Advocate Akhilesh Kumar Sah
JCIT Vs M/s. Flipkart India Private Limited (ITAT Bangalore)
Review of the order of the Tribunal on a possible hidden transaction not permissible: Flipkart India Private Ltd case
ITAT does not have power to review its own order. Recently, in JCIT vs. Flipkart India Private Ltd [M.P. No. 337/Bang/2018 (In ITA No.202/Bang/2018) (AY. 2015-16) (Appeal by Assessee) & (ITA No. 693/Bang/2018) (AY. 2015-16) (Appeal by Revenue), decided on 24-04-2019], it was observed that the power of the Tribunal under section 254(2) of the Income Tax Act, 1961 (for short ‘the Act’) is only to rectify mistakes apparent on the face of the record. The Tribunal does not have power to review its own orders. Power of review is not an inherent power but must be conferred by law either specifically or by necessary implication. Courts have consistently held that review proceedings imply those proceedings where a party, as of right, can apply for reconsideration of the matter already decided upon after a fresh hearing on the merits of the controversy between the parties and that such a remedy is available only if provided by the statute. The law on powers of Tribunal is well settled and is governed by the ratio laid down by the Hon’ble Supreme Court, on scope of powers under section 154 of the Act, which is akin to Sec.254(2) of the Act, in ITO vs. Volkart Brothers [(1971) 82 ITR 50 (SC)], as follows:
“…………….. an error which has to be established by a long drawn process of reasoning on points where there may conceivably be two opinions cannot be said to be an error apparent on the face of the record. A decision on a debatable point of law is not a mistake apparent from the record.
The learned Members of the ITAT held that the present Miscellaneous Application filed by the Revenue is devoid of any merit and is liable to be dismissed as without any basis and virtually seeking a review of the order of the Tribunal on a possible hidden transaction which requires examination after lifting the corporate veil when there those were neither the basis of assessment by the AO or CIT(A) or the Tribunal.
FULL TEXT OF THE ITAT JUDGEMENT
This is a Miscellaneous Application (M.A.) filed by the Assessee u/s.254(2) of the Income Tax Act, 1961 (Act) praying for an order recalling its order dated 25.04.2018 and rectifying order adjudicating the grievance projected by the revenue in this Miscellaneous Petition.
2. The Assessee is a company. During the relevant previous year it was engaged in the business of wholesale trader/distributor of books, mobiles, computers and related accessories. It filed a return of income for AY 2015-16 declaring loss of Rs.796,34,36,863/-.
3. The AO noticed that the Assessee was a wholesale dealer and acquired goods from various persons and was immediately selling the goods to retail sellers like M/S.WS Retail Services Pvt.Ltd. and others, who subsequently would sell those goods as sellers on internet platform under the name ‘Com’. The AO further noticed that the Assessee has been purchasing goods at say Rs.100/- and selling them to the retailers at Rs.80/-. The purchases during the relevant previous year was Rs.10335,73,05,882/- and sales was Rs.9351,75,05,319/-. After excluding closing stock of unsold goods, the purchase and sales figure were as follows:
