https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=461415 https://www.taxtmi.com/caselaws?id=461415 Rectification u/s 254 - Levy of penalty u/s 271(1)(c) - disallowance of exemption of capital gains earned, u/s 54F & 54EC - ITAT found that the claim was disallowed for the reason that new house was not purchased within the stipulated time as prescribed under the law, since the assessee had invested Rs.30 lakhs in the said property within stipulated period prescribed u/s 54F, therefore, the assessee was eligible to deduction of exemption to the extent of Rs.30 lakhs. HELD THAT:- As the exemption denied by the AO under section 54F was allowed by the ITAT to the tune of Rs.30 lakhs. While penalty has been confirmed by the ITAT even on the addition/disallowance deleted by the ITAT in quantum proceedings.Therefore, the facts as stated by assessee that the ITAT has confirmed penalty even on the addition deleted is found to be factually correct. As during the course of hearing, which took place before the ITAT on various occasions, the assessee in the first instance itself had placed copy of the order of the ITAT in quantum proceedings demonstrating the fact that of having been granted relief to the extent of Rs.30 lakhs, which was even taken note of by the Bench, when the appeal was first heard on 21.2.2020. Therefore, it cannot be denied that order of the ITAT in the quantum proceedings was very much part of the records and non-consideration of the same, while dealing with the appeal of the assessee, in penalty proceedings, does tantamount to a mistake apparent from record. Even if the assessee did not refer to the same when the appeal was finally heard the fact remains that the order was very much part of the record before us and non-consideration of the same tantamounted to error in the order of the ITAT. Even otherwise, we may state that even if the assessee had failed to place on record the order passed by the ITAT in the quantum proceedings granting relief to the assessee to the extent of Rs.30 lakhs, the said order being a public document, non-consideration of the effect of the same in penalty proceedings would still tantamount to mistake apparent from the record. The fact remains that in the quantum proceedings, the assessee has been granted relief to the tune of Rs.30 lacs allowing exemption u/s. 54F of the Act to the said extent against capital gains returned and confirming penalty on this addition which stands deleted by the ITAT, is clearly impermissible in law. There cannot be any case for penalizing the assessee for an offence which has been found to have not been committed at all, and therefore, the confirmation of penalty on this aspect i.e. on the addition which stood deleted by the ITAT, was in any case a mistake which was eligible for rectification under section 254(2) of the Act. It is a clear and apparent mistake and the MA filed by the assessee needs to be allowed, which we hold so. MA allowed. Case-Laws Income Tax Thu, 27 Jun 2024 00:00:00 +0530