Tribunal restores appeals for hearing, dismisses others. Cross Objections in related cases also revived.

The Tribunal allowed MA Nos. 4 & 5/Jab/2020, restoring the appeals for being heard on merits, and dismissed MA Nos. 3, 6, and 7/Jab/2020. The corresponding Cross Objections in the cases of MA Nos. 4 & 5/Jab/2020, if any, were also revived.

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Issues Involved:
1. Whether the Revenue's appeals were wrongly dismissed as withdrawn/not pressed due to the tax effect being below the threshold limit.
2. Whether the appeals were covered by the exception of revenue audit objections as per Clause 10(c) of Circular No. 3/2018.
3. Whether the Tribunal provided proper opportunity to the Revenue to raise objections during the hearing.
4. The admissibility of new materials in the proceedings under section 254(2) of the Income Tax Act, 1961.
5. The interpretation of Clause 10(c) of Circular No. 3/2018 in relation to audit objections.

Detailed Analysis:

1. Wrongful Dismissal of Appeals:
The Revenue claimed that its appeals were wrongly dismissed as withdrawn/not pressed because, although the tax effect was below the threshold limit of Rs. 50 lacs as per Circular No. 17/2019, the cases were covered by the exception listed in Clause 10(c) of Circular No. 3/2018. The Tribunal noted that the appeals were dismissed en masse without specific opportunity for the Revenue to raise objections, violating the principles of natural justice. Therefore, the Tribunal found that the dismissal of appeals was not maintainable due to the lack of proper opportunity for the Revenue to be heard.

2. Exception of Revenue Audit Objections:
The Revenue argued that the appeals were covered by the exception in Clause 10(c) of Circular No. 3/2018, which pertains to cases with accepted revenue audit objections. The Tribunal examined the authorization memo dated 30/10/2018, which stated that the appeals were filed despite being low tax-effect cases due to the audit objections. However, the Tribunal found that in the case of MA No. 3/Jab/2020, the audit objection was not accepted by the Assessing Officer (AO), and therefore, Clause 10(c) did not apply. For MA Nos. 6 & 7/Jab/2020, the Tribunal concluded that there were no audit objections in these cases, and thus, they were not covered by Clause 10(c).

3. Opportunity to Raise Objections:
The Tribunal noted that the appeals were dismissed without proper opportunity for the Revenue to raise objections, which was a serious violation of the principles of natural justice. The Tribunal emphasized that a fair hearing demands adequate notice, and the short time frame in which the appeals were fixed did not allow for proper representation or objection by the Revenue. This lack of opportunity rendered the dismissal of the appeals legally infirm.

4. Admissibility of New Materials:
The Tribunal acknowledged that the proceedings under section 254(2) are limited to mistakes apparent from the record, precluding the admission of new materials. However, in this case, the Tribunal found that the Revenue's applications were admissible not only under section 254(2) but also based on the terms of the impugned order itself, which provided liberty to the parties to move the Tribunal in case of any error or omission. Therefore, the Tribunal allowed the consideration of new materials to ensure justice.

5. Interpretation of Clause 10(c):
The Tribunal deliberated on the interpretation of Clause 10(c) of Circular No. 3/2018, which states that cases with accepted revenue audit objections should be contested on merits. In the case of MA No. 3/Jab/2020, the Tribunal found that the AO was not personally satisfied with the audit objection, and therefore, the reassessment proceedings did not survive. For MA Nos. 6 & 7/Jab/2020, the Tribunal concluded that the appeals were not covered by Clause 10(c) as there were no audit objections in these cases. The Tribunal emphasized that the circular should be strictly construed, and only cases clearly covered by the exceptions should be excluded.

Conclusion:
The Tribunal allowed MA Nos. 4 & 5/Jab/2020, restoring the appeals for being heard on merits, and dismissed MA Nos. 3, 6, and 7/Jab/2020. The corresponding Cross Objections in the cases of MA Nos. 4 & 5/Jab/2020, if any, were also revived. The order was pronounced on September 07, 2020.

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