Cavalier Trading Pvt Ltd vs. DCIT (Bombay High Court)

10. os wp 2471-19 2477-19.doc
R.M. AMBERKAR
(Private Secretary)
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
O.O.C.J.
WRIT PETITION NO. 2471 OF 2019
Cavalier Trading Pvt Ltd .. Petitioner
Versus
Dy. Commissioner of Income Tax – OSD-II, Central Range
7 & Anr. .. Respondents
WITH
WRIT PETITION NO. 2477 OF 2019
Kalpit Trading Pvt Ltd .. Petitioner
Versus
Dy. Commissioner of Income Tax – OSD-II, Central Range
7 & Anr. .. Respondents
……………….
 Mr. Devendra Jain a/w Ms. Radha Halbe for the Petitioner
 Mr. Ashok Kotangle a/w P.A. Narayanan, Arun Nagarjun & Sakshi
Pandhelkar for the Respondents
……………….
CORAM : UJJAL BHUYAN &
MILIND N. JADHAV, JJ.
DATE : JANUARY 31, 2020.
P.C.:
1. Heard Mr. Jain, learned counsel for the petitioner
and Mr. Kotangle, learned standing counsel, revenue for the
respondents.
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2. Issue arising in both the writ petitions being the
same, those have been heard together and are being
disposed of by this common order.
3. However, for the sake of convenience, relevant
facts may be noted from Writ Petition No. 2471 of 2019
4. This petition has been filed under Article 226 of
the Constitution of India assailing the legality and
correctness of order dated 13.3.2019 passed by the Income
Tax Appellate Tribunal, “A” Bench, Mumbai (“Tribunal” for
short) in M.A. No. 658/M/2018 arising out of Income Tax
Appeal No. 4875/Mum/2014 for the assessment year 1999-
2000.
4.1. From a perusal of the order dated 13.3.2019,
it is seen that petitioner had challenged the order of the
Commissioner of Income Tax (Appeals) restricting its profit to
the extent of 1.5% of the sale and 1.5% on the purchase
before the Tribunal by filing the related appeal. Initially,
petitioner urged the following grounds:-
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“1. The CIT(A) is not justified in confirming or reducing the
estimation from 3% to 1.5% on sale and purchases made /
estimated by Assessing Officer in violation of principle of
natural justice.
2. He ought to have restricted the estimation upto 1% proposed
by the Assessing Officer, in similar circumstances in group
company’s appeal being ITA No. 4876/Mum/2014 in his letter /
SCN dated 20.7.2001.
3. The CIT(A) is further not justified in reducing the addition /
estimation to 1.5% from 3% on sales and purchases. He
ought to have restricted 1% on sale or purchase either, not on
both.
4. The CIT(A) is not justified in confirming the rejection of audited
book results without going into the background facts and
compelling circumstances to save other’s skin in the
proceedings before the Settlement Commission.
The appellant craves leave to add, amend and modify any of
the above grounds of appeal.”
4.2. Thereafter, during the pendency of the appellate
proceedings, petitioner submitted an application dated
27.7.2017 seeking leave to file modified / amended grounds
which were as follows:-
“1. The CIT(A) is not justified in confirming or reducing the
estimation from 3% to 1.5% on sale and purchases made /
estimated by Assessing Officer in violation of principle of
natural justice.
2. He ought to have restricted the estimation upto 1% proposed
by the Assessing Officer in similar circumstances in group
company’s appeal being ITA No. 4876/Mum/2014, in his
letter / SCN dated 20.7.2007.
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3. The CIT(A) is further not justified in reducing the addition /
estimation to 1.5% from 3% on sales and purchases. He
ought to have restricted 1% on sale or purchase either, not on
both.
4. The CIT(A) is not justified in confirming the rejection of audited
book results without going into the background facts and
compelling circumstances to save other’s skin in the
proceedings before the Settlement Commission.”
4.3. The related appeal was heard by the Tribunal on
29.5.2018 and by order of even date, Tribunal affirmed the
findings of the Commissioner of Income Tax (Appeals).
5. Petition filed a Misc. Application before the
Tribunal under Section 254(2) of the Income Tax Act, 1961
(“the Act” for short) contending that the modified grounds
were not considered by the Tribunal while disposing of the
appeal.
6. Tribunal, by the impugned order dated 13.3.2019
took the view that the modified / additional grounds were
nothing but reiteration of the basic issue which was
restricting the profit of the petitioner. Therefore, Tribunal
held that there was no mistake apparent in the face of the
record within the meaning of Section 254(2) of the Act and
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dismissed the Misc. Application.
7. On a query by the Court, learned counsel for the
petitioner submits that as on date, petitioner has not filed
appeal before this Court against the order passed by the
Tribunal dismissing the appeal.
8. We have compared the grounds initially taken by
the petitioner in the appeal as well as the grounds
subsequently submitted by the petitioner contending those
to be modified grounds. On considering the two sets of
grounds, we find that Tribunal had rightly opined that the
core issue for adjudication in the appeal before the Tribunal
was restriction of profit of the petitioner on sale and
purchase from 3% to 1.5%. In fact, the so-called modified or
additional grounds were nothing but reiteration of the
original grounds.
9. Section 254(2) of the Act provides that Tribunal
may, at any time within six months from the end of the
month in which the order was passed, with a view to
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rectifying any mistake apparent from the record, amend any
order passed by it while disposing of the appeal and shall
make such amendment if the mistake is brought to its notice
by the assessee or by the Assessing Officer. Substance of
Section 254(2) of the Act is rectification of mistake apparent
from the record. An error or mistake apparent from the
record is one which is manifest on the face of the record. No
long-drawn hearing is required for rectification of such
mistake.
10. In the instant case, what we notice is that not only
was there no mistake apparent from the record but in the
garb of the Misc. Application, petitioner had sought for
review of the final order passed by the Tribunal and for rehearing
of the appeal which is not permissible in law. In our
view, Writ Petition does not appear to be bonafide.
11. In the light of the above, we dismiss both the Writ
Petitions and impose cost of Rs. 10,000/- on each of the
petitions on the petitioner. The costs be paid by the
petitioner to the Maharashtra State Legal Services Authority
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within two months from the date of this order.
12. Both the Writ Petitions are dismissed with cost as
above.
[ MILIND N. JADHAV, J. ] [ UJJAL BHUYAN, J. ]
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