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2021 (1) TMI 823 - AT - Income TaxRectification u/s 254 - non-consideration of subsequent CBDT Circular and the special order so passed by the CBDT - Maintainability of appeal on low tax effect - whether mistake apparent from record? - HELD THAT - The appeal was filed by the Revenue on 11.02.2019 and therefore, the present appeal was not filed pursuant to special order of the CBDT dated 16.09.2019 and as the matter didn t fall in any exception as so prescribed by the CBDT in its earlier circular dated 8.8.2019 and the special order doesn t apply in the instant case, the appeal was rightly dismissed by the Coordinate Bench on account of low tax effect in light of CBDT s circular dated 8.8.2019. Both CBDT Circular no. 23 of 2019 and special order dated 16.09.2019 were not in existence and thus not part of the record at the time when the matter was heard on 20.08.2019 or at the time of passing of order by the Tribunal on 22.08.2019 and therefore, non-consideration of subsequent CBDT Circular and the special order so passed by the CBDT is not a mistake apparent from record which can be rectified within the narrow compass of section 254(2) of the Act. In the result, miscellaneous application so filed by the Revenue is not maintainable.
Issues:
1. Interpretation of CBDT circulars regarding monetary limits for filing appeals. 2. Application of special order exempting cases involving bogus LTCG/STCL through penny stocks from monetary limits. 3. Consideration of special orders issued by CBDT after the filing of appeal. 4. Rectification under section 254(2) of the Income Tax Act, 1961. Issue 1: Interpretation of CBDT circulars regarding monetary limits for filing appeals The case involved a miscellaneous application filed by the Revenue against an order passed by the Co-ordinate Bench. The Department argued that the Tribunal did not appreciate the findings of the Assessing Officer regarding accommodation entry and penny stock transactions. The Department sought the recall of the order based on a CBDT circular specifying exceptions to monetary limits for filing appeals. The Department contended that the appeal should be heard on merits despite the low tax effect involved. Issue 2: Application of special order exempting cases involving bogus LTCG/STCL through penny stocks from monetary limits The Assessee argued that the Tribunal had dismissed the appeal based on the CBDT circular dated 08.08.2019, which increased the monetary limit for maintaining appeals. The Assessee highlighted that the circular exempting penny stock cases from monetary limits was issued after the Tribunal's decision. The Assessee relied on a similar decision by the Jaipur Bench in a related case, emphasizing that the special order by CBDT did not apply to the present appeal. Issue 3: Consideration of special orders issued by CBDT after the filing of appeal The Tribunal referred to CBDT Circular no. 23 of 2019 and a special order dated 16.09.2019 exempting cases involving bogus LTCG/STCL through penny stocks from monetary limits. The Tribunal emphasized that the special order required for filing appeals in such cases had not been issued before the filing of the present appeal by the Revenue. The Tribunal held that the appeal was rightly dismissed based on the CBDT circular dated 08.08.2019, as the special order did not apply retroactively to pending appeals. Issue 4: Rectification under section 254(2) of the Income Tax Act, 1961 The Tribunal concluded that the miscellaneous application filed by the Revenue was not maintainable as the CBDT circular and special order were not part of the record at the time of the original decision. The Tribunal held that the non-consideration of subsequent circulars and special orders by CBDT did not constitute a mistake apparent on the record that could be rectified under section 254(2) of the Act. Therefore, the application was dismissed. This detailed analysis of the judgment addresses the interpretation of CBDT circulars, application of special orders, consideration of orders issued after the appeal filing, and the rectification under section 254(2) of the Income Tax Act, 1961.
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