Revenue's appeal dismissed for failing to meet tax effect threshold despite audit objections on book profit calculation

Gujarat HC upheld Tribunal's dismissal of Revenue's appeal based on tax effect threshold. AO issued notice u/s 154 following audit objections and revised book profit calculation by adding waiver of principal amount. CIT(A) quashed the s.154 order, ruling no mistake existed in the effect-giving order dated 23rd August 2012, as audit objections pertained to original assessment order which had merged into CIT(A)'s order. Tribunal correctly dismissed Revenue's miscellaneous application, finding appeal wasn't filed due to accepted audit objection, thus not falling under CBDT Circular exceptions requiring withdrawal below threshold limits.

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Issues:
Challenge to order of Income Tax Appellate Tribunal under Article 227 of the Constitution of India based on audit objection and tax effect falling below threshold limit.

Analysis:
The petitioner challenged the order of the Income Tax Appellate Tribunal, which dismissed the appeal of the Revenue based on the tax effect being below the prescribed monetary limit and the provisions of Section 268A of the Income Tax Act. The Tribunal allowed the Revenue to approach for recall if tax effect was more. The Revenue filed a Miscellaneous Application citing audit objections and incorrect tax effect calculation. However, the Tribunal rejected the application, stating that the appeal was not related to audit objections and did not fall under the exceptions provided in the CBDT Circular. The petitioner contended that the order under Section 154 was based on audit objections and should be reconsidered. The Court noted that the audit objection was against the assessment under Section 147, not the order giving effect to the CIT (A) order. The order under Section 154 was set aside by the CIT (A) as there was no mistake apparent on record. The Tribunal rightly dismissed the Miscellaneous Application, as the appeal was not related to the audit objection accepted by the department.

The CIT (A) allowed the appeal of the assessee, quashing the order under Section 154 passed by the Assessing Officer. The Tribunal upheld the dismissal of the Miscellaneous Application, as the appeal did not pertain to the audit objection accepted by the department. The Court found no merit in the petition and dismissed it.

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