2021 (3) TMI 1436 - AT - Income Tax

Maintainability of appeal in Tribunal on low tax effect - HELD THAT - The stand of the Revenue is that after circular no.17/2019 the Department has issued circular no.23/2019 dated 6.9.2019. According to the new circular certain classes of cases have been carved out from availing of the benefit of circular no.17 of 2019. We have discussed this issue in our order 2020 (9) TMI 1252 - ITAT AHMEDABAD and we have held that on 14.8.2019 when the appeals were dismissed on account of low tax effect involved in them by virtue of relief given by the CIT(A) the condition for exclusion of certain classes of cases was not available. Following our order extracted (supra) we find no merit in these misc. applications of the Revenue. They stand dismissed.

Summary

Issues Involved:
1. Apparent error in the Tribunal's order dated 14/08/2019.
2. Applicability of CBDT Circular No. 23 of 2019 and Office Memorandum dated 16/09/2019 to previously dismissed appeals.
3. Whether the Tribunal's earlier order can be recalled based on subsequent circulars.

Detailed Analysis:

1. Apparent Error in Tribunal's Order Dated 14/08/2019:
The Revenue filed three miscellaneous applications pointing out an apparent error in the Tribunal's order dated 14/08/2019. The Tribunal had dismissed appeals based on Circular No. 17 of 2019, which set a monetary limit of Rs. 50 lakhs for maintainability of appeals. The Revenue contended that subsequent Circular No. 23 of 2019 and an Office Memorandum dated 16/09/2019 should be considered, which exempted cases involving bogus Long-Term Capital Gains (LTCG) and Short-Term Capital Loss (STCL) from these monetary limits.

2. Applicability of CBDT Circular No. 23 of 2019 and Office Memorandum Dated 16/09/2019 to Previously Dismissed Appeals:
The Tribunal noted that Circular No. 23 of 2019 and the Office Memorandum dated 16/09/2019 were issued after the Tribunal's order dated 14/08/2019. These circulars allowed appeals to be filed on merits in cases involving organized tax evasion activities, notwithstanding the monetary limits specified in earlier circulars. However, the Tribunal emphasized that these subsequent circulars did not provide for the recall of earlier orders. The Tribunal referred to the ITAT Jaipur Benches' decision, which clarified that these circulars apply only to appeals filed after their issuance and do not affect appeals dismissed earlier.

3. Whether the Tribunal's Earlier Order Can Be Recalled Based on Subsequent Circulars:
The Tribunal concluded that the subsequent circulars did not make the earlier order erroneous. The Tribunal’s order dated 14/08/2019 was based on the prevailing Circular No. 17 of 2019, and the subsequent Circular No. 23 of 2019 did not retrospectively apply to previously dismissed appeals. The Tribunal found no merit in the Revenue's contention that the earlier order should be recalled.

Conclusion:
The Tribunal dismissed all the miscellaneous applications filed by the Revenue. It held that the subsequent circulars did not provide grounds for recalling the earlier order, as they did not apply retrospectively to appeals dismissed before their issuance. The Tribunal's decision was consistent with the ITAT Jaipur Benches' interpretation, affirming that the special order and subsequent circulars apply only to appeals filed after their issuance.

Order Pronouncement:
The order was pronounced in open court on 25/03/2021, dismissing all the miscellaneous applications filed by the Revenue.