Principal Commissioner Of Income Tax Ii vs. M/S Narrottam Enterprises
What did the High Court hold?
The High Court held that the Income Tax Appeal (ITA No.95/2017) had been disposed of by recording the concession of the counsel for the appellants erroneously. The Court found that even if a concession was recorded, the order could still be recalled due to such a procedural mistake, especially since other appeals were also decided on the same day. The Court found force in the contention raised by the review petitioner (Revenue). Accordingly, the order dated 31.10.2019 was recalled, and ITA No.95/2017 was restored to its original number for further proceedings. The Registry was directed to list the appeal accordingly. No issue was expressly left undecided, as the review petition was allowed, leading to the restoration of the original appeal.
What were the facts?
The Principal Commissioner of Income Tax II, Indore (Revenue) filed a Review Petition before the High Court of Madhya Pradesh at Indore. The petition sought to recall an order dated 31.10.2019 passed by the High Court in ITA No.95/2017. The original appeal was filed by the Revenue under Section 260-A of the Income Tax Act, 1961, and was dismissed by the High Court based on a concession made by the Revenue's counsel, referencing a CBDT Circular dated 6.9.2019. The Revenue contended that the appeal, involving a tax effect of Rs.57,00,000/-, was erroneously dismissed as it fell under an exceptional clause (10(c)) of Circular No.3/2018, which mandates contesting appeals on merits where a Revenue Audit Objection has been accepted by the Department. The Revenue argued that re-assessment proceedings were completed based on such an objection.
What were the issues?
1. Whether the High Court's order dated 31.10.2019, dismissing ITA No.95/2017 based on concession and a CBDT Circular, can be recalled on the ground that the appeal falls under an exceptional clause of the Circular, despite the tax effect being below the revised monetary limit? (Question of law and fact, concerning Section 260-A of the Income Tax Act, 1961 and CBDT Circulars). Assessee's Contention (Revenue's argument in the review petition): The appeal should be decided on merits as it falls under Exceptional Clause 10(c) of Circular No.3/2018, where a Revenue Audit Objection was accepted by the Department. The order dated 31.10.2019, which dismissed the appeal based on a concession and a circular that did not apply to this specific exception, should be recalled. Revenue's Contention (Respondent's argument): No review lies against an order passed on the concession of the appellant's counsel and at the instance of the appellant's counsel seeking withdrawal of the appeal.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
ORDER This Review Petition under Order XLVII Rule 1 read with Section 115 of the Code of Civil Procedure, 1908 has been filed by the Income Tax Department for re-calling of the order dated 31.10.2019 :2: R.P.No.467 of 2020
passed by this Court in ITA No.95/2017. 02. The said Income Tax Appeal was filed by the appellant-Income Tax Department under Section 260-A of Income Tax Act, 1961, which came to be dismiss by this Court on a concession given by the counsel appearing for the appellants on the basis of the Circular dated 6.9.2019. 03. The Case of the review petitioner is that when the matter was listed before this Court on 31.10.2019, for consideration of the CBDT Circular No.17/2019 dated 8.8.2019, in continuation of Circular No.3/2018 dated 11.7.2018, by which the monetary limit of the department’s appeal was re-fixed to Rs.1 crore, certain other appeals were also listed before this Court on their maintainability. However, subsequently, when the aforesaid order was passed by this Court on 31.10.2019, it came to the knowledge of the Department that the present appeal does not fall within the ambit of the aforesaid Circular dated 8.8.2019 despite that the appeal tax effect to the tune of Rs.57,00,000/- was involved, as it falls under the Exceptional Clause in 10(c) of Circular No.3/2018 dated 11.7.2018. Para 10 (c) of the Circular reads as under:- “10. Adverse judgments relating to the following issues should be contested on merits notwithstanding that the tax effect entitled is less than the monetary limits specified in para 3 above or there is no tax effect. xxxxxxxxxxxxxxx (c) Where Revenue Audit Objection in the case has been accepted by the Department.” :3: R.P.No.467 of 2020
Thus, the case of the review petitioner is that the instant case falls under the ambit of Exceptional Clause 10(c) of the Circular as Revenue Audit Objection was accepted by the Department and accordingly, re- assessment proceedings were completed and thus, the appeal needs to be decided on merits despite the fact that the tax involved is Rs.57 Lakhs only. Thus, it is submitted that the order dated 31.10.2019 be re- called and ITA No. 95/2017 be restored to its original number.
Shri M.K. Choudhary, learned Senior counsel for the respondent has submitted that the aforesaid order passed by this Court on 31.10.2019 reveals that it has been passed not only on the concession made by the counsel appearing for the appellants but also at the instance of the counsel for the appellants only, who had sought withdrawal of the appeal and in such circumstances, no review lies against such order.
On due consideration of the rival submissions and on perusal of the documents filed on record, this Court is of the opinion that it appears that the aforesaid Income Tax Appeal has been disposed of by this court recording concession of the counsel appearing for the appellants erroneously as on the same day other appeals were also decided by this Court and in such circumstances, even if this Court has recorded the concession of the counsel appearing for the appellants, it cannot be said that the order cannot be recalled because of such procedural mistake.
In view of the same, this Court finds force with the contention raised by the counsel for the review petitioner. Accordingly, the order :4: R.P.No.467 of 2020
passed by this on 31.10.2019 is hereby recalled and I.T.A.No.95/2017 is restored to its original number.
Registry is directed to list I.T.A.No.95/2017 accordingly.
With the aforesaid, the Review Petition stands disposed of.
A copy of this order be kept in I.T.A.No.95/2017. (Subodh Abhyankar ) (Pranay Verma) JUDGE
JUDGE moni MONI RAJU DN: c=IN, o=HIGH COURT OF MADHYA PRADESH BENCH INDORE, ou=JUDICIAL, postalCode=452001, st=Madhya Pradesh, 2.5.4.20=6fb601f03d4083a3289219d85392bac3bde1be8a53b d80aeba7af5a5244844c1, pseudonym=85E21E23646B47526A49E99D9182D0AE8ABD62 D1, serialNumber=3BFD07BEC0C790E4AEA8CB122D629549D106 7813B2AE8FB016F1BF08EE881126, cn=MONI RAJU Date: 2022.06.22 10:11:34 +05'30'
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