2021 (1) TMI 397 - AT - Income Tax

Scope of rectification u/s 254 - unaccounted investment in Bungalow - cost of construction on investment in Bungalow - Revision under section 263 on receipt of report of value - HELD THAT - As categorically recorded that the assessee was found to be in control and possession of a palatial Bungalow in the course of search, the assessee could not corroborate the cost of construction of Bungalow as recorded in the books of account with the supporting bills. The cost of construction on investment in Bungalow was purportedly recorded in the books of account; the true value thereof could not be established by the supporting documents. Since the assessee failed to offer satisfactory cooperation toward the outlay of cost of Bungalow, the assessing officer accordingly made his endeavour to explore the true value of Bungalow. The legality of order passed under section 263 is also examined. In para-12 the order, it was noted that assessee raised some other connected grounds for leading the action of Commissioner of income tax; however, the representative of assessee not addressed those grounds. As noted that before passing the order learned Commissioner of Income tax, granted opportunity to the assessee, the assessee itself has not availed those opportunity, no reasons were explained as to why the assessee did not availed the opportunity, therefore, the remaining other grounds, though were not argued, were also considered and adjudicated upon. Under the garb of present application, the applicant cannot seek appreciation or reappreciation of the facts and evidence. In our considered view, none of the contention raised in the present application required further indulgence under the scope of provision of section 254(2) of the Act. The assessee seeking review of the order which is beyond the scope of section 254(2) of the Act. Therefore, we do not find any merit or substance in the application filed by assessee for seeking rectification in the order dated 20th April 2017. In the result miscellaneous application filed by assessee is dismissed.

Summary

Issues:
Rectification/recalling of consolidated order dated 20.04.2017 in Income Tax Appeals.

Analysis:
The assessee filed seven Miscellaneous Applications (MA's) seeking rectification/recalling of the consolidated order. The applicant contended that the Tribunal's finding was incorrect and against the evidence on record. The Tribunal held that the assessee possessed a Bungalow during the search but could not corroborate the construction cost. The assessee argued that all relevant documents were furnished to the revenue, contradicting the Tribunal's finding. Additionally, the assessee disputed the valuation report of the DVO, stating that only limited information was provided. The assessee also cited precedents to support their argument, requesting rectification, modification, or recall of the order.

The counsel for the assessee highlighted that no incriminating documents were found during the search, and the valuation report was obtained post-assessment. The Commissioner of Income Tax added amounts based on the valuation report, which the assessing officer confirmed. The assessee argued that as no incriminating material was found, no addition should have been made. Despite producing bills and vouchers, the Tribunal upheld the addition. The assessee sought to recall the order based on these grounds.

On the other hand, the revenue contended that there was no mistake in the Tribunal's order warranting rectification under section 254(2) of the Act. The revenue emphasized that the Commissioner of Income Tax acted correctly in invoking section 263 based on the valuation report. The Tribunal was urged not to recall the order, as it had considered both parties' submissions and passed a detailed and reasoned order.

After considering the arguments, the Tribunal noted that the predecessor had thoroughly examined the case before passing the order. The Tribunal recorded the submissions of both parties and deliberated on various aspects, including the cost of construction and the legality of the order under section 263. The Tribunal found that the applicant's contentions did not require further consideration under section 254(2) of the Act. Therefore, the Tribunal dismissed the miscellaneous application filed by the assessee.

In conclusion, the Tribunal dismissed all miscellaneous applications as the assessee raised common contentions in all applications. The decision was based on the findings that the applicant's arguments did not warrant rectification under the provisions of section 254(2) of the Act.