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2021 (3) TMI 864 - AT - Income TaxRectification of mistake u/s 254 - non maintainability of appeal on low tax effect - Department is seeking recalling of the said order in view of the subsequent circular dated 6th September, 2019 and Special Order of CBDT dated 16th September, 2019 - HELD THAT - It is pertinent to note that the subsequent Circular No. 23 of 2019 dated 6th September, 2019 as well as the Special Order dated 16th September, 2019 are the subsequent developments and not in existence at the time of passing the impugned order. Therefore, these subsequent Circular and Special Order of the CBDT cannot be applied to the impugned order dated 21.08.2019. Thus the Tribunal has taken a view that the CBDT Circular No. 23 dated 6th September, 2019 as well as the CBDT Special Order dated 16th September, 2019 do not apply in the instant case as the same were not in existence at the relevant point of time of passing the impugned order. Accordingly in view of the earlier order of this Tribunal and to maintain the rule of consistency, we hold that the non-consideration of subsequent circular issued by the CBDT as well as Special Order of the CBDT would not constitute an apparent mistake on record of the impugned order dated 21.08.2019 which can be rectified under section 254(2) of the Act. Hence the Miscellaneous Application filed by the revenue is not maintainable.
Issues Involved:
1. Recalling of Tribunal Order 2. Application of CBDT Circulars 3. Tax Evasion through Bogus LTCG 4. Monetary Limits for Filing Appeals 5. Rectification under Section 254(2) of the Income Tax Act Issue-wise Detailed Analysis: 1. Recalling of Tribunal Order: The revenue sought the recalling of the Tribunal's order dated 20/08/2019 in ITA No. 842/JP/2019. The basis for this request was that the appeal fell under the exceptions mentioned in para 2 (tax evasion through bogus LTCG) of CBDT Circular No. 23 of 2019 dated 06/09/2019. 2. Application of CBDT Circulars: The Tribunal had initially dismissed the appeal due to the tax effect being below the revised monetary limit as per CBDT Circular No. 17 of 2019 dated 08/08/2019. The revenue argued that the case fell under the exceptions of penny stock scams as specified in CBDT Circular No. 23 of 2019 dated 06/09/2019. The Tribunal noted that the subsequent circular and the special order were not in existence at the time of the original order, and thus, could not be applied retroactively. 3. Tax Evasion through Bogus LTCG: The revenue contended that the assessee claimed exemption under Section 10(38) of the Income Tax Act for capital gains, which was added back by the Assessing Officer as it was deemed bogus. The revenue argued that this case involved organized tax evasion through bogus LTCG, falling under the exceptions of the new circular. 4. Monetary Limits for Filing Appeals: The Tribunal's original decision was based on the revised monetary limits for filing appeals as per Circular No. 17 of 2019, which increased the limit for appeals before the ITAT from ?20,00,000 to ?50,00,000. The revenue's appeal was dismissed as the tax effect was below this threshold. The Tribunal reiterated that the new circular and special order could not be applied to appeals decided before their issuance. 5. Rectification under Section 254(2) of the Income Tax Act: The Tribunal examined whether the non-consideration of the subsequent circular and special order constituted a mistake apparent from the record, which could be rectified under Section 254(2). The Tribunal concluded that since these documents were not in existence at the time of the original order, their non-consideration did not constitute an apparent mistake that could be rectified. Conclusion: The Tribunal followed the decision of the Coordinate Bench in a similar case, concluding that the subsequent circular and special order did not apply to the impugned order dated 21/08/2019. The revenue's Miscellaneous Application was dismissed as it did not meet the criteria for rectification under Section 254(2) of the Income Tax Act. The Tribunal emphasized maintaining consistency with previous decisions, ruling that the non-consideration of subsequent circulars and orders did not constitute an apparent mistake on the record.
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