Revenue's application to recall order rejected as state police information doesn't qualify under Circular No.3/2018 exemption list

ITAT dismissed Revenue's miscellaneous application seeking to recall tribunal order and hear case on merit despite low tax effect. Addition made by AO based on state police information fell below prescribed monetary limit in Circular No.3/2018. Revenue argued modified circular allowed hearing on merit for certain circumstances involving enforcement agencies. ITAT held modified circular's list of agencies (CBI/ED/DRI/SFIO/DGGI) was exhaustive and did not include state police department. Since addition was not based on information from specified enforcement agencies, circular exemption was inapplicable. Revenue's claim to recall order was misconceived.

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Issues:
1. Whether the latest Circular No.5/2024 issued by CBDT, enlarging the scope of exceptions, applies retrospectively to the assessee's case.
2. Whether the modified Circular No.3/2018, dated 11.07.2018, applies to the assessee's case and necessitates hearing the matter on merit.
3. Whether the state police department's information falls within the scope of the modified Circular No.3/2018.

Analysis:
1. The Revenue contended that Circular No.5/2024, enlarging exceptions, should apply retrospectively to the assessee's case. However, the Tribunal found that the Circular explicitly stated its prospective application and emphasized that CBDT circulars are binding on Revenue. Citing legal precedent, the Tribunal held that Circular No.5/2024 does not apply retrospectively, supporting the assessee's argument that the old Circular No.3/2018 is applicable, leading to the dismissal of the Revenue's appeals due to low tax effect.

2. The Tribunal examined the modified Circular No.3/2018, which allowed hearing on merit in certain circumstances. The Revenue argued for a recall based on this modification. However, the Tribunal noted that the addition in the assessee's case was based on state police information, not enforcement agencies specified in the circular. The Tribunal held that the modified circular did not apply to the state police department's information, as it was not explicitly included, rejecting the Revenue's claim for a recall and emphasizing that legal actions cannot retroactively render legal actions illegal.

3. The Tribunal further clarified that the exhaustive nature of agencies listed in the circular, such as CBI/ED/DRI/SFIO/DGGI, precluded the addition of further agencies like the state police department. The Tribunal concluded that the state police department did not fall within the agencies specified in the circular, thus the modified Circular No.3/2018 did not apply to the assessee's case. Consequently, the Tribunal dismissed the Revenue's miscellaneous applications, affirming that the state police department's information did not warrant a recall for hearing on merit.

In conclusion, the Tribunal dismissed both Miscellaneous Applications (MA No.36/Rjt/2020 and MA No.37/Rjt/2020) of the Revenue, emphasizing the non-retrospective application of Circular No.5/2024 and the inapplicability of the modified Circular No.3/2018 to the state police department's information.

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