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TAXAP/108/2009 5/ 5 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX
APPEAL No. 108 of 2009
=========================================
COMMISSIONER
OF INCOME TAX - Appellant(s)
Versus
HYTAISUM
MAGNETICS LIMITED - Opponent(s)
=========================================
Appearance :
MRS
MAUNA M BHATT for
Appellant(s) : 1,
RULE SERVED for Opponent(s) :
1,
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CORAM
:
HONOURABLE
MR.JUSTICE D.A.MEHTA
and
HONOURABLE
MS.JUSTICE H.N.DEVANI
Date
: 04/10/2010
ORAL
ORDER
(Per
: HONOURABLE MS.JUSTICE H.N.DEVANI)
Vide
order dated 15.2.2010, this Court had issued notice for final
disposal returnable on 2.3.2010. Despite service of notice, there
is no appearance on behalf of the respondent.
Heard
learned Senior Standing Counsel for the appellant.
Admit.
The following substantial question of law arises for determination :
“Whether
the Income Tax Appellate Tribunal was justified in entertaining and
allowing Miscellaneous Application filed by the assessee for
recalling the order dated 22.6.2006 made by the Tribunal despite
there being no mistake apparent on record?”
The
Assessing Officer had framed assessment under section 143(3) of the
Act for assessment year 1997-98 determining the total income at
Rs.3,85,35,410/- as against the returned loss of Rs.24,69,17,246/-.
Being aggrieved, the assessee carried the matter in appeal before
the Commissioner (Appeals). The assessment order was challenged by
the assessee on various grounds, including the ground relating to
treating the return of income filed as invalid on the ground that
the return was not accompanied with the tax audit report and
accounts as required under section 44AB of the Act; as well as the
ground relating to setting off of the loss claimed in the return.
The Commissioner (Appeals) vide order dated 13.6.2001 dismissed both
the grounds of appeal. Being aggrieved, the assessee carried the
matter in second appeal before the Tribunal wherein the above
referred grounds were taken as grounds No.1 and 2. The Tribunal vide
order dated 22.6.2006, dismissed both the aforesaid grounds of
appeal.
Subsequently,
the assessee moved a miscellaneous application for recalling the
order dated 22.6.2006 made by the Tribunal on the ground that ground
No.2 had not been disposed of by the Tribunal and that though
the said ground had been specifically taken up before the
Commissioner (Appeals), the Commissioner (Appeals) had also not
disposed of the said ground.
The
Tribunal, after considering submissions advanced on behalf of the
parties, found that ground No.2 had not been dealt with by it in its
order dated 22.6.2006 and held that the same was a mistake apparent
on record. The Tribunal, accordingly, vide the impugned order dated
11.04.2008 amended paragraph 5 of its order and substituted it by
the following :
“[5] Thus,
Ground No.1 stands dismissed. So far as Ground No.2 is concerned, we
find that this ground has not been disposed of by the CIT (A) and
accordingly, we direct the CIT (A) to dispose of the ground relating
to not allowing of set off of carried forward losses, after giving
proper and reasonable opportunity to the assessee.”
The
learned Senior Standing Counsel for the appellant invited attention
to the order made by Commissioner (Appeals) as well as the earlier
order dated 22.6.2006 made by the Tribunal, to submit that both, the
Commissioner (Appeals) as well as the Tribunal had, at length,
considered the controversy raised vide ground No.2 and had dismissed
the same on merits. It was, accordingly, urged that the Tribunal was
not justified in holding that the said ground had not been dealt
with and as such, there was a mistake apparent on record in the
order of the Tribunal.
As
can be seen from the order of the Commissioner (Appeals), the second
ground raised before him was regarding set off of loss claimed in
the return. The Commissioner (Appeals), in paragraphs No.2, 3 and 4
of his order, while dealing with the question regarding treating the
return of income filed as invalid return on the ground that tax
audit report was not attached and the books of accounts were not
audited, has after appreciating the evidence on record, held that
the Assessing Officer was perfectly justified in rejecting the books
of account and taking the loss shown in the return at Nil. The
Commissioner (Appeals) has thereafter specifically observed that
ground No.2 is regarding setting off of loss claimed in the return
and that the ground was already decided against the assessee in the
preceding paragraph.
The
Tribunal in its order dated 22.6.2006, has dealt with grounds No.1
and 2 raised before it. In the concluding part of paragraph 4
wherein the Tribunal has recorded its findings in relation to the
said issue, the Tribunal has categorically held as follows:
“Although
the proviso to section 139(9) empowers the assessing officer to
condone the delay and treat the return as a valid return, but the
assessee in this case has not made an application before the
assessing officer for the extension of the time or even no such plea
was taken either before the CIT (Appeals) or before us, therefore,
we are of the view that the proviso to section 139(9) will not come
for the rescue of the assessee. We, therefore, hold that the
original return filed by the assessee on 28/11/97 was an invalid
return. The return filed by the assessee u/s 139(3) was invalid,
therefore, we hold that the assessee is not entitled to carry
forward the loss as determined during the assessment year under
consideration.”
Thus,
it is apparent that the Tribunal, after detailed discussion in
relation to Ground No.1 and 2, which were related grounds, has held
that the assessee was not entitled to carry forward the loss as
determined during the assessment under consideration. In the
circumstances, it is apparent that the finding recorded by the
Tribunal that Ground No.2 has not been dealt with by the Tribunal is
contrary to the record and as such, the Tribunal was not justified
in holding that there was a mistake apparent on record in its
earlier order dated 22.6.2006.
In
the light of the aforesaid, there being no mistake apparent in the
order dated 22.6.2006 made by the Tribunal, the Tribunal was not
justified in entertaining and granting the miscellaneous application
made by the assessee and modifying the order dated 22.6.2006 and as
such the impugned order dated 11.04.2008 made by the Tribunal
cannot be sustained. The question stands answered accordingly.
For
the foregoing reasons, the appeal is allowed. The impugned order
dated 11.04.2008 made by the Tribunal in Miscellaneous Application
No.229/Ahd/2007 is hereby quashed and set aside.
[D.A.MEHTA,
J.]
[HARSHA
DEVANI, J.]
parmar*
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