2019 (8) TMI 294 - AT - Income Tax

Rectification of mistake u/s 254 - dismissal of Revenue s appeal for tax effect below the prescribed monetary limit - HELD THAT - It is a matter of record that Revenue s appeal for Assessment Year 2009-10 in the case on hand was dismissed vide the Tribunal s order in ITA No.280/Bang/2017 dated 03.08.2018 by relying on the CBDT Circular No.3/2018; that the tax effect involved in the appeal was below the monetary limits prescribed therein. While doing so, the Tribunal was dealing with a cluster of 25 cases comprising 28 appeals; and inadvertently, while disposing off the 28 appeals, failed to note that as per para 10(c) of the said CBDT Circular (supra), Revenue would contest appeals in respect of orders which were the result of the Department s acceptance of Revenue audit objections, even if the tax effect in such appeal is lower than the prescribed limit; as is the position in the case on hand. In these factual circumstances, as laid out above, we are of the view that an error has inadvertently crept into the Tribunal s order dated 03.08.2018 for Assessment Year 2009-10 in the case on hand, which is a mistake apparent from the face of the record before us and is rectifiable under section 254(2) of the Act. the very basis of the dismissal of Revenue s appeal for tax effect below the prescribed monetary limit in the impugned order of the Tribunal was the CBDT Circular No.3/2018; which was placed before the Tribunal in the course of proceedings. Having considered the above CBDT Circular (supra), partly, an error has inadvertently crept into the impugned order of the Tribunal for not having taken cognizance of para 10(c) thereof which, in our view, is rectifiable under section 254(2) of the Act as it is a mistake apparent from the record

Summary

Issues:
Appeal dismissal due to tax effect below prescribed limit; Application for recall of order based on CBDT Circular; Contention on mistake apparent from record; Consideration of para 10(c) of CBDT Circular; Application of Section 254(2) of the Income Tax Act; Comparison with cited judicial decision.

Analysis:
The Appellate Tribunal received a Miscellaneous Application (MP) from the Revenue regarding the dismissal of their appeal in ITA No.280/Bang/2017 for Assessment Year 2009-10 due to the tax effect being below the prescribed monetary limits as per the CBDT Circular No.3/2018. The Revenue argued that the Tribunal failed to consider para 10(c) of the Circular, which allows appeals based on Revenue audit objections to be contested regardless of tax effect. The Revenue sought the recall of the order under Section 254(2) of the Income Tax Act, stating the omission of para 10(c) was a mistake apparent on the face of the record.

The Assessee opposed the recall, citing a decision of the Calcutta High Court that rectification based on new documents not presented before the Tribunal is impermissible. The Tribunal acknowledged the error in not applying para 10(c) of the CBDT Circular, which led to the dismissal of the Revenue's appeal. The Tribunal found this to be a mistake apparent from the record and rectifiable under Section 254(2) of the Act. The Tribunal distinguished the cited judicial decision as the Circular was presented during proceedings, unlike the case referenced. Consequently, the Tribunal set aside the impugned order and recalled it for further consideration and adjudication on the merits.

The Tribunal directed the Registry to schedule the Revenue's appeal for Assessment Year 2009-10 for further proceedings. The Tribunal allowed the Revenue's Miscellaneous Petition for the said assessment year. The order was pronounced in open court on 2nd August 2019.