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2014 (2) TMI 850 - MADRAS HIGH COURTScope and power of rectification u/s 154 of the Act –Held that:- The decision in Honda Siel Power Products Limited Vs. Commissioner of Income-tax [2007 (11) TMI 8 - Supreme Court of India] followed – the fundamental principle has nothing to do with the inherent powers of the Tribunal/authority - the important reason for giving power of rectification is to see that no prejudice is caused to either of the parties appearing before it by its decision based on a mistake apparent from the record - the first appellate authority rightly entertained the application under Section 154 and rectified the error solely on the ground that as per the law, which holds the land, at the relevant point of time, no penalty was imposable when a loss has been incurred by the assessee - the term "income" in Section 271(1)(c) was interpreted to mean "prospective income" - the assessment order disclose loss to be carried forward – thus, the Commissioner was justified in entertaining the application and rectifying the mistake – thus, the order of the Tribunal set aside. Levy of Penalty u/s 271(1)(c) of the Act – Held that:- The Tribunal had allowed the Department's appeal only on the question of jurisdiction under Section 154 of the Income-tax Act – thus, it would be proper to remit back the matter for decision on the question of levy of penalty – The appeal allowed only on the aspect of jurisdiction of the CIT(A)Decided partly in favour of Assessee.
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