2020 (2) TMI 898 - AT - Income Tax

Penalty Order Void without JCIT Approval; Rectification /= Review

The Appellate Tribunal held that a penalty imposed under section 271AAB of the Income Tax Act, 1961, without prior approval from the Joint Commissioner of ... Rectification of mistake u/s 254 - date in final penalty order u/s 271AAB was wrongly mentioned as 29/09/2016 instead of 30/09/2016 - HELD THAT:- In the present case it is an admitted fact that the A.O. passed the penalty order under section 271AAB of the Act, on 29/09/2016 while the approval was granted by the Joint Commissioner / Additional Commissioner of Income Tax, Central Range on 30/09/2016 and the order dated 22/04/2019 was passed after considering those facts on record, so there is no mistake apparent from the record for the purpose of rectification under section 254 of the Act. No merit in these Miscellaneous Applications of the Department, accordingly the same are dismissed. Issues:1. Penalty imposed under section 271AAB without prior approval from JCIT.2. Typographical error in the penalty order date.Issue 1: The Appellate Tribunal considered two Miscellaneous Applications arising from a common order related to the imposition of a penalty under section 271AAB of the Income Tax Act, 1961. The Department had imposed a penalty on the assessee without obtaining prior approval from the Joint Commissioner of Income Tax (JCIT). The Tribunal held that as per section 274 of the Act, the penalty could not be imposed without prior approval from the JCIT. The penalty order was deemed void ab initio as it was passed before obtaining the necessary approval, leading to the deletion of the penalty by the Tribunal.Issue 2: The Department argued that a typographical error in the penalty order date was the reason for the confusion. The Assessing Officer had forwarded the draft penalty order for approval, which was dated 29/09/2016, but the approval from the JCIT was granted on 30/09/2016. The final penalty order mistakenly retained the date of 29/09/2016, causing the discrepancy. The Department sought rectification of this error, citing provisions under section 292B of the Income Tax Act, 1961, which allows for mistakes, defects, or omissions to be rectified if they align with the intent and purpose of the Act.The Tribunal, after considering the arguments from both parties, concluded that there was no mistake apparent from the record for rectification under section 254 of the Act. It emphasized that while rectification of mistakes is permissible, the Tribunal does not have the power to review its own order. Citing precedents from various High Courts, the Tribunal highlighted that rectification is not equivalent to a review or recall of the order. Therefore, the Miscellaneous Applications seeking rectification of the penalty order were dismissed, as the Tribunal found no merit in the Department's claims.In conclusion, the Tribunal dismissed the Department's Miscellaneous Applications, upholding the original order regarding the penalty imposed under section 271AAB. The judgment emphasized the distinction between rectification and review, highlighting that rectification of mistakes does not entail a review or recall of the original order.