2020 (7) TMI 709 - AT - Income Tax

Rectification u/s 254 - Sale of land - land in question were sold by the assessee in the capacity of power of attorney holder and AO has assessed the income in the hand of the assessee who sold the land - tribunal deleted addition - HELD THAT - Assessee produced the relevant documentary evidence in support of the claim that he has executed the sale deeds in the capacity of power of attorney holder of the land owners namely, Hanuman Sahai, Chauthmal, Gyarsi Lal, Pachuram, Shankar Lal and Nanchi Lal. Tribunal has given a finding of fact on merits after analyzing the documentary evidence. AO though did not accept the documentary evidence but also not conducted any enquiry and particularly by examination of the original land owners who have given a power of attorney in favour of the assessee. The assessment order is silent about enquiry conducted by the AO. Now after passing the said order of the Tribunal the AO is coming up with a new stand that the issued summons U/s 131 of the IT Act to the land owners that being the case and nothing has come out from the alleged enquiry or attempt made by the AO it would support the case of the assessee. The summons issued by the AO if served upon the land owners then non appearance of the land owners would not discharge the AO from conducting further enquiry. Assessee cannot be blamed for non appearance of the land owners in response to the summons if any issued by the AO. AO is not allowed to setup a new case after the matter was decided by the Tribunal. The assessment order is completely silent about the alleged summons issued by the AO hence, the Tribunal decided the case based on the material available on record which cannot be recalled without any substantial fact or material relevant for the disposal of the case brought on record. Matter decided on merits and based on the analysis of fact and record cannot be reversed or reviewed. Even otherwise the scope of Section 254(2) of the Act is very limited and circumscribed and does not given the jurisdiction to the tribunal to re-evaluate the material/evidence hence, the Misc. Application filed by the Revenue deserves dismissed.

Summary

Issues:
Recalling of impugned order by the Revenue based on alleged mistake in the Tribunal's decision.

Analysis:
The Revenue sought recalling of the impugned order by the Tribunal due to alleged mistake in the decision. The Revenue argued that the Tribunal erred in deleting the addition made by the Assessing Officer (AO) without considering the summons issued by the AO to the original landowners who gave power of attorney to the assessee. The Revenue contended that the AO assessed the income in the hands of the wrong party, the assessee who sold the land. On the contrary, the assessee argued that the summons were not mentioned in the assessment order, and the Tribunal's decision based on documentary evidence cannot be reviewed. The Tribunal analyzed the facts and held that the assessee sold the land as a power of attorney holder and not as the owner, and the AO failed to conduct further inquiry by examining the original landowners. The Tribunal emphasized that the AO's failure to contradict the documentary evidence led to the deletion of the addition in the assessee's hands.

The Tribunal's decision was based on the fact that the assessee presented documentary evidence supporting the sale deeds executed as a power of attorney holder. The Tribunal highlighted the AO's lack of inquiry into the original landowners, despite issuing summons, as a crucial oversight. The Tribunal reasoned that the AO's failure to conduct a proper investigation and bring forth material establishing the assessee as the owner of the land resulted in the deletion of the addition. The Tribunal emphasized that the assessment order did not reflect any inquiry conducted by the AO regarding the alleged summons issued to the landowners. Therefore, the Tribunal dismissed the Revenue's miscellaneous application, stating that the decision was made based on the available facts and records, and cannot be reversed without substantial new evidence. The Tribunal also clarified the limited scope of Section 254(2) of the Act, preventing re-evaluation of evidence, and upheld the decision based on the analysis of facts on record.