2023 (10) TMI 1348 - AT - Income Tax

Rectification u/s 254 against the order of the Tribunal - undisclosed Income of the assessee - Addition made on substantive and protective basis - addition u/s 69A was made in the hands of Shri Ajit Pramod Jogi on substantial basis, and the same addition was made in the hands of Shri Virendra Pandey on protective basis. While deciding the impugned ITA s by the Tribunal in the case of Shri Ajit Jogi, wherein the department was in appeal has been dismissed as not maintainable on account of low tax effect by applying CBDT s Circular No. 3/2018 dated 11/07/2018. Under the same common order 2019 (1) TMI 2037 - ITAT RAIPUR in the case of Shri Virendra Pandey was decided in favour of the assessee, since the substantive addition in the case of Shri Ajit Pramod Jogi was deleted by the CIT(A), therefore, it was inferred that if the assessment, where substantive additions have been set aside, in that case the same addition on protective additions does not stand. HELD THAT - On perusal of such facts, it is evident that there was certain information which was provided by the CBI which was submitted in form of a report by the inspector to the AO and therefore the case of the assessee. Accordingly, the contention of the assessee that there was no information provided by the CBI and, thus, exceptions carved out in clause No. 10(e) of CBDT s Circular No. 3/2018 are not applicable in the present case, is not comprehensible and, therefore, are not accepted. In our considered opinion the present case is squarely covered by the said exception under clause No. 10(e) of CBDT s Circular No. 3/2018 dated 11/07/2018, Para 10 of the said circular was amended on 20/08/2018 vide F.No. 279/Misc.142/2007-ITJ(Pt), wherein the exception qua the issues enumerated in the said para are advised to be contested on merits notwithstanding that the tax effect entailed is less then the monetary limits specified. Para 10(e) specifies the condition where addition is based on information received from external sources in the nature of law enforcement agencies such as CBI/ED/DRI/SFIO/Director general of GST intelligence (DGGI) . Consequently, the contention raised by the Revenue in filing of the present MA are found to be on right footing, therefore are appropriate, thus, the order passed 2019 (1) TMI 2037 - ITAT RAIPUR is directed to be recall and to consider the grounds therein for fresh adjudication on merits.

Summary

Issues involved:
The issues involved in this case include the application filed by the revenue against the order of the Tribunal dated 17/01/2019, concerning ITA Nos. 124/RPR/2011 and 191/RPR/2011 for A.Y. 2014-15.

Judgment Summary:

Issue 1: Application regarding addition under section 69A of the IT Act
The revenue filed miscellaneous applications (MA) against the Tribunal's order concerning additions made under section 69A of the IT Act. The Tribunal dismissed the appeal of the revenue in the case of Shri Ajit Jogi due to low tax effect as per CBDT Circular No. 3/2018. However, the revenue contended that the case fell under an exception clause of the circular, allowing contesting on merits. The AR of the assessee argued that the information was not received from CBI, thus not covered by the exception clause.

Issue 2: Recalling the order of ITAT in ITA No. 124/RPR/2011
The Tribunal found that information from CBI was indeed provided to the Income Tax department, leading to the inclusion of Rs. 45 lakhs as undisclosed income. As a result, the Tribunal accepted the revenue's contention and directed the recall of the order in ITA No. 124/RPR/2011 for fresh adjudication on merits.

Issue 3: Application regarding ITA No. 191/RPR/2011
A similar contention was raised by the revenue in MA No. 32/RPR/2019 concerning ITA No. 191/RPR/2011 for A.Y. 2004-05, claiming coverage under an exception clause of the CBDT Circular. The AR of the assessee argued against the maintainability of the application, stating that the case was decided on merits and not due to low tax effect.

Issue 4: Decision based on linked cases
The Tribunal observed that the decision in the case of Shri Ajit Pramod Jogi had a binding effect on the case of Mr. Virendra Pandey, leading to the allowance of the revenue's application. The Tribunal recalled the order in ITA No. 191/RPR/2011 based on the decision in the linked case.

In conclusion, both applications of the Department were allowed based on the observations made by the Tribunal in these matters.