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TMI Blog2023 (11) TMI 1317X X X X Extracts X X X X X X X X Extracts X X X X ..... aised by assessee in its appeal, which reads as under: "GROUND 1: AGAINST RE-OPENING OF ASSESSMENT: 1. The learned Commissioner of Income-tax (Appeals)-I (CIT(A) erred in confirming the action of reopening the assessment for the year u/ s 148 of the Act. 2. The Appellant prays that the said re-opening is bad in law and deserves to be upheld". 4. Then, Ld. AR submitted that the order of ITAT in Para No. 3, as noted above in Para No. 2 of this order, suffers from certain mistakes rectifiable u/s 254(2). Although the assessee has narrated these mistakes as two (2) mistakes in Para No. 10 and 11 of M/A but for the sake of a smooth discussion, we re-arrange them as three (3) mistakes, as under: (i) The first mistake being claimed is such that the Ground No. 1 of appeal raised by assessee was not pressed by then arguing counsel, Shri Pankaj Shah ("erstwhile counsel") for expediting the disposal of appeal. To support this claim of assessee, Ld. AR drew us to an affidavit of erstwhile counsel filed on record. In Para No. 2 thereof, the said counsel has made averments to the effect that the Indore Bench was functioning in virtual mode and during the month of November, 2022, a physi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l of assessee, being unaware of decision, it constitutes a rectifiable mistake u/s 254(2). Further reliance is placed on Mahamaya Banerjee, in re AIR 1989 Cal. 106 where it was held that the petition withdrawn by party due to misconception/wrong advice of counsel is a sufficient cause for review of an order. Ld. AR also relied upon Federal Mogul Goetze (India) Ltd. Vs. ACIT (2022) 134 Taxmann.com 322 (Del HC) to argue that the power of rectification u/s 254(2) is not limited to a mistake committed by Tribunal alone, it is available even for a case of a mistake of counsel. (iii) The third mistake being claimed is such that the erstwhile counsel was not having any authorization to withdraw the ground raised by the assessee and yet the ITAT has allowed withdrawal of ground No. 1, therefore, there is an apparent mistake in the impugned order. Ld. AR carried us to the "Letter of Authority" given by the assessee to erstwhile counsel and submitted that the said authority, enabled the counsel to make statements and explanations but did not confer any authority for withdrawal of any of the grounds. Therefore, non-pressing of ground by erstwhile counsel and allowing the same by ITAT withou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opted by assessees/counsels. While some assessees/counsels narrate each and every aspect and some use general/wider phraseology. In present case, the "Letter of Authority" given by assessee to counsel was much wider even though it did not spell out each and every item separately. Moreover, in the "Letter of Authority", the assessee has also empowered the counsel to "compound matters wherever necessary". Further, the authority also ends with "all statements and explanations made by the counsel shall be binding on us". Therefore, the counsel had ample authority to withdraw ground. (iv) Lastly, Ld. DR submitted that if a situation of non-pressing ground by counsel is treated as a mistake apparent from record, it will open a window for the parties/counsels for not pressing any ground at the time of hearing of appeal and subsequently coming with a M/A u/s 254(2), when the order of ITAT goes against them on other grounds. Such approach shall be very fatal to judicial proceeding and it must be stopped and should not be entertained, encouraged and allowed in any case. 8. We have heard learned Representatives of both sides, considered their rival submissions and carefully perused the mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 70,00,000. 2. The Appellant prays that the said addition be deleted. The Appellant craves leave to add to, alter and / or amend the above grounds of appeal. Place: Indore Dated: March 14, 2018 Signature: SANTOSH Status: Company 9. Now, we deal with various claims raised by assessee, one by one. The first claim projected by assessee is such that the erstwhile counsel has chosen not to press Ground No. 1 for expediting the disposal of appeal. It is submitted by means of affidavit of erstwhile counsel that the erstwhile counsel initially argued grounds on merits and thereafter when he took up Ground No. 1 (which is a legal ground), the Bench indicated paucity of time. We are afraid to accept such a contention because as a matter of procedure and judicial practice, the ITAT is first taking up legal grounds and thereafter merits of the case. Furthermore, it is also strange to accept that the counsel could skip Ground No. 1 and argue other Grounds (which were on merits) first and thereafter come back to argue Ground No. 1. This claim of assessee is very strange. In any case, even if we assume that it happened so, at least it is being accepted in the affidavit that the deciding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by assessee before CIT(A) and the CIT(A) dismissed assessee's ground by observing thus: "4.1 Ground No. 1 : Through this grounds of appeal, the appellant has challenged the reopening of the case u/s 148 of the IT Act, 1961. The notice u/s 148 was issued to the appellant on 05.02.2015. The notice u/s 148 has been issued after recording the reasons. The appellant has been provided the reasons recorded u/s 148 of the I. T. Act. As far as the adequacies of reasons are concerned in my opinion, they are adequate and based on relevant facts and material. The need to issue notice arose due to noticing of that the company was engaged in receiving accommodation entries from bogus companies. The appellant filed the letter dated 15.12.2015 stated that return filed u/s 139(1) of the I. T. Act, 1961, may be treated as return filed in response to notice u/s 148 of the Income-tax Act, 1961. Subsequently notice u/s 143(2) and 142(1) has been issued and appellant have complied the above notices. The AO has followed the proper procedure before issuing the notice u/s 148 of the Income-tax Act, 1961. Therefore, the appeal on this ground is dismissed." On perusal of this para of CIT(A) and also the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd contention of assessee. 11. The third and last claim projected by assessee is such that the erstwhile counsel was not having any authorization to withdraw the grounds raised by the assessee and yet the ITAT has allowed withdrawal of ground. In this regard, we scan and re-produce below the "Letter of Authority" filed by assessee's erstwhile counsel: On perusal of same, one can easily find that the assessee has given authority to his counsel to appear and present assessee before ITAT. Such authority was fullest, unlimited and unrestricted and there is no rider mentioned therein. Secondly, the assessee has specifically authorized his counsel "to compound matters wherever necessary". This compounding, in a way, authorized assessee's counsel to withdraw full or part of the appeal i.e. one or more grounds. Ld. AR submitted that this authority of compounding was limited for compounding of matters before income-tax authorities but neither the Ld. DR nor we are influenced to accept such submission of Ld. AR. Lastly, the assessee has also mentioned in the authority that the statements and explanations shall be binding upon him. At the cost of repetition, we re-cite Para No. 3 of the ord ..... 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