PRINCIPAL COMMISSIONER OF INCOME TAX-1, AHMEDABAD vs. MANJU DINESHKUMAR GUPTA

C/SCA/14416/2021 ORDER DATED: 06/12/2021 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 14416 of 2021 ========================================================== PRINCIPAL COMMISSIONER OF INCOME TAX-1, AHMEDABAD Versus MANJU DINESHKUMAR GUPTA ========================================================== Appearance: MR MR BHATT with MR KARAN SANGHANI for M R BHATT & CO.(5953) for the Petitioner(s) No. 1 for the Respondent(s) No. 1 ========================================================== CORAM: HONOURABLE MS. JUSTICE SONIA GOKANI and HONOURABLE MS. JUSTICE NISHA M. THAKORE

Date : 06/12/2021

ORAL ORDER (PER : HONOURABLE MS. JUSTICE SONIA GOKANI) 1. Petitioner has preferred this petition seeking to challenge the order passed by Income Tax Appellate Tribunal (“the Tribunal” for short) passed in M.A.No.35/AHD/2020 (In ITA No.2166/AHD/2017) for Assessment Year 2014-15 on 09.09.2020. 2. We have heard Mr.M.R.Bhatt, learned Senior Advocate appearing with Mr. Karan Sanghani for the petitioner who have submitted that this very issue was challenged by the department in the matter, which

was

decided

this

Court Page 1 of 5

C/SCA/14416/2021 ORDER DATED: 06/12/2021 reported in Principal Commissioner of Income Tax, Central, Ahmedabad vs. Anand Natwarlal Sharda, 2021 128 taxxman.com 376. The same has been followed in very many other matters including Special Civil Application No. 8622 of 2021. 3. The Court in the base matter has held thus: “5. The petitioner-original applicant having filed the Miscellaneous Application before the Tribunal under Section 254(2) of the said Act for rectifying the mistake apparent from the record, it would be also beneficial to reproduce the relevant part of Section 254(2) of the said Act: “254. Orders of Appellate Tribunal (1) *** (2) The Appellate Tribunal may, at any time within six years from the date of the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub-section (1), and shall make such amendment if the mistake is brought to its notice by the assessee or the Assessing Officer” 6. So far as the facts of the case are concerned, the Appeal filed by the petitioner before the Tribunal against the order passed by the CIT(Appeals) was dismissed by the Appellate Tribunal by a common order passed on 14.08.2019, in view of the CBDT circular dated 08.08.2019. Admittedly, at the relevant time when the Tribunal passed the order dated 14.08.2019, neither the Circular No. 23 of 2019 dated 06.09.2019 nor the Office Memorandum No. 279 dated 16.09.2019 was in existence. Apart from the fact that the said circular and the Office Memorandum being not in existence and therefore not taken into consideration by the Tribunal while Page 2 of 5

C/SCA/14416/2021 ORDER DATED: 06/12/2021 disposing all the Appeals could not be said to be a mistake apparent from the record as contemplated under sub-section (2) of Section 254 of the said Act, the Court also does not find any substance in the submission of Mr. Bhatt that the Tribunal should have recalled the order dated 14.08.2019 in view of the said Circular dated 06.09.2019 and the Office Memorandum dated 16.09.2019, which had retrospective effect. The Court at this juncture does not think it appropriate to deal with the facts of the case, as the main issue that falls for consideration before this Court in the present petition would be, as to whether the Circular dated 06.09.2019 and the Office Memorandum dated 16.09.2019 had any retrospective effect as sought to be submitted by learned Advocate Mr. Bhatt. 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 Page 3 of 5

C/SCA/14416/2021 ORDER DATED: 06/12/2021 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 therefore has rightly held that the CBDT Circular No. 23/2019 dated 06.09.2019 should be read along with the Office Memorandum dated 16.09.2019, in respect of the appeals to be filed pursuant to such special orders of CBDT and shall apply to all the appeals filed on or after 16.09.2019 by the revenue, where the tax effect may be low but the appeal could still be filed by the revenue on merits. 8. 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. 9. 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. 4. The question being identical, no separate reasons Page 4 of 5

C/SCA/14416/2021 ORDER DATED: 06/12/2021 would be necessary. The petition stands dismissed accordingly. (MS. SONIA GOKANI, J. ) (NISHA M. THAKORE,J) SUDHIR Page 5 of 5