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TMI Blog2022 (8) TMI 1458X X X X Extracts X X X X X X X X Extracts X X X X ..... ose all the material facts before AO in the regular assessment - HELD THAT:- ITAT after elaborate discussion on the issue of reason to believe has taken a view that reason recorded by the AO was nothing but borrowed satisfaction. In holding so the ITAT analyzed the facts available on record, given various reasoning and also referred several judicial precedent. As Such the Revenue in M.A. has not pointed out any specific mistake in the order which is apparent from the record. The issue raised by the Revenue in M.A. requires long drawn argument which is not allowed under section 254(2) of the Act. If the Revenue feels the order passed by the Revenue is erroneous on account of law or on fact then the only remedy available is to challenge the order at higher forum. In holding so we draw support and guidance from the judgment of Hon ble Supreme Court in case of CIT vs. Reliance Telecom Ltd. [ 2021 (12) TMI 211 - SUPREME COURT] ITAT erred in holding that no addition was made based on reasons to believe recorded - Again it is noted that the ITAT has considered all the materials available on record and also made comparable reference to the income identified by the AO in reasons recorded an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ind any merit in the argument of Ld. Counsel for the Revenue. Hence, the MA filed by the Revenue is dismissed. Whether materials found during the search on the basis of which proceedings under section 153C of the Act were initiated, were not belonging to the assessee? - ITAT after elaborate discussion on the issue whether search materials belong to assessee or not, has taken a view that such materials do not belong to the assessee. In holding so the ITAT analyses the fact available on record, gives various reasoning and also refer the several judicial precedent. As Such the Revenue in M.A. has not pointed out any specific mistake in the order which is apparent from the record. The issue raised by the Revenue in M.A. requires long drawn argument which is not allowed under section 254(2) of the Act. If the Revenue feels the order passed by the Revenue is erroneous on account of law or on fact then the only remedy available is to challenge the order at higher forum. M.A s in this segment filed by the Revenue are hereby dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... ill apply to all the above mentioned MA Numbers falling under this segment. 4. The Revenue in this miscellaneous Application has requested to recall the order passed by the ITAT in ITA No. 461/Ahd/2019 vide order dated 12/11/2020 on the reasoning that there is mistake apparent from record within the provision of section 254(2) of the Act. 5. The Revenue in M.A. submitted that the Hon'ble ITAT erred in holding that the AO at time of recording reasons to believe for the escapement of income has not applied his mind properly. As such the AO properly applied his mind which can be established from the reasons recorded wherein he has analysed the materials found during the course search and decoded the amount relating to different assessee. Thereafter, he reached to reason to believe that the income has escaped assessment. As such, the information was received from external sources, containing ample materials, showing undisclosed income of the assessee. But there was failure on the part of the assessee to disclose the same. Thus, there is no illegality in the action of the AO in recording the reason to believe as it was formed after applying the mind. 6. The Hon'ble Tribunal also erre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we embark upon an enquiry on the facts of present case in order to find out whether there is any apparent error committed by Tribunal or not while adjudicating the appeals, we think it appropriate to bear in mind certain basic principles for exercising the powers contemplated under section 254(2) of the Act in the light of various judgments of Hon'ble Supreme Court as well as Hon'ble High Court expounding the scope of exercising powers under section 254(2) of the Act. We do not deem it necessary to recite and recapitulate all of them, but suffice to say that core of all these authoritative pronouncements is that the power for rectification under section 254(2) of the Act can be exercised only when mistake, which is sought to be rectified, is an obvious and patent mistake, which is apparent from the record and not a mistake, which is required to be established by arguments and long drawn process of reasoning on points, on which there may conceivably be two opinions. For fortifying this view, we make reference to the decision of the Hon'ble jurisdictional High Court in the case of ACIT Vs. Saurashtra Kutch Stock Exchange Ld., reported in 262 ITR 146 which has been upheld by the Hon'b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... record. The issue raised by the Revenue in M.A. requires long drawn argument which is not allowed under section 254(2) of the Act. If the Revenue feels the order passed by the Revenue is erroneous on account of law or on fact then the only remedy available is to challenge the order at higher forum. In holding so we draw support and guidance from the judgment of Hon'ble Supreme Court in case of CIT vs. Reliance Telecom Ltd. reported in 133 taxmann.com 41 where in was held as under: 4. In the present case, a detailed order was passed by the ITAT when it passed an order on 6-9- 2013, by which the ITAT held in favour of the Revenue. Therefore, the said order could not have been recalled by the Appellate Tribunal in exercise of powers under section 254(2) of the Act. If the Assessee was of the opinion that the order passed by the ITAT was erroneous, either on facts or in law, in that case, the only remedy available to the Assessee was to prefer the appeal before the High Court, which as such was already filed by the Assessee before the High Court, which the Assessee withdrew after the order passed by the ITAT dated 18-11-2016 recalling its earlier order dated 6-9-2013. Therefore, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITAT has considered all the materials available on record and also made comparable reference to the income identified by the AO in reasons recorded and final addition made by the AO in the assessment order passed under section 143(3) read with 147 of the Act. Thus, in our considered view, there is no mistake apparent in the order of the ITAT. At the this juncture we again feel pertinent to refer the judgment of Hon'ble Supreme Court in case of CIT vs. Reliance Telecom Ltd (supra) where it was held that even if the order passed by the ITAT is erroneous on merit the only remedy available to the aggrieved party to prefer appeal before Hon'ble High Court. The relevant observation of the Hon'ble Supreme Court (supra) extracted as under: "Even the observations that the merits might have been decided erroneously and the ITAT had jurisdiction and within its powers it may pass an order recalling its earlier order which is an erroneous order, cannot be accepted. As observed hereinabove, if the order passed by the ITAT was erroneous on merits, in that case, the remedy available to the Assessee was to prefer an appeal before the High Court, which in fact was filed by the Assessee before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be any addition during the search proceedings in the assessment framed under section 153A of the Act until and unless such addition is based on the incriminating materials found during the course of search from the premises of the assessee. In holding so the ITAT has relied on the judgement of Hon'ble Gujarat High Court in the case of Saumya Construction P. Ltd reported in 387 ITR 529 and Hon'ble Delhi High Court in the case of Kabul Chawala reported in 380 ITR 573. However, the principles laid down by the Hon'ble Courts nowhere restricts the addition based on incriminating material found from the premises of the concerned assessee only. As such, the documents were found of incriminating nature from the premise which was controlled by the searched group and the assessee was directly belonging to the searched group. ii. The finding of the ITAT that the Revenue to prolong the search has passed the prohibitory orders under section 132(3) of the Act is totally misplaced and which is against the principles laid down by the Hon'ble Supreme Court in the case of the VLS Finance Ltd versus CIT reported in 384 ITR 1. But the ITAT inadvertently has misinterpreted the impugned judgement o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Construction (P) Ltd. (supra) and the judgment of Hon'ble Delhi High Court in case of Kabul Chawla (supra). 13.2 In this regard, we note that the ITAT after elaborate discussion on the issue of assessment in case of search proceeding has taken a view that in the proceeding under section 153A of the Act, the addition to total income can only be made on the basis of material found from the premises of the assessee. In holding so, the ITAT analyses the facts available on record, gives various reasoning and also refers several judicial precedent. As Such the Revenue in M.A. has not pointed out any specific mistake in the order which is apparent from the record. The issue raised by the Revenue in M.A. requires long drawn argument which is not allowed under section 254(2) of the Act. If the Revenue feels the order passed by the Revenue is erroneous on account of law or on fact then the only remedy available is to challenge the order at higher forum. In holding so we draw support and guidance from the judgment of Hon'ble Supreme Court in case of CIT vs. Reliance Telecom Ltd. (supra). 14. The 2nd grievance of the Revenue is that the ITAT erred in holding that prohibitory order under sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dismissed. 19. Coming to the next set/segment of M.A's filed by the Revenue having common issues are as under: S. No. M.A. Nos. In IT(SS) Nos. A.Y. In case of Assessee 1-6 M.A No. 36 to 41/Ahd/2021 IT(SS) No. 118 to 123/Ahd/2019 2009-10 to 2014-15 Hitesh Ashok Vaswani 7-12 M.A No. 42 to 47/Ahd/2021 IT(SS) No. 130 to 135/Ahd/2019 2009-10 to 2014-15 Mamta Ashok Vaswani 13 M.A No 48/Ahd/2021 IT(SS) No. 206/Ahd.2019 2013-14 Navin Ashok Vaswani 14-15 M.A No. 49 to 50/Ahd/2021 IT(SS) No. 204 to 205/Ahd/2019 2009-10 to 2010-11 Harsha Deepak Vaswani 16-21 M.A No. 51 to 56/Ahd/2021 IT(SS) No. 124 to 129/Ahd/2019 2009-10 to 2014-15 Vanita Dilip Vaswani 22-23 M.A No. 64 to 65/Ahd/2021 IT(SS) No. 278 to 279/Ahd/2019 2012-13 to 2013-14 Shri Sai Siddhi Corporation 24-28 M.A No. 66 to 70/Ahd/2021 IT(SS) No. 280 to 284/Ahd/2019 2010-11 to 2014-15 Venus Township India P. Ltd 29-31 M.A No. 71 to 73/Ahd/2021 IT(SS) No. 834 to 836/Ahd/2019 2012-13 to 2014-15 Venus Infra Build P. Ltd 20. In all these M.A's. identical issues were raised by the Revenue. Therefore, we take up M.A. No. 36/AHD/2021 in ITA No. 118/AHD/2019 as lead case and proceed to decide the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rch on the basis of which proceedings under section 153C of the Act were initiated, were not belonging to the assessee. However from prima facie perusal of satisfaction note it revealed that the materials seized belong to the assessee. In this regard the tribunal also erred in not considering the decision of Hon'ble Jurisdictional high court in case of Kamlesh Dharamshi Patel vs. CIT reported in 31 taxmann.com 50 where it was held that the relation and reference of seized material to the assesse is to be seen in the light of language of satisfaction note. The ITAT further erred in not directly applying the order of tribunal in case of Anilkumar Gopikisan Aggarwal against which department is in appeal and not considering the judgment of Hon'ble Delhi High Court in case of Kabul Chawla (supra) where the term undisclosed income is defined 23.2 In this regard, we note that the ITAT after elaborate discussion on the issue whether search materials belong to assessee or not, has taken a view that such materials do not belong to the assessee. In holding so the ITAT analyses the fact available on record, gives various reasoning and also refer the several judicial precedent. As Such the Rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Saumya Construction P. Ltd reported in 387 ITR 529 and Hon'ble Delhi High Court in the case of Kabul Chawala reported in 380 ITR 573. However, the principles laid down by the Hon'ble Courts nowhere restricts the addition based on incriminating material found from the premises of the concerned assessee only. As such, the documents were found of incriminating nature from the premise which was controlled by the searched group and the assessee was directly belonging to the searched group. 28. It was also pointed out in the miscellaneous application by the revenue that the concept of incriminating materials does not arise with respect to the assessment years which got abated or the search year. In other words, the informations/documents received from the other sources can also be used for the purpose of the additions with respect to abated assessment years/ search year. However, the ITAT without considering the facts have decided the issue in favour of the assessee. Accordingly, the order of the ITAT suffers from the mistake apparent from record and therefore the order of the ITAT should be recalled for fresh adjudication within the meaning of the provisions of section 254(2) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in M.A. requires long drawn argument which is not allowed under section 254(2) of the Act. If the Revenue feels the order passed by the Revenue is erroneous on account of law or on fact then the only remedy available is to challenge the order at higher forum. In holding so we draw support and guidance from the judgment of Hon'ble Supreme Court in case of CIT vs. Reliance Telecom Ltd. (supra). 30.3 With respect to the contention of the revenue that there were certain assessment years which were abated and therefore the documents/ the information received from other sources can be used again the assessee, we note that there was no such argument advanced by the learned DR of the assessee at the time of hearing. The finding in the impugned appeals were given by the ITAT that the documents found from the premises of the 3rd party can be used against the assessee either under the proceedings under section 153C or 147 of the Act. As such, the issue of abated or unabated assessment years were not arising as evident from the finding of the ITAT with respect to the captioned appeals. Accordingly, there cannot be any question for deciding the issue whether there is apparent mistake in the o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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