1988 (7) TMI 53 - HC - Income Tax

Summary

Issues Involved:
The judgment involves a reference u/s 256 of the Income-tax Act, 1961 regarding the rectifiability of a penalty order based on a subsequent High Court decision.

Facts and Decision:
For the assessment year 1971-72, the assessee filed a return showing a net loss, but the Income-tax Officer computed a different amount. Penalty proceedings were initiated u/s 271(1)(c) of the Act for concealing income. The Tribunal upheld the penalty order. The assessee sought rectification based on a subsequent High Court decision. The Tribunal rejected the rectification application, leading to this reference.

Contentions:
The assessee argued that no penalty was leviable based on the High Court decision. The Department contended that there was no apparent mistake in the Tribunal's order.

Reframed Question:
The court reframed the question to focus on whether the Tribunal was justified in not rectifying the order in light of the High Court decision.

Analysis and Conclusion:
The court referred to the High Court decision in a similar case where the concealed income was determined. It was held that the Tribunal's decision was justified as there was no mistake apparent on the record. The court emphasized that a subsequent decision should be directly applicable to warrant rectification. Since the Tribunal's finding aligned with the High Court decision, there was no basis for rectification.

Final Decision:
The court answered in the affirmative, stating that the Tribunal was justified in not rectifying the order. Each party was directed to bear their own costs in this reference.