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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
BELA M. TRIVEDI, ASHOKKUMAR C. JOSHI, JJ.
Principal Commissioner of Income Tax (Central) Ahmedabad - Petitioner
Versus
Anand Natwarlal Sharda - Respondent
R/Special Civil Application No. 7520 of 2021
Decided On : 24-06-2021
Income Tax Act 1961 - Sections 254 - Wrong computation of tax - Claim bogus LTCG/STCL through penny stocks - Petitioner had filed appeal being challenging order passed by CIT by which CIT had allowed Appeal filed by respondent - Assessee challenging assessment order passed by Assessing Officer - Tribunal vide order dismissed Appeal along with other Appeals on ground that Tax Effect involved in all appeals did not exceed in each of Appeals in view of circular issued by CBDT on with clarification that appellant shall be at liberty to point out cases
Finding of the Court: Circular speaks about Appeals that may be filed with special order of Board in future and hence could not be construed to have retrospective effect - Tribunal interpreting said Circular/ Office Memorandum in impugned order has rightly observed that in respect of each case or category of cases whether an appeal should be filed in view Circular or not shall be decided by Board by way of special order and thus a specific requirement of issuance of special order by CBDT - Tribunal therefore has rightly that CBDT Circular should be read along with Office Memorandum in respect of appeals to be filed pursuant to such special orders of CBDT and shall apply to all appeals filed on or after by revenue where tax effect may be low but appeal could still be filed by revenue on merits
Result: Petition dismissed
JUDGMENT :
Bela M. Trivedi, J.
1. The petitioner- The Principal Commissioner of Income Tax (Central) Ahmedabad, has filed the present petition under Article 226/227 of the Constitution of India challenging the order dated 09.09.2020 passed by the Income Tax Appellate Tribunal, Ahmedabad Bench, Ahmedabad (hereinafter referred to as “the Tribunal”) in M.A. No. 77/AHD/2020 in ITA No. 1274/AHD/2019 (Annexure A) filed by the petitioner under Sections 254(2) of the Income Tax Act, 1961 (hereinafter referred to as “the said Act”), seeking prayer to recall the order dated 14.08.2019 passed by the Tribunal in ITA No. 1274 of 2019 and others. The Tribunal vide the impugned order dated 09.09.2020 has dismissed the said M.A. No. 77 of 2020 filed in ITA No. 1274 of 2019 along with the other Miscellaneous Applications filed by the petitioner (original applicant) holding that there was no mistake apparent on the face of record which could be rectified within the narrow compass of Sections 254(2) of the said Act.
2. The petitioner had filed the appeal being ITA No. 1274 of 2019 challenging the order dated 01.05.2019 passed by the CIT (Appeals), by which the CIT (Appeals) had allowed the Appeal filed by the respondent -assessee challenging the assessment order dated 24.12.2018 passed by the Assessing Officer. The Tribunal vide the order dated 14.08.2019 dismissed the said Appeal along with other 627 Appeals on the ground that the Tax Effect involved in all the said appeals did not exceed Rs.50,00,000/- in each of the Appeals, in view of the circular issued by the CBDT on 08.08.2019, with clarification that the appellant (i.e. the petitioner herein) shall be at liberty to point out the cases which were wrongly included in the Appeals so summarily dismissed, either owing to wrong computation of tax effect or owing to such cases being covered by the permissible exceptions or for any other reason. The petitioner filed Miscellaneous Applications including M.A. No. 77 of 2020 in case of the respondent, under Section 254(2) of the said Act, on the ground that the case was covered under the exception carved out under the CBDT Circular No. 23 of 2019 dated 06.09.2019. The Tribunal vide the impugned order dated 09.09.2019 dismissed the said Miscellaneous application alongwith the other Miscellaneous Applications.
3. The learned Senior Advocate Mr. M.R. Bhatt appearing for the petitioner vehemently submitted that the Tribunal had committed gross error by not entertaining the Miscellaneous Application filed by the petitioner under Section 254(2) of the said Act in view of the subsequent circular No. 23/2019 dated 06.09.2019 as well as the Office Memorandum No. 279 dated 16.09.2019. According to Mr. Bhatt, the CBDT had in supercession of the earlier circular dated 11.07.2018 prescribed minimum monetary limit at Rs. 20,00,000/- for filing Appeal before the Appellate Tribunal, providing certain exceptions. The said Circular was made retrospectively applicable to all the pending appeals. The said circular dated 11.07.2018 came to be modified by Circular No. 17/2019 dated 08.08.2019, whereby the monetary limit for filing the appeal before the Appellate Tribunal was revised to Rs. 50,00,000/-. Thereafter the CBDT issued the Circular No. 23/2019 dated 06.09.2019 under Section 268A of the said Act which provided that the cases involving organized tax evasion scam through bogus long term capital gain/ short term capital loss on penny stocks were not made subject to the monetary limits prescribed for filing the Appeals. Thus, according to Mr. Bhatt, the said circular dated 06.09.2019 being clarificatory in nature would relate back to the circular dated 11.07.2018 as modified by the circular dated 08.08.2019. He further drew the attention of the Court to the Office Memorandum No. 279 dated 16.09.2019 issued by the CBDT and submitted that the monetary limits fixed for filing appeals before the Tribunals/ High Court/ Supreme Court would not apply in case of assessee claim
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