INCOME TAX OFFICER, WARD-2, NIZAMABAD V. TRINETHRA RICE INDUSTRIES, NIZAMABAD

MA 26/HYD/2025

AI Insights

The case involves the Income Tax Department (Revenue) filing a Miscellaneous Application under section 254(2) of the Income Tax Act, 1961, seeking restoration of an appeal that was previously dismissed due to low tax effect as per CBDT Circular. The original appeal was dismissed with liberty to seek restoration if the case fell under exceptions provided in the Circular. The Revenue argued that subsequent applications under the Direct Tax Vivad se Vishwas Scheme (DTVSVS) were rejected on technical grounds, and thus, the appeal should be restored. The assessee opposed the application, arguing that the Revenue did not meet the criteria for restoration as they failed to demonstrate how the case falls under the exceptions of the Circular.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 791779 (ITAT-HYDERABAD)
• Duration Of Justice: 8 month(s) 7 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 10-12-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB-A
• Assessment Year: 2012-2013
• Appeal Filed On: 02-04-2025
• Other Referred Cases: Mr. Abdul Subhan vs. ACIT, CIT vs. Shyam Sundar Lal Sharma
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tax effect

Judgement Text

"1 आयकर अपीलीय न्यायाधिकरण में, हैदराबाद ‘ए’ बेंच, हैदराबाद IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ A ‘ Bench, Hyderabad श्री मंजूनाथ जी, माननीय लेखा सदस्य एवं श्री रवीश सूद, माननीय न्याययक सदस्य SHRI G. MANJUNATHA, HON’BLE ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, HON’BLE JUDICIAL MEMBER M.A. No.26/Hyd/2025 आयकरअपीलसं./I.T.A. No.629/Hyd/2024) (निर्धारण वर्ा/ Assessment Year : 2012-13) The Income Tax Officer, Ward-2, Nizamabad. Vs. Trinethra Rice Industries, Nizamabad. PAN : AAFFT4896A (अपीलधर्थी/ Appellant) (प्रत्यर्थी/ Respondent) करदाता का प्रयतयनयित्व/ Assessee Represented by : Shri P. Murali Mohan Rao, C.A. राजस्व का प्रयतयनयित्व/ Department Represented by : Ms. G. Saratha, Sr.A.R. सुनवाई समाप्त होने की यतयथ/ Date of Conclusion of Hearing : 28.11.2025 घोषणा की तारीख/ Date of Pronouncement : 10.12.2025 O R D E R प्रयत मंजूनाथ जी./PER MANJUNATHA G. A.M. The Revenue has filed the present Miscellaneous Application (in short, “M.A.”) u/s 254(2) of the Income Tax Act, 1961 (for short “the Act”) against the order of the Tribunal in ITA No.629/Hyd/2014 dated 13.11.2024 pertains to the assessment year A.Y. 2012-13. Printed from counselvise.com M.A.No.26/Hyd/2025 in ITA No.629/Hyd/2024 Trinethra Rice Industries 2 2. The relevant contents of the Miscellaneous Application filed by the Revenue are reproduced as under : “1. The Applicant respectfully submits this Miscellaneous Application restoration of appeal, seeking recall of the order of this Hon'ble Tribunal dated 25.08.2021 in ITA No. 1033/Hyd/2019, whereby the appeal of the assessee was dismissed as withdrawn on account of the assessee opting for the Direct Tax Vivad se Vishwas Scheme, 2020 (DTVSVS 2020). 2. The Hon'ble Tribunal, while dismissing the appeal, had graciously recorded that liberty was reserved to the assessee to approach the Tribunal for revival of the appeal in case the settlement under the DTVSVS was not accepted or was rejected on technical grounds. 3. The assessee had duly filed the required Forms 1 & 2 under the DTVSVS 2020 and even received Form-3. However, owing to acute financial hardship and paucity of funds, the assessee could not remit the determined sum within the prescribed time, leading to rejection of the application. 4. Thereafter, in good faith and with a genuine desire to settle the dispute, the assessee once again approached the Department under the Direct Tax Vivad se Vishwas Scheme, 2024, by filing Form-1 vide Acknowledgement No. 797904710311224 dated 31.12.2024. Unfortunately, this application too was rejected by the authorities on 12.03.2025 on technical grounds, since no appeal was deemed pending as on the relevant date. 5. It is humbly submitted that during this entire interregnum from 25.08.2021 till 12.03.2025, the assessee was bona fide pursuing remedies under successive DTVSV Schemes, and therefore, could not earlier approach this Hon'ble Tribunal for recall. The lapse of time was not due to negligence or disregard of law but solely because the assessee was genuinely attempting to obtain relief under the beneficial settlement schemes introduced by the Legislature. 6. The Hon'ble ITAT, Chennai Bench, in Mr. Abdul Subhan vs. ACIT (MA No.92/Chny/2022 dated 24.02.2023), held in para 4 that when the assessee's application under the DTVSVS failed on account of inability to meet statutory conditions, the liberty granted by the Tribunal must be honoured, and the appeal restored. The Tribunal observed that such failure is not fatal, and justice demands that the appeal be recalled and adjudicated on merits. 7. The Applicant submits that the present case is on identical footing. Since the DTVSVS 2020 application and subsequently the DTVSVS 2024 application both failed, the appeal which was dismissed only conditionally deserves to be recalled in the interest of justice, equity and fair play. 8. The Hon'ble Courts have consistently held that beneficial legislation such as settlement schemes must be interpreted liberally in favour of the assessee (CIT vs. Shyam Sundar Lal Sharma [2015] 229 Taxman 448 (SC)). 9. In the instant case, the Applicant has throughout acted with bona fides and diligence, seeking to avail settlement under successive Government Schemes instead of burdening judicial forums. The Applicant is a law-abiding citizen Printed from counselvise.com M.A.No.26/Hyd/2025 in ITA No.629/Hyd/2024 Trinethra Rice Industries 3 and individual taxpayer, who, due to financial adversity and technical reasons, could not complete the scheme requirements. To now deprive her of adjudication on merits would amount to gross injustice. In view of the facts narrated above and the judicial precedents cited, it is most humbly and respectfully prayed that this Hon'ble Tribunal may be pleased to: • Recall its order dated 25.08.2021 in ITA No. 1033/Hyd/2019; • Restore the appeal of the assessee to its original position for hearing and disposal on merits; • Condone the lapse of period between 25.08.2021 and 12.03.2025, considering that the applicant was bona fide pursuing remedies under successive DTVSV Schemes; • And pass such other order(s) as this Hon'ble Tribunal may deem fit, in the interest of justice, equity and fair play.” 3. The learned Sr. A.R. for the Revenue, Ms. G. Saratha, submitted that, the appeal of the Revenue in ITA No.629/Hyd/2014 for the assessment year 2012–13 was dismissed by the Tribunal vide order dated 13.11.2024 on account of low tax effect in terms of CBDT Circular, with liberty to the Revenue to seek restoration in the event the case falls under any of the exceptions provided in the Circular. She submitted that on verification of records, it was noticed that the issue involved in the present appeal relates to an exception provided under the said Circular and, therefore, the appeal of the Revenue is required to be restored for adjudication on merits. It was therefore prayed that the Miscellaneous Application filed by the Revenue may be allowed and the appeal be restored. 4. The learned counsel for the assessee, Shri P. Murali Mohan Rao, C.A., on the other hand, strongly opposed the Miscellaneous Application filed by the Revenue and submitted that the appeal of the Printed from counselvise.com M.A.No.26/Hyd/2025 in ITA No.629/Hyd/2024 Trinethra Rice Industries 4 Revenue was rightly dismissed by the Tribunal on account of low tax effect. He submitted that the Revenue has failed to demonstrate as to how the present case falls under any of the exceptions provided in the CBDT Circular. He further submitted that the Miscellaneous Application is nothing but an attempt on the part of the Revenue to re- argue the matter without pointing out any mistake apparent from the record as required under Section 254(2) of the Act. He, therefore, prayed that the Miscellaneous Application filed by the Revenue be dismissed. 5. We have heard both the parties and considered the relevant contents of the Miscellaneous Application filed by the Revenue. It is an admitted fact that the appeal of the Revenue in ITA No.629/Hyd/2014 for the assessment year 2012–13 was dismissed by this Tribunal vide order dated 13.11.2024 on the ground that the tax effect involved in the appeal was below the monetary limit prescribed by the CBDT Circular, with liberty to the Revenue to seek restoration in the event the case falls under any of the exceptions provided in the said Circular. On perusal of the Miscellaneous Application, we find that except making a general statement that the issue involved falls under the exceptions to the low tax effect Circular, the Revenue has not brought any specific material on record to demonstrate as to which particular exception is attracted in the present case. The Revenue has Printed from counselvise.com M.A.No.26/Hyd/2025 in ITA No.629/Hyd/2024 Trinethra Rice Industries 5 also not pointed out any mistake apparent from the record in the order passed by the Tribunal dated 13.11.2024 so as to warrant interference under Section 254(2) of the Act. 6. It is a settled proposition of law that the scope of proceedings under Section 254(2) of the Act is very limited and the same can be invoked only for rectification of a mistake apparent from the record and not for reviewing or re-arguing the matter. Since, in the present case, the Revenue has failed to point out any such apparent mistake in the impugned order, we are of the considered view that the Miscellaneous Application filed by the Revenue is not maintainable. 7. In the result, the Miscellaneous Application filed by the Revenue is dismissed. Order pronounced in the Open Court on 10th December, 2025. Sd/- (श्री रवीश सूद) (RAVISH SOOD) न्यधनयक सदस्य/JUDICIAL MEMBER Sd/- (मंजूनाथ जी) (MANJUNATHA G.) लेखध सदस्य/ACCOUNTANT MEMBER Hyderabad, dated 10.12.2025. TYNM/sps Printed from counselvise.com M.A.No.26/Hyd/2025 in ITA No.629/Hyd/2024 Trinethra Rice Industries 6 आदेशकी प्रयतयलयि अग्रेयषत/ Copy of the order forwarded to:- 1. यनिााररती/The Assessee : Trinethra Rice Industries, Sy.No.247/E & 250/A, Opp. Swathi Weigh Bridge, Khanapur, Nizamabad – 503002. Telangana. 2. राजस्व/ The Revenue : The Income Tax Officer, Ward –2, Nizamabad. 3. The Principal CIT, Hyderabad. 4. यवभागीयप्रयतयनयि, आयकर अिीलीय अयिकरण, हैदराबाद / DR, ITAT, Hyderabad 5. गार्ाफ़ाईल / Guard file आदेशानुसार / BY ORDER Sr. Private Secretary ITAT, Hyderabad Printed from counselvise.com "