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2015 (7) TMI 441 - AT - Income TaxRectification of order passed - penalty levied u/s 158BFA(2) - Held that - Tribunal has considered the decision rendered by the co-ordinate bench in the case of Ekta Exports (2015 (4) TMI 617 - ITAT MUMBAI). The Tribunal has noted down that the Explanation 1 to sec. 271(1)(c) provides that an assessee can escape from penalty levied u/s 271(1)(c) of the Act, if the bonafides of the assessee are proved. The co-ordinate bench of Tribunal, in the case of Ekta Exports (2015 (4) TMI 617 - ITAT MUMBAI), had followed the decision rendered in the case of Nayan Builders and Developers Pvt Ltd Vs. ITO (2011 (3) TMI 46 - ITAT MUMBAI ), wherein it was held that the admission of substantial question of law by the Hon ble High Court lends credence to the bona fides of the assessee. - Tribunal has also taken the view that the question of examination of bona fides of the assessee shall arise only in respect of penalty levied u/s 271(1)(c) of the Act, in view of the Explanation-1 given under sec. 271(1)(c) of the Act. Since the provisions of sec. 158BFA(2) does not contain any provision as that of Explanation 1 to sec. 271(1)(c) of the Act, the Tribunal took the view that the contention that bona fides of the assessee due to admission of substantial question of law by the Hon ble High Court is not applicable in respect of penalty levied u/s 158BFA(2) of the Act. On appreciation of these legal points, the Tribunal did not follow the decision rendered by the co-ordinate bench in the case of Ekta Exports (2015 (4) TMI 617 - ITAT MUMBAI). - Tribunal has taken a conscious view of the matter by duly considering all the relevant provisions of the Act and accordingly we do not find any merit in the miscellaneous application filed by the assessee - Decided against assessee.
Issues involved:
Rectification of order confirming penalty under section 158BFA(2) of the Act based on addition of Rs. 9.00 lakhs, interpretation of decision in the case of M/s Ekta Exports, applicability of Explanation 1 to section 271(1)(c) to penalty levied under section 158BFA(2), binding nature of decisions by co-ordinate benches, and consideration of bonafides of the assessee. The judgment pertains to a miscellaneous application filed by the assessee seeking rectification of an order confirming a penalty under section 158BFA(2) of the Act based on an addition of Rs. 9.00 lakhs. The assessee argued that since the Hon'ble High Court admitted an appeal challenging the addition, it indicates the issue is debatable, and hence, the penalty should not be sustained. The assessee relied on the decision in the case of M/s Ekta Exports to support this argument. The Tribunal considered the applicability of Explanation 1 to section 271(1)(c) to the penalty levied under section 158BFA(2) and concluded that the question of bonafides of the assessee only arises in the context of section 271(1)(c), not section 158BFA(2). The assessee contended that decisions by co-ordinate benches are binding and argued that the matter should have been referred to a larger bench due to a different view taken by the Tribunal. However, the Tribunal held that it had considered all relevant provisions and rejected the application, stating that the decision was a conscious one. The Tribunal noted that the co-ordinate bench in the case of Ekta Exports did not examine the applicability of Explanation 1 to section 271(1)(c) to the penalty levied under section 158BFA(2). The Tribunal held that since the co-ordinate bench did not address this issue, it could not agree with the assessee's contention that the decision should be binding. The Tribunal emphasized that if the co-ordinate bench had considered and decided on the applicability of Explanation 1 to section 158BFA(2), then its decision would have been binding. The Tribunal concluded that it had taken a conscious view by considering all relevant provisions and therefore found no merit in the assessee's application, ultimately dismissing it. In summary, the judgment delves into the interpretation of legal provisions, the relevance of decisions by co-ordinate benches, and the applicability of bonafides of the assessee in the context of penalties under different sections of the Act. The Tribunal's decision highlights the importance of thorough consideration of all relevant factors and provisions in reaching a judgment, ultimately emphasizing the conscious nature of its decision-making process.
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