ITAT recalls dismissal order after finding CBI information exception applies under CBDT Circular 3/2018 clause 10(e)

ITAT Raipur recalled its earlier order dismissing revenue's appeal on low tax effect grounds. The case involved undisclosed income additions under section 69A made substantively against one assessee and protectively against another based on CBI information. Initially, the appeal was dismissed applying CBDT Circular 3/2018 due to minimal tax effect. However, on rectification, the Tribunal held that exception clause 10(e) of the circular applied since additions were based on CBI information from external law enforcement agencies. The Tribunal directed fresh adjudication on merits, accepting revenue's contention that such cases must be contested regardless of monetary limits when involving information from agencies like CBI/ED/DRI.

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Issues involved:
The issues involved in this case include the application filed by the revenue against the order of the Tribunal dated 17/01/2019, concerning ITA Nos. 124/RPR/2011 and 191/RPR/2011 for A.Y. 2014-15.

Judgment Summary:

Issue 1: Application regarding addition under section 69A of the IT Act
The revenue filed miscellaneous applications (MA) against the Tribunal's order concerning additions made under section 69A of the IT Act. The Tribunal dismissed the appeal of the revenue in the case of Shri Ajit Jogi due to low tax effect as per CBDT Circular No. 3/2018. However, the revenue contended that the case fell under an exception clause of the circular, allowing contesting on merits. The AR of the assessee argued that the information was not received from CBI, thus not covered by the exception clause.

Issue 2: Recalling the order of ITAT in ITA No. 124/RPR/2011
The Tribunal found that information from CBI was indeed provided to the Income Tax department, leading to the inclusion of Rs. 45 lakhs as undisclosed income. As a result, the Tribunal accepted the revenue's contention and directed the recall of the order in ITA No. 124/RPR/2011 for fresh adjudication on merits.

Issue 3: Application regarding ITA No. 191/RPR/2011
A similar contention was raised by the revenue in MA No. 32/RPR/2019 concerning ITA No. 191/RPR/2011 for A.Y. 2004-05, claiming coverage under an exception clause of the CBDT Circular. The AR of the assessee argued against the maintainability of the application, stating that the case was decided on merits and not due to low tax effect.

Issue 4: Decision based on linked cases
The Tribunal observed that the decision in the case of Shri Ajit Pramod Jogi had a binding effect on the case of Mr. Virendra Pandey, leading to the allowance of the revenue's application. The Tribunal recalled the order in ITA No. 191/RPR/2011 based on the decision in the linked case.

In conclusion, both applications of the Department were allowed based on the observations made by the Tribunal in these matters.

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