2007 (7) TMI 44 - HC - Income Tax

Appeal to Appellate tribunal - Alleged that assessee had not pay the full amount of self- assessment tax and accordingly penalty imposed on him - Commissioner(Appeal) deleted penalty amount on the ground that demand notice not serve to him but tribunal sustain penalty upto unpaid amount of tax

Summary

Issues:
Challenge to order of Income tax Appellate Tribunal regarding rectification of mistake in assessment order for the assessment year 2001-02.

Analysis:
The petition was filed to challenge the order passed by the Income tax Appellate Tribunal, Bombay, dismissing the miscellaneous application seeking rectification of mistake in the order for the assessment year 2001-02. The assessee had filed the return of income on October 31, 2001, and paid self-assessment tax. However, an order was passed stating that the assessee had not paid the full amount of self-assessment tax, leading to penalty imposition. The Commissioner of Income-tax (Appeals) accepted the assessee's contention that no demand was raised against them, thus deleting the penalty. The Tribunal, on appeal by the Revenue, upheld the penalty to the extent of the tax remaining unpaid. The assessee then filed a miscellaneous application seeking rectification, which was dismissed by the Tribunal, leading to the current petition.

The main issue in the petition was whether the Tribunal was justified in rejecting the miscellaneous application on the ground that the plea regarding non-service of the demand notice was not raised during the appeal. The court noted that the Commissioner of Income-tax (Appeals) had deleted the penalty based on the non-service of the demand notice. The Tribunal's finding that the plea was not raised before them was deemed unsustainable, as it was a crucial aspect of the case. Therefore, the court allowed the writ petition, setting aside the Tribunal's order and directing them to reconsider the miscellaneous application on its merits.

In conclusion, the court allowed the writ petition with no order as to costs, keeping the contentions of both sides open for further consideration. The judgment highlighted the importance of addressing key issues raised during the appeal process and ensuring that all relevant aspects are considered before making a decision on rectification applications in tax matters.