Subhash Jain, Ajmer vs Assessee

Jh vkj-ih-rksykuh] U;kf;d lnL; ,oa Jh Vh-vkj-ehuk] ys[kk lnL; ds le{k BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM

M.A. No. 29/JP/2014 (Arising out of M.A. No. 17/JP/2011 in ITSSA No. 165, 166/JP/2005) Asstt. Years-Block Period 1991-1992 to 2000-2001

Late Shri Subhash Jain, Ajmer cuke A.C.I.T., Central, through legal heir Deepak Jain, Vs. Ajmer. Ajmer.

LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No. ABDPJ 5979 K vihykFkhZ@Appellant izR;FkhZ@Respondent

fu/kZkfjrh dh vksj ls@ Assessee by : None jktLo dh vksj ls@ Revenue by : Mrs. Neena Jeph (JCIT)

lquokbZ dh rkjh[k@ Date of Hearing : 27/03/2015 ?kks"k.kk dh rkjh[k@ Date of Pronouncement : 10/04/2015

vkns'k@ ORDER

PER: T.R. MEENA, A.M.

The assessee has filed this Miscellaneous Application U/s 254(2) of the

Income Tax Act, 1961 (in short the Act) against the order of this Bench of

ITAT, Jaipur in ITA No. 17/JP/2011, which was passed on 11/07/2014. 2 M.A. No. 29/JP/2014_

Subhash Jain Vs. ACIT

2. Facts of the case are that in this case block assessment was completed

for the block period 1991-92 to 2000-01 up to 09/08/2000 passed on

25/01/2008. The department has charged surcharge on tax amount. The

assessee filed M.A. against the order of the Assessing Officer, which has been

rejected by the Hon'ble Bench by considering the Hon'ble Supreme Court

decision in the case of CIT Vs. Suresh N. Gupta in case No. 32 of 2008 arising

out of SLP (C) No. 4617/2007 dated 07/01/2008 wherein a levy of surcharge

has been held justified in cases of searches conducted even before 01/6/2002

declaring the proviso clarificatory in nature but the larger Bench of the

Hon'ble Supreme Court in case of CIT Vs. Vatika Township P. Ltd. (2014) 367

ITR 466 (SC) has also decided that surcharge cannot be levied retrospectively.

The appellant has given brief facts of the case in petition are as under:-

(i) Search and seizure operation U/sec. 132 were carried on at assessee premises and incompliance the assessee filed its return for the block period and assessment were completed U/sec.

158BA without the levy of surcharge on the tax liability.

(ii) Later on the Assessing Officer seek to amend his apparent mistake by passing a rectification order u/sec. 154 which was challenged by assessee before the CIT appeals where the CIT, Appeals allowed the appeal of the assessee on the ground that 3 M.A. No. 29/JP/2014_ Subhash Jain Vs. ACIT

levy of surcharge was a debatable issue i.e. surcharge component was removed from the calculation of tax liability.

(iii) Later the CIT issued notice U/s 263 to the assessee and cancelled the order of Assessing Officer for non levy of surcharge considering the provisions of section 113 and section 4 of the Act.

(iv) The assessee filed an appeal before the ITAT and it was held that proviso to section 113 of the Act cannot be held to be declaratory or clarificatory in nature and was prospective in its operations.

(v) Against the decision of ITAT the revenue filed the appeal with High Court where it was decided that proviso inserted in Section 113 of the Act by the Finance Act, 2002 was prospective in nature and the surcharge leviable in the instant case is not applicable.

(vi) This decision of the High Court has been decided by the Supreme Court as under:-

Retrospectively it attached to benefit the person in contradistinction to the provision imposing some burden or liability where the presumption attaches towards prospectively. In the instant case, the proviso added to section 113 of the Act is not beneficial to the assessee. On 4 M.A. No. 29/JP/2014_ Subhash Jain Vs. ACIT

the contrary, it is provision which is onerous to the assessee. Therefore, in a case like this, we have proceed with the normal rule of presumption against retrospective operation. Thus, the rule against retrospective operation is a fundamental rule of law that no statute shall be construed to have a retrospective operation unless such a construction appears very clearly in the terms of the Act or arises by necessary and distinct implication. Dogmatically framed, the rule is no more than a presumption, and thus could be displaced by out weighing factors.

3. No one appeared on behalf of the appellant but facts of the case and

ruling on this issue of the Hon'ble Supreme Court in the case of CIT Vs Vatika

Township Private Ltd. (supra) has been considered. It is found that the Larger

Bench has overruled own decision of CIT Vs Suresh N Gupta (supra) and held

that amendment in Section 113 is not retrospective but prospective. This

Bench also has dismissed the M.A. filed by the revenue in case of ACIT Vs.

Shri Deena Nath jain in M.A. No. 18/JP/2011 for the same block period in the

group cases of the assessee vide order dated 31/10/2014. Being law of the

land on this issue, is binding on the lower court, therefore, we modify our

order U/s 254(2) of the Act being apparent mistake as legal position has been

changed on this issue by the Highest Court of this land, therefore, it is an 5 M.A. No. 29/JP/2014_ Subhash Jain Vs. ACIT

apparent mistake on record. The Hon'ble Supreme Court in the case of ACIT

Vs. Saurashtra Kutch Stock Exchange Ltd. (2008) 305 ITR 27 (SC) has held as

under:

"A patent, manifest and self-evident error which does not require elaborate discussion of evidence or arguments to establish it, can be said to be an error apparent on the face of the record and can be corrected while exercising certiorari jurisdiction. An error cannot be said to be apparent on the face of the record if one has to travel beyond the record to see whether the judgment is correct or not. An error apparent on the record means an error which strikes one on mere looking and does not need a long drawn out process of reasoning on points on which there may be conceivably two opinions. Such error should not require any extraneous matter to show its incorrectness. To put it differently, it should be so manifest and clear that no court would permit it to remain on record. If the view accepted by the court in the original judgment is one of possible views, the case cannot be said to be covered by an error apparent on the face of the record. Where after the Appellate Tribunal rendered its decision on appeal, a miscellaneous application was filed by the assessee under section 254(2) of the Income-tax Act, 1961, stating that a decision of the jurisdictional High Court was not brought to the notice of the Tribunal: Held, that there was a mistake apparent from the record which required rectification".

6 M.A. No. 29/JP/2014_ Subhash Jain Vs. ACIT

In view of the ruling of the Hon'ble Supreme Court, we allow the assessee's

M.A.

5. In the result, the Misc. Applications of the assessee is allowed.

Order pronounced in the open court on 10/04/2015.

Sd/- Sd/- ¼vkj-ih-rksykuh½ ¼Vh-vkj-ehuk½ (R.P.Tolani) (T.R. Meena) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member

Tk;iqj@Jaipur fnukad@Dated:- 10th April, 2015 *Ranjan

vkns'k dh izfrfyfi vxzsf'kr@Copy of the order forwarded to:

1. vihykFkhZ@The Appellant- Late Shri Subhash Jain, Ajmer through legal heir Deepak Jain, Ajmer.

2. izR;FkhZ@ The Respondent- The A.C.I.T., Central, Ajmer.

3. vk;dj vk;qDr@ CIT

4. vk;dj vk;qDr¼vihy½@The CIT(A)

5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur

6. xkMZ QkbZy@ Guard File (M.A. 29/JP/2014)

vkns'kkuqlkj@ By order,

lgk;d iathdkj@Asst. Registrar