2023 (7) TMI 1428 - AT - Income Tax

Dismissal of appeal on low tax effect - Misc. Application seeking recalling of the order whereby the appeal of the revenue dismissed by the Tribunal due to low tax effect as provided in CBDT Circular no.3/2018 dated 8th August 2019 - validity of acceptance of the audit objection and remedial action propose u/s 147 - HELD THAT - We find that the departmental appeal was arising from reassessment order passed u/s 147 of the Act in pursuant to the audit objection which was duly accepted by the department as per letter dated 13.01.2015 and hence this case falls in the exceptions provided in CBDT Circular no.3/2018. Accordingly the impugned order of the Tribunal is recalled and the appeal of the revenue is restored to its original no and stage for fresh hearing and adjudication on merits. The registry is directed to fix the appeal of the revenue for fresh hearing and adjudication on 09.08.2023. Since the date of hearing of the appeal is pronounced in open court and has been noted by both the parties therefore, no separate notice issue in this respect. Misc. appeal filed by the Revenue is allowed.

Summary

Issues Involved:
Recalling of order due to low tax effect as per CBDT Circular no.3/2018.

Analysis:
The judgment revolves around the issue of recalling an order dated 21.08.2019 by the Appellate Tribunal ITAT INDORE, where the appeal of the revenue and others was dismissed due to low tax effect as per CBDT Circular no.3/2018. The revenue sought the recalling of the order through a Misc. Application. The assessee's representative argued that the case fell within the exception provided in the CBDT Circular 03/2018, as there was an audit objection accepted by the department leading to reassessment. The departmental representative provided a report of the AO and a letter dated 13.01.2015 addressing the acceptance of the audit objection and proposing remedial action under section 147 of the Act. The Tribunal, after considering the submissions and relevant material, found that the appeal in question arose from a reassessment order due to an audit objection accepted by the department, falling within the exceptions provided in the CBDT Circular. Consequently, the Tribunal recalled the impugned order dated 21.08.2019 and restored the appeal of the revenue to its original number and stage for fresh hearing and adjudication on merits. The registry was directed to fix the appeal for fresh hearing on 09.08.2023. The judgment was pronounced in open court on 07/07/2023, and the Misc. appeal filed by the Revenue was allowed.

This judgment highlights the importance of exceptions provided in circulars like CBDT Circular no.3/2018 and the significance of audit objections accepted by the department leading to reassessment. It underscores the Tribunal's authority to recall orders based on valid grounds and the necessity of deciding appeals on their merits rather than dismissing them solely on the ground of low tax effect. The case demonstrates the procedural aspects of recalling orders, restoring appeals for fresh hearing, and ensuring proper adjudication on merits in line with relevant legal provisions and circulars.