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2020 (9) TMI 1252 - AT - Income TaxNon maintainability of appeal on low tax effect before ITAT - Addition u/s 68 - bogus LTCG on penny stock - HELD THAT:- Tribunal has identified the appeals involving tax effect by virtue of relief given by the CIT(A) below Rs.50 lakhs on 14/08/2019 and dismissed those appeals. On 14/08/2019, no such Circular was available. The subsequent Circular, in any case, would not make the order of the Tribunal suffering from an apparent error. The Circular No.23 of 2019 or Office Memorandum F.No.279/Misc./M-93/2018-ITJ (PT.) nowhere contemplates that these will be applicable w.e.f. 08/08/2019, i.e. the date when Circular No.17 of 2019 was issued. In cases involving long term capital gains and short term capital gains exemption through penny stocks, we find that the CBDT has since come out with a special order communicated vide office memorandum dated 16.09.2019 stating that monetary limits fixed for filing appeals in these cases before the Tribunal, High Court and Supreme Court shall not apply in case of assessee claiming bogus LTCG/STCG through penny stock and appeal shall be filed on merits. The special order thus talks about filing of appeal in such cases and therefore, it relates to any appeal in such cases which can be filed pursuant to such an order on and after the date of such special order and therefore doesn't contemplate a situation where the appeal which has already been filed prior to issuance of such a special order by the Revenue which shall be read and understood as filed pursuant to such special order. CBDT low tax effect circulars issued from time to time wherein the tax effect have been progressively increased by the -Revenue with a view to minimize the litigation has been read by the Courts and the Tribunal, and even the CBDT has also clarified latter, that these CBDT Circulars shall apply not just to future appeals but also to pending appeals and therefore, where the appeal has already been filed'by the Revenue and is pending, such appeal has been held to be covered by a subsequent low tax effect circular and dismissed on account of low tax effect. However, in the instant case, the issue is regarding carving out an exception from such low tax effect limits and that too, not just by a general order but by way of a special order where such appeals can be filed, therefore, unless the special order has been passed by the CBDT and an appeal is filed pursuant to such a special order, the exception cannot be read and understood to apply to existing appeals which have already been filed prior to issuance of the special order. Therefore, we are of the considered view that the CBDT Circular no. 23 of 2019 should be read along with special order of the CBDT dated 16.09.2019 in respect of appeals filed pursuant to such special order and shall thus apply to all appeals filed on or after 16.09.2019 by the Revenue where the tax effect may be low but the appeal can still be filed by the Revenue on merits. In the instant case, the appeal of the Revenue was filed on 22.05.2019 and therefore, the present appeal was not filed pursuant to such a special order of the CBDT dated 16.09.2019 and thus, the matter doesn't fall in any exception as so prescribed by the CBDT in its earlier circular dated 8.8.2019 and the special order doesn't apply in the instant case and the appeal has thus rightly been dismissed by the Bench on account of low tax effect in light of CBDT's circular dated 8.8.2019. Miscellaneous Applications filed by the Revenue are dismissed.
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