2019 (6) TMI 585 - AT - Income Tax

Rectification of mistake u/s 254 - Tribunal proceeded to delete the penalty on the ground that the First Appellate Authority had deleted all the additions and the Tribunal sustained this order of the First Appellate Authority - HELD THAT - It is a fact that the First Appellate Authority had sustained the addition/disallowance in respect of the addition made on account of coal cost freight amounting to .1631.85 lakhs and the assessee had not filed any appeal against confirming such addition/disallowance by the First Appellate Authority. We notice that the Tribunal by oversight omitted to consider this factual position and therefore a mistake is crept in the order passed by the Tribunal which is apparent on the record and needs rectification. In the circumstances we recall the order passed by the Tribunal to hear the parties in respect of the penalty levied u/s. 271(1)(c) of the Act on the addition sustained by the Ld. First Appellate Authority regarding coal cost freight as the penalty survived only in respect of this addition. In respect of other additions no penalty is survived as the quantum additions were deleted by the First Appellate Authority and was confirmed by the ITAT.

Issues:
Rectification of mistake apparent on record in the order passed by the Tribunal ITA.No. 4720/MUM/2012 dated 27.06.2018 regarding the deletion of penalty u/s. 271(1)(c) on the addition of ?1631.85 lakhs sustained by the First Appellate Authority.

Analysis:
The Miscellaneous Application was filed by the Revenue seeking rectification of a mistake apparent on record in the Tribunal's order dated 27.06.2018 concerning the deletion of penalty u/s. 271(1)(c) on the addition of ?1631.85 lakhs sustained by the First Appellate Authority. The Revenue contended that the Tribunal erroneously held that the First Appellate Authority deleted all additions, leading to the deletion of the penalty. However, the First Appellate Authority had actually sustained the addition/disallowance of ?1631.85 lakhs on account of coal cost freight, and the assessee did not appeal against this decision before the Tribunal in the quantum proceedings. The Tribunal acknowledged this oversight and agreed that a mistake had crept into the order, necessitating rectification.

Upon hearing both parties and reviewing the order, the Tribunal confirmed that the First Appellate Authority had indeed sustained the addition of ?1631.85 lakhs related to coal cost freight, and the assessee did not challenge this decision. The Tribunal recognized the need for rectification as it had omitted to consider this factual position in its previous order. Consequently, the Tribunal recalled its earlier order to allow for a reevaluation of the penalty levied u/s. 271(1)(c) specifically on the addition of coal cost freight sustained by the First Appellate Authority. The Tribunal clarified that no penalty survived in relation to other additions since they were deleted by the First Appellate Authority and confirmed by the ITAT. The appeal was scheduled for a rehearing after issuing notices to the concerned parties.

In conclusion, the Miscellaneous Application was allowed, and the order for rectification was pronounced in open court on 9th May 2019.

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