2019 (11) TMI 134 - AT - Income Tax

Rectification u/s 254 - ALP determination - Review or rectification - HELD THAT - Assessee is not co-operating with authorities including tribunal and now hyper technical approach of hair splitting of the appellate order dated 16.06.2017 of the tribunal is done by the assessee in this MA and raising hyper technical pleas were done to somehow wriggle out of tribunal order dated 16.06.2017 by succeeding in somehow getting the appellate order dated 16.06.2017 passed by the tribunal recalled. One more feeble plea is raised by learned counsel for the assessee that the assessee was not exactly told by the Bench as to which all agreements were to be produced before the Bench at the time of hearing of the appeal . This clearly reveals and demonstrate the desperation of the assessee to somehow get the well reasoned detailed order dated 16.06.2017 passed by the tribunal recalled under the garb of this MA. The fact of the matter is that these agreements were entered into by the assessee to undertake various transactions during the impugned ay and in order to prove its contentions that only net revenue is to be considered while computing ALP and the so called claimed passed through costs are to be reduced from gross revenue to arrive at net revenue which is to be considered for determining ALP, the onus is on the assessee to produce relevant evidences to support its contentions. The said onus never get discharged. The next attempt is made in this MA to show that tribunal order dated 16.06.2017 was passed beyond 90 days and hence this order needed to be recalled. It is admitted by the assessee that the aforesaid appellate order dated 16.06.2017 passed by the tribunal was received on 25.07.2017. Merely because the appellate order dated 16.06.2017 passed by the tribunal was received by assessee on 25.07.2017 , a presumption is drawn by the assessee of its own that the appellate order was passed by the tribunal beyond 90 days , which later rightly stood corrected by assessee of its own during the course of hearing in MA when confronted with factual matrix of the case by not pressing too far this plea during the course of hearing before the Bench of this MA. It is also observed that further pleas are raised by assessee in this MA applications on merits of the issue which are infact an attempt to get the decision of the tribunal reviewed which is beyond the purview of limited scope of Section 254(2) as it is well settled that scope of provisions of Section 254(2) is limited to correcting mistakes apparent from records and the tribunal is debarred from reviewing its own decision while deciding MA. There is no need for us to go into these pleas challenging decision of the tribunal dated 16.06.2017 on merits of the issues as it is beyond limited scope of Section 254(2) of the 1961 Act as otherwise it will lead to reviewing of its own decision by the tribunal in MA which is not permissible

Issues Involved:

1. Rectification of mistakes apparent from records under Section 254(2) of the Income-tax Act, 1961.
2. Non-submission of relevant agreements by the assessee.
3. Timeliness of the tribunal's order.
4. Attempts to review the tribunal's decision under the guise of rectification.

Issue-Wise Detailed Analysis:

1. Rectification of Mistakes Apparent from Records under Section 254(2) of the Income-tax Act, 1961:

The assessee filed a Miscellaneous Application (MA) seeking rectification of mistakes in the appellate order dated 16.06.2017 passed by the Income-Tax Appellate Tribunal (ITAT) under Section 254(1) of the Income-tax Act, 1961. The tribunal emphasized that its scope to rectify its own appellate order under Section 254(2) is limited to correcting mistakes apparent from records. The tribunal does not have the power to review its own decision within this limited scope.

2. Non-Submission of Relevant Agreements by the Assessee:

The tribunal highlighted the conduct of the assessee during the assessment/appellate proceedings. The assessee failed to submit various agreements with its clients for the relevant period (assessment year 2009-10) despite being specifically asked by the tribunal. Instead, the assessee submitted an agreement dated 24.10.2013, which pertained to a later period (assessment year 2014-15) and was irrelevant for adjudicating the appeal/issues before the authorities. The tribunal noted that the assessee's conduct was not above board and suggested that something was being hidden from the authorities, which forced them to adjudicate based on the available material.

3. Timeliness of the Tribunal's Order:

The assessee contended that the tribunal's order dated 16.06.2017 was passed beyond the 90-day limit and should be recalled. However, the tribunal clarified that the date of hearing was 20.03.2017, and the date of pronouncement was 16.06.2017, which falls within the 90-day period. The assessee's presumption that the order was passed beyond 90 days was corrected during the hearing, and this plea was not pressed further.

4. Attempts to Review the Tribunal's Decision under the Guise of Rectification:

The assessee raised various pleas on the merits of the issue, attempting to get the tribunal's decision reviewed, which is beyond the purview of Section 254(2). The tribunal reiterated that the scope of Section 254(2) is limited to correcting mistakes apparent from records and does not permit reviewing its own decision. The tribunal dismissed the MA, stating that the assessee's attempt to get the well-reasoned appellate order recalled was not permissible within the limited mandate of Section 254(2). The tribunal suggested that the assessee could seek redress by filing an appeal with the Hon’ble Bombay High Court under Section 260A of the Income-tax Act, 1961.

Conclusion:

The tribunal dismissed the Miscellaneous Application No. 748/Mum/2017 arising out of ITA No. 7484/Mum/2014 for the assessment year 2009-10, filed by the assessee. The order was pronounced in the open court on 04.09.2019.

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