JUDGMENT : Bhargav D. Karia, J. 1. Heard learned advocate Mr.Karan Sanghani for the petitioner. 2. By this petition under Article 227 of the Constitution of India, the petitioner has challenged order dated 25th January, 2023 passed by Income Tax Appellate Tribunal, B Bench, Ahmedabad (for short ‘the Tribunal’) in Miscellaneous Application No.128/Ahd/2021 in ITA No.132/Ahd/2019. 3. The brief facts of the case are as under. 3.1 The respondent – assessee filed return of income on 30th December, 2006 for A.Y. 2006-07 declaring total income at Rs. Nil. 3.2 The case was re-opened and order under Section 143(3) read with Section 147 of the Income Tax Act, 1961 (for short ‘the Act’) was passed on 14th December, 2011, wherein tax was computed on the book profit of Rs.13,07,83,251/-. 3.3 The respondent–assessee being aggrieved preferred appeal before the CIT(A). The appeal was allowed by CIT(A) by order dated 23rd July, 2012. 3.4 The Assessing Officer passed an order giving effect of the CIT(A) and determined the book profit at Rs. Nil on 23rd August, 2012. 3.5 It is the case of the petitioner–Revenue that revenue audit party noticed that waiver of principal amount of loan of Rs.16,17,43,729/- being extra-ordinary item was reduced from book profit. The audit party was of the opinion that exclusion of waiver of principal amount of loan was not in accordance with the provisions of Section 115JB of the Act, hence it was a mistake apparent on record. 3.6 On perusal of the paper book submitted by the petitioner, we could not find the above order passed by the Assessing Officer on 14th December, 2011 as well as order dated 23rd July, 2012 passed by the CIT(A) of order giving effect dated 23rd August, 2012 passed by the Assessing Officer. 3.6.1 Learned advocate Mr.Sanghani therefore filed draft amendment placing the aforesaid orders on record. The same is allowed in terms of the draft. To be carried out forthwith. 3.7 The Assessing Officer, on receipt of the audit objections, issued a notice under Section 154 of the Act and passed order dated 29th March, 2016 by adding waiver of principal amount of Rs.16,17,43,729/- and revised the book profit was calculated at Rs.02,77,96,120/-. 3.8 Being aggrieved with the order under Section 154 dated 29th March, 2016, assessee filed appeal before the CIT(A), who deleted the disallowance/addition by order dated 28th November, 2018. 3.8 Being aggrieved with the order under Section 154 dated 29th March, 2016, assessee filed appeal before the CIT(A), who deleted the disallowance/addition by order dated 28th November, 2018. 3.9 It appears that the Assessing Officer submitted the scrutiny report dated 30th January, 2019 where tax effect was calculated at Rs.01,35,86,474/-. 3.10 The department–petitioner preferred appeal before the Tribunal being aggrieved by the order dated 28th November, 2018 passed by the CIT(A) order. The Tribunal by order dated 05th April, 2021 passed in ITA No.132/Ahd/2019 dismissed the appeal of the Revenue in view of CBDT Circular/Instruction No.17/2019 by holding that the tax effect being below the prescribed monetary limit and provision of Section 268A of the Act would apply. The Tribunal, however, stated in its order that “on re-verification at the end of the AO it comes to the notice that the tax effect is more or Revenue’s case falls within the ambit of exceptions provided in the Circular, then the Department will be at liberty to approach the Tribunal for recall of this order. Such application should be filed within the time period prescribed in the Act.”. 3.11 The petitioner–Revenue thereafter filed Miscellaneous Application No.128/Ahd/2021 in ITA No.132/Ahd/2019 on the ground that audit party had raised audit objection which was accepted by the Assessing Officer and thereafter order under Section 154 was passed. It was, therefore, submitted before the Tribunal that the case would fall under the exceptions as mentioned in para-10 of the Circular No.3/2018 dated 11th July, 2018 and its subsequent amendment dated 20th August, 2018 and O.M. dated 16th September, 2019 to Circular No.23/2019 dated 06th September, 2018 as it was noticed from the scrutiny report submitted by the then Assessing Officer that tax effect has wrongly been mentioned at Rs.41,66,937/- instead of Rs.01,35,86,474/-. 3.12 However, the Tribunal by the impugned order dated 25th January, 2023 rejected the Miscellaneous Application filed by the petitioner–Revenue by observing as under. “3. The ld. DR fairly agreed with the fact that revenue audit objection was in respect of assessment framed under Section 147 of the Act and not that under Section 154 of the Act, in which proceedings the present appeal lays. 4. “3. The ld. DR fairly agreed with the fact that revenue audit objection was in respect of assessment framed under Section 147 of the Act and not that under Section 154 of the Act, in which proceedings the present appeal lays. 4. In view of the above, since admittedly the proceedings, in relation to which the Revenue has preferred appeal against the appellate order before us, is not in lieu of audit objection being accepted by the Department, the Revenue’s case does not fall in the Exception provided in clause 10(c) of the CBDT Circular no.23 of 2019 requiring withdrawal of the appeal of the Department where tax effect fall below the threshold limit. In view of the same, MA filed by the Revenue merits no consideration, and is dismissed accordingly.” 4. Being aggrieved, the petitioner has preferred this petition challenging the aforesaid impugned order dated 25th January, 2023 passed by the Tribunal rejecting the Miscellaneous Application. 5. Learned advocate Mr.Sanghani submitted that audit objections were raised on 12th May, 2014 i.e. after the order giving effect was passed by the Assessing Officer on 23rd August, 2012 determining the revised total income at Rs. Nil in view of the appellate order dated 23rd July, 2012 passed by the CIT(A) for the year under consideration. 5.1 It was, therefore, submitted that the Assessing Officer was justified in passing the order under Section 154 of the Act on the basis of the audit objections on 29th March, 2016 which was carried further before the CIT(A) and the Tribunal. Learned advocate Mr.Sanghani submitted that the Tribunal ought to have considered the fact that order under Section 154 of the Act was passed upon the audit objection and accordingly, in the facts of the case, para-10 of the Circular No.3/2018 dated 11th July, 2018 would be attracted and the Tribunal ought to have recalled the order by permitting the petitioner to make submission on merits instead of dismissing the appeal on low tax effect. 6. Having heard learned advocate for the petitioner and considering the facts of the case, it is not in dispute that the audit objection was raised in respect of the assessment framed under Section 143(3) read with Section 147 of the Act and not against the order giving effect to the CIT(A)’s order and the order passed by the Assessing Officer on 23rd August, 2012. The order under Section 154 of the Act is, therefore, quashed and set aside by the CIT(A) on the very ground by observing as under. “3.2 I have carefully considered the facts of the case, rival contentions as well as the case law relied upon by the appellant. The appellant company is engaged in the business of manufacturing of castor oil from castor seeds and trades in edible and non-edible oils. For the year under consideration, the appellant filed return of income dated 30/12/2006 wherein income was declared at NIL. Initially the case was not selected for scrutiny u/s 143(3) of the Act, but thereafter the case was reopened u/s. 148 of the Act on the sole issue of the unabsorbed depreciation or business loss whichever is less for the purpose of MAT u/s.115JB is to be calculated on year to year basis and not on totality basis. The re- assessment order was passed making the additions accordingly. Aggrieved by the same, the appellant filed an appeal before CIT(A) and the appeal was fully allowed vide order dated 23/07/2012. While giving effect to the CIT(A)'s order, the Assessing Officer altered the book profit computed as per section 115JB of the Act by making an addition of Rs. 16,17,43,729/- on account of waiver of principal amount of loan. However no such addition was made under the normal provisions of the Act. The rectified book profit was computed as under. Particulars Amount (in Rs.) Book profit as per order u/s 143(3) r.w.s. 147 of the Act dated 14/12/2011 13,07,83,251 Add: Waiver of principal amount 16,17,43,729 Revised total book profit 29,25,26,980 Less: Unabsorbed depreciation allowed to the extent of Rs. 26,47,30,860 (Relief allowed by CIT(A)) 26,47,30,860 Revised book profit 2,77,96,120 In the present appeal, the appellant has challenged this action of the AO on the grounds- firstly, that in the reasons recorded for reopening, there was no mention of this issue; secondly, by holding that exclusion of principal waiver while computing book profit is a mistake apparent from record which was not a subject matter of appeal before the CIT(A); thirdly, issue involved is of debatable nature and is not a mistake apparent from record. In support of its claim, the appellant has relied on various decisions of the Ahmedabad and other ITATs and courts. In support of its claim, the appellant has relied on various decisions of the Ahmedabad and other ITATs and courts. After going through the submissions of the appellant, in my considered opinion, the action of the AO is contrary to the settled position of law on this issue. Even on merits, the claim of the appellant is justified as credit on account of waiver of principal being a capital receipt cannot be treated an operating result of the appellant as held by the Hon'ble Mumbai ITAT in case of M/s. JSW Steel Limited, Vs. Assistant Commissioner of Income Tax (ITA No.923/Bang/2009) dated 13/01/2017 and the Hon'ble Rajkot ITAT in case of ACIT v/s M/s Ajanta Mfg. Ltd in ITA Nos. 263 & 264/Rjt/2013 dated 03/08/2017. In view of these facts, the AO is directed to delete the disallowance so made. This ground of appeal is thus allowed.” 6.1 Being aggrieved by the aforesaid order of the CIT(A) allowing the appeal filed by the assessee, the revenue preferred ITA No.132/Ahd/2019. CIT(A) has quashed and set aside the audit objection, admittedly pertaining to the assessment order, which has merged into the order of CIT(A) dated 23rd July, 2012. Therefore, CIT(A) has rightly quashed the order under Section 154 passed by the Assessing Officer on the ground that there cannot be any mistake apparent on the record in order giving effect dated 23rd August, 2012. 7. In such circumstances, the Tribunal has rightly dismissed the Miscellaneous Application of the petitioner holding that the appeal preferred by the revenue against the appellate order before the Tribunal was not in lieu of the audit objection being accepted by the department. Therefore, the case would not fall in the exceptions as provided in clause 10(c) of the CBDT Circular No.3/2018 requiring withdrawal of the appeal of the petitioner where the tax effect fall below the threshold limit. 8. In view of the foregoing reasons, the petition being devoid of any merits, is dismissed. No order as to cost.