2020 (8) TMI 661 - AT - Income Tax

Tribunal Upholds Order on Penalty Proceedings under IT Act

The Tribunal dismissed the Revenue's Miscellaneous Application, upholding its original order dated 12.02.2019 regarding the validity of the initiation of ... Rectification of mistake u/s 154 - non considering of the judgment of Hon’ble Madras High Court - jurisdiction of the Tribunal U/s 254(2) - present Misc. Application that the Tribunal has decided the appeal of the assessee by following decisions of Hon’ble Karnataka High Court as well as other decisions on the point of validity of initiation of penalty proceedings however, there is a judgment of Hon’ble Madras High Court which is in favour of the Revenue - HELD THAT:- We do not agree with this contention and plea of the Revenue simply due the reason that while deciding this issue the Tribunal has taken a firm view which is supported by various judgments including the judgment of Hon’ble jurisdiction High Court in case of Seveta Construction Co. [2016 (12) TMI 1603 - RAJASTHAN HIGH COURT]. The judgment of jurisdiction High Court is binding on this Tribunal specifically Jaipur and Jodhpur Benches of the Tribunal. The decision of Hon’ble Madras High Court was not relied upon or cited by the Revenue at the time of hearing of the appeal. Further, even in case of divergent view of the Hon’ble High Courts on a issue the Tribunal is bound by the view taken by the Hon’ble jurisdiction High Court. Hence, the decision which was not cited by the reviewed or relied upon by the Revenue at the time of hearing cannot be a ground for mistake in the order of the Tribunal when the Tribunal has followed the various other decisions of Hon’ble High Courts as well as decision of Hon’ble jurisdiction High Court. It is settled proposition of law that the jurisdiction of the Tribunal U/s 254(2) of the Act is very limited and circumscribed and does not permit any review or revision of its own decision taken on merits. Therefore, we do not find any merit or substance in the Misc. Application of the Revenue, the same is dismissed. Issues:Recalling of order dated 12.02.2019 by the Revenue based on alleged mistake in the impugned order regarding validity of initiation of penalty proceedings under section 271(1)(c) of the IT Act.Analysis:The Revenue sought to recall the order dated 12.02.2019 of the Tribunal due to an alleged mistake in the impugned order related to the validity of the initiation of penalty proceedings under section 271(1)(c) of the IT Act. The Revenue argued that the Tribunal did not consider the judgment of the Hon'ble Madras High Court in the case of Sundaram Finance Ltd. vs. ACIT, which was in favor of the Revenue. The Revenue contended that the Tribunal's failure to consider this judgment amounted to a mistake apparent on the record requiring rectification. However, the Tribunal disagreed with this contention, stating that it had taken a firm view supported by various judgments, including the judgment of the Hon'ble jurisdiction High Court. The Tribunal highlighted that the decision of the Hon'ble Madras High Court was not cited or relied upon by the Revenue during the appeal hearing. The Tribunal emphasized that even in cases of divergent views among High Courts, it is bound by the view of the jurisdiction High Court. The Tribunal held that the jurisdiction under section 254(2) of the Act is limited and does not permit a review or revision of its own decision on merits. Therefore, the Tribunal dismissed the Revenue's Miscellaneous Application, finding no merit in the request for recalling the order.In conclusion, the Tribunal dismissed the Miscellaneous Application of the Revenue, upholding its original order dated 12.02.2019 regarding the validity of the initiation of penalty proceedings under section 271(1)(c) of the IT Act. The Tribunal emphasized the limited scope of review under section 254(2) of the Act and the binding nature of the jurisdiction High Court's decisions on the Tribunal.