Tribunal upholds dismissal of Revenue's applications challenging appeal limits

The Tribunal dismissed all miscellaneous applications filed by the Revenue, ruling that subsequent circulars and an office memorandum did not justify recalling the earlier order dismissing appeals based on monetary limits specified in Circular No. 17 of 2019. The Tribunal held that the later circulars were not in force when the original order was passed, and thus, no apparent error existed. The decision was made on 09/09/2020.

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Issues Involved:
1. Apparent error in the Tribunal's order dated 14/08/2019.
2. Applicability of CBDT Circular No. 17 of 2019 and Circular No. 23 of 2019.
3. Consideration of Office Memorandum dated 16/09/2019.
4. Recall of earlier Tribunal orders based on subsequent circulars.

Detailed Analysis:

1. Apparent error in the Tribunal's order dated 14/08/2019:
The Revenue filed miscellaneous applications pointing out an apparent error in the Tribunal's order dated 14/08/2019. The Tribunal had dismissed appeals where the tax effect was less than Rs. 50 lakhs based on CBDT Circular No. 17 of 2019. The Revenue contended that subsequent Circular No. 23 of 2019 and an Office Memorandum dated 16/09/2019 should be considered, which provide exceptions to the monetary limits for cases involving bogus Long-Term Capital Gain (LTCG) and Short Term Capital Loss (STCL) through penny stocks.

2. Applicability of CBDT Circular No. 17 of 2019 and Circular No. 23 of 2019:
CBDT Circular No. 17 of 2019, issued on 08/08/2019, stated that appeals with a tax effect of less than Rs. 50 lakhs would not be maintainable before the Tribunal. The Tribunal identified and dismissed 628 appeals based on this circular. However, the Revenue argued that Circular No. 23 of 2019, issued on 06/09/2019, provided exceptions for cases involving organized tax evasion through bogus LTCG/STCL, allowing appeals to be filed on merits despite the monetary limits.

3. Consideration of Office Memorandum dated 16/09/2019:
The Office Memorandum dated 16/09/2019 reiterated the exceptions provided in Circular No. 23 of 2019, stating that the monetary limits for filing appeals would not apply in cases involving bogus LTCG/STCL through penny stocks. The Revenue contended that based on these circulars and the memorandum, the dismissed appeals should be reconsidered.

4. Recall of earlier Tribunal orders based on subsequent circulars:
The Tribunal examined whether Circular No. 23 of 2019 and the Office Memorandum dated 16/09/2019 could warrant the recall of its earlier order. The Tribunal noted that these circulars did not provide for the recall of earlier orders but only for future appeals to be filed on merits. The Tribunal referred to a decision by the ITAT Jaipur Benches, which held that subsequent circulars do not apply retrospectively to appeals dismissed based on earlier circulars.

The Tribunal concluded that since Circular No. 23 of 2019 and the Office Memorandum were not in existence when the order was passed on 14/08/2019, there was no apparent error in the order. The Tribunal emphasized that the subsequent circulars could not be considered a mistake apparent from the record under section 254(2) of the Income-tax Act.

Conclusion:
The Tribunal dismissed all the miscellaneous applications filed by the Revenue, holding that the subsequent circulars and office memorandum did not warrant the recall of the earlier order dismissing the appeals based on the monetary limits specified in Circular No. 17 of 2019. The Tribunal's decision was pronounced in open court on 09/09/2020.

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