2021 (2) TMI 211 - AT - Income Tax

Rectification of mistake - revenue seeks to recall the order passed by this Tribunal on the ground that this Tribunal had dismissed the appeal of the Revenue stating that the tax effect involved in the said appeal is less than the prescribed monetary limits of CBDT Circular, whereas the assessment in the instant case has been reopened on the basis of Revenue Audit Objection which had been accepted by the department and hence, the same would fall within the exception provided in para 2(c ) of the said Circular - HELD THAT - On a conjoint reading of Circular No.5/2017 dated 23/01/2017 and Circular No.21/2015 and 08/2016 issued by CBDT, we find that if the case falls in any of the exceptions provided in the said Circulars, the said monetary limits prescribed for preferring the appeal would not be applicable. A plain reading of the aforesaid Circulars would result in such understanding only, which, in our considered opinion, is unambiguous. There is absolutely no need to interpret the veracity or eligibility of the Revenue to prefer appeal before this Tribunal at the time of Miscellaneous Application proceedings u/s. 254(2) of the Act where the scope of the tribunal is very limited We find that the ld. AR before us was only trying to question / challenge the very basis of Revenue preferring the appeal before us on the ground that re-assessment was framed in the name of non-existent entity and that the Revenue ought not to have preferred any appeal per se on merits before this Tribunal. This, in our considered opinion, is certainly not an issue in dispute before us in the Miscellaneous Application preferred by the Revenue. Hence, we are not inclined to entertain the argument of the ld. AR in the Miscellaneous Application proceeding. At the cost of repetition, we would like to state that the Revenue Audit Objection has been accepted by the department which had ultimately triggered initiation of re-assessment proceedings, is already on record and hence, certainly falls under the exception provided in the CBDT Circular prescribing the monetary limits for preferring appeals before the Tribunal by the Revenue. In view of this, we hold that the Miscellaneous Application of the Revenue deserves to be allowed and is hereby allowed. The order passed by this Tribunal in the case of this assessee is hereby recalled - Miscellaneous Application of the Revenue is allowed.

Summary

Issues:
1. Recall of order based on CBDT Circular monetary limits for filing appeals by Revenue.
2. Validity of reopening assessment based on Revenue Audit Objection.
3. Proper procedure for filing appeals before the Tribunal.

Analysis:
1. The Revenue filed a Miscellaneous Application seeking to recall the Tribunal's order dismissing their appeal in a case where the tax effect was below the CBDT-prescribed monetary limits. The Revenue argued that the assessment was reopened based on a Revenue Audit Objection, falling within an exception in the Circular. The AR contended that while reopening assessment might be valid, filing appeals should be based on merits, citing a Kolkata Tribunal decision.

2. The Tribunal considered the Revenue's arguments and examined the materials, including the Revenue Audit Objection triggering reassessment. The assessment was completed under section 143(3) r.w.s.147, but the CIT(A) quashed it due to errors in framing it in the name of a non-existent entity. The Revenue appealed this decision, which was dismissed initially due to monetary limits set by the CBDT Circulars.

3. The Tribunal analyzed the relevant Circulars and exceptions, concluding that if a case falls within an exception, the monetary limits for appeals do not apply. The Tribunal emphasized that during Miscellaneous Application proceedings, the Tribunal's scope is limited, and the basis for Revenue's appeal should not be challenged. Since the Revenue Audit Objection triggered reassessment and fell under the Circular's exception, the Tribunal allowed the Miscellaneous Application, recalling the previous order and directing the appeal to proceed.

In conclusion, the Tribunal allowed the Revenue's Miscellaneous Application, emphasizing adherence to Circular exceptions and proper procedures for filing appeals, ultimately recalling the previous order and directing the main appeal to proceed in regular course.