2020 (2) TMI 721 - AT - Income Tax

Revision u/s 254 - Penalty u/s 271(1)(c) - defective notice or not? - HELD THAT - Issue of penalty has elaborately been considered by the Hon ble Bench and penalty levied on income declared in the return of income as well as penalty levied on additions made by AO over and above the returned income has separately been considered by the Hon ble bench. Therefore in our considered opinion there is no mistake apparent from record as envisaged by the provisions of Section 254(2) and what the revenue is seeking is nothing more than a review of the order which is impermissible. The said conclusion find support from the order of Hon ble Bombay High Court in CIT V/s Earnest Exports Ltd. 2010 (2) TMI 261 - BOMBAY HIGH COURT wherein it was observed that power u/s 254(2) is confined to rectification of mistake apparent on record and Section 254(2) is not a carte blanche for the Tribunal to change its own view by substituting a view which it believes should have been taken in the first instance. Further Sec. 254(2) is not a mandate to unsettle decisions taken after due reflection. These provisions empower the Tribunal to correct the mistakes errors and omissions apparent on the face and the said provision is not an avenue to revive a proceeding by recourse to a distinguished argument nor does it contemplate a fresh look at a decision recorded on merits. A mistake apparent from record is one for which no elaborate argument is required. It must be glaring obvious or selfevidenced mistake. If it is a mistake which requires to be establish by complicated process of investigation argument or proof it cannot be held to be mistake apparent from record. A debatable issue does not come with the scope of provisions of Sec. 254(2). Respectfully following the ratio of these decisions we are of the considered opinion that the pleas urged by the revenue are beyond the scope of Sec. 254(2) and therefore we are not inclined to accept the same. Resultantly the application stand rejected. The plea urged in all the other applications are more or less similar.

Summary

Issues:
Recall of Tribunal order regarding penalty u/s 271(1)(c) for various years for different assessees.

Analysis:

1. The revenue filed Miscellaneous Applications seeking the recall of the Tribunal order that allowed the assessee's appeal by deleting penalties u/s 271(1)(c) for various years. The revenue argued that the penalty was initiated on one limb but ultimately levied on another limb, leading to the penalty being set aside and directed to be deleted.

2. The assessee contended that the review of the order falls outside the ambit of Section 254(2) and that the Tribunal's order was reasonable and did not contain any apparent mistakes. The Tribunal thoroughly examined the facts and submissions, noting discrepancies in the penalty proceedings where penalties were levied for inaccurate particulars of income instead of concealment of income.

3. The Tribunal's order extensively discussed the penalty levied on income declared in the return of income and on additions made by the Assessing Officer over and above the returned income. The Tribunal found that the penalties were levied on inappropriate charges, leading to the penalties being set aside and directed to be deleted based on legal grounds.

4. The Tribunal cited relevant case laws to support its decision and emphasized that the revenue's plea for a review was impermissible as it sought to unsettle decisions taken after due reflection. The Tribunal highlighted that Section 254(2) does not allow for a fresh look at a decision recorded on merits and is limited to rectifying mistakes apparent on the face of the record.

5. The Tribunal rejected the revenue's pleas, stating that the issues raised were beyond the scope of Section 254(2) and were not considered as mistakes apparent from the record. The Tribunal upheld its original order and dismissed all the miscellaneous applications filed by the revenue for different assessees and assessment years.

6. In conclusion, the Tribunal maintained its decision to delete the penalties based on legal grounds and emphasized the limitations of Section 254(2) regarding the review of orders. The Tribunal's rejection of the revenue's pleas was supported by relevant legal precedents, ensuring the finality of the Tribunal's original order.