At, Income Tax Appellate Tribunal Ahmedabad
By, THE HONOURABLE MR. RAJPAL YADAV
By, JUDICIAL MEMBER & PRADIP KUMAR KEDIA
By, ACCOUNTANT MEMBER
For the Appellant: Mudit Nagpal, Sr.DR. For the Respondent: Sanket Bakshi, AR.
Rajpal Yadav, Judicial Member:
1. Present Misc. Application is directed at the instance of the Revenue pointing out apparent error in the order of the Tribunal dated 11.9.2017 passed in ITA No.2871/Ahd/2014.
2. Brief facts of the case are that the assessee has claimed weighted deduction under section 35(2AB) of the Income Tax Act at Rs.1,26,23,818/-. This deduction was disallowed to the assessee and the dispute travelled upto the Tribunal. The Tribunal in ITA No.75/Ahd/2012 vide order dated 6.4.2017 remitted this issue to the file of the AO for fresh adjudication. The AO has imposed penalty of Rs.43.00 lakhs under section 271(1)(c) of the Act. The dispute qua imposition of this penalty travelled upto the Tribunal in ITA No.2871/Ahd/2014. Since quantum addition was set aside by the Tribunal in ITA No.75/Ahd/2012, and therefore, in the penalty proceedings, the Tribunal has observed that de novo assessment is pending before the AO, and unless the quantum is decided, no penalty be imposed upon the assessee. Accordingly, appeal of the assessee was allowed for statistical purpose and issue was remitted to the file of the AO. It was left to the AO to initiate or not to initiate penalty proceedings on this issue. In the MA, it has been pleaded that the order of the Tribunal dated 11.9.2007 passed in penalty proceedings was received by the Department on 25.1.2018, by that time, the AO has already passed quantum order in pursuance of ITAT's order dated 6.4.2017 in the quantum proceedings. The AO did not initiate penalty proceedings in the de novo assessment order on the directions of the Tribunal. Under these circumstances, a prayer is being made that order dated 11.9.2017 passed in ITA No.2871/Ahd/2014 be recalled.
3. At the time of hearing of this MA, it has been brought to our notice that quantum order of the Tribunal passed in ITA no.75/Ahd/2012 was challenged by the assessee before the Hon'ble High Court vide Tax Appeal No.1057 of 2017. Hon'ble High Court has allowed the appeal of the assessee on 26.3.2018. The Hon'ble High Court has allowed weighted deduction claimed by the assessee under section 35(2AB) of the Act.
4. With the assistance of the ld.representatives, we have gone through the record carefully. The power of rectification under section 254 of the Income Tax Act can be exercised only when the mistake, which is sought to be rectified, is an obvious patent mistake, which is apparent from the record and not a mistake, which is required to be established by arguments and long drawn process of reasoning on points, on which there may conceivably be two opinions. We do not find any merit in this application of the Revenue for two reasons viz. the Tribunal has set aside penalty order on 11.9.2017. Department was represented by its authorized officer, hence, it was in the knowledge of the Department, and this information ought to be remitted to the AO. He has passed de novo assessment order on 27.12.2017 i.e. after order of the Tribunal in September, 2017. Second reason is that since addition stands deleted by the Hon'ble High Court and appeal of the Revenue will not be maintainable before the Hon'ble Supreme Court for want of tax effect, therefore, there are no chance for
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any revival of issue of penalty under section 271(1)(c) of the Act. In view of the above two circumstances, we do not find any apparent error in the order of the Tribunal, and therefore MA of the Department is dismissed. 5. In the result, Misc. Application of the Revenue is dismissed. Order pronounced in the Court on 5th October, 2018 at Ahmedabad.