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2019 (4) TMI 1301 - AT - Income TaxRectification u/s 254 - assessee was not eligible for deduction u/s 80IB - penalty u/s 271(1)(c) imposed - mistake apparent from the record or not? - assessee delayed the filing of revised return of income - HELD THAT - Assuming, for the sake of discussion, that the assessee has an arguable case on merits, as contended by the assessee; we cannot be persuaded to review our decision in our aforesaid order dated 11.08.2016 dismissing assessee s appeal. It is settled law that review of an order of ITAT is not permitted in proceedings u/s 254(2) . When a party claims, contrary to a reasoned order of the ITAT on merits, to have an arguable case on merits, or even a good case on merits; even then, a review of the earlier order of ITAT is beyond the scope of Section 254(2), if there is no mistake apparent from the record in the earlier order. What is permitted u/s 254(2) is rectification of mistake apparent from the record; and not a review. There is no mistake apparent from record in our aforesaid order dated 11.08.2016. We have also already expressed that it is settled law that review of an order of ITAT is not permitted in proceedings Under Section 254(2). What is permitted Under Section 254(2) of I.T. Act is rectification of mistake apparent from the record; but there is no mistake apparent from record - Decided against assessee.
Issues Involved:
1. Timeliness and Validity of Revised Returns 2. Justification for Claiming Deduction under Section 80IB 3. Applicability of Penalty under Section 271(1)(c) 4. Consideration of Additional Evidence and Arguments Detailed Analysis: 1. Timeliness and Validity of Revised Returns: The Assessee filed revised returns for the Assessment Years 2005-06 and 2006-07, withdrawing the deduction claims under Section 80IB. The revised return for AY 2005-06 was beyond the statutory time limit prescribed under Section 139(5) of the Income Tax Act, whereas the revised return for AY 2006-07 was within the permissible time limit. The Tribunal noted that the withdrawal of claims was made only after the Assessing Officer (AO) issued a questionnaire during the assessment proceedings, questioning the legitimacy of the deductions claimed. 2. Justification for Claiming Deduction under Section 80IB: The Assessee claimed that the deductions under Section 80IB were initially made based on a bona fide belief that they were eligible. However, upon realizing during the preparation of the return for AY 2007-08 that the deductions were not permissible, the Assessee voluntarily withdrew the claims. The Tribunal found that the Assessee failed to provide any credible explanation or information regarding the eligibility criteria for the deductions at the time of the original filing. The Tribunal held that the Assessee's claims were not bona fide and were made with the intent to avail of deductions that were not legally permissible. 3. Applicability of Penalty under Section 271(1)(c): The Tribunal upheld the penalties imposed by the AO under Section 271(1)(c) for both AY 2005-06 and 2006-07. The penalties were based on the finding that the Assessee had furnished inaccurate particulars of income by claiming deductions under Section 80IB, which were not permissible. The Tribunal emphasized that the Assessee withdrew the claims only after being confronted by the AO's questionnaire, indicating that the claims were not made in good faith. The Tribunal referred to the decision in CIT vs. Zoom Communication Pvt. Ltd. (191 Taxman 179 Delhi), which held that making a wholly untenable claim with no foundation attracts penalty under Section 271(1)(c). 4. Consideration of Additional Evidence and Arguments: The Assessee contended that the Tribunal had not considered the Paper Book dated 08.07.2016, which contained explanations and supporting documents for the initial claims and subsequent withdrawals. The Tribunal clarified that it had perused all materials on record, including the Paper Book. The Tribunal reiterated that the additional evidence did not alter the crucial fact that the Assessee withdrew the claims only after being questioned by the AO. The Tribunal also noted that review of its earlier order is not permissible under Section 254(2) of the Income Tax Act, and only rectification of apparent mistakes is allowed. Conclusion: The Tribunal dismissed the Miscellaneous Applications filed by the Assessee, confirming the penalties under Section 271(1)(c) for both AY 2005-06 and 2006-07. The Tribunal held that the Assessee had not provided a bona fide explanation for the initial claims under Section 80IB and had withdrawn the claims only after being confronted by the AO. The Tribunal also clarified that it had considered all materials on record, including the Paper Book, and found no mistake apparent from the record in its earlier order.
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