H BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER MA No. 74/Mum/2016 Arising out of ITA No. 42 87/Mum/2012 ( [ [ / Assessment Year : 1993-94) Sh. Hitesh S. Me hta / Assistant 32, Madhuli Commissioner of Income v. Dr. A.B.Road, Worli Tax- Ce ntral Circle 23 Mumbai-400 018 R.No. 409, Aayakar Bhavan M K Road Mumbai-400020 . /P : ABAP M4491J ( /Appellant) .. ( / Respondent) Assessee by : Shri Dharmesh Shah,CA Revenue by : Dr. P.Daniel(DR) / Date of Hearing : 29-07-2016 /Date of Pronouncement : 17-10-2016 / O R D E R PER RAMIT KOCHAR, Accountant Member This above miscellaneous application , filed by assessee, being MA No.74/Mum/2016 arising out of appeal bearing ITA no. 4287/Mum/2012 , asssessee has sought rectification in order of Mumbai Tribunal dated 10-11-2015 passed in ITA no. 4287/Mum/2012 for assessment year 1993-94 by deleting observation of Tribunal in para 23 of said order dated 10-11-2015 or in alternatively recalling said order dated 10-11-2015 passed by Tribunal in ITA no. 4287/Mum/2012 for hearing afresh after giving opportunity of being heard. Thus, in nut-shell assessee is aggrieved by observation of Tribunal in para 23 of order dated 10-11-2015 in ITA No. 4287/Mum/2012 which reads as under:- 2 MA/74/Mum/2016 arising out of ITA No.4287/Mum/2012 23. We would however like to state at this point of time that at time of adjudicating appeal no ITA 5138/Mum/2003 for assessment year 1993-94 in case of assessee itself Tribunal in first round of litigation has clarified, inter-alia, in its order dated 17th March 2006 at para 7 that Counsel of assessee agreed that assessee shall not seek refund of tax deposited on admitted amount of income if matter is restored to file of Assessing Officer and we are of considered view that said concession of assessee will continue to be in force keeping in view peculiar facts, circumstances and history of case. 2. This case has chequered history. assessee is member of Harshad S. Mehta group. He is notified under Special Court( Trial of Offences Relating to Transactions in Securities) Act,1992 on 08-06-1992. There was search and seizure action u/s. 132 of Act by Revenue at premises of assessee at 27-09-1990 wherein large number of documents were seized . second search and seizure operation was carried out at assessee s premises on 28-02-1992 wherein large number of documents and valuable were seized. assessee had not filed return of income with Revenue for relevant previous year. income from capital gains has been offered for taxation by assessee vide letter dated 28-03-1996 at Rs.5,90,78,784/- before AO which was subsequently revised to Rs.6,33,82,188/- as per working given in letter dated 28-05-2003 filed before learned CIT(A) in first round of litigation. income was assessed by AO in first round of litigation at Rs.25,30,14,505/- vide assessment orders dated 29-03-1996 passed by AO u/s.144 of Act , which assessment was set aside by learned CIT(A) with certain directions in first appeal in first round of litigation vide appellate orders dated 28-05-2003 .The said appellate order of learned CIT(A) was challenged by assessee before Tribunal in first round of litigation wherein Tribunal vide orders dated 17-03-2006 in ITA no 5138/Mum/2003 set aside matter back to file of learned CIT(A) to decide issue on merits since order passed by learned CIT(A) in first round of litigation amounted to setting aside order of AO which was not permitted under law as per provisions of Section 251(1)(a) of Act. 3 MA/74/Mum/2016 arising out of ITA No.4287/Mum/2012 issue arose before Tribunal in first round of litigation while adjudicating appeal of assessee in ITA no. 5138/Mum/2003 whether matter should be restored to file of AO or learned CIT(A) and Tribunal in para 7 noted as under : 7. One more aspect has arisen in course of hearing as to whether matter should be restored to file of Assessing Officer or to file of Learned CIT(A). Learned Counsel for Assessee has vehemently argued that on identical facts, Tribunal had restored matter for fresh assessment to file of Assessing Officer in various cases, list of which has been given in Paper Book No. 1 . He has also argued that decision of Co- ordinate Bench should be followed by another Co-ordinate Bench where facts are identical. According to him, there is no change in facts of present case and cases earlier decided by Tribunal. Reliance has also been placed on Supreme Court judgment in case of S.I. Rooplal Vs. Lt. Governor, Delhi Lab.I.C.370(SC) . It was also submitted that Assessing Officer has all powers of making investigations while Learned CIT(A) would have to depend upon Assessing Officer and, therefore, there is no point in restoring matter to file of Learned CIT(A). Proceeding further, it was submitted by him that restoration to Learned CIT(A) would cause injustice to assessee as Department would be able to recover high pitched demand through process carried out by Special Court. On other hand, Learned Special Counsel strongly opposed prayer of assessee by submitting-(i) that demand against assessee would be wiped out if matter is restored to file of Assessing Officer and as per undertaking given by Department, department will have to return money which has been collected on admitted amount of income. , (ii) if Tribunal holds that order of setting aside of Learned CIT(A) is contrary to provisions of Section 251(1)(a) of Income Tax Act,1961, then matter should go back only to Learned CIT(A) so that he may decide appeal on merit. According to him, powers of Learned CIT(A) are co- terminus to that of Assessing Officer and ,therefore, it is wrong to say that Learned CIT(A) would not be in position to make necessary enquiries . If necessary , remand report can be sought by Learned CIT(A) . It may be clarified at this stage that both Counsels agreed to effect that assessee will not seek refund of tax deposited on admitted amount of income if matter is restored to file of Assessing Officer and Revenue would not press for demand of tax on disputed addition on account of unexplained income from sale of shares and dividend/interest income, etc. In second round of litigation in set aside proceedings , learned CIT(A) partly allowed appeal of assessee and assessment was also enhanced by learned CIT(A), vide orders dated 29-03-2012. Both 4 MA/74/Mum/2016 arising out of ITA No.4287/Mum/2012 Revenue and assessee came in appeal before Tribunal in second round of litigation which was adjudicated by Tribunal vide orders dated 10-11-2015 in ITA no. 3442/Mum/2012 and ITA no. 4287/Mum/2012 and Tribunal vide observation in para 23 of its order keeping in view peculiar facts, circumstances and history of case stipulated that assessee shall not seek refund of taxes deposited on admitted amount of income. assessee has now filed miscellaneous application seeking rectification of Tribunal order dated 10-11-2015 by way of deletion of para 23 of said order or recalling entire order of Tribunal in ITA No. 4287/Mum/2012 for assessment year 1993-94 for fresh hearing after giving opportunity of being heard to assessee. 3. learned counsel for assessee submitted that in first round of litigation , Tribunal restored matter to file of learned CIT(A) as there was non-compliance by assessee before AO and partial appearance before learned CIT(A). It was submitted that prayer was made in first round of litigation by assessee to set aside matter before AO and it was contested by assessee before Tribunal that if matter is restored to file of AO then no refund will be sought by assessee of taxes paid on admitted income which was admitted vide letters filed before authorities from time to time. It was submitted that it was argued that similarly Revenue should also not press for demand. Our attention was drawn to Tribunal Order in ITA no. 5138/Mum/2003 dated 17-03-2006 para 7/page 5 in case of assessee for assessment year 1993-94 wherein Tribunal held as under:- 7. One more aspect has arisen in course of hearing as to whether matter should be restored to file of Assessing Officer or to file of Learned CIT(A). Learned Counsel for Assessee has vehemently argued that on identical facts, Tribunal had restored matter for fresh assessment to file of Assessing Officer in various cases, list of which has been given in Paper Book No. 1 . He has also argued that decision of Co- 5 MA/74/Mum/2016 arising out of ITA No.4287/Mum/2012 ordinate Bench should be followed by another Co-ordinate Bench where facts are identical. According to him, there is no change in facts of present case and cases earlier decided by Tribunal. Reliance has also been placed on Supreme Court judgment in case of S.I. Rooplal Vs. Lt. Governor, Delhi Lab.I.C.370(SC) . It was also submitted that Assessing Officer has all powers of making investigations while Learned CIT(A) would have to depend upon Assessing Officer and, therefore, there is no point in restoring matter to file of Learned CIT(A). Proceeding further, it was submitted by him that restoration to Learned CIT(A) would cause injustice to assessee as Department would be able to recover high pitched demand through process carried out by Special Court. On other hand, Learned Special Counsel strongly opposed prayer of assessee by submitting-(i) that demand against assessee would be wiped out if matter is restored to file of Assessing Officer and as per undertaking given by Department, department will have to return money which has been collected on admitted amount of income. , (ii) if Tribunal holds that order of setting aside of Learned CIT(A) is contrary to provisions of Section 251(1)(a) of Income Tax Act,1961, then matter should go back only to Learned CIT(A) so that he may decide appeal on merit. According to him, powers of Learned CIT(A) are co- terminus to that of Assessing Officer and ,therefore, it is wrong to say that Learned CIT(A) would not be in position to make necessary enquiries . If necessary , remand report can be sought by Learned CIT(A) . It may be clarified at this stage that both Counsels agreed to effect that assessee will not seek refund of tax deposited on admitted amount of income if matter is restored to file of Assessing Officer and Revenue would not press for demand of tax on disputed addition on account of unexplained income from sale of shares and dividend/interest income, etc. It is admitted by learned counsel that no return of income was filed by assessee for impugned assessment year with Revenue and income is admitted by filing letters before authorities below from time to time which also find mentioned in preceding para s of this order .It is submitted that Revenue cannot appropriate and withheld taxes so deposited as no return of income was ever filed by assessee with Revenue . Thus, it was submitted before Tribunal that error has crept in order of Tribunal dated 10-11-2015 whereby Tribunal has imposed condition that on admitted income , assessee will not seek refund of taxes deposited , as now matter is set aside and restored to file of AO by Tribunal vide orders dated 10-11-2015 and hence there is no additions to income left for time being till de-novo 6 MA/74/Mum/2016 arising out of ITA No.4287/Mum/2012 assessment is framed by AO. Alternatively, It was submitted that directions may be issued to Revenue for not pressing outstanding demand against assessee. It was also submitted that in second round of litigation , no such concession was offered by assessee that if Tribunal set aside this matter to file of AO for de-novo determination of issue on merits, assessee will not seek refund of taxes deposited on admitted income. Since, now Tribunal has restored matter to file of AO for de-novo determination of matter in second round of litigation, then no such conditions for not seeking refund of taxes deposited on admitted income can be imposed on assessee. 4.The learned DR on other hand submitted that there is no mistake which has crept in order of Tribunal which can now be rectified under this miscellaneous application u/s 254(2) of Act as scope of rectification is limited to mistakes apparent from record. It was submitted that Tribunal has correctly stipulated condition of non-seeking of refund of taxes on admitted income as assessee has not filed return of income with Revenue for impugned assessment year and concession was also given by counsel in first round of litigation before Tribunal itself that assessee will not seek refund of taxes deposited on admitted income through letters filed during assessment and appellate proceedings before learned CIT(A) if matter is restored to file of AO for denovo adjudication of matter on merits in first round of litigation. Alternatively, it was submitted that if order dated 10-11-2015 of Tribunal is rectified then matter should be restored to file of learned CIT(A) in both cross appeals which were adjudicated by Tribunal vide orders dated 10- 11-2015. 5. We have heard learned counsels and gone through entire records. We have observed that this case has chequered history which duly find 7 MA/74/Mum/2016 arising out of ITA No.4287/Mum/2012 mentioned in details in preceding para s as well orders of authorities passed from time to time for impugned assessment year. assessee did not file return of income with Revenue for impugned assessment year which is lapse on part of assessee meaning thereby there is no returned income and no taxes were deposited on account of returned income for impugned assessment year. assessee admitted certain income during course of assessment proceedings before AO as well appellate proceedings before learned CIT(A) in first round of litigation vide letters which found mentioned in preceding para s of this order on which admittedly taxes were deposited with Revenue. Tribunal after keeping in view peculiar facts and circumstances of case as well history of case has set aside matter in second round of litigation to file of AO for de-novo determination of issues on merits, which consequentially has led to wiping of outstanding demand against assessee including admitted income of assessee which was admitted by assessee through letters before authorities below, till matter is de- novo adjudicated by AO on merits in set aside proceedings. This will lead to situation whereby assessee although being defaulter of having not filed return of income with Revenue but having admitted income through letters before AO and learned CIT(A) will be in advantageous positions vis- -vis whereby if he had admitted income by filing return of income with Revenue , then in that case if assessee had filed return of income then admiited income would not have got wiped out but despite being defaulter of not having filed any return of income with Revenue will be in advantageous position as even admitted income for time although through letters filed before authorities below being wiped out and assessee will be in position to seek refund of taxes deposited with Revenue on admitted income through letters filed with authorities below. assessee cannot be allowed to profit despite being defaulter of having not filed return of income vis- -vis tax-payer who are 8 MA/74/Mum/2016 arising out of ITA No.4287/Mum/2012 tax compliant and come forward and file their return of income with Revenue and pay their taxes voluntarily on income admitted through filing return of income with Revenue , as It will lead to anomalous situation which will act as discouragement to tax compliant tax-payers whereby defaulters are allowed to profit at cost of tax compliant tax-payers which is against equity , equality and cannons of justice. Court cannot be part of encouragement to such abuse of process of law and if assessee has come to seek relief from Court it has to come to court with clean hands. Thus, conditions imposed by Tribunal in para 23 of orders dated 10-11-2015 that assessee will not seek refund of taxes deposited on admitted income albeit through letters before authorities below was conscious decision of Tribunal keeping in view peculiar facts , circumstances and chequered history of case and was conscious act on part of Tribunal to grant greater justice to both parties and no mistake whatsoever had crept in afore-stated order of Tribunal dated 10-11-2015 which could be rectified within limited mandate of Section 254(2) of Act. We order accordingly. 6. In result, miscellaneous application being MA No. 74/Mum/2016 filed by assessee is dismissed. Order pronounced in open court on 17th October, 2016. 17-10-2016 Sd/- sd/- (AMIT SHUKLA) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; Dated 17-10-2016 [ , 9 MA/74/Mum/2016 arising out of ITA No.4287/Mum/2012 /Copy of Order forwarded to : 1. / Appellant 2. / Respondent. 3. ( ) / CIT(A)- concerned, Mumbai 4. / CIT- Concerned, Mumbai 5. , , / DR, ITAT, Mumbai H Bench 6. [ / Guard file. / BY ORDER, //True Copy// / (Dy./Asstt. Registrar) , / ITAT, Mumbai Hitesh S. Mehta v. Assistant Commissioner of Income-tax- Central Circle 23, Mumbai