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2020 (3) TMI 1277 - AT - Income TaxMaintainability of appeal - low tax effect - Appeals filed by the Revenue Department as dismissed as withdrawn, however the liberty was granted to the Revenue Department to seek recall of the order, in case it realized that the captioned appeal falls within the exceptions as prescribed in the Circular No. 03/2018 and/or having involved the tax effect more than ₹ 50 Lakh - Revenue department sought recall of the order of the tribunal on the ground that the captioned appeals fall under the aforesaid exception as the addition was based on penny stock. HELD THAT - On specific query, Ld. AR Sh. Ashwani Kalia along with Mr. Kapil Aggarwal Ld. Chartered Accountants does not controvert the findings of the CBDT and/or claim of the revenue and expressed no objection to recall of the order 23-08-2019 2019 (8) TMI 1621 - ITAT AMRITSAR under challenge as requested in the instant miscellaneous applications. Considering the peculiar facts and circumstance, as the case of the assessee falls under the exception in view of the CBDT clarification dated 16.09.2019 and ends of justice, recalling of the order dated 23rd August, 2019 passed by the Co-ordinate Bench is warranted, hence ordered accordingly. Miscellaneous Applications filed by the Revenue Department stands allowed.
Issues:
1. Recall of order dated 23rd August, 2019 passed by the Co-ordinate Bench. 2. Applicability of CBDT Circular No. 17/2019 dated 8th August, 2019. 3. Impact of subsequent clarification/Circular No. 23/2019 dated 16th September, 2019 on the case. Issue 1: Recall of order dated 23rd August, 2019: The order addressed the Miscellaneous Applications filed by the Revenue Department seeking the recall of the order dated 23rd August, 2019 passed by the Co-ordinate Bench. The Co-ordinate Bench had dismissed the appeals filed by the Revenue Department but granted liberty to seek recall if the appeals fell within exceptions as prescribed in Circular No. 03/2018 or had a tax effect exceeding ?50 Lakh. The Revenue Department sought recall based on the exception related to penny stocks as per CBDT clarification dated 16.09.2019. The AR and Chartered Accountants representing the respondents did not contest the CBDT findings, leading to the order's recall for the ends of justice. Issue 2: Applicability of CBDT Circular No. 17/2019: The judgment considered the impact of CBDT Circular No. 17/2019 dated 8th August, 2019, which precluded the Revenue Department from filing appeals before the Appellate Tribunal if the tax effect did not exceed ?50 Lakh. The Co-ordinate Bench had initially dismissed the appeals filed by the Revenue Department based on this circular but allowed for a recall if exceptions applied, as per Circular No. 03/2018. The subsequent clarification in Circular No. 23/2019 dated 16th September, 2019, exempted cases involving bogus Long Term Capital Gains/Short Term Capital Loss through penny stocks from the monetary limits specified in Circulars issued under Section 268A of the Income Tax Act, 1961. Issue 3: Impact of subsequent clarification/Circular No. 23/2019: The judgment highlighted the significance of the subsequent clarification in Circular No. 23/2019 dated 16th September, 2019, which empowered the Central Board of Direct Taxes to exempt cases involving bogus LTCG/STCL through penny stocks from monetary limits for filing appeals before ITAT/High Court and SLPs/appeals before the Supreme Court. This clarification influenced the decision to recall the order dated 23rd August, 2019, as the Revenue Department's appeals fell under the exception related to penny stocks, as per the CBDT clarification. In conclusion, the judgment addressed the recall of the order dated 23rd August, 2019 passed by the Co-ordinate Bench, considering the applicability of CBDT Circular No. 17/2019 and the subsequent clarification in Circular No. 23/2019. The decision to recall the order was based on the exception related to penny stocks as per the CBDT clarification, emphasizing the importance of adhering to the regulatory guidelines and ensuring justice in the proceedings.
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