2022 (2) TMI 214 - AT - Income Tax

Rectification of mistake - Default for non-deduction of tax u/s 206C(1) in respect of scrap sales affected and levy of penalty u/s 271CA - Co-ordinate Bench has decided the matter in favour of the assessee treating the assessee no default for non-deduction of tax u/s 206C(1) whereas when it comes to the matter relating to levy of penalty u/s 271CA, matter has been restored back to the file of Assessing Officer to decide the same afresh and thereafter, in para 11, both the appeals of the assessee are allowed for statistical purposes. HELD THAT - As apparent mistake which has crept in the order of the Co-ordinate Bench wherein in the quantum proceedings, the matter has been decided in favour of the assessee and in the same order, the matter relating to consequent levy of penalty has been restored back to the file of the AO. Therefore, the findings recorded in para 10 while disposing off ground relating to levy of penalty u/s 271CA is hereby rectified/amended with the following findings which shall read as under - As we have held in Para 4 above that there is no merit in the orders of the AO treating the assessee in default for non deduction of tax u/s 206C(1) of the Act in respect of scrap sales affected by him during the year under consideration, the consequent levy of penalty u/s 271CA of the Act is hereby directed to be deleted. Further, in concluding para 11, in place of existing finding, it should read as Both the appeals of the assessee are allowed . Subject to above changes in Para 10 and 11 of the order passed by the Tribunal, there is no other change in the order so passed -miscellaneous applications so filed by the assessee are disposed off in light of aforesaid directions.

Summary

Issues involved: Delay in filing miscellaneous applications due to national lockdown, treatment of assessee in default under section 201(1)/201(1A) of section 206C, imposition of penalty under section 271CA, rectification of apparent mistake in the order of the Co-ordinate Bench.

Analysis:

1. Delay in filing miscellaneous applications: The assessee filed two miscellaneous applications against the order passed by the Co-ordinate Bench, citing a delay of 21 days due to the national lockdown caused by the COVID-19 pandemic. The Hon'ble Supreme Court's order granting relaxation in limitation was invoked to request condonation of the delay. After considering the reasons for the delay, the Tribunal condoned the delay and admitted the miscellaneous applications for adjudication.

2. Treatment of assessee in default under section 201(1)/201(1A) of section 206C: The Coordinate Bench had previously addressed the issue of treating the assessee in default for non-deduction of tax under section 206C(1) of the Act. The Coordinate Bench found no merit in the AO's decision to treat the assessee in default regarding scrap sales. The Tribunal upheld this finding and directed the deletion of the consequent penalty under section 271CA.

3. Imposition of penalty under section 271CA: The Coordinate Bench had restored the matter of imposing penalty under section 271CA back to the file of the Assessing Officer for fresh consideration. The Tribunal, after reviewing the findings, rectified an apparent mistake in the order. The Tribunal directed the deletion of the penalty under section 271CA, as the quantum proceedings had already been decided in favor of the assessee.

4. Rectification of apparent mistake in the order of the Co-ordinate Bench: The Tribunal identified an error in the Coordinate Bench's order where the matter of imposing penalty under section 271CA was restored back to the AO despite the quantum proceedings being in favor of the assessee. The Tribunal rectified this mistake and directed the deletion of the penalty under section 271CA. The Tribunal clarified the rectifications to be made in the order, ensuring consistency and coherence in the decision.

In conclusion, the Tribunal disposed of the miscellaneous applications filed by the assessee, making necessary rectifications in the order to align with the findings and directions provided in the judgment. The rectifications ensured that the decision regarding the treatment of the assessee in default and the imposition of penalty under section 271CA was consistent with the favorable outcome of the quantum proceedings.