Calcutta High Court
Principal Commissioner Of Income ... vs Vasudha Jain on 31 October, 2022
OD-11
IN THE HIGH COURT AT CALCUTTA
SPECIAL JURISDICTION (INCOME TAX)
ORIGINAL SIDE
ITAT/148/2022
IA No.GA/1/2022; GA/2/2022
PRINCIPAL COMMISSIONER OF INCOME TAX, -5, KOLKATA
Vs
VASUDHA JAIN
BEFORE :
THE HON'BLE JUSTICE T.S. SIVAGNANAM
And
THE HON'BLE JUSTICE HIRANMAY BHATTACHARYYA
Date : 31st October 2022.
Appearance :
Mr. Tilak Mita, Adv.
..for appellant
Mr. Pranit Bag , Adv.
...for respondent
RE:
RE: GA/1/2022
The Court:- Heard Mr. Tilak Mitra, learned Advocate for the appellant
and Mr. Pranit Bag, learned Advocate for the respondent.
There is a delay of 1113 days in filing the appeal. Though the reasons
given in the affidavit are not convincing the issues involved in the appeal had
been decided by this court in earlier matters, this court exercises discretion
and condone the delay in filing the appeal. Accordingly, the application is
allowed.
ITAT/148/2022
This appeal filed by the revenue under section 260A of the Income
Tax Act, 1961 [the Act] is directed against the order dated 15.2.2019 passed by
the Income Tax Appellate Tribunal "A[SMC]" Bench in ITA No.1018/Kol/2018
for the assessment year 2015-16 the revenue has raised the following
substantial question of law for consideration :
1. Whether on the facts and in the circumstances of the case, the
Income Tax Appellate Tribunal erred in law in holding that the
scripts of M/s. Sulabh Engineers & Services Limited were not
bogus and the claim of LTCG amounting to Rs.9,31,615/- on the
sale of such scrips was allowable for Long Term Capital Gain
sailing against the findings of the Assessing Officer as well as the
CIT [Appeals] giving rise to perversity of facts ?
2. Whether in the facts and circumstances of the case, the impugned
order of the Appellate Tribunal is perverse for granting Long Term
capital Gain benefit to the assessee ?
3. Whether the Assessee is entitled to tax exemption u/s. 10[38]
when the records and material indicates that the alleged income
shown as Long Term Capital Gain is result of manipulated practice
of an organised tax evasion ?
We have heard Mr. Tilak Mitra, learned Advocate for the appellant
and Mr. Pranit Kumar Bag, learned Counsel for the respondent.
It is not disputed before us that the issue involved in this appeal was
decided by this Court in an earlier matter in the case of Principal
Commissioner of Income Tax (1) Kolkata Vs. Rakesh Kumar Khemuka in
ITAT No. 163 of 2021 and ITAT No. 172 of 2021 dated 20th July, 2022
and the appeal filed by the revenue was dismissed. The said decision was
followed in the case of Principal Commissioner of Income Tax, Central - 2,
Kolkata, Vs. Giridhar Lal Goenka in ITAT 34 OF 2022 dated 25th July,
2022. The operative portion for the order reads as follows :-
"The learned tribunal had dismissed the appeal filed by the
revenue by noting the fact that the appeal is less than the
monetary limit of Rs.50 lakhs fixed by the CBDT. The revenue is
on appeal contesting the matter on merits. We had an occasion to
consider similar issued in the case of Principal Commissioner of
Income Tax -1, Kolkata vs. Rakesh Kumar Khemuka in ITAT No.163 of
2021 and ITAT No.172 of 2021 and by a judgment dated 20th July,
2022 the appeal filed by the revenue was dismissed. The
operative portion of the said judgment reads as follows:
"We have heard Mr. Soumen Bhattacharjee, learned standing
Counsel appearing for the appellant and Mr. Abhratosh Majumder, learned
Senior Counsel appearing for the respondent assessee.
On 19th February, 2022 we had passed the following order:
"The Court : We have heard Mr. Soumen Bhattacharjee,
learned Standing Counsel, appearing for the appellant/revenue and Mr.
Abhratosh Majumder, learned Senior Counsel, assisted by Mr. Avra
Majumder, learned Counsel for the respondent/assessee.
An important issue is raised in this appeal as regards the
applicability of the Circular issued by the CBDT in Circular no.23, dated 6th
September, 2019 and the effect of the Office Memorandum dated 16th
September, 2019. The High Court of Gujarat in Principal Commissioner of
Income-tax vs. Denisha Rajendra Keshwani, reported in (2022)134
taxmann.com 249 (Gujarat) and Principal Commissioner of Income-tax,
(Central), Ahmedabad vs. Anand Natwarlal Sharda, reported in (2021)128
taxmann.com 376 (Gujarat) have held that the Office Memorandum dated
16th September, 2019 has to be read along with the Circular No.23, dated
6th September, 2019 and can only have prospective effect.
Learned Senior Counsel appearing for the respondent/assessee
submitted that the decisions referred above laid down the correct legal
principal and identical question was considered by the High Court of
Chattisgarh in the decision reported in (2021) 130 taxmann.com 291 and a
Special Leave Petition filed by the revenue was dismissed by the Hon'ble
Supreme Court as reported in (2021) 130 taxmann.com 292 (SC).
We find that the order impugned before us has been passed by the
Tribunal in a batch of cases. That apart, we also take note of the fact that
in several cases revenue has filed appeals with inordinate delay citing the
Office Memorandum dated 16th September, 2019. Thus we have to
examine as to the effect of the office memorandum as to whether it can be
given retrospective effect or not. Since the issue has a larger ramification,
appropriate assistance should be given to the learned standing Counsel.
Therefore, we direct the Commissioner of Income tax (Judicial),
Kolkata to render the required assistance to the standing Counsel
appearing for the Department, supply adequate material and also notes on
submission, which can be considered by us on the next hearing date.
List the matter on 21st February, 2022."
In terms of the above direction the Principal Commissioner of Income
Tax (Judicial), Kolkata has addressed the learned Standing Counsel for
the appellant by letter dated 3rd March, 2022. Along with the said letter,
notes on submission dated 7th March, 2022 has been appended. The said
notes of submission reads as follows:
"Notes on Submissions
1. The issue before the Hon'ble High Court is seen to be the retrospective or
prospective applicability of Central Board of Direct Taxes Circular No. 23 dated
06.09.2019 and Central Board of Direct Taxes OM dated 16.09.2019 by which
exception to the tax effect was allowed for filing appeals in Long Term Capital
Gain/Penny Stock in ITAT in respect of appeals which were dismissed by ITAT.
2. I am therefore to submit that in view of the facts of the impugned matter, the
exception to penny stock cases from the stipulation of monetary limit would be
indeed operable from 16.09.2019 that is only in the cases where appeal was
filed on or after 16.09.2019."
In the light of the stand taken by the Department, the monetary limit
would be operable from 16th September, 2019, that is, only in cases where
appeal was filed on or after 16th September, 2019."
Mr. Soumen Bhattacharyya, learned standing counsel for the
appellant/revenue would submit that though in the instant case
the appeal before the tribunal was filed in the year 2019, as on
the date when the circular was issued to take effect from
16.9.2019, the appeal was pending before the tribunal. It is
submitted that in the case of Rakesh Kumar Khemuka, the
department had given specific instruction. In our considered
view, the department having taken a decision and a circular
having been issued on 6.9.2019 followed by official memorandum of
16.9.2019 taking a decision that the stipulation of monetary
limit would be operable from 16.9.2019, it is of no significance
as to whether the appeal was pending on the said date and whether
the tribunal was hearing the matter. This is so because the cut
off date fixed under the circular is that it will apply to cases
where appeals are filed on or before 16.9.2019. In the instant
case, admittedly, the appeal has been filed much prior to the
said date.
For the above reason, we find that the order passed by the
learned tribunal dismissing the appeal does not call for any
interference. Accordingly, the appeal filed by the revenue
(ITAT/34/2022) stands dismissed. Since the substantial questions
of law raised in this appeal do not arise for consideration, they
are left open."
Following the above decision the appeal filed by the revenue is dismissed
and the substantial question of law which have been raised does not arise for
consideration.
(T.S. SIVAGNANAM, J.)
(HIRANMAY BHATTACHARYYA, J.)
Pkd/GH.
