Tribunal Reopens Appeal Dismissed for Low Tax Effect, Citing Audit Objection Exception in CBDT Circular.

The ITAT INDORE recalled its order dated 21.08.2019, dismissing the revenue's appeal due to low tax effect per CBDT Circular no.3/2018. The Tribunal found that the appeal involved an audit objection accepted by the department, qualifying as an exception under the Circular. Consequently, the appeal was restored for fresh hearing and adjudication on merits, with a hearing scheduled for 09.08.2023. The decision emphasizes the Tribunal's authority to recall orders based on exceptions in circulars and the importance of adjudicating appeals on their merits. The judgment was pronounced on 07.07.2023, allowing the Revenue's Misc. application.

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Issues Involved:
Recalling of order due to low tax effect as per CBDT Circular no.3/2018.

Analysis:
The judgment revolves around the issue of recalling an order dated 21.08.2019 by the Appellate Tribunal ITAT INDORE, where the appeal of the revenue and others was dismissed due to low tax effect as per CBDT Circular no.3/2018. The revenue sought the recalling of the order through a Misc. Application. The assessee's representative argued that the case fell within the exception provided in the CBDT Circular 03/2018, as there was an audit objection accepted by the department leading to reassessment. The departmental representative provided a report of the AO and a letter dated 13.01.2015 addressing the acceptance of the audit objection and proposing remedial action under section 147 of the Act. The Tribunal, after considering the submissions and relevant material, found that the appeal in question arose from a reassessment order due to an audit objection accepted by the department, falling within the exceptions provided in the CBDT Circular. Consequently, the Tribunal recalled the impugned order dated 21.08.2019 and restored the appeal of the revenue to its original number and stage for fresh hearing and adjudication on merits. The registry was directed to fix the appeal for fresh hearing on 09.08.2023. The judgment was pronounced in open court on 07/07/2023, and the Misc. appeal filed by the Revenue was allowed.

This judgment highlights the importance of exceptions provided in circulars like CBDT Circular no.3/2018 and the significance of audit objections accepted by the department leading to reassessment. It underscores the Tribunal's authority to recall orders based on valid grounds and the necessity of deciding appeals on their merits rather than dismissing them solely on the ground of low tax effect. The case demonstrates the procedural aspects of recalling orders, restoring appeals for fresh hearing, and ensuring proper adjudication on merits in line with relevant legal provisions and circulars.

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