RP-74-2020 High Court Of Madhya Pradesh RP-74-2020 (INCOME TAX DEPARTMENT Vs M/S TURQUOISE INVESTMENT AND FINANCE PVT. LTD.) 1 Indore, Dated : 23-01-2020 Ms. Veena Mandlik, learned counsel for appellant. T h e present review petition has been arising out of order dated 12.12.2019 passed in ITA No.94/2019 disposing of appeal keeping in view of CBDT circular dated 08.08.2019. Learned counsel for appellant has argued before this Court as there was audit objection in matter appeal could not be disposed of as done by this Court. This Court in similar circumstances in ITA No.75/2019 Income Tax Department V/s M/s Krishna Warehouse has passed following order:- Learned counsel for appellant has argued before this Court that appeal cannot be disposed of in view of CBDT circular dated 10.12.2015 read with circular dated 11.07.2018 as there is audit objection. Learned counsel for respondent has drawn attention of this Court towards judgement delivered by Division Bench of Bombay High Court in case of Principal Commissioner of Income- Tax, Mumbai vs. Nawany Construction Co. (P.) Ltd., (2018) 98 Taxmann.com 294 (Bombay). Paras-6 to 9 of aforesaid judgement reads as under :- 6. However, latter Circular dated 11.7.2018 contains para 10. para 10 of this Circular reads as under: "10. Adverse judgments relating to following issues should be contested on merits notwithstanding that tax effect entailed is less than monetary limits specified in para 3 above or there is no tax effect: (a) Where Constitutional validity of provisions of Act or Rule is under challenge, or (b) Where Board's order, Notification, Instruction or Digitally signed by Ajit Kamalasanan Date: 25/01/2020 17:24:37 2 RP-74-2020 Circular has been held to be illegal or ultra vires, or (c) Where Revenue Audit objection in case has been accepted by Department, or (d) Where addition relates to undisclosed foreign assets/bank accounts." 7 . Mr. Pinto would submit that this is conditional withdrawal permitted. Revenue's Circular, therefore, cannot b e read de hors or by omitting this condition. One of conditions in Clause 10(c) of this Circular is, where Revenue Audit Objection in case has been accepted by Department. 8. It is conceded that while seeking to restore Income Tax Appeal No.254 of 2013 on file of this Court, neither Revenue's Circular dated 1172018 is referred nor any condition therein. If condition now relied upon is with regard to Revenue Audit Objection, then, mere raising of this objection in terms of this Circular is not enough. Revenue will have to point out that this audit objection has been accepted by Department. We have no such record before us. 9 . In circumstances, we find that this is attempt t o get over binding Circulars and in any case we shall not allow Revenue to get over them in this manner. Circulars continue to bind Revenue and if they contain any conditions, whether such conditions are attracted or not would have to be proved and established by Revenue. Once there is no such record before us, we do not countenance oral request of Mr. Pinto. Consequently, we do not see any reason to entertain this appeal. It is dismissed. Learned counsel for appellant has merely stated that there was audit objection and therefore, in light of Division Bench judgement of Bombay High Court, mere raising of this objection in terms of circular is not enough. Revenue has not pointed out that this audit objection has been accepted by department nor any record has been placed before us and therefore, present income tax appeal stands disposed of keeping in view CBDT circulars dated 10.12.2015 and 11.07.2018. Digitally signed by Ajit Kamalasanan Date: 25/01/2020 17:24:37 3 RP-74-2020 In light of aforesaid judgment as Revenue has not pointed out that audit objection has been accepted by department nor any record has been place before us. Apex Court in case of Haridas Das Vs. Usha Rani Bank (Smt) and Ors., reported in (2006) 4 SCC 78 in paragraph 13 and 20 has held as under :- 13. In order to appreciate scope of review, Section 114 CPC has to be read, but this section does not even adumbrate ambit of interference expected of court since it merely states that it " may make such order thereon as it thinks " . parameters are prescribed in Order 47 CPC and for purposes of this lis, permit defendant to press for rehearing " on account of some mistake or error apparent on face of records or for any other sufficient reason" . former p r t of rule deals with situation attributable to applicant, and latter to jural action which is manifestly incorrect or on which two conclusions are not possible. Neither of them postulate rehearing of dispute because party had not highlighted all aspects of case or could perhaps have argued them more forcefully and/or cited binding precedents to court and thereby enjoyed favourable verdict. This is amply evident from Explanation to Rule 1 of Order 47 which states that fact that decision on question of law on which judgment of court is based has been reversed or modified by subsequent decision of superior court in any other case, shall not be ground for review of such judgment. Where order in question is appealable aggrieved party has adequate and efficacious remedy and court should exercise power to review its order with greatest circumspection. This Court in Thungabhadra Industries Ltd. vs. Govt. of A.P. Digitally signed by Ajit Kamalasanan Date: 25/01/2020 17:24:37 4 RP-74-2020 held as follows: " There is distinction which is real, though it might not always be capable of exposition, between mere erroneous decision and decision which could be characterised as vitiated by "error apparent" . review is by no means appeal in d isg u ise whereby erroneous decision is reheard and corrected, but lies only for patent error. " where without any elaborate argument one could point to error and say here is substantial point of law which stares one in face, and there could reasonably be no two opinions entertained about it, clear case of error apparent on face of record would be made out." 2 0 . When aforesaid principles are applied to background facts of present case, position is clear that High Court had clearly fallen in error in accepting prayer for review. First, crucial question which according to High Court was necessary to be adjudicated was question whether Title Suit No. 201 of 1985 (sic 1 of 1986) was barred by provisions of Order 2 Rule 2 CPC. This question arose in Title Suit No. 1 of 1986 and was irrelevant so far as Title Suit No. 2 of 1987 is concerned. Additionally, High Court erred in holding that no prayer for leave under Order 2 Rule 2 CPC was made in plaint in Title Suit No. 201 of 1985. claim of oral agreement dated 19-8-1982 is mentioned in para 7 of plaint, and at end of plaint it has been noted that right to institute suit for specific performance was reserved. That being so, High Court has erroneously held about infraction of Order 2 Rule 2 CPC. This was not case where Order 2 Rule 2 CPC has any application. In aforesaid case, Apex Court has held that rehearing of case Digitally signed by Ajit Kamalasanan Date: 25/01/2020 17:24:37 5 RP-74-2020 can be done on account of some mistake or error apparent on face of record or for any other sufficient reason. In present case, there is no error apparent on face of record and petitioner infact under guise of review is challenging order passed by this Court, which is under review. Similarly Apex Court in case of State of West Bengal and Ors. Vs. Kamal Sengupta and Anr., reported in (2008) 8 SCC 612 in paragraphs 21, 22 and 35 has held as under :- " 21. At this stage it is apposite to observe that where review is sought on ground of discovery of new matter or evidence, such matter or evidence must be relevant and must be of such character that if same had been produced, it might have altered judgment. In other words, mere discovery of new or important matter or evidence is not sufficient ground for review ex debito justitiae. Not only this, party seeking review has also to show that such additional matter or evidence was not within its knowledge and even after exercise of due diligence, same could not be produced before court earlier. 2 2 . term " mistake or error apparent" by its very connotation signifies error which is evident per se from record of case and does not require detailed examination, scrutiny and elucidation either of facts or legal position. If error is not self-evident and detection thereof requires long debate and process of reasoning, it cannot be treated as error apparent on face of record for purpose of Order 47 Rule 1 CPC or Section 22(3)(f) of Act. To put it differently order or decision or judgment cannot be corrected merely because it is erroneous in law or on ground that different view could have been taken by court/tribunal on point of fact or law. In any case, while exercising power of review, t h e court/tribunal concerned cannot sit in appeal over its judgment/decision. Digitally signed by Ajit Kamalasanan Date: 25/01/2020 17:24:37 6 RP-74-2020 35. principles which can be culled out from above noted judgments are: (i) power of Tribunal to review its order/decision under Section 22(3)(f) of Act is akin/analogous to power of civil court under Section 114 read with Order 47 Rule 1 CPC. (ii) Tribunal can review its decision on either of grounds enumerated in Order 47 Rule 1 and not otherwise. (iii) expression "any other sufficient reason" appearing in Order 47 Rule 1 has to be interpreted in light of other specified grounds. (iv) error which is not self-evident and which can be discovered by long process of reasoning, cannot be treated as error apparent on face of record justifying exercise of power under Section 22(3)(f). (v) erroneous order/decision cannot be corrected in guise of exercise of power of review. (vi) decision/order cannot be reviewed under Section 22(3)(f) on basis of subsequent decision/judgment of coordinate or larger Bench of tribunal or of superior court. (vii) While considering application for review, tribunal must confine its adjudication with reference to material which was available at time of initial decision. happening of some subsequent event or development cannot be taken note of for declaring initial order/decision as vitiated by error apparent. (viii) Mere discovery of new or important matter or evidence is not sufficient ground for review. party seeking review has also to show that such matter or evidence was not within its knowledge and even after exercise of due diligence, same could not be produced before court/tribunal earlier." In aforesaid case Apex Court has held that mistake or error Digitally signed by Ajit Kamalasanan Date: 25/01/2020 17:24:37 7 RP-74-2020 apparent on face of record means mistake or error which is prima-facie visible and does not require any detail examination. In present case petitioner has not been able to point out any error apparent on face of record, on contrary this Court has decided case on merits. Apex Court again dealing with scope of interference and limitation of review in case of Inderchand Jain (dead) Through LRs Vs. Motilal (dead) Through LRs, reported in (2009) 14 SCC 663 in paragraphs 7, 22, 24, 29, 31 and 33 has held as under :- "Section 114 of Code of Civil Procedure (for short " Code") provides for substantive power of review by civil court and consequently by appellate courts. words "subject as aforesaid" occurring in Section 114 of Code mean subject to such conditions and limitations as may be prescribed as appearing in Section 113 thereof and for said purpose, procedural conditions contained in Order 47 of Code must be taken into consideration. Section 114 of Code although does not prescribe any limitation on power of court but such limitations have been provided for in Order 47 of Code; Rule 1 whereof reads as under: "17. power of civil court to review its judgment/decision is traceable in Section 114 CPC. grounds on which review can be sought are enumerated in Order 47 Rule 1 CPC, which reads as under: "1. Application for review of judgment.(1) Any person considering himself aggrieved- (a) by decree or order from which appeal is allowed, but from which no appeal has been preferred, (b) by decree or order from which no appeal is allowed, or (c) by decision on reference from Court of Small Causes, and who, from discovery of new and important matter or evidence which, after exercise of due diligence, was not within his Digitally signed by Ajit Kamalasanan Date: 25/01/2020 17:24:37 8 RP-74-2020 knowledge or could not be produced by him at time when decree was passed or order made, or on account of some mistake or error apparent on face of record, or for any other sufficient reason, desires to obtain review of decree passed or order made against him, may apply for review of judgment of court which passed decree or made order." 22. Whereas appellant-defendant filed review application confined to question that he was entitled to restitution of property and mesne profit in respect whereof learned Single Judge of High Court did not pass any specific order, application for review filed by respondent was on merit of judgment. relevant grounds of review which have been placed before us relate to: (i) Unconditional withdrawal of some amount by one of creditors of defendant as also defendant himself. (ii) defendant's application before executing court that he was ready and willing to get sale deed executed on receipt of amount in cash and said admission allegedly was not brought to notice of court. (iii) While holding that there was no agreement to reduce sale consideration, High Court had ignored fact that it was admitted case of parties, as stipulated in contract, that defendants would get premises vacated from tenants within three months. (iv) appellant had prayed for alternative relief viz. that he was ready to get decree for specific performance of contract by paying Rs 1,15,000. court did not consider evidence of DWs 1 to 6 in their proper perspective. (v) court did not consider that property could not be restored back to appellant-defendant and as such court should have exercised its discretionary jurisdiction. Digitally signed by Ajit Kamalasanan Date: 25/01/2020 17:24:37 9 RP-74-2020 24. appeal is continuation of suit. Any decision taken by appellate court would relate back, unless contrary intention is shown, to date of institution of suit. There cannot be any doubt th t appellate court while exercising its appellate jurisdiction would be entitled to take into consideration subsequent events for purpose of moulding relief as envisaged under Order 7 Rule 7 read with Order 41 Rule 33 of Code of Civil Procedure. same shall, however, not mean that court would proceed to do so in review application despite holding that plaintiff was not entitled to grant of decree for specific performance of contract. 2 9 . Order 41 Rule 1 of Code stipulates that filing of appeal would not amount to automatic stay of execution of decree. law acknowledges that during pendency of appeal it is possible for decree-holder to get decree executed. execution of decree during pendency of appeal would, thus, be subject to restitution of property in event appeal is allowed and decree is set aside. court only at time of passing judgment and decree reversing that of appellate court should take into consideration subsequent events, but, by no stretch of imagination, can refuse to do so despite arriving at findings that plaintiff would not be entitled to grant of decree. 3 1 . Contention of Mr Venugopal that defendant having accepted novation of contract but only quantum of amount being different, court could have asked respondent-plaintiff to deposit further sum of Rs 24,000 cannot be accepted for more than one reason. Apart from fact that such contention had never been raised before appellate court, keeping in view finding of fact arrived at that there had in fact been no novation of contract, such course of action was not open. In any view of matter, same would amount to re appreciation of evidence which was beyond Digitally signed by Ajit Kamalasanan Date: 25/01/2020 17:24:37 10 RP-74-2020 review jurisdiction of High Court. 33. High Court had rightly noticed review jurisdiction of court, which is as under: " law on subject- exercise of power of review, as propounded by Apex Court and various other High Courts may be summarised as hereunder: (i) Review proceedings are not by way of appeal and have to be strictly confined to scope and ambit of Order 47 Rule 1 CPC. (ii) Power of review may be exercised when some mistake or error apparent on fact of record is found. But error on face of record must be such error which must strike one on mere looking at record and would not require any long-drawn process of reasoning on points where there may conceivably be two opinions. (iii) Power of review may not be exercised on ground that decision was erroneous on merits. (iv) Power of review can also be exercised for any sufficient reason which is wide enough to include misconception of fact or law by court or even advocate. (v) application for review may be necessitated by way of invoking doctrine actus curiae neminem gravabit." In our opinion, principles of law enumerated by it, in facts of this case, have wrongly been applied" Apex Court while dealing with scope of review has held that re-appreciation of evidence and rehearing of case without there being any error apparent on face of record is not permissible in light of provisions as contained u/s 114 and Order 47 Rule 1 of Code of Civil Procedure, 1908. Apex Court in case of S. Bagirathi Ammal Vs. Palani Roman Catholic Mission, reported in (2009) 10 SCC 464 in paragraphs 12 and 26 has held as under :- Digitally signed by Ajit Kamalasanan Date: 25/01/2020 17:24:37 11 RP-74-2020 "12. error contemplated under Rule must be such which is apparent on face of record and not error which has to be fished out and searched. In other words, it must be error of inadvertence. It should be something more than mere error and it must be one which must be manifest on face of record. When does error cease to be mere error and becomes error apparent on face of record depends upon materials placed before court. If error is so apparent that without further investigation or enquiry, only one conclusion can be drawn in favour of applicant, in such circumstances, review will lie. Under guise of review, parties are not entitled to rehearing of same issue but issue can be decided just by perusal of records and if it is manifest can be set right by reviewing order. With this background, let us analyse impugned judgment of High Court and find out whether it satisfies any of tests formulated above. 2 6 . As held earlier, if judgment/order is vitiated by apparent error or it is palpable wrong and if error is self- evident, review is permissible and in this case High Court has rightly applied said principles as provided under Order 47 Rule 1 CPC. In view of same, we are unable to accept arguments of learned Senior Counsel appearing for appellant, on other hand, we are in entire agreement with view expressed by High Court." In light of aforesaid judgments, this court does not find any reason to review order dated 12.12.2020 passed in ITA No. 94/2019. There is no error apparent on face of record. No case for interference is made out in matter. Resultantly, Review Petition is dismissed. Certified copy as per rules. (S.C.SHARMA) (SHAILENDRA SHUKLA) Digitally signed by Ajit Kamalasanan Date: 25/01/2020 17:24:37 12 RP-74-2020 JUDGE JUDGE ajit Digitally signed by Ajit Kamalasanan Date: 25/01/2020 17:24:37 Income-tax Department v. Turquoise Investment And Finance Pvt. Ltd