Revenue's Application Dismissed: Circular & Order Issued Post-Appeal, Not Considered. Exceptions Inapplicable.

The Tribunal dismissed the Revenue's miscellaneous application seeking rectification of an order based on a CBDT Circular and special order, as they were issued after the appeal filing date and not part of the record during initial proceedings. The Tribunal held that the exceptions outlined in the circular and special order did not apply to the case at hand, leading to the affirmation of the previous order's dismissal due to low tax effect.

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Issues:
1. Rectification of mistake under section 254(2) of the Act based on CBDT Circular no. 23 of 2019 and special order dated 16.09.2019.
2. Applicability of the circular and special order to an appeal already disposed of by the Tribunal.
3. Interpretation of the CBDT Circular and special order in cases involving organized tax evasion activity through penny stocks.
4. Consideration of the circular and special order post-disposal of the appeal by the Tribunal.
5. Whether non-consideration of the circular and special order constitutes a mistake apparent from the record.

Analysis:

The case involved a miscellaneous application filed by the Revenue against an order passed by the Bench in ITA No. 535/JP/2019 dated 02.09.2019. The Revenue sought rectification of the order under section 254(2) of the Act based on CBDT Circular no. 23 of 2019 and a special order dated 16.09.2019. The Revenue claimed that the matter fell under the exception of penny stock as per the circular and special order, allowing for the appeal to be heard on merits. The Departmental Representative (DR) relied on the circular and special order, arguing that the case should be reconsidered based on the exceptions outlined.

On the other hand, the Assessee's Representative (AR) contended that the circular was issued after the Tribunal's order and should apply to future appeals. The AR highlighted the requirement for a special order by the CBDT for appeals involving organized tax evasion activity through penny stocks. The Tribunal considered the contentions of both parties and examined the applicability of the circular and special order to the appeal in question.

The Tribunal referred to the CBDT Circular no. 23 of 2019 and the subsequent special order exempting cases involving bogus LTCG/STCL through penny stocks from monetary limits for filing appeals. It noted that the special order specified that appeals in such cases should be filed on merits. However, the Tribunal emphasized that the special order applied to appeals filed after its issuance on 16.09.2019. Since the Revenue's appeal was filed before this date, the Tribunal concluded that the exceptions outlined in the circular and special order did not apply to the case at hand.

Furthermore, the Tribunal highlighted that the circular and special order were not part of the record during the earlier proceedings and, therefore, could not be considered as a mistake apparent from the record for rectification under section 254(2) of the Act. Consequently, the Tribunal dismissed the miscellaneous application filed by the Revenue, affirming the previous order's dismissal based on low tax effect in accordance with the CBDT's circular dated 8.8.2019.

In conclusion, the Tribunal's decision was based on the timing of the circular and special order, their applicability to the appeal in question, and the absence of these documents during the initial proceedings, leading to the dismissal of the Revenue's application for rectification.

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