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TMI Blog2013 (12) TMI 427X X X X Extracts X X X X X X X X Extracts X X X X ..... on was erroneous on merits. That would be the province of a Court of appeal. A power of review is not be confused with appellate power which may enable an Appellate Court to correct all manner of errors committed by the subordinate Court. Following Lily Thomas, etc. etc. v. Union of India and others [2000 (5) TMI 1045 - SUPREME COURT] - Possibility of two views on the same subject is no ground to review the earlier judgment passed by a Bench of the same strength. Following CIT v. Mool Chand Shyam Lal [2004 (7) TMI 42 - ALLAHABAD High Court] - The Tribunal does not have power to review its judgment under Section 254(2) of the Act, which authorises the Tribunal to only correct its mistakes - ITAT has committed grave error of law to recall the order dated 30.6.1998 by the impugned order dated 14.2.2000 passed under section 254(2) of the Act - Decided in favour of Revenue. - Income Tax Appeal Defective No. 44 of 2000 - - - Dated:- 29-11-2013 - Sunil Ambwani And Surya Prakash Kesarwani,JJ. JUDGMENT (Delivered by Hon'ble Surya Prakash Kesarwani,J.) 1- This Income Tax Appeal has been filed by the revenue under Section 260-A of the Income Tax Act, 1961 (hereinafter refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecall its order in respect of ground No.3 in the assessee's appeal for assessment year 1992-93 and decide the same afresh ; (c) for such further and other reliefs as the nature and circumstances of the case may require." 7- By an order dated 14.2.2000 under challenge in this appeal the ITAT allowed the prayer made in Clause-(b) and rejected the prayers of Clause (a) and (c) and recalled its order dated 23.6.1998. Para 34 and 66 to 74 of the order dated 30.6.1998 passed by the ITAT is reproduced below : "(34)- We have considered the matter carefully. One may not hesitate in saying that in terms of the MOU dated 17th August, 1987, pages 15-19, between the parties the Agent firm was to be reimbursed the amount "on the basis of actual expenses supported by valid documents in case of direct allocable expenses" as envisaged by clause 5. There is no dispute that but for the debit notes, no details were furnished by the company before the assessing officer or the Ld. CIT(A). There is no improvement in this state even before us. An estimate in the assessee's claim is, therefore, the only answer. In an estimate subjectivity element cannot altogether be ruled out. However, it is the dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... L A/c of the Agent firm for the assessment year 1992-93 showed a credit of Rs.13,51,13,893/- under the head " service charges", the company was found to have debited only an amount of Rs.2,52,65,200/- ( in short 2.5 crores ), the different of the two figures coming to Rs.10,98,48,683/-, found by the A.O. as excess credit by the Agent firm in their books. On a query raised by the A.O. Vide his letter dated 16.12.94, about the amount of Rs.10.98 crores, the assessee company vide its reply dated 17.1.95 submitted that in so far as the payment of Rs. 2.52 crores was concerned, this was paid by them to the Agent firm at the rate of 2% of the total collection in terms of the MOU dated Ist April, 1991 executed between them ( referred to supra). About the discrepancy in the figures (amounting to Rs.10.98 crores ), the appellant took the stand that " the same will be explained in the case of M/s Sahara India as it acting as the Agent of other companies as well." Followed then a letter dated 20.1.95 from the A.O. To M/s Sahara India, the assessee's Agent. They, inter-alia, submitted that they were also collecting service charges from the members directly for extending facility to them for d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s with the change of the facts, the assessee became entitled to get service charges in terms of the MOU dated 1.4.91. However, as far as the amount of Rs.11.44 crores was concerned, in the absence of any details etc. provided by the agent firm to the assessee company, the only course which was left for the revenue authorities was to make the assessment and the same having been done keeping in view the past treatment did not call for any interference. (70)-We have considered the matter carefully. As pointed out earlier, it would appear that the facts obtainable for the year under consideration are slightly different, infact better than the earlier year disposed of by us by this order. The MOU dated 1st April 1991 relevant for the assessment year 1992-93, unlike the earlier one dated 17th August 1987 relevant for the assessment year 1991-92 specifically provided in para 6(1) for the payment of service charges by the company to the Agent firm at the rate of 2% of the total deposits collected by the latter. This being the position, in so far as the amount of Rs.2.52 crores is concerned, the same being 2% of the total deposits collected by the firm because rightly payable by the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the expenses incurred on behalf of the company. There is no dispute that at no stage any details much less supported by documents were furnished by the firm to the appellant company or by the company to the Revenue authorities excepting giving the following bifurcation : Sl. No. Particulars Amount (Rs.) 1. Establishment 3,45,57,775/- 2. Travelling and conveyance 74,32,621/- 3. Stationery Printing 78,29,267/- 4. Advertisement Publicity 34,72,820/- 5. Business development 6,11,16,112/- 11,44,08,593/- (73)-We are unable to disagree with the Ld. Senior Standing counsel that the above figures only bifurcated the huge amount of Rs.11.44 crores ( in short ) in five major heads and it was far from saying that it stood to provide the details of actual expenses much less they being supported by valid documents, as stipulated by the parties with reference to the MOU referred to supra. To say so, Shri Agarwal submitted, would be travesty of facts. (74)-On a consideration of the facts and circumstances, we are inclined to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact that the firm has been assessed to tax, inter-alia, on the said sum of Rs.11,44,08,593/- reimbursed by the applicant." 9- The ITAT disposed of the aforesaid Misc. Application by the impugned order observing as under :- "12. Coming to the next point, the specific submission of the Ld. Counsel for the assessee was that the materials produced before the Tribunal, particularly the assessment order of the firm for the A.Y. 1992-93, which was filed in the supplementary paper book at pages 23 to 31 and 32 to 40 as well as other documents, including the chart and statement of expenditure apportioned to Sahara India Investment Savings Corporation Limited and the assessee company etc. filed in another supplementary paper book, which were very much relevant for adjudicating the issue for the A.Y. 1992-93, have not been considered by the Tribunal. It was further submitted by the Ld. Counsel for the applicant, that detailed submissions were made on behalf of the assessee on this point but the same have not been considered nor dealt with in the order of the Tribunal which amount to mistake apparent from the record. In this regard the specific plea of the ld. Counsel for the assessee, Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvestment corporation Limited, Lucknow for the A.Y. 1991-92. It is not the case of the department that these documents were not before the Tribunal at the time of the hearing of the appeals. The Ld. Sr. D.R. Also did not dispute the assertion of the Ld. Counsel for the assessee that arguments were advanced before the Tribunal on the basis of these documents. Thus, the existence of the above mentioned material before the Tribunal at the time of hearing of the appeal for the A.Y.1992-93 is not disputed. So far as the consideration of the issue relating to deduction on account of expenses reimbursed by the assessee company to the firm for the A.Y. 1992-93 is concerned, the issue has been dealt with from page 66 to page 74. 20. In view of the above cited authorities, the legal position is clear. The settled legal position is that if at the time of deciding an issue, the relevant material which has got bearing on the issue was placed before the Tribunal and arguments were made in relation thereto but the same was not considered, then such non-consideration amounts to a mistake apparent from the record and such mistake has to be rectified U/s 254 (2) of the I.T. Act. 25. To conclude, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , therefore, the only answer. (ii) Considering all the facts and circumstances of the case, the assessee's claim was restricted to 4.5% (four and a half percent ) as against 3% allowed by the authorities below. (iii) The assessee firstly claimed an amount of Rs.2,52,65,200/- towards "service charges" on the strength of Clause 6(1) of the MOU dated Ist April,1991 relevant for the assessment year under consideration ; pages 20-24 of the assessee's paper book for the assessment year 1991-92. (iv) the assessee claimed another amount of Rs.11,44,08,593/- towards "reimbursement of expenses to Agent (M/s Sahara India ). (v) By adding the two figures of Rs.2,52,65,200/- being expenses claimed as service charges @ 2% in terms of the MOU dated 1.4.91, and the amount of Rs.11,44,08,593/-, the aggregate coming to Rs.13,96,73,793/- and taking the figure of total collection at Rs.1,26,32,59,971/- the assessing officer restricted the assessee's claim to 3% of the total collections which worked out to Rs.3,78,97,797/-. This amount deducted from the total claim of the assessee at Rs.13,96,73,793/-, an amount of Rs.10,17,75,996/- was disallowed, affirmed during the first appeal, also in disp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 it is evident that the deduction in respect of "service charges" was allowed on the strength of Clause 6(1) of the MOU dated Ist April,1991. The claim of the assessee with regard to another amount of Rs. 11,44,08,593/- towards reimbursement of expenses to the agent (M/s Sahara India ) was found to be referable to the internal page-22 of the MOU which provided that "the expenses so incurred by the firm in conducting the business of the company shall be reimbursed on the basis of actual expenses supported by valid documents in case of direct allocable expenses. The ITAT further noted in paragraphs- 72 and 73 that the MOU says that reimbursement for expenses shall be made against the bills raised by the firm for the expenses incurred on behalf of the company and that there was no dispute that at no stage any details muchless supported by documents were furnished by the firm to the appellant company or by the company to the revenue authorities except giving bifurcation in five heads. 12- Thus, on the basis of MOU the claim of direct allocable expenses was allowable if the expenses so claimed were actually incurred, supported by valid documents and such expenses were reimbursed agai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that at no stage any details muchless the details supported by documents were furnished by the firm to the assessee company or by the assessee company to the revenue authorities. 15- In our view, the impugned order passed by the ITAT recalling the original order dated 30.6.1998 was completely outside the scope of Section 254(2) of the Act. Section 254(2) of the Act is reproduced below : "254. (2) The Appellate Tribunal may, at any time within four years from the date of the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub- section (1), and shall make such amendment if the mistake is brought to its notice by the assessee or the [ Assessing] Officer: Provided that an amendment which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee, shall not be made under this sub- section unless the Appellate Tribunal has given notice to the assessee of its intention to do so and has allowed the assessee a reasonable opportunity of being heard : [Provided further that any application filed by the assessee in this sub section on or after the 1st day of October 1998, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st sight of its earlier findings recorded in para-34 and omission to apply its own finding given in the earlier part of the order and that a supplementary paper book containing a copy of the assessment order and also the statement of expenditure apportioned to the applicant (respondent-assessee ) were filed which have not been referred. The ITAT accepted these two grounds to recall its order dated 30.6.1998 completely ignoring the fact that it had discussed in detail in the original order, the terms of the MOU which clearly provides for reimbursement of expenses by the respondent assessee to the firm on actual basis supported by valid documents in case of direct allocable expenses and bills to be raised by the firm for the expenses incurred on behalf of the company. The findings of the ITAT in the order originally passed was that at no stage any details muchless supported by documents were furnished by the firm to the assessee company or by the assessee company to the revenue authorities. These findings not only remained undisturbed in the impugned order, but also there is no reference of any evidence in the impugned order in terms of the MOU. Thus, the very basis of passing the im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the subordinate Court." 23- In the case of Lily Thomas, etc. etc. v. Union of India and others, JT 2000(5) SC 617, Hon'ble Supreme Court in para 51 reiterated the principle laid down in Patel Narshi Thakershi and others (supra ) and held that possibility of two views on the same subject is no ground to review the earlier judgment passed by a Bench of the same strength." 24- In the case of M/s Northern India Caterers (India) v. Lt. Governor of Delhi [AIR 1980 SC 674 ] in para -8, Hon'ble Supreme Court held that it is beyond dispute that a review proceeding cannot be equated with the original hearing of the case, and the finality of the judgment delivered by the Court will not be reconsidered except 'where a glaring omission or patent mistake or like grave error has crept in earlier by judicial fallibility." 25- Similar view was expressed by Hon'ble Supreme Court in the case of Chandrakanta v. Sheikh Habib (1975) 3 SC 933. In the case of Meera Bhanja (Smt.) v. Nirmala Kumari Choudhury, 1995 (1) SCC 170 in para 8 Hon'ble Supreme Court held as under : "It is well settled that the review proceedings are not by way of an appeal and have to be strictly confined to the scope a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pursuance of the rectification application, we are of the view that the CESTAT exceeded its power given to it under the provisions of Section 35C(2) of the Act. This Court has already laid down law in the case of T.S. Balram v. M/s. Volkart Brothers, 82 ITR 50 to the effect that a "mistake apparent from the record" cannot be something which can be established by a long drawn process of reasoning on points on which there may conceivably be two opinions. It has been also held that a decision on a debatable point of law cannot be a mistake apparent from the record. If one looks at the subsequent order passed by the CESTAT in pursuance of the rectification application, it is very clear that the CESTAT re-appreciated the evidence and came to a different conclusion than the earlier one. 17. Similarly, in pursuance of the rectifying application, the CESTAT came to the conclusion that an officer of the department, who was working as Assistant Director (Cost) and who was also a Member of an Institute of Cost and works Accountants was not competent as a Cost Accountant to ascertain value of the goods. It is strange as to why the CESTAT came to the conclusion that the Cost Accountant, whose ..... X X X X Extracts X X X X X X X X Extracts X X X X
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