2022 (4) TMI 1463 - AT - Income Tax

Rectification of mistake - Maintainability of appeal on low tax effect - validity of reopening of assessment - main appeal was dismissed by the Tribunal on the ground of low tax effect - Revenue has preferred a Miscellaneous Application before us stating that the case falls under the exception of in Para 10(e) of the said circular as much as the assessment in the instant case has been reopened on the basis of information received from external sources - HELD THAT - AR vehemently objected that ultimately there is no evidence brought on record that information was forwarded by the Sales Tax Department and its DGIT (Investigation) who had merely verified the website of Sales Tax Department Govt. of Maharashtra and gathered the information that assessee has made some purchases from a tainted dealer. This argument of the learned Authorised Representative is incorrect in view of the fact that even the sworn statement recorded by the Sales Tax Department has been forwarded to the Investigation Wing of Income tax Department which is forming part of the judicial record before us. The factual report given by the learned Assessing Officer has already been furnished to the learned Authorised Representative during the course of previous hearings. We are inclined to recall the order passed by this Tribunal by accepting the fact that there was a mistake that had occurred in the said order. We also hold that the present case clearly falls under the ambit of exception provided in Para 10(e) of the CBDT Circular. The Registry is directed to fix the main appeal for regular hearing on 29th June 2022. Both parties informed in open court and no fresh notices to follow.

Summary

Issues involved:
1. Recall of order based on low tax effect.
2. Exception under CBDT Circular for reopening assessment based on external sources.
3. Verification of information from Sales Tax Department.
4. Judicial record and evidence presented.
5. Decision to recall the order and fix the main appeal for regular hearing.

Analysis:
1. The Appellate Tribunal received a Miscellaneous Application from the Revenue seeking to recall the order passed in a specific case due to the dismissal of the main appeal on the grounds of low tax effect, in accordance with a CBDT Circular dated August 8, 2019.

2. The Revenue argued that the case fell under the exception provided in Para 10(e) of the CBDT circular as the assessment had been reopened based on information received from external sources. The information was forwarded by the Sales Tax Department of the Government of Maharashtra to the DGIT (Investigation) Wing, Mumbai, which then triggered the reopening of the assessment.

3. The Assessee's representative objected, claiming that there was no concrete evidence that the information had been forwarded by the Sales Tax Department and the DGIT (Investigation). However, it was established that the sworn statement recorded by the Sales Tax Department had indeed been forwarded to the Investigation Wing of the Income-tax Department, forming part of the judicial record.

4. After considering the arguments and the evidence presented, the Tribunal decided to recall the order, acknowledging the mistake in the previous decision. It was concluded that the case fell within the exception provided in Para 10(e) of the CBDT Circular, and the main appeal was scheduled for regular hearing on a specified date without the need for fresh notices to be issued to the parties.

5. The Miscellaneous Application of the Revenue was allowed, and the order was pronounced in open court on a specific date, directing the Registry to fix the main appeal for regular hearing as per the decision.