DCIT(CENTRAL)-1, INDORE, INDORE V. MAHAMRITYUNJAY HOSPITAL PVT. LTD, BADWANI

MA 53/IND/2024

AI Insights

The case involves the Revenue's Miscellaneous Application under section 254(2) of the Income-tax Act, 1961, seeking to recall an earlier ITAT order dismissing their appeal due to the tax effect being below the prescribed limit. The Revenue argued that an audit objection by the Revenue Audit Party (RAP) fell under the 'exceptional clause' of the circulars that allow for appeals to be heard on merits despite the tax effect limit. However, the Tribunal noted that the relevant circulars had been superseded and modified, raising the tax effect limit and omitting the clause regarding audit objections, thus leading to the dismissal of the M.A.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 633258 (ITAT-INDORE)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 09-06-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHISH PORWAL
• Assessee Lawyers: VIJAY BANSAL
• Keywords: Tax effect; Audit objection

Judgement Text

" Page 1 of 5 आयकर अपीलीय अिधकरण, इंदौर Ɋायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI BHAGIRATH MAL BIYANI, ACCOUNTANT MEMBER AND SHRI PARESH M JOSHI, JUDICIAL MEMBER M.A. NO.53/Ind/2024 (Arising out of ITA No.306/Ind/2023 (AY: 2011-12) DCIT(Central)-1, Indore बनाम/ Vs. Mahamritunjay Hospital Pvt. Ltd, 1, Anjad Naka, Barwani (PAN: AAECM9731D) (Revenue/Appellant) (Assessee/Respondent) Assessee by Shri Vijay Bansal, AR Revenue by Shri Ashish Porwal, Sr. DR Date of Hearing 06.06.2025 Date of Pronouncement 09.06.2025 आदेश / O R D E R Per Paresh M Joshi, J.M.: The Revenue has filed the present Miscellaneous Application u/s 254(2) of Income-tax Act, 1961 (hereinafter referred to as the “Act”) wherein it is prayed that “therefore, it is prayed that the Hon’ble ITAT may decide the appeal on merits on the ground raised in the order u/s 253(2) of the Act dated 11.08.2023”. DCIT(Central)-1 v/s Mahamritunjay Hospital Pvt. Ltd M.A. No.53/Ind/2024 – A.Y. 2011-12 Page 2 of 5 2. In the M.A filed by the Revenue it is stated that being aggrieved by the order of Ld. CIT(A) dated 06.06.2023 Revenue had filed an appeal before this Tribunal being ITA No.306/Ind/2023 which was dismissed by this Tribunal vide their order dated 15.12.2024 in appeal No. ITA /306/Ind/2023, Assessment Year 2011-12 that CBDT vide Circular No.3/2018 dated 11.07.2018 had fixed “Tax effect limit” of Rs.20 lakh for department to file an appeal before ITAT, which “Tax effect limit” was enhanced to Rs.50 lakh vide Circular No.17/2019 dated 08.08.2019 of CBDT. Since the tax effect in the instant appeal was less than 50 lakh the present appeal dismissed as aforesaid circular dated 08.08.2019 is also applicable to pending appeal before ITAT. However while dismissing the appeal this Tribunal in their order dated 15.02.2024 had clarified that the liberty is however granted to the revenue to file an Miscellaneous Application if the issue in present appeal falls under any exception clause of circulars (supra). 3. Be that as it may Revenue is now contending in the Miscellaneous Application that “Revenue Audit Party” (RAP) DCIT(Central)-1 v/s Mahamritunjay Hospital Pvt. Ltd M.A. No.53/Ind/2024 – A.Y. 2011-12 Page 3 of 5 has raised an audit objection in the case and therefore the case falls under “exceptional clause” of Circulars No.03/2018 dated 11.07.2018 and Circular No.17/2019 dated 08.08.2019 which was effective on date of appeal and consequently in view of “RAP audit objection case” falls under exceptional clause of applicable circular. Hence this Tribunal should recall their order dated 15.02.2024 and hear the revenue appeal on merits. There is thus a mistake which is apparent from record. The said mistake should therefore be rectified by this Tribunal and matter should be recalled and be heard afresh on merits. 4. During the course of the hearing held the Ld. DR for and on behalf of revenue while repeating and reiterating the contents of present M.A also fairly stated that the factual situation as on date is quite abnormal as on one hand revenue is pressing for recall of ITAT order dated 15.02.2024 and on other hand “Audit objection” in Circular No.5/2024 dated 15.03.2024 are totally absent which was not so in earlier the Circular No.3/2018 dated 11.07.2018 wherein para 10(c) read as under:- DCIT(Central)-1 v/s Mahamritunjay Hospital Pvt. Ltd M.A. No.53/Ind/2024 – A.Y. 2011-12 Page 4 of 5 “10. Adverse judgments relating to the following issues should be contested on merits notwithstanding that the tax entailed is less than the monetary limits specified in para 3 above or there is no tax effect: (a) Where the Constitutional validity of the provisions of an Act or Rule is under challenge, or (b) Where Board's order, Notification, Instruction or Circular has been held to be illegal or ultra vires, or (c) Where Revenue Audit objection in the case has been accepted by the Department, or (d) Where addition relates to undisclosed foreign income/undisclosed foreign assets (including financial assets)/undisclosed foreign bank account. (e) Where addition is based on information received from external sources in the nature of law enforcement agencies such as CBI/ED/DRI/SFIO/Directorate General of GST Intelligence (DGGI). (f) Cases where prosecution has been filed by the Department and is pending in the Court.” 5. That it is only on basis of aforesaid Circular No.3/2018 present M.A. is filed and that even if the matter is restored back there would be no appeal to argue on merits as “Audit objection acceptance by Department” is omitted by Circular No.5/2024 dated 15.03.2024 and modified Circular No.9/2024 dated 17.09.2024. Above all Circular No.5/2024 dated 15.03.2024 by virtue of para 2 has superseded Circular No.3/2018 dated 11.07.2018 and further modified Circular No.9/2024 dated 17.09.2004 by virtue of para 5 now states that tax effect should be above 60 lakhs and that post 17.09.2024 this circular would apply to pending appeals before this Tribunal. The Ld. DCIT(Central)-1 v/s Mahamritunjay Hospital Pvt. Ltd M.A. No.53/Ind/2024 – A.Y. 2011-12 Page 5 of 5 DR therefore agreed that even if exercise of recall is applied basis Circular No.3/2018 dated 11.07.2018 and Circular No.17/2019 dated 08.08.2019 the result and consequence would be a nullify/ not fruitful as “audit objection acceptance” has gone and now limit is 60 lakh (supra). 6. In view of premises drawn up by us the M.A is dismissed. Ordered accordingly. 7. In result M.A is dismissed. Order pronounced in Open Court on 09.06.2025. Sd/- Sd/- (BHAGIRATH MAL BIYANI) (PARESH M JOSHI) ACCOUNTANT MEMBER JUDICIAL MEMBER Indore िदनांक / Dated : 09/06/2025 Dev/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order COPY Senior Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore "