By JAGDISH D. SHAH | JAGDISH T. PUNJABI
Chartered Accountants
4. ITO vs. Iraisaa Hotels Pvt. Ltd.
Members
: Saktijit Dey, JM and Rajesh Kumar, AM
MA No.
29/Mum/2017 arising out of ITA No.: 6165/Mum/2014
A. Y.:
2007-08
Dated: 10th September, 2018.
Counsel
for revenue / assessee: Ram Tiwari / Pradeep Kapasi
Section 254 – The ITAT is an adjudicator and not an investigator.
It has to rely upon the investigation / enquiry conducted by the AO. The
Department cannot fault the ITAT’s order and seek a recall on the ground that
an order of SEBI, though available, was not produced before the ITAT at the
hearing. The negligence or laches lies with the Department and for such
negligence or laches, the order of the ITAT cannot be termed as erroneous u/s.
254(2). Section 254(2) of the Act is very limited in its scope and ambit and
only applies to rectification of mistake apparent on the face of record, review
of earlier decision of the Tribunal is not permissible under the provisions of
section 254(2) of the Act
FACTS
The Revenue filed an application
seeking recall of the order dated 29th April, 2016 passed in ITA No.
6165/Mum/2014. It was contended that at
the time of disposal of the appeal by the Tribunal, though the final order
dated 31.3.2015, passed by SEBI was available it was not brought to the notice
of the Tribunal while deciding the issue relating to additions made u/s. 68 of
the Act by the Assessing Officer (AO) in respect of unsecured loan and share
capital amounting to Rs. 1,69,94,882. It
was contended that had the observations of the SEBI in the final order been
considered, the issue relating to the disputed additions made by the AO could
have been decided in a different manner i.e., in favor of the Department. It was submitted that the appeal order be
recalled and the appeal be heard and decided afresh after considering the final
report of the SEBI.
HELD
From the narration of facts in the
authorisation memo of the learned PCIT, the Tribunal noticed that he admits
that proper enquiry was not done by the learned CIT(A) and by the AO at the
stage of remand which resulted in not bringing certain facts to the notice of
the Tribunal. It observed that it is
crystal clear that the Tribunal has proceeded on the basis of facts and
material on record and as were placed before it at the time of hearing by the
learned Counsels appearing for the parties.
It observed that the role of the Tribunal as a second appellate
authority is of an adjudicator and not an investigator.
The Tribunal under the provisions
of the Act has to decide the grounds raised in an appeal filed either by the
assessee or by the Department on the basis of the facts and materials available
on record or brought to its notice at the time of hearing of appeal.
The Tribunal observed that it is
after passing of the order of the Tribunal the Department has come forward with
the final order of the SEBI by stating that, though, it was available at the
time of hearing of appeal but it could not be brought to the notice of the
Tribunal. It held that the negligence or
laches for not bringing the final order of SEBI to the notice of the Tribunal
lies with the Department and for such negligence or laches of the Department,
the appeal order passed by the Tribunal cannot be termed as erroneous to bring
it within the ambit of section 254(2) of the Act.
After disposal of appeal by the
Tribunal, if the Department comes with fresh evidence certainly it cannot be
entertained, much less, by taking recourse to section 254(2) of the Act.
The Tribunal observed that by
filing this application the Department wants a review of the earlier decision
of the Tribunal which is not permissible under provisions of section 254(2) of
the Act which is very limited in its scope and ambit and only applies to
rectification of mistake apparent on the face of record.
The Tribunal held the application
filed by the Department to be not maintainable.
