THE PRINCIPAL COMMISSIONER OF INCOME TAX 1, AHMEDABAD vs. HARISH KESHAVLAL PATEL

By way of this writ application, the writ applicant has challenged the order dated 09.09.2020 passed by the Income Tax Appellate Tribunal, Ahmedabad Bench in the Misc. Application No.91/Ahd/2020 (ITA No.1837/Ahd/2013).

The brief facts which emerges from the record are as under;

1 The writ applicant has preferred the Misc. Application for recall of the order dated 14.08.2019 passed by the Income Tax Appellate Tribunal. The said Misc. Application was preferred for rectification of the original order dismissing the appeal by the Tribunal on the ground that the issue has wrongly been considered on the ground of low tax effect being involved, more particularly, by referring to the exception as mentioned in Circular No.23/2019 dated 06.09.2019 as the transactions entered into by the assessee concerns with the penny stock

2 The Income Tax Appellate Tribunal, however, rejected the said rectification application vide the impugned order dated 09.09.2020 holding as under; “7. We have duly considered the rival contentions and gone through the records carefully. The Tribunal has identified the appeals involving tax effect by virtue of relief given by the CIT(A) below Rs.50 lakhs on 14.08.2019 and MA No.401/Ahd/2019 (In IT(ss)A No.178/Ahd/2018). The DCIT vs. Shri Dhiren H. Vora Asst. Year-2011-12 (and 12 Others) dismissed those appeals. On 14.08.2019, no such Circular was available. The subsequent Circular, in any case, would not make the order of the Tribunal suffering from an apparent error. The Circular No.23 of 2019 or Office Memorandum F.No.279/Misc./M-93/2018-IT.J (PT.) nowhere contemplates that these will be applicable w.e.f. 08/08/2019, i.e, the date when Circular No.17 of 2019 was issued.”

3 Being dissatisfied by the said order dated 09.09.2020 passed by the Income Tax Appellate Tribunal, the Revenue is here before us by way of this writ application.

We have heard Mr. M.R. Bhatt, the learned senior counsel appearing for the Revenue. Mr. Bhatt has invited the attention of this Court to the order dated 24.06.2021 passed by this Court in the Special Civil Application No.7520 of 2021 and submitted that the issue under consideration has already been decided by this Court by the aforesaid order. We quote the observations made by the Coordinate Bench as contained in Paras-7,8 and 9 respectively as under; “7. From the bare reading of the Circular dated 06.09.2019, it appears that the CBDT had decided that notwithstanding anything contained in any Circular issued under Section 268A specifying monetary limits for filing of departmental appeals before the Income Tax Appellate Tribunal (ITAT), High Courts and SLPs/Appeals before the Supreme Court, appeals may be filed on merits as the exception to the said Circular, where the Board by way of special order direct filing of appeals on merits in cases involved in organized tax evasion activity. The Office Memorandum dated 16.09.2019 was issued pursuant to the said circular dated 06.09.2019 stating inter alia that by virtue of the powers of CBDT under Section 268A of the Income Tax Act, the monetary limits fixed for filing appeals before ITAT/High Court and SLPs/Appeals before Supreme Court shall not lie in case of assessees claiming bogus LTCG/STCL through penny stocks and appeals/ SLPs in such cases appeals shall be filed on merits. There is nothing to suggest in the said Circular/ Office Memorandum that they shall have retrospective effect. On the contrary, from the language employed in the said Circular dated 06.09.2019, it clearly transpires that the appeals may be filed on merits as an exception to the other Circulars issued earlier, where the Board by way of special order direct filing of Appeals on merits in the cases involved in organized tax evasion activity. Therefore, by virtue of the said Circular dated 06.09.2019, the appeals could be filed on merits, irrespective of the monetary limits fixed in earlier cases, if the Board passes special order for filing appeals in cases involving tax evasion activity. The said Circular speaks about the Appeals that may be filed with the special order of the Board in future, and hence could not be construed to have retrospective effect. The Tribunal interpreting the said Circular/ Office Memorandum in the impugned order has rightly observed that in respect of each case or category of cases whether an appeal should be filed in view of the Circular dated 06.09.2019 or not shall be decided by the Board by way of special order, and thus a specific requirement of issuance of special order by CBDT is a must. The Tribunal

The appeals including the appeal in case of the respondent, which were disposed of by the Tribunal vide the common order dated 14.08.2019 could not be said to have been filed pursuant to the special order of the CBDT in view of the Circular dated 06.09.2019 read with the Office Memorandum dated 16.09.2019, and therefore it could not be said that the Tribunal had committed any mistake apparent from the record, which would require rectification as envisaged in Section 254(2) of the said Act.

In that view of the matter, the Court does not find any illegality or infirmity in the impugned order dated 09.09.2020 passed by the Tribunal dismissing the Miscellaneous Application filed by the petitioner. The petition being devoid of merits is dismissed in limine.”

In view of the aforesaid, this writ application fails and is hereby rejected. (J. B. PARDIWALA, J) (NISHA M. THAKORE,J) Vahid