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Issues Involved:
1. Jurisdiction of the Income-tax Appellate Tribunal to reduce the penalty u/s 35 of the Income-tax Act, 1922. 2. Whether the Tribunal's order under section 35 was patently erroneous. Summary: 1. Jurisdiction of the Income-tax Appellate Tribunal to reduce the penalty u/s 35 of the Income-tax Act, 1922: The writ petition challenged the jurisdiction of the Income-tax Appellate Tribunal to reduce the penalty levied by passing an order u/s 35 of the Income-tax Act, 1922. The Tribunal initially dismissed the assessee's appeal against the penalty imposed u/s 28(1)(c) for concealing income. However, upon an application by the assessee u/s 35, the Tribunal acknowledged that it had overlooked a material fact during the initial judgment. The Tribunal rectified its order, reducing the penalty from Rs. 30,000 to Rs. 10,000, citing that the quantum of penalty levied appeared excessive given the reduction in assessable income by Rs. 51,198 on appeal. 2. Whether the Tribunal's order under section 35 was patently erroneous: The department contended that the Tribunal's order u/s 35 was without jurisdiction and erroneous. The court examined whether the Tribunal could rectify a mistake resulting from its own oversight of a material fact. The court referenced various judgments, including the Madras High Court's decision in Commissioner of Income-tax v. J. Sundaram and the Bombay High Court's decision in Sidhramappa v. Commissioner of Income-tax, to distinguish between permissible rectification and impermissible review of orders. The court concluded that the Tribunal's rectification was justified as it was correcting an error apparent from the record, which was due to the Tribunal's own inadvertence in overlooking a material fact. The court held that the Tribunal had the jurisdiction to rectify its order under section 35 of the Act, as the error was apparent from the record and not due to any fault of the assessee. The petition was dismissed, and no order as to costs was made.
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