after considering the facts and circumstances of the case was no found acceptable by the lower authorities and their finding was confirmed by the Tribunal by way of a reasoned and speaking order. The judgment of Supreme Court in case of P.R. Metrani as pointed out earlier is not applicable to the facts of the present case. There is thus no apparent mistake in the order of the Tribunal. 7. In view of the foregoing discussion, we do not see any apparent mistake in the order of the Tribunal dt. 28th April, 2006. The miscellaneous application filed earlier on the same issue has already been-rejected. The Tribunal has no power of review. We therefore reject the second miscellaneous applicatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on for the reasons set out in the assessment order as reproduced by the learned AM in his separate instant order. The AO made addition of Rs. 11 lakhs by treating it as income from undisclosed sources. No relief was allowed by the learned CIT(A) as well who reproduced the entries appearing on p. 18 of Annex. A-1 in detail. On the top of the said page the noting of the denominations of Notes available were also mentioned i.e., 500 Notes = 5,60,000 100 (Bank seal) = 2,00,000 100 Notes = 2,20,000 + 1,40,000 ---------- Total = 11,00,000 ---------- Certain amounts of expenses with narration were mentioned on the said page with identified dates and the net balances were drawn at various stages. The period covered on the said page No. 18 was from 1st April, 1995 to 19th Sept., 1997. The learned CIT(A) did not accept the contention of the assessee that the expenses mentioned on this page were a planner and not actual expenditure. It was noticed by him that the specific expenses such as electricity bills, stamp duty, NSCI bill, etc. were found to have been mentioned which indicated that these were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s offered by the assessee in that case explaining the entries on the paper. In the facts of the present case, no, satisfactory explanation has been filed by the assessee regarding the notings on account of denominations of Notes available with the assessee and also date-wise expenditure incurred by the assessee. The ratio laid down by Mumbai Tribunal in the case of D.A. Patel vs. Dy. CIT (2001) 70 TTJ (Mumbai) 969 : (2000) 72 ITD 340 (Mumbai) relied upon by the learned Authorised Representative for the assessee is not relevant to the facts of the present case. We agree with the findings of the CIT(A) in this regard and dismiss the ground filed by the assessee." 5. Thereafter the assessee filed miscellaneous application running into seven pages with paras 1 to 8 dividing grounds into two broad heads, viz., (a) the conclusion is based on erroneous facts and/or on misappreciation of the facts on record; and (b) vital issues/grounds and legal contentions which go to the root of the very addition are remained to be dealt with and/or considered. The entire application was directed against the sustenance of addition of Rs. 11 lakhs, which was registered and numbered as 307/Mum/2006. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vident errors and the Tribunal has no power to recall its previous order in order to rewrite the said orders. The mistake has to be such for which no elaborate arguments or reasons are required. In the present miscellaneous application the assessee has set out at length, which according to him are the errors and facts not considered by the Tribunal. The other issue raised by the applicant in the miscellaneous applicant is non-dealing/non-consideration of various vital issues which again are not to be raised by way of miscellaneous application under s. 254(2) of the Act. Their Lordships of Hon'ble Bombay High Court in CIT vs. Ramesh Electric Trading Co. have categorically held that the 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. 5. Their Lordships of Hon'ble Supreme Court in CIT vs. Karam Chand Thapar Bros. (P) Ltd. (1989) 76 CTR (SC) 36 : (1989) 176 ITR 535 (SC) had held as under: 'It is equally well-settled that the decision of the Tribunal has not to be scrutinized sentence by sentence merely to find out whether all facts have been set out in detail by the Tribunal or whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1993) 203 ITR 497 (Bom) recalled the order on ground No. 3 in the light of the judgment rendered by the Hon'ble Supreme Court in the case of P.R. Metrani vs. CIT (2006) 206 CTR (SC) 290 : (2006) 287 ITR 209 (SC) on merits. In her opinion non-consideration of the decision of the Hon'ble Supreme Court was a mistake apparent from record. However, the learned AM did not agree with the learned JM and dismissed the miscellaneous application on the ground that successive miscellaneous applications are not permissible and further the judgment of the Hon'ble Supreme Court in the case of P.R. Metrani is not applicable. This is how the matter has come up before me. 8. The learned counsel for the assessee contended that the learned JM was justified in recalling the order as the same was not in conformity with the law laid down by the Hon'ble Supreme Court in the case of P.R. Metrani, which came into being after the passing of the order. He relied on the judgment of the Hon'ble Supreme Court in the case of Saurashtra Kutch Stock Exchange Ltd. for the proposition that a subsequent judgment delivered by the Hon'ble Supreme Court on the point decided by the Tribunal was binding and if such orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is apparent from record and does not extend to reviewing of the earlier order. 10. The crucial expression 'mistake apparent from the record' came up for adjudication before the Hon'ble Supreme Court in the celebrated case of T.S. Balaram, ITO vs. Volkart Bros. Ors. (1971) 82 ITR 50 (SC). In this case it was held that: "a mistake apparent on the record must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning on points on which there may be conceivably two opinions. A decision on a debatable point of law is not a mistake apparent from the record". The Hon'ble Supreme Court in the case of CIT vs. Hero Cycles (P) Ltd. (1997) 142 CTR (SC) 122 : (1997) 228 ITR 463 (SC) considered the scope of rectification proceedings. In this case the claim for deduction under s. 35B was not originally allowed at all. An order was passed by the CIT(A) on assessee's application directing certain allowance to be given on proportionate basis after verification of the assessee's claim under s. 35B. The ITO thereafter entertained the assessee's prayer for rectification of the order and allowed the assessee's claim in respect of matters like col ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me Court or that of the jurisdictional High Court rendered prior to or subsequent to the impugned order, the same constitutes a mistake apparent from record capable of rectification under s. 254(2). In the same breath it will be an error apparent from record if the order is not in conformity with the retrospective amendment carried out to the statutory provision covering the period and point in dispute, of course, subject to the fulfilment of other conditions prescribed in the Act such as limitation period etc. 12. It is, therefore, clear that the power given to the Tribunal under s. 254(2) is confined to rectifying any mistake which is apparent from the record. The Tribunal is not empowered to review its order in the garb of rectification under s. 254(2). The Hon'ble jurisdictional High Court in the case of CIT vs. Ramesh Electric Trading Co. considered a case in which the Tribunal was required to decide whether the commission payment of Rs. 54,000 was deductible under s. 37. After examining the circumstances it came to the conclusion that the amount was not deductible. The assessee moved miscellaneous application under s. 254(2) stating that although the appeal memo contained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Electric Trading Co. needs to be examined. In this later case the Tribunal omitted to decide some of the grounds of the appeal by oversight. The Hon'ble Rajasthan High Court approved the view taken by the Tribunal in exercising its power under s. 254(2) by recalling the order to make a fresh order deciding the issues which were left undecided. The Hon'ble Rajasthan High Court discussed in para 5 the judgment of the Hon'ble jurisdictional High Court in Ramesh Electric Trading Co. and held that the issue raised before it was different from the one considered by the Hon'ble Bombay High Court. It was clarified that the ratio decidendi of Ramesh Electric Trading Co. was that while deciding an issue the Tribunal did not take into consideration some of the arguments and it was under those circumstances that the miscellaneous application was held to be not maintainable. Further it was clarified that the case before the Hon'ble Rajasthan High Court was on the failure to decide the grounds raised by the assessee in appeal memo. It is, therefore, axiomatic that the judgment of the Hon'ble jurisdictional High Court in the case of Ramesh Electric Trading Co. has not been diluted in any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this page No. 18, that it was not a planner but the incurring of actual expenditure. Even the balance as on 19th Sept., 1997 at the end of the page at Rs. 2 lakhs matched with the cash of Rs. 2 lakhs found at the time of search. The assessee in statement recorded at the time of search admitted that this page was in his own handwriting but claimed to be a rough working and assured to inform actual position in due course. There is no material on record through which the assessee furnished any detail of the notings on this page contrary to its contents. When the Tribunal dismissed this ground of the assessee with the elaborate reasoning as extracted above, it can be safely concluded that a particular view was formed about this page No. 18, on its appreciation. The first miscellaneous application filed by the assessee met with the fate of dismissal by the reasoning as extracted above. Now through this miscellaneous application the assessee desires to convince the Bench for forming a different opinion from the one made earlier. In my considered opinion the doors of s. 254(2) are closed to the review of the earlier decision based on the same set of facts. 15. Another important question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Hon'ble Allahabad High Court disapproved the view taken by the Tribunal in entertaining the second miscellaneous application on the same set of facts and recalling its appellate order on the alleged premise that there was an error apparent in the order. The learned Authorised Representative failed to draw my attention towards any judgment accepting the maintainability of second miscellaneous petition on the same set of facts. From these judgments it becomes apparent that once a miscellaneous application is filed which is rejected by the Tribunal, it is not permissible to entertain a second miscellaneous application against the original order on the same set of facts. Coming back to the instant case I observe that the Tribunal, after thorough discussion, in the order passed against the first miscellaneous application took a conscious decision that its conclusion in the original order was not based on erroneous facts and/or on misappreciation of the facts on record and further no legal contention going to the root of the very addition remained to be considered. Now when the second miscellaneous application came to be filed with the same contents, inter alia, placing reliance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority made a summary adjudication order under s. 132(5). Thereafter assessment was completed for asst. yrs. 1981-82 and 1982-83 by making certain additions on the basis of the documents found at the time of search. The AO pressed into service the presumption in terms of s. 132(4A) of the Act. The addition so made was echoed in the first appeal. The Tribunal however accepted the appeals of the assessee and set aside the orders passed by the learned CIT(A) except to the extent of certain additions. The Hon'ble High Court held that presumption under s. 132(4A) was not limited to the passing of an order under s. 132(5) only and the same presumption could be raised for framing the regular assessment as well. When the matter came up before the Hon'ble Supreme Court it was held that the presumption under s. 132(4A) is available only in regard to the proceedings for search and seizure under s. 132 and is not available for framing regular assessment. It was clarified that though the presumption under s. 132(4A) is not available to the authorities while framing the regular assessment but the material seized can be used as a piece of evidence in any other proceedings under the Act. It is on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A-1 belongs to the assessee; (ii) its contents are true; and (iii) it is in the handwriting of the assessee. The assessee himself admitted that it was in his own handwriting, which implied that it belonged, to him. He however took a plea that its contents were not actual transactions but only a planner. No evidence worth the name could be produced in support of his submission. Even in his final statement, he assured of filing explanation in due course, but at no stage of proceedings before the Tribunal, the assessee could point out any such explanation having been furnished. Obviously none of the transactions recorded on this page were found to have been entered in the regular books of account. When this page itself is crying hoarse that the recordings on it are the actual transactions, the natural consequence is that such transactions are undisclosed if not recorded in the regular books of account, which is the case here. The consideration of page No. 18 of Annex. A-1 does not amount to raising any presumption, be it rebuttable or non-rebuttable, as contemplated under s. 132(4A). It is a simple case of appreciation of evidence found at the time of search. In the scheme of block a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ord, in the original order passed by the Tribunal warranting any interference on this count. For the foregoing reasons I agree with the view expressed by the learned AM. The Registry of the Tribunal is directed to list this matter before the Division Bench for passing an order in accordance with the majority view. RAJENDRA SINGH, A.M.: 18th Jan., 2010 This miscellaneous application had been filed by the assessee on 2nd April, 2007 requesting for rectification of mistakes in the order of Tribunal dt. 28th April, 2006 in IT(SS)A No. 614/Mum/2003 relating to the block assessment. Earlier the assessee had filed a miscellaneous application on the same issue on 28th May, 2006 which had been rejected by the Tribunal vide order dt. 12th Dec., 2006 in MA No. 307/Mum/2006. The second miscellaneous application has been filed by the assessee on the same issue on the same set of facts with additional arguments based on the judgment of Hon'ble Supreme Court in the case of P.R. Metrani vs. CIT (2006) 206 CTR (SC) 290 : (2006) 287 ITR 209 (SC) which were delivered subsequent to the order on the first miscellaneous application. After hearing both the parties the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X
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