CNTRAL CIRCLE-2(2)KOLKATA, KOLKATA V. VIVEK MUNDRA, KOLKATA

MA 17/KOL/2024

AI Insights

The case involves a Miscellaneous Application filed by the Revenue seeking rectification of an order dated 31.10.2023 concerning ITA No. 894/KOL/2023 for the Assessment Year 2013-14. The Revenue argued that the tax effect involved, although below the threshold limit set by CBDT Circular No. 17/2019, warranted an appeal due to the nature of the transactions involved, specifically trading in penny stocks. The respondent, Vivek Mundra, contested this, asserting that the scrip in question was not a penny stock. The Tribunal reviewed the submissions and found no evidence supporting the Revenue's claim that the transactions involved penny stocks, leading to the dismissal of the application.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 32993 (ITAT-KOLKATA)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 18-03-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Tax effect; Rectification of order; Penny stocks; Bogus
• Section: 254(2)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH KOLKATA SHRI SONJOY SARMA, JUDICIAL MEMBER SHRI SANJAY AWASTHI, ACCOUNTANT MEMBER MA No. 17/Kol/2024 (Arising out of ITA No. 894/Kol/2023) (Assessment Year 2013-14) Central Circle-2(2), Kolkata, Office of the DCIT, CC-2(2), Kolkata, Aayakar Bhawan Poorva, 4th Floor, 110 Shantipally, E.M. Bypass, Kolkata - 700107 ………………………………Applicant vs. Vivek Mundra, 803-804, Shubham, 1, Sarojini Naidu Sarani, Park Street, Kolkata - 700017 ..….............................. Respondent [PAN: AFQPM3436D] Appearances by: Assessee represented by : Priyanka Salarpuria, AR. Department represented by : Sailen Samadder, Addl. CIT, Sr. DR Date of concluding the hearing : 07.03.2025 Date of pronouncing the order : 18.03.2025 O R D E R PER SANJAY AWASTHI, ACCOUNTANT MEMBER: 1. The present Miscellaneous Application has been filed by the Revenue for rectification of order, dated 31.10.2023, passed by the Tribunal in ITA No. 894/Mum/2023, pertaining to the Assessment Year 2013-14. The Revenue has filed the following written submissions: “The undersigned most respectfully sheweth the following facts for consideration by Hon'ble Bench: 1 The above appeal was preferred by the revenue against the order of the Ld. CIT (A), Kolkata-20 for the AY 2013-14. The Hon'ble Tribunal has passed the order on 31/10/2023 vide ITA No. 894/KOL/2023. 2. The Hon'ble ITAT, in the above mentioned case, dismissed the appeal of the revenue stating that \"the time of hearing before the Tribunal, Ld. Counsel, for the 2 MA No. 17/Kol/2024 Vivek Mundra assessee has contended that the tax effect involved in this appeal of the Revenue is less than the monetary limit of Rs. 50,00,000/- fixed by the CBDT for filing the appeal by the Revenue before the Tribunal and this position is not disputed even by the Id. D/R. In the Circular No. 17/2019 dated 8th August, 2019 issued by the CBDT, the monetary limit for filing the appeal by Revenue before the Tribunal is revised to Rs. 50,00,000/- As further clarified in the said Circular, the monetary limit se revised is applicable even to the pending appeals and the same are directed to be withdrawn or not pressed. We accordingly treat this appeal as withdrawn/not pressed on account of low tax effect in view of the CBDT Circular No. 17/2019 dated 8th August, 2019 and dismiss the same.\" 3. The tax effect in the instant case is Rs. 41,13,195/- which is less than the threshold limit for preferring appeal before the Hon'ble ITAT u/s 253 of the 1.T. Act, 1961. But, CBDT's Circular no. 23 of 2019 dated 06.09.2019 specifies filing of appeal on merits though tax effect is below the threshold limit as specified in CBDT Circular no.17/2019 dated 08.08.2019 in cases where there has been organised tax-evasion scam through bogus Long-Term Capital Gain/Short Term Capital Loss on penny stocks. Moreover, as per revised Circular of CBDT vide No. 05/2024 dated stated in para 3.1 (h). Accordingly, a mistake has been crept in this order. Therefore, the monetary limit is not applicable in the present case as per both the circulars. 4. In view of the above, a Miscellaneous application u/s 254(2) of the I.T Act, 1961 is hereby being filed against order dated 31.10.2023 in case of ITA 894/KOL/2023 with request to review the said order of the facts mentioned above and decide the case on merit.” 2. Before us, the Ld. DR averred that the funds involved in the impugned transactions were generated from trading in penny stocks. He pointed out the narration on page 3 of Ld. AO. 2.1 The Ld. AR on the other hand, averred that the scrip Oil Country Tabular Ltd. was not a penny stock and thus the said transaction was not a transaction in “penny stocks” since there is no finding to this effect in the Ld. AO’s order. 3. The rival contentions have been heard and the relevant documents have been perused. It is clear from a reading of the Ld. AO’s order that the impugned addition is not, prima facie, pertaining to any trading in penny stock. At least, neither the Revenue, nor the Ld. DR have been able to demonstrate anything to the contrary. Accordingly, this MA is dismissed, as non-maintainable. 4. In the result, the Miscellaneous Application filed by the Revenue is dismissed. 3 MA No. 17/Kol/2024 Vivek Mundra Order pronounced on 18.03.2025 Sd/- Sd/- (Sonjoy Sarma) (Sanjay Awasthi) Judicial Member Accountant Member Dated: 18.03.2025 AK, P.S. Copy of the order forwarded to: 1. Vivek Mundra 2. Central Circle-2(2), Kolkata 3. CIT(A)- 4. CIT- 5. CIT(DR) //True copy// By order Assistant Registrar, Kolkata Benches "