Tribunal Rectifies Error in Order, Deletion of Penalty Confirmed

The Tribunal allowed the Miscellaneous Application seeking rectification of a mistake in its earlier order, acknowledging that the First Appellate Authority had sustained the addition of Rs. 1631.85 lakhs related to coal cost freight, leading to the deletion of penalty u/s. 271(1)(c). The Tribunal recognized the oversight in its initial decision and recalled the order for reconsideration of the penalty specifically on the coal cost freight addition. The appeal was set for a rehearing, with notices to be issued to the parties involved. The rectification order was pronounced on 9th May 2019, confirming no penalty survived for other additions deleted by the First Appellate Authority and upheld by the ITAT.

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Issues:
Rectification of mistake apparent on record in the order passed by the Tribunal ITA.No. 4720/MUM/2012 dated 27.06.2018 regarding the deletion of penalty u/s. 271(1)(c) on the addition of Rs. 1631.85 lakhs sustained by the First Appellate Authority.

Analysis:
The Miscellaneous Application was filed by the Revenue seeking rectification of a mistake apparent on record in the Tribunal's order dated 27.06.2018 concerning the deletion of penalty u/s. 271(1)(c) on the addition of Rs. 1631.85 lakhs sustained by the First Appellate Authority. The Revenue contended that the Tribunal erroneously held that the First Appellate Authority deleted all additions, leading to the deletion of the penalty. However, the First Appellate Authority had actually sustained the addition/disallowance of Rs. 1631.85 lakhs on account of coal cost freight, and the assessee did not appeal against this decision before the Tribunal in the quantum proceedings. The Tribunal acknowledged this oversight and agreed that a mistake had crept into the order, necessitating rectification.

Upon hearing both parties and reviewing the order, the Tribunal confirmed that the First Appellate Authority had indeed sustained the addition of Rs. 1631.85 lakhs related to coal cost freight, and the assessee did not challenge this decision. The Tribunal recognized the need for rectification as it had omitted to consider this factual position in its previous order. Consequently, the Tribunal recalled its earlier order to allow for a reevaluation of the penalty levied u/s. 271(1)(c) specifically on the addition of coal cost freight sustained by the First Appellate Authority. The Tribunal clarified that no penalty survived in relation to other additions since they were deleted by the First Appellate Authority and confirmed by the ITAT. The appeal was scheduled for a rehearing after issuing notices to the concerned parties.

In conclusion, the Miscellaneous Application was allowed, and the order for rectification was pronounced in open court on 9th May 2019.

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