2014 (7) TMI 1109 - AT - Income Tax

Rectification of mistake - Non consideration of precedent decision - Penalty u/s 271(1)(c) - Held that - decision of the Delhi Court in the case of Nalwa Sons Investment Ltd. (2010 (8) TMI 40 - DELHI HIGH COURT) has not been cited before the Tribunal when the appeal was heard and the same has been admitted by the learned senior counsel for the assessee during the hearing of this miscellaneous application. Therefore not considering the decision which was not cited during the course of the appellate proceeding cannot be the basis for invoking provisions of section 254(2) of the Income Tax Act. Moreover the decision in the case of Nalwa Sons Investment Ltd. (supra) is neither rendered by the Hon ble Jurisdictional High Court of Bombay nor by the Hon ble Apex Court and hence the same has only pursuasive value so far this Bench of the Tribunal. Therefore it cannot be said that the Tribunal has ignored/not considered a provision of law or binding decision of a Court. The other mistakes alleged by the assessee are not mistake apparent on the record for the purpose of section 254(2) of the Act. - Considering the entirety of the facts and the relevant provisions of law more particularly the limited scope of section 254(2) we are of the considered opinion that the mistake alleged by the assessee in the impugned order of the Tribunal dated 15.01.2014 are not mistakes apparent for the purpose of section 254(2) and in fact the assessee intends a revision or review of the order of the Tribunal which is beyond the scope of the said provision - Decided against assessee.

Summary

Issues:
1. Recall of the order of the Tribunal dated 15.01.2014 regarding the levy of penalty u/s 271(1)(c) without considering a specific decision.
2. Alleged mistakes in the impugned order of the Tribunal dated 15.01.2014 pointed out by the assessee's counsel.
3. Whether the Tribunal can rectify the mistakes allegedly committed while adjudicating the case of the assessee.
4. Consideration of relevant legal decisions and provisions in the context of rectification of mistakes in the Tribunal's order.

Issue 1:
The assessee sought a recall of the Tribunal's order dated 15.01.2014, contending that the Tribunal had adjudicated the issue of penalty u/s 271(1)(c) without considering a specific decision of the Delhi High Court. The decision cited by the assessee emphasized that when an assessment is made under a specific section and tax is paid accordingly, penalty under a different section should not be imposed based on additions made during a normal assessment procedure.

Issue 2:
The learned senior counsel for the assessee highlighted alleged mistakes in the Tribunal's order dated 15.01.2014. These included the lack of evidence supporting the claim of a mistake by the accountant leading to the bad debts claim, misapplication of legal precedents, disbelief in the inaccessibility of documents affecting deductions, and reliance on certain decisions without allowing submissions. The counsel argued that the tax paid remained unchanged despite the disallowance of the write-off.

Issue 3:
During the proceedings, the assessee's counsel relied on legal decisions to support the proposition that the Tribunal could rectify mistakes made while adjudicating the case. However, the Departmental Representative opposed this move, stating that the application aimed to reopen arguments beyond the Tribunal's scope under the Income Tax Act.

Issue 4:
After considering the arguments and reviewing the material on record, the Tribunal found that the decision cited by the assessee was not presented during the original appeal hearing. The Tribunal clarified that the decision lacked binding authority and, therefore, could not be the basis for invoking the relevant provisions of the Income Tax Act. The Tribunal also analyzed other alleged mistakes and concluded that they were not apparent on the record for rectification under the Act. Additionally, the Tribunal differentiated the case at hand from precedents where rectification was allowed, emphasizing the limited scope of section 254(2) for rectifying mistakes.

In conclusion, the Tribunal dismissed the Miscellaneous Application filed by the Assessee, stating that the alleged mistakes were not apparent for rectification under section 254(2) and that the application sought a revision or review of the Tribunal's order, exceeding the scope of the provision.