ITAT Can Rectify Its Order If It Failed to Consider Amendment Made in CBDT Circular While Deciding the Appeal | HC

Case Details: Ajit Pramod v. Income-tax Officer - [2024] 158 taxmann.com 578 (Chhattisgarh)

Judiciary and Counsel Details

• • Narendra Kumar Vyas, J.
  • Kshitij Sharma, Adv. for the Petitioner.
  • Ajay Kumrani & Amit Chaudhury, Advs. for the Respondent.

Facts of the Case

Assessing Officer (AO) made additions as undisclosed income to the assessee’s total income for the relevant assessment year. The additions were made per the CBI investigation, and the assessee didn’t refute the additional income that belonged to him through any documentary evidence.

On appeal, the CIT(A) set aside the order passed by the AO. Further, the Tribunal dismissed the AO’s appeal due to the low tax effect. After that, the AO preferred an application under Section 254(2), contending that monetary limits would not apply. Accordingly, there was an apparent mistake on the face of the record in the order passed by ITAT.

The Tribunal admitted the application, and the assessee filed the instant writ petition against such admission before the Chhattisgarh High Court.

High Court Held

The High Court held that from a bare perusal of section 254(2), it was quite clear that if any patent, manifest and self-evident error cropped up in the order passed by the Tribunal which does not require elaborate discussion of evidence or argument to establish it can be said to be an error apparent on the face of the record and can be corrected while exercising jurisdiction under this Act.

Further, the Tribunal, in the instant case, while dismissing the appeal, had taken into consideration the circular dated 11-7-2018 but did not consider when the circular was amended on 20-7-2018. The circular was amended by inserting clause 10(e), which clearly provided that if additions based on information received from external sources like law enforcement agencies such as CBI/ED/DRI/SFIO/Directorate General of GST Intelligence (DGGI), the issues will be contested on merits notwithstanding that the tax effect entailed is less than the monetary limits specified or there is no tax effect.

From the factual and legal position, it is quite vivid that the Tribunal has not committed any illegality in allowing the Miscellaneous Application vide its order dated 19-10-2023, as is apparent on the face of the record, which can very well be rectified by the Tribunal while exercising the power under section 254(2).

Therefore, while considering the application under section 254(2), the Tribunal is not required to revisit the earlier order and go into the details of merits. The powers under section 254(2) are only to rectify/correct any mistake apparent from the record.

Thus, the writ petition was dismissed.