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2022 (3) TMI 1562 - AT - Income TaxRectification u/s 154 - revenue seeks to recall the order of the ITAT 2019 (9) TMI 1714 - ITAT CUTTACK questioning Applicability of monetary limits fixed for filing further appeals on the assesses claiming bogus LTCG/STCL through alleged transaction in penny stocks - scope of CBDT Circular dated 6.9.2019, special circular dated 16.9.2019 - Tribunal has not dealt the matter on merits but dismissed on the ground of monetary limits. Therefore, the order be recalled and decided on merits - HELD THAT - In this case, we find that the order has been passed by the Tribunal on 26.9.2019 and the CBDT issued special circular on 6.9.2019, special circular dated 16.9.2019 i.e. before passing the order of the Tribunal. Therefore, it cannot be alleged that special circular has not been considered by the Tribunal, which is not a mistake apparent on record to recall the order for fresh consideration. In view of above, we dismiss the M.A. application filed by the revenue.
Issues:
1. Recall of ITAT order based on CBDT Circular No. 23 of 2019. 2. Decision on merits in cases involving alleged bogus LTCG/STCL through penny stocks. 3. Application of CBDT Circulars on tax effect limits for filing appeals. 4. Interpretation of special orders for filing appeals on merits in organized tax evasion cases. Issue 1: Recall of ITAT order based on CBDT Circular No. 23 of 2019 The Appellant sought to recall the ITAT order dated 26.9.2019 in ITA No. 205/CTK/2019, citing CBDT Circular No. 23 of 2019 dated 6.9.2019. The Appellant claimed that the order was dismissed based on monetary limits and not on merits, requesting a fresh consideration based on the circular's provisions. Issue 2: Decision on merits in cases involving alleged bogus LTCG/STCL through penny stocks The Appellant argued that the ITAT order did not address the case on merits but solely on monetary limits. The Respondent contended that in cases involving penny stocks, decisions should be made on merits, not solely based on tax effect limits. The ITAT considered the arguments and referred to similar decisions by other benches regarding the issue. Issue 3: Application of CBDT Circulars on tax effect limits for filing appeals The ITAT analyzed CBDT Circular No. 23 of 2019 and the subsequent special order dated 16.9.2019 exempting cases involving bogus LTCG/STCL through penny stocks from monetary limits specified for filing appeals. The ITAT emphasized the need for a special order by the CBDT to file appeals in such cases, post the special order's issuance date. Issue 4: Interpretation of special orders for filing appeals on merits in organized tax evasion cases The ITAT clarified that the special order by the CBDT dated 16.9.2019 allowed appeals in cases involving organized tax evasion activity through penny stocks to be filed on merits, exempting them from monetary limits. The ITAT emphasized that the special order applied to appeals filed after 16.9.2019 and not retroactively to pending appeals filed before the special order's issuance. In conclusion, the ITAT dismissed the Miscellaneous Applications filed by the Revenue, as the appeals were not filed pursuant to the special order of the CBDT dated 16.9.2019. The ITAT held that the CBDT Circulars should be read in conjunction with the special order for filing appeals on merits in cases involving bogus LTCG/STCL through penny stocks. The ITAT's decision was based on the specific requirements outlined in the circulars and the timing of the appeals filed in relation to the issuance of the special order.
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