2019 (3) TMI 1354 - AT - Income Tax

Rectification u/s 254 - apparent mistake in the order of the Tribunal - allowabilty of discount in absence of details - non consideration of order of co-ordinate benches of Tribunal - HELD THAT - Tribunal has considered the contentions and arguments of the assessee and has also considered the net profit shown by the assessee during preceding and in the year under consideration. Also observe that the assessee, before CIT(A) expressed her inability to furnish the details on discount invoice-wise, which resulted into confirmation of disallowance by the first appellate authority. From paras 8 & 9, clearly observe that the Tribunal has taken a lenient view as the part amount of cash discount @1% of total turnover has been allowed to the assessee and balance amount of claim of cash discount has been confirmed. Fully satisfied that there is no apparent mistake in the order of the Tribunal dated 30.11.2017 which requires any rectification permissible u/s.254(2). If findings arrived by the Tribunal are disturbed, then certainly it would amount to review of order under the garb of rectification which is not permissible as per the provisions of the Act. Therefore, inclined to hold that this miscellaneous application is devoid of merits and without any substance, therefore, the same is dismissed.

Summary

Issues:
Rectification of Tribunal order under section 254(2) of the Income Tax Act, 1961 for A.Y. 2013-2014 regarding part disallowance of discount and commission.

Analysis:
The assessee filed a miscellaneous application seeking rectification of the Tribunal's order dated 30.11.2017, which upheld part disallowance under discount and commission. The Authorized Representative argued that the Tribunal ignored the rule of consistency and failed to consider a decision by a coordinate bench, requesting the order to be rectified. The Departmental Representative contended that there was no apparent mistake in the Tribunal's order and the assessee was attempting a review under the guise of a miscellaneous application. The Tribunal had initially disallowed a claim of &8377; 15,40,933.22 due to lack of evidence of further cash discounts provided by the assessee.

Upon reviewing the submissions, the Tribunal found that the assessee had expressed inability to furnish discount details invoice-wise before the CIT(A), leading to the confirmation of the disallowance. The Tribunal noted that in the preceding assessment year, a similar claim was allowed after a 5% disallowance was deleted by the CIT(A). However, in the current year, the disallowance was due to the absence of evidence or details, not on an estimate basis. The Tribunal considered the assessee's submission on post-invoice discounts but emphasized the need for full details to accept such payments. Ultimately, the Tribunal estimated a cash discount of 1% of total sales, allowing &8377; 6,94,944.74 and confirming the balance disallowance of &8377; 8,43,988.48.

The Tribunal concluded that there was no apparent mistake in the order requiring rectification under section 254(2) of the Act. Dismissing the miscellaneous application, the Tribunal held that disturbing its findings would amount to a review under the guise of rectification, which is impermissible. The application was deemed devoid of merits and substance, leading to its dismissal.

In summary, the Tribunal's decision upheld the part disallowance of discount and commission after considering the submissions and arguments of both parties. The application for rectification was dismissed as the Tribunal found no apparent mistake warranting a revision of its order, emphasizing the importance of maintaining the integrity of its original decision.