Revenue's Application Dismissed: Proper Legal Recourse Required for ITAT Orders (2)

The Tribunal dismissed the Revenue's Miscellaneous Application seeking the recalling of the order passed due to low tax effect, citing that challenging ITAT orders should be done through legal recourse, not a Miscellaneous Application under section 254(2) of the Act. The Tribunal found no apparent mistake in the original order related to the disallowance of expenses under section 14A of the Act, even without earning exempt income, and upheld the dismissal, emphasizing the need for proper legal channels in challenging orders.

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Issues:
1. Recalling of the order passed in ITA No.656/Chd/2018 dated 01.08.2018 related to assessment year 2014-15 due to low tax effect involved as per CBDT Circular No. 3/2018.

Analysis:

Issue 1: Recalling of the order based on low tax effect
The Appellate Tribunal received a Miscellaneous Application from the Revenue seeking the recalling of the order passed in ITA No.656/Chd/2018 dated 01.08.2018 concerning the assessment year 2014-15. The appeal of the Revenue was initially dismissed due to the low tax effect involved as per the CBDT Circular No. 3/2018 dated 11.07.2018. The Revenue contended that the dismissal was in violation of the CBDT Circular as it related to the disallowance of expenses under section 14A of the Act, even if no exempt income was earned. The Revenue raised several grounds challenging the order, arguing that it was not acceptable and should be reinstated and decided on merits. However, the Tribunal found no apparent mistake in the order and dismissed the Miscellaneous Application, stating that challenging orders passed by the ITAT should follow legal recourse and not through a Miscellaneous Application under section 254(2) of the Act.

This detailed analysis addresses the issue of recalling the order based on low tax effect as per the CBDT Circular and the subsequent challenge raised by the Revenue. The Tribunal emphasized that rectification through the present proceedings is only applicable for apparent mistakes, and challenging ITAT orders should follow proper legal channels rather than through a Miscellaneous Application.

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