DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-16(2), HYDERABAD V. PRAGATI GREEN MEADOWS & RESORTS LIMITED, HYDERABAD

MA 17/HYD/2020

AI Insights

The case involves the Deputy Commissioner of Income Tax, Circle-16(2), Hyderabad, as the appellant, and Pragathi Green Meadows & Resorts Limited, Hyderabad, as the respondent. Initially, the Tribunal dismissed the Revenue's appeal in ITA No.1795/Hyd/2017 due to the low tax effect, adhering to CBDT Circulars. However, the Revenue filed a miscellaneous application arguing that the case should be reconsidered as it involved a reopening of assessment based on an audit objection, which falls under an exception in the Circular. The Tribunal agreed, acknowledging its earlier oversight and recalled the dismissal order, setting the stage for a new hearing.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 714607 (ITAT-HYDERABAD)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 06-08-2025
• Appeal Filed By: Department
• Order Result: Allowed
• Assessment Year: 2009-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Tax effect; Period of limitation; Audit objection; Time period of passing order
• Section: 147; 148

Judgement Text

"आयकर अपीलीय न्यायाधिकरण में, हैदराबाद ‘बी’ बेंच, हैदराबाद IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘B‘ Bench, Hyderabad श्री रवीश सूद, माननीय न्याययक सदस्य एवं श्री मिुसूदन सावडिया, माननीय लेखा सदस्य SHRI RAVISH SOOD, HON’BLE JUDICIAL MEMBER AND SHRI MADHUSUDAN SAWDIA, ACCOUNTANT MEMBER M.A.No.17/Hyd/2020 (Arising out of I.T.A.No.1795/Hyd/2017) (निर्धारण वर्ा/ Assessment Year : 2009-10) Dy. Commissioner of Income Tax Circle-16(2) Hyderabad Vs. Pragathi Green Meadows & Resorts Limited Hyderabad (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) करदाता का प्रतततितित्व/ Assessee Represented by : Shri P.Murali Mohan Rao, AR राजस्व का प्रतततितित्व/ Department Rep. by : Dr. Sachin Kumar, DR सुिवाई समाप्त होिे की ततति/ Date of Conclusion of Hearing : 18.07.2025 घोर्णध की तधरीख/Date of Pronouncement : 06.08.2025 O R D E R प्रनत रवीश सूद, जे.एम./PER RAVISH SOOD, J.M. 1. The present miscellaneous application filed by the Revenue arises from the order passed by the Tribunal in ITA No.1795/Hyd/2017 for the A.Y. 2009–10, dated 26.08.2019, while disposing of the appeal filed by the Revenue. Printed from counselvise.com 2. On a perusal of the Tribunal’s order in ITA No.1795/Hyd/2017 (supra), we find that the appeal filed by the Revenue was dismissed on the ground that the “tax effect” involved was below the monetary limit of Rs. 50 lakhs as contemplated in CBDT Circular No. 03/2018 dated 11.07.2018, read with Circular No. 17/2019 dated 08.08.2019. In the present application, the Revenue contends that since the assessment was reopened based on a revenue audit objection which was accepted by the Department, the case falls within the exception provided in Para 10(c) of CBDT Circular No. 03/2018. Accordingly, the Revenue has sought the recall of the Tribunal’s order, which dismissed the appeal due to the low tax effect. 3. Dr. Sachin Kumar, the learned Departmental Representative (for short, “DR”), at the threshold of the hearing, submitted that the Tribunal, while dismissing the revenue’s appeal based on low tax effect, failed to consider that as the case was reopened under section 147 of the Income-tax Act, 1961 (“the Act”) based on an audit objection, therefore, the same was covered by the exception provided in Para 10(c) of the CBDT Circular No. 03/2018. The Ld. DR argued that the order of the Tribunal, therefore, suffers from a mistake apparent from the record, rendering it amenable for rectification under Section 254(2) of the Act. Printed from counselvise.com 4. Per Contra, Shri P. Murali Mohan Rao, learned Authorized Representative (for short, “AR”) for the assessee company, opposed the application. The Ld. AR submitted that the miscellaneous application filed by the Revenue was beyond the limitation period prescribed under section 254(2) of the Act and hence not maintainable. It was further pointed out by him that in the assessee’s case for A.Y. 2007–08, a similar issue had arisen. Elaborating on his contention, the Ld. AR submitted that initially, the appeal of the Revenue for AY. 2007-08 was dismissed by the Tribunal on low tax effect, but later, upon a miscellaneous application filed by the Revenue (since the reopening was based on an audit objection), the Tribunal recalled the order. The Ld. AR submitted that, however, upon hearing the matter on merits in ITA No. 265/Hyd/2013, vide order dated 30.08.2023, the Tribunal again dismissed the appeal on merits. Thereafter, the Revenue preferred an appeal before the Hon’ble High Court, which was dismissed vide order dated 21.10.2024 in ITTA No. 15 of 2024, on the ground of low tax effect as per CBDT Circular No. 09 of 2024 dated 17.09.2024. The Ld. AR, thus argued that since the appeal for A.Y. 2007–08 was similarly reopened under section 147 based on an audit objection and dismissed by the High Court for low tax effect, therefore, no mistake can be attributed to the Tribunal’s order for A.Y. 2009–10 wherein a similar recourse was taken while dismissing the appeal filed by the revenue. Printed from counselvise.com 5. We have given our thoughtful consideration to the contentions advanced by the Ld. Authorized Representatives of both parties, perused the order of the Tribunal, and the material available on record. 6. Admittedly, the case of the assessee company for A.Y. 2009–10 was reopened under section 147 of the Act based on a revenue audit objection (as stated by the ACIT, Circule-16(3), Hyderabad, in his letter dated 07.07.2014 addressed to the CIT-V, Hyderabad). The Assessing Officer issued a notice under section 148 on 09.03.2014 pursuant to the aforesaid audit objection. As such, the case clearly falls within the exception carved out in Para 10(c) of CBDT Circular No. 03/2018 dated 11.07.2018. However, this fact had inadvertently remained unnoticed by the Tribunal while dismissing the Revenue’s appeal on 26.08.2019, thereby constituting a mistake apparent from the record, which warrants rectification under section 254(2) of the Act. 7. Apropos, the objection of the Ld. AR on limitation, we note that no concrete evidence has been placed on record to establish that the miscellaneous application is time-barred. On the contrary, the Ld. DR has filed a copy of the letter dated 21.02.2025 and a communication from the ITO (Judicial)-2, Hyderabad, confirming that the Tribunal’s order was received in the office of the PCIT-4, Hyderabad on 25.10.2019. We thus, based on the aforesaid fact, find that the miscellaneous Printed from counselvise.com application has been filed by the revenue filed within the prescribed time limit contemplated under section 254(2). 8. Apropos the Ld. AR’s contention that the Hon’ble High Court had dismissed the Revenue’s appeal for A.Y. 2007–08 for the reason of low tax effect, despite that the case for the said year was also reopened based on an audit objection, we are not persuaded to subscribe to his said claim. On a perusal of the Hon’ble High Court’s order in ITTA No. 15 of 2024, dated 21.10.2024, we find that although the appeal was dismissed on account of low tax effect as per the CBDT Circular No. 09 of 2024, but liberty was granted to the Revenue to seek recall if it was later found that the matter falls under the exceptions to the Circular. 9. We thus, in the backdrop of our aforesaid deliberations, are of the considered view that the Tribunal, while dismissing the Revenue’s appeal in ITA No. 1795/Hyd/2017, dated 26.08.2019, failed to consider the applicability of the exception under Para 10(c) of the CBDT Circular No. 03/2018. Accordingly, the aforesaid omission of the Tribunal while disposing the appeal constitutes a mistake apparent from the record. 10. Accordingly, the order passed by the Tribunal in ITA No. 1795/Hyd/2017, dated 26.08.2019, is recalled. The Registry is directed to fix the appeal for hearing in due course after issuing notices to both parties. Printed from counselvise.com 11. In the result, the miscellaneous application filed by the Revenue is allowed. Order pronounced in the open court on 6th August, 2025. Sd/- Sd/- Sd/- (श्री मिुसूदन सावडिया) (MADHUSUDAN SAWDIA) लेखा सदस्य/ACCOUNTANT MEMBER Sd/- (श्री रवीश सूद) (RAVISH SOOD) न्यायिक सदस्य/JUDICIAL MEMBER Sd/- Hyderabad, dated 06.08.2025. *L.Rama/sps आदेशकी प्रनतनिनि अग्रेनर्त/ Copy of the order forwarded to:- 1. निर्धाररती/The Assessee : M/s Pragathi Green Meadows and Resorts Private Limited, 271/A, Road No.10, Banjara Hills, Hyderabad 2. रधजस्व/ The Revenue : The Deputy Commissioner of Income Tax, Circle-16(2), Hyderabad 3. The Principal Commissioner of Income Tax, Hyderabad. 4. नवभधगीयप्रनतनिनर्, आयकर अिीिीय अनर्करण, हैदरधबधद / DR, ITAT, Hyderabad 5. गधर्ाफ़धईि / Guard file आदेशधिुसधर / BY ORDER Sr. Private Secretary ITAT, Hyderabad Printed from counselvise.com "