INCOME TAX ACT, 1961

Section 254

Appeal (Tribunal) - Rectification of mistake - Penalty under section 271(1)(c) -

By way of these Miscellaneous Applications, Revenue sought to recall order of Tribunal who allowed assessee's appeal by deleting penalty under section 271(1)(c) for various years as levied as well as confirmed by lower authorities. In the application, it was submitted that the case was decided in assessee's favour on legal issue since it was observed that AO initiated penalty for concealment of income, by taking support from Explanation-3 to section 271(1)(c). However, AO levied penalty for furnishing of inaccurate particulars of income. Therefore, it was concluded that penalty was initiated on one limb but ultimately levied on another limb and therefore, order was set aside and the penalty was directed to be deleted. Held: High Court in CIT v. Bhagwati Developers Pvt. Ltd. (2003) 261 ITR 658 (Cal) : 2003 TaxPub(DT) 1037 (Cal-HC) observed that a mistake apparent from the record must be an obvious and patent mistake and not something which could be established by a long-drawn process of reasoning on points on which there may be conceivably two opinions. A decision on a debatable point is not mistake apparent from record. A mistake apparent from record is one for which no elaborate argument is required. A debatable issue does not come with the scope of provisions of section 254(2). Thus plea urged by Revenue was beyond the scope of section 254(2) and therefore, application stand rejected.

Followed:CIT v. Earnest Exports Ltd. (2010) 323 ITR 577 (Bom) : 2010 TaxPub(DT) 1579 (Bom-HC) CIT v. Pearl Woolen Mills (2011) 330 ITR 164 (P&H) : 2011 TaxPub(DT) 0107 (P&H-HC) CIT v. Bhagwati Developers Pvt. Ltd. (2003) 261 ITR 658 (Cal) : 2003 TaxPub(DT) 1037 (Cal-HC)

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

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