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2018 Supreme(Guj) 920
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
Akil Kureshi, B.N. Karia, JJ.
Ambica Realties Pvt. Ltd. – Appellant
Vs.
Deputy or Assistant Registrar or His Sucessors to Office – Respondent
Special Civil Application No. 17372 of 2013
Decided On : 24-09-2018
S.N. Soparkar, Adv., B.S. Soparkar, Adv., Pranav G Desai, Adv., M.R. Bhatt, Adv., Mauna M Bhatt, Adv.
Headnote:
Income-tax Act, 1961 - Section 158BC - Tax Assessment - Petitioner is a private limited company - Petitioner company was subjected to search operations carried out - One was the Director of the Company - He was also subjected to search during the same period - During the search carried out at the premises of certain loose papers were seized by the Department - Held, However, the order of the Tribunal exercising power of rectification when the tax appeal against the same order was pending, was set aside on a concession by the counsel for the respondent - This therefore can be seen more of an order which was invited - Court notice that Bombay High Court in case of RW Promotions Pvt. Ltd., has held that statutory provisions do not envisage any embargo on the part of the Tribunal in exercising rectification jurisdiction merely because tax appeal is pending before the High Court - In this context the contention of the counsel for the Revenue that it may be a case of self-imposed restriction by the Tribunal in a given case, but not a requirement of law, assumes significance - In the present case, however, Court do not find it necessary to go so deep in the issue and give our final opinion thereon - This is so because on the fourth and the last contention in our opinion the petitioner would succeed - This was the petitioners contention on merits of the impugned order passed by the Tribunal - This would require some further reference to the material on record - Petition allowed. (Paras 11,1 2)
Akil Kureshi, J.
The petitioner has challenged an order dated 4.10.2013 passed by the Income-tax Appellate Tribunal ('the Tribunal' for short) in a Misc. Application No.11/Rjt/2012 filed by the respondent Income-tax Department. Relevant facts may be noted at the outset :-
2. The petitioner is a private limited company. The petitioner company was subjected to search operations carried out in December, 1996. One Shri M. N. Patel was the Director of the Company. He was also subjected to search during the same period. During the search carried out at the premises of Shri M. N. Patel certain loose papers were seized by the Department. Assessment under Section 158BC of the Income-tax Act, 1961 ('the Act' for short) was carried out in case of petitioner as well as Shri M. N. Patel for the block period. Assessment of total income of Rs. 3.06 (rounded off) was made. This included a sum of Rs. 2,27,41,125/- (rounded of Rs. 2.27 crores) on the basis of loose papers seized by the Department, on substantive basis in the hands of the petitioner Company and on protective basis in the hands of Shri M. N. Patel.
3. The Company as well as Shri M. N. Patel challenged such assessment before the Tribunal. The Tribunal passed an order on 20.6.2000 in case of the company and deleted the addition in the hands of the company while making observations touching the liability of Shri M. N. Patel in this regard. Aggrieved by such judgment and order of the Tribunal Shri M. N. Patel approached the High Court. The High Court allowed the petition of Shri M. N. Patel by judgment dated 17.4.2001 and requested the Tribunal to hear both appeals simultaneously. The Tribunal thereupon decided the appeals of the company as well as Shri M. N. Patel by common order dated 10.10.2001 and restored entire issue back before the Assessing Officer. In the fresh assessments the Assessing Officer on or around 31.3.2013 taxed the income in hands of Shri M. N. Patel on substantive basis and in the hands of the company on protective basis. Again two appeals came to be filed before the Tribunal. These two appeals were disposed of by Tribunal by common order dated 29.7.2011. The Tribunal held that Shri M. N. Patel had only 6.25% share of the profit of the company and therefore confirmed the addition of Rs. 13.53 lacs (rounded off) out of the total additions of Rs. 2.27 crores of unaccounted income. In so far as company is concerned, the Tribunal was of the opinion that the Assessing Officer had not made any investigation and collected any evidence to tax the company concerning the remaining amount. The Tribunal therefore deleted the protective assessment in case of the company.
4. Aggrieved by this order of the Tribunal dated 29.7.2011 the Revenue had filed two appeals before the High Court. The Revenue's Tax Appeal No.41 of 2012 against Shri M. N. Patel came to be dismissed by the High Court by an order dated 18.3.2013. The Revenue's Tax Appeal No.42 of 2012 against the company has been admitted and is pending for final hearing.
5. On or around 2.3.2012 the Revenue filed an Application No.11 of 2012 before the Tribunal and requested the Tribunal to correct a mistake which according to Revenue had crept in the order disposing of the appeals so far as not deciding the question of remaining part of the profit of 93.75% of Rs. 2.16 crores (rounded off), whether the same has to be brought to the tax and if yes, in whose hands on substantive basis. The Tribunal allowed such application by impugned order dated 4.10.2013. The Tribunal was of the opinion that such remaining amount of Rs. 2.16 crores could be taxed in the hands of the company. The Revenue's Misc. Application was accordingly allowed. The company has thereupon filed present petition challenging the said order of Tribunal.
6. Appearing for the petitioner learned counsel Shri Soparkar raised following contentions :
(i) The Misc. Application for rectification filed by the Department was in the appeal concerning Shri M. N. Pat
