2018 (10) TMI 1348 - AT - Income Tax

Rectification of mistake apparent from the record u/s. 254(2) - ITAT has been guided by Explanation 5A to section 271(1)(c) - Held that - Nowhere in the order of the ITAT there is a mention that ITAT is following Explanation 5A to section 271(1)(c). In our considered opinion, this assertion of the ld. Counsel of the assessee is not apparent from the order of the ITAT. Consideration of this limb of the argument of the ld. Counsel of the assessee would fall under review and reconsideration of a co-ordinate bench order, not permissible u/s. 254(2). Another mistake apparent from the record as submitted that during the course of hearing, it was submitted before the ITAT that the A.O. has not specified the limb of concealment of income or furnishing of inaccurate particulars of income under which he is intending to initialise penalty proceedings and, hence, the levy of penalty ought to be deleted. For this the assessee submits that the ITAT has recorded the submissions of the assessee that the A.O. has not recorded any satisfaction regarding the concealment of income for furnishing of inaccurate particulars of income. We find that the assessee is totally incorrect in his assertion that there was any issue before the ITAT that the order passed u/s. 271(1)(c) is bad inasmuch as a specific limb has not been specified. This is clearly an afterthought. ITAT has erred in observing that the assessee s explanation that they have voluntarily filed revised computation of income cannot be accepted. We find that it is submitted by the assessee that the assessee has inadvertently missed out in including the sum of ₹ 18,05,000/- as in the return of income. In this regard, we note that this issue was duly noted by the ITAT and has not been accepted. If the ITAT does not accept any submission of the assessee, by no stretch of imagination can be considered as mistake apparent from the record in the order of the ITAT liable for rectification u/s. 254(2). Another plank of the assessee s argument is that the loose sheet found cannot be considered as any money, bullion, jewellery or other valuable article or thins as contemplated in the concerned section. Hence, it is claimed that no penalty is leviable on such unsustainable addition. We find that on this issue the assessee is clearly seeking review of the order of the ITAT not permissible u/s. 254(2). Thus from the above discussion, we find that the issues pointed out by assessee do not fall under the realm of mistake apparent from the record liable to be rectified u/s. 254(2)

Summary

Issues Involved:
1. Applicability of Explanation 5 to section 271(1)(c) of the Income Tax Act.
2. Non-specification of the limb under section 271(1)(c) by the Assessing Officer.
3. Voluntary filing of revised computation of income.
4. Consideration of loose sheet as "money, bullion, jewellery or other valuable article or thing" for penalty purposes.

Issue-wise Detailed Analysis:

1. Applicability of Explanation 5 to section 271(1)(c) of the Income Tax Act:
The assessee argued that the ITAT mistakenly applied Explanation 5A instead of Explanation 5 to section 271(1)(c). The Tribunal clarified that there was no mention of Explanation 5A in its order and that the assertion by the assessee’s counsel was not apparent from the record. The Tribunal emphasized that reconsideration of this argument would fall under a review, which is not permissible under section 254(2) of the Act. The Tribunal cited the Hon’ble jurisdictional High Court’s decision in CIT vs. Ramesh Electric and Trading Co. and the Hon’ble Apex Court’s decision in T.S. Balaram, ITO v. Volkart Bros., stating that a mistake must be obvious and patent, not one requiring extensive reasoning.

2. Non-specification of the limb under section 271(1)(c) by the Assessing Officer:
The assessee contended that the Assessing Officer did not specify whether the penalty was for concealment of income or furnishing inaccurate particulars. The Tribunal found this assertion incorrect, noting that there was no issue before the ITAT regarding the order passed under section 271(1)(c) being invalid due to non-specification of the limb. The Tribunal deemed this argument as an afterthought.

3. Voluntary filing of revised computation of income:
The assessee claimed that the non-disclosure of ?18,05,000 was an unintentional error corrected by a voluntary revised computation before the assessment was completed. The Tribunal noted that this issue was considered and not accepted in the original order. It emphasized that non-acceptance of an assessee's submission does not constitute a mistake apparent from the record, thus not liable for rectification under section 254(2).

4. Consideration of loose sheet as "money, bullion, jewellery or other valuable article or thing":
The assessee argued that the loose sheet seized could not be considered as "money, bullion, jewellery or other valuable article or thing" under the relevant section, and hence, no penalty should be levied. The Tribunal found that this argument sought a review of the original order, which is not permissible under section 254(2).

Conclusion:
The Tribunal concluded that the issues raised by the assessee did not constitute mistakes apparent from the record. It reiterated that re-appreciation or re-adjudication is not permissible under the guise of rectification of mistakes. Consequently, the miscellaneous application by the assessee was dismissed. The order was pronounced in the open court on 22.10.2018.