2018 (3) TMI 234 - AT - Income Tax

Rectification of mistake - since the transaction of commodities trading had not been entered by the assessee in his books of accounts as on the date of search on 01.08.2012 and thereby it takes the character of undisclosed income for which penalty u/s 271AAB CV is exigible - Held that - AR drew our attention to the computation of the total income wherein the assessee had offered income from commodity trading only under the head income from other sources. AO had also specifically stated in the body of the assessment order vide column no. 10 that the assessee is having only salary income and income from other sources. Due to the absence of the assessee at the time of hearing this particular fact had escaped the attention of the Tribunal. On perusal of the fact available on record, we find that the finding recorded by this Tribunal in para 9 of its order dated 10.11.2017 that the assessee is mandated to maintain books of accounts u/s 44AA of the Act is factually incorrect and deserves to be rectified. This mistake of primary fact had lead to a conclusion of upholding the levy of penalty u/s 271AAB of the Act. Hence, in these facts and circumstances and in view of the aforesaid mistake of primary fact rightly pointed out by the ld. AR , we deem it fit to recall the orders of this Tribunal dated 10.11.2017 in the case of aforesaid assessees. Miscellaneous applications of the Assessees are allowed.

Summary

Issues involved:
1. Recall of order passed by the Tribunal in the case of three assesses for the assessment year 2013-14.
2. Non-service of notice for the hearing and factual errors in the Tribunal's order.
3. Discrepancy in the Tribunal's finding regarding the nature of income from commodities trading.
4. Rectification of the mistake of primary fact leading to the levy of penalty under section 271AAB of the Act.

Detailed Analysis:
1. The judgment deals with the miscellaneous applications filed by the assessee seeking to recall the order passed by the Tribunal in the case of three assesses for the assessment year 2013-14. The applications were based on the grounds that the notice for the hearing was not served on the assessee, and there were factual errors in the Tribunal's order. The Ld. AR raised objections regarding the non-service of notice, which resulted in the assessee's absence during the hearing. Additionally, discrepancies were pointed out in the Tribunal's finding related to the nature of income from commodities trading.

2. The first preliminary objection raised was regarding the non-service of notice for the hearing scheduled on a specific date, which led to the assessee's inability to be present. The second objection highlighted a factual error in the Tribunal's order, specifically in paragraph 9, where it was mentioned that the assessee had accepted engagement in commodities trading business. This finding influenced the conclusion of undisclosed income and the subsequent levy of penalty under section 271AAB of the Act.

3. The Ld. AR pointed out that the assessee had offered income from commodity trading only under the head "income from other sources" in the computation of total income. Moreover, the assessment order indicated that the assessee had only salary income and income from other sources, not from commodities trading. The absence of the assessee during the hearing resulted in the Tribunal overlooking this crucial fact, leading to an incorrect conclusion regarding the maintenance of books of accounts under section 44AA of the Act.

4. Upon reviewing the facts, the Tribunal acknowledged the mistake of primary fact in its order, specifically regarding the requirement for the assessee to maintain books of accounts under section 44AA of the Act. This mistake influenced the decision to uphold the penalty under section 271AAB. Consequently, the Tribunal deemed it appropriate to recall its orders dated 10.11.2017 in the case of the mentioned assesses. The miscellaneous applications of the assesses were allowed, and the order was pronounced in court on 12.01.2018.