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2016 (6) TMI 1313 - HC - Income TaxApplication for rectification under Section 254(2) - penalty under Section 221 - Held that:- Tribunal in the impugned order has dealt with the issue of imposition of penalty being imposed under Section 221 of the Act even without service of demand notice under Section 156 of the Act upon an assessee. This the Tribunal could have only done while passing an order in appeal. The consequent order which would has been passed in appeal would enable the parties to challenge the same before this Court in an appeal under Section 260A of the Act. The procedure adopted by the Revenue in this case has deprived the right of statutory appeal to the petitioner. No appeal is entertained by this Court from an order dismissing the Miscellaneous Application for rectification under Section 254(2) of the Act (see Chem Amit (2004 (11) TMI 24 - BOMBAY HIGH COURT). Thus in the process of atoning for a mistake, one should take utmost care to ensure no further prejudice is caused. The rejection on merits of the contentions of the parties by the Tribunal on a substantial question of law is subject to the statutory right of appeal under Section 260A of the Act. This right cannot be bypassed by dealing with the merits in an Miscellaneous Application for rectification. In the above view, we set aside the impugned order dated 14th March, 2008 of the Tribunal. We direct the Tribunal to recall its order dated 9th May, 2006 to the extent it upheld the order of the Assessing Officer imposing penalty under Section 221 of the Act and post the appeal for hearing at a date convenient to it
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