2019 (11) TMI 1568 - AT - Income Tax

Rectification of mistake - Penalty imposed u/s.271(1)(c) - HELD THAT - One of the two limbs having concealed particulars of income have been highlighted whereas the second limb has not been struck off, and this argument has been taken for the first time by way of this Miscellaneous Application only. We also perused the reply of the assessee dated 31.08.2013 wherein the assessee has understood the notice to mean that penalty proceedings has been understood by the assessee to be proposed for both the limbs. As the assessee has understood the notice in the same manner in which it was issued by the AO and understood by the learned D.R. also. We find that there are two views possible on examining this notice issued u/s.274 r.w.s.271 of the Act dated 28.03.2013. In view of the above discussion, we hold that there is no mistake apparent in the order of the Tribunal dated 14.03.2019 and the miscellaneous application has no merit and is dismissed. Miscellaneous Application filed by the Revenue is dismissed.

Summary

Issues Involved:
Recalling of Tribunal order regarding penalty imposition under section 271(1)(c) of the Income Tax Act, 1961 based on the notice issued u/s.274 r.w.s.271 dated 28.03.2013.

Analysis:

1. Recalling of Tribunal Order:
The Revenue filed a Miscellaneous Application seeking the recalling of the Tribunal order dated 14.03.2019 in ITA No.464/Mum/2019 for A.Y. 2010-11. The crux of the issue revolved around the Tribunal's decision to delete the penalty imposed under section 271(1)(c) of the Act. The Revenue contended that the AO had indicated one limb for penalty imposition in the notice u/s.274 r.w.s.271 dated 28.03.2013, while the other limb was not highlighted. The Department argued that this constituted a prima facie apparent mistake warranting the order's recall.

2. Arguments by the Parties:
The learned D.R. emphasized that the AO had indicated the penalty limb in the notice, albeit not highlighted, and sought the order's recall based on this discrepancy. Conversely, the A.R. of the assessee opposed the recall, stating that such arguments were never raised during the original hearing. The A.R. highlighted that the assessee had responded to both limbs of the notice in a reply to the ADIT, indicating a clear understanding of the penalty proceedings for concealment of income or furnishing inaccurate particulars.

3. Judgment and Reasoning:
Upon considering the submissions and the notice issued u/s.274 r.w.s.271 dated 28.03.2013, the Tribunal found that the Department's Miscellaneous Application lacked merit. The Tribunal noted that the assessee had comprehended the notice in the same manner as issued by the AO and understood by the D.R. The Tribunal observed that two views were possible regarding the notice's interpretation, leading to the conclusion that no apparent mistake existed in the Tribunal's order dated 14.03.2019. Consequently, the Miscellaneous Application filed by the Revenue was dismissed.

4. Conclusion:
The Tribunal, comprising Shri Rajesh Kumar, Accountant Member, and Shri Ramlal Negi, Judicial Member, pronounced the order on 21st November 2019, dismissing the Revenue's Miscellaneous Application. The judgment underscored the importance of a comprehensive understanding of legal notices and the limited scope for recalling orders under the relevant provisions of the Income Tax Act, 1961.