Court revives Tax Appeal, stresses evidence requirements, recalls order citing circular compliance.

The Court allowed the recall of the order dated 01.10.2019 in Tax Appeal No.465 of 2019, citing compliance with circulars and legal precedents. The decision ensured the parties' rights to present arguments, directing the revival of the tax appeal before the appropriate bench. The Court emphasized the necessity of supporting evidence and material on record, highlighting the insufficiency of relying solely on circulars without substantive proof.

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Issues:
1. Recall of order dated 01.10.2019 in Tax Appeal No.465 of 2019 based on tax effect below prescribed limit.
2. Exceptional clause (c) of Para 10 of Amended Circular of Board No.03 of 2018 dated 20.08.2018 as modified by Circular No.17 of 2019 dated 08.08.2019.
3. Reopening of assessment based on audit objections.
4. Interpretation of audit objections as grounds for recall of order.
5. Compliance with circulars and legal precedents in recalling orders.

Issue 1:
The application sought the recalling of the order dated 01.10.2019 in Tax Appeal No.465 of 2019 due to the tax effect being below the prescribed monetary limit of Rs. 1 Cr. as per the CBDT Circular No.17 of 2019 dated 08.08.2019.

Issue 2:
The Revenue contended that the matter fell under exceptional clause (c) of Para 10 of the Amended Circular of Board No.03 of 2018 as modified by Circular No.17 of 2019. The application aimed to recall the order and revive the tax appeal, seeking to condone any filing delay and requesting further reliefs in the interest of justice.

Issue 3:
The respondent opposed the recall, stating that the reopening of assessment was based on audit objections and subsequent reassessment under Section 148 of the Income Tax Act. The respondent argued that the audit objections did not pertain to the present Tax Appeal arising from a notice under Section 263 of the Act, emphasizing the need for material evidence to recall the order.

Issue 4:
The Court deliberated on whether the audit objections could serve as grounds for recalling the order, emphasizing the necessity of placing relevant material on record. The respondent cited a Bombay High Court decision highlighting the insufficiency of mere reliance on circulars without supporting evidence.

Issue 5:
After hearing both parties, the Court noted the previous judgment upholding the order of the ITAT related to the assessment under Section 143(3) of the Income Tax Act. Considering the arguments and legal precedents, the Court allowed the recall of the order dated 01.10.2019 in Tax Appeal No.465 of 2019, ensuring the rights of the parties to raise contentions, and directed the revival of the tax appeal before the appropriate bench.

This detailed analysis of the judgment from the Gujarat High Court provides insights into the issues surrounding the recall of an order in a tax appeal, the application of circulars and legal precedents, and the importance of supporting evidence in legal proceedings.

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