2018 (3) TMI 234 - AT - Income Tax

Tribunal recalls orders for assesses due to notice non-service & factual errors. Penalty levy mistake acknowledged.

The Tribunal recalled its orders in the case of three assesses for the assessment year 2013-14 due to non-service of notice for the hearing and factual ... Recall of tribunal order - non-service of notice and audi alteram rule - mistake of primary fact - rectification of factual error - maintenance of books of accounts under section 44AA - penalty under section 271AABRecall of tribunal order - non-service of notice and audi alteram rule - mistake of primary fact - maintenance of books of accounts under section 44AA - penalty under section 271AAB - Whether the Tribunal's order dated 10.11.2017 should be recalled on account of non-service of notice for hearing and a factual error that led to an incorrect finding regarding maintenance of books and consequent levy of penalty. - HELD THAT: - The assessee applied to recall the Tribunal's order on the ground that notice of hearing dated 06.11.2017 was not served and therefore the assessee could not be personally present. In addition, it was pointed out that the Tribunal had recorded in para 9 that the assessee had accepted engagement in commodities trading and was therefore mandated to maintain books of accounts under section 44AA, and had treated commodities trading transactions as not entered in books, thereby sustaining penalty under section 271AAB. A perusal of the assessment record and computation showed that income from commodities trading had been offered only under the head 'income from other sources' and the assessing officer had recorded that the assessee had only salary income and income from other sources. Thus the Tribunal's factual finding that the assessee was required to maintain books under section 44AA was factually incorrect. The absence of the assessee at the hearing contributed to this primary factual mistake escaping the Tribunal's notice. Because this mistake of primary fact was material and had led to the conclusion upholding the penalty under section 271AAB, the Tribunal found it appropriate to rectify the error by recalling its earlier order dated 10.11.2017. [Paras 1]Orders of this Tribunal dated 10.11.2017 are recalled and the miscellaneous applications are allowed.Final Conclusion: The Tribunal recalled its order dated 10.11.2017 in I.T.A. Nos. 1471, 1475 & 1476/Kol/2015 on the ground of non-service of notice and a material mistake of primary fact regarding the requirement to maintain books under section 44AA, which had led to sustaining penalty under section 271AAB; the miscellaneous applications were allowed. Issues involved:1. Recall of order passed by the Tribunal in the case of three assesses for the assessment year 2013-14.2. Non-service of notice for the hearing and factual errors in the Tribunal's order.3. Discrepancy in the Tribunal's finding regarding the nature of income from commodities trading.4. Rectification of the mistake of primary fact leading to the levy of penalty under section 271AAB of the Act.Detailed Analysis:1. The judgment deals with the miscellaneous applications filed by the assessee seeking to recall the order passed by the Tribunal in the case of three assesses for the assessment year 2013-14. The applications were based on the grounds that the notice for the hearing was not served on the assessee, and there were factual errors in the Tribunal's order. The Ld. AR raised objections regarding the non-service of notice, which resulted in the assessee's absence during the hearing. Additionally, discrepancies were pointed out in the Tribunal's finding related to the nature of income from commodities trading.2. The first preliminary objection raised was regarding the non-service of notice for the hearing scheduled on a specific date, which led to the assessee's inability to be present. The second objection highlighted a factual error in the Tribunal's order, specifically in paragraph 9, where it was mentioned that the assessee had accepted engagement in commodities trading business. This finding influenced the conclusion of undisclosed income and the subsequent levy of penalty under section 271AAB of the Act.3. The Ld. AR pointed out that the assessee had offered income from commodity trading only under the head 'income from other sources' in the computation of total income. Moreover, the assessment order indicated that the assessee had only salary income and income from other sources, not from commodities trading. The absence of the assessee during the hearing resulted in the Tribunal overlooking this crucial fact, leading to an incorrect conclusion regarding the maintenance of books of accounts under section 44AA of the Act.4. Upon reviewing the facts, the Tribunal acknowledged the mistake of primary fact in its order, specifically regarding the requirement for the assessee to maintain books of accounts under section 44AA of the Act. This mistake influenced the decision to uphold the penalty under section 271AAB. Consequently, the Tribunal deemed it appropriate to recall its orders dated 10.11.2017 in the case of the mentioned assesses. The miscellaneous applications of the assesses were allowed, and the order was pronounced in court on 12.01.2018.