INCOME TAX OFFICER, WARD-1, JHUNJHUNU, JHUNJHUNU V. SUNITA DADA, PILANI, JHUNJHUNU

ITA 1374/JPR/2024

AI Insights

The case involves an appeal by the Income Tax Officer, Ward-1, Jhunjhunu against Sunita Dada, concerning the deletion of an addition of Rs. 4,34,644 made under section 69 of the Income Tax Act, 1961, for unexplained investment. The addition was initially made by the Assessing Officer (AO) following a notice under sections 148 and 142(1) based on information from the Serious Fraud Investigation Office (SFIO) regarding tax evasion on the NSEL platform. The Ld. CIT (A) set aside the AO's order, leading to the revenue's appeal. The tribunal dismissed the revenue's appeal, noting the low tax effect and the merits of the case as per the CBDT circular exceptions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 474490 (ITAT-JAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURAV HARSH; LD
• Assessee Lawyers: GAUTAM SINGH CHOUDHARY
• Keywords: Unexplained investment; Tax effect; TDS; Accommodation entries; Revision of order; Penny stocks; Bogus
• Section: 147; 148; 142(1); 250; 263; 69

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH “SMC”, JAIPUR BEFORE SHRI GAGAN GOYAL, ACCOUNTANT MEMBER AND SHRI NARINDER KUMAR, JUDICIAL MEMBER ITA No. 1374 (A.Y. 2014-15)/JPR/2024 Income Tax Officer, Ward -1, Jhunjhunu – 333 001 ...... Appellant vs. Sunita Dada, Grasim Retail Shop, Vidya Vihar, Pilani Market, Chirawa, Jhunjhunu – 333 001 …...Respondent Appellant by : Mr. Saurav Harsh, Adv. Ld. AR Respondent by : Mr. Gautam Singh Choudhary, JCIT, Ld. DR Date of hearing : 24/02/2025 Date of pronouncement : 13/03/2025 O R D E R PER GAGAN GOYAL, A.M: This appeal by revenue is directed against the order of NFAC, Delhi dated 27.09.2024 passed u/s. 250 of the Income Tax Act, 1961 (in short ‘the Act’). The revenue has raised the following grounds of appeal: - S. No Grounds Of Appeal Tax effect 1 Whether on the facts and in the circumstances of the case and in law the Ld. CIT(A)(NFAC) is Justified in deleting the addition of Rs. 4,34,644/- made u/s. 69 on account of unexplained investment in the order passed by the AO u/s. 147 r.w.s 144B of the I.T. Act, 1961. Rs. 1,30,393/- 2 Whether on the facts and in the circumstances of the case and in law 0 the Ld. CIT(A)/NFAC) is justified in ignoring the facts that credible information regarding Tax Evasion Petition in case of defaulters, Brokers and Traders who traded on NSEL Exchange Platform has been forwarded by NSEL and as per list of traders, the assessee is one of the traders who has made transactions in NSEL platform during FY 2013-14. 3 Whether on facts and in the circumstances of the case and in law the Ld. CIT(A)(NFAC) is justified in deleting the addition made u/s. 69 on account of unexplained investment in the order passed by the AO u/s. 147 r.w.s. 144B of the I.T. Act,1961. Whereas in para 11 of the assessment order it is mentioned that the assessee has invested Rs.54,00,000/- in purchase of immovable property, which is a typographical cut copy mistake. The Id. CIT(A) has also not looked into the mistake and not appreciated the facts of the case. The addition on account of unexplained investment has been made by the AO on the basis of penny stock transaction of Rs.4,34,644/- and the Id. CIT(A) has failed to appreciate the facts of the case before deleting the addition. 0 4 The appellant craves leave or reserves right to amend, modify, alter, add or forego any grounds(s) of appeal at any time before or during the hearing of this appeal. 0 Total Tax Effect Rs.1.30,393/- 2. The brief facts of the case are that the assessee filed her return of income on 31.10.2014, declaring total income at Rs. 3,99,140/-. Credible information regarding tax evasion petition in the cases of defaulters, brokers and traders who traded on National Spot Exchange Ltd. (NSEL Exchange) platform has been forwarded by NSEL to CBDT. This information reports that rampant tax evasions have been committed on the platform of NSEL during the F.Y. 2013-14. The Serious Fraud Investigation Office (SFIO) has also prepared a detailed report on NSEL scam and given findings and recommendations to the CBDT to investigate the cases of the traders who has made transactions on the NSEL platform. As per this information Mrs. Sunita Dada is one of the traders who has made transactions in NSEL platform during the year under consideration. 3. In view of this, a notice u/s. 148 and 142(1) of the Act was issued to the assessee. In response to this the assessee filed a return of income at Rs. 4, 12,320/-. Ultimately, the case of the assessee was assessed after making addition of Rs. 4, 34,644/- u/s. 69 of the Act. The assessee being aggrieved with this order of the AO preferred an appeal to the Ld. CIT (A), who in turn set aside the order of the AO and appeal of the assessee was allowed. Now, the revenue being aggrieved with the same preferred the present appeal before us. 4. We have gone through the order of the AO, order of the Ld. CIT (A) and submissions of the assessee alongwith grounds taken by the revenue before us. Before taking up the matter on its merits, we need to decide the admissibility of the revenue appeal. As the tax effect in this case is only Rs. 1,30,393/-, i.e. below the threshold limit as prescribed by the CBDT time to time for filing appeals before ITAT/HIGH COURT AND SUPREME COURT. On this issue report of the AO was called for and the Ld. DR submitted the report received from the office of the Income Tax Officer, Ward-1, Jhunjhunu vide his letter dated: 04.03.2025. We thoroughly considered the report of the AO alongwith the Circular No. 5/2024, dated: 15.03.2024 and it is found that the matter of the assessee is entitled for the benefits given by the circulars issued by the CBDT. As the present matter is falling in exception clause as provided in clause 3.1.C, where it has been provided that “Monetary limits given in paragraph 4 with regard to filing appeal/SLP shall be applicable to all cases including those relating to TDS/TCS under the Act with the following exceptions where the decision to file appeal/SLP shall be taken on merits, without regard to the tax effect and the monetary limits: a. Where any provision of the Act or the Rules or notification issued there under has been held to be constitutionally invalid, or b. Where any order, notification, instruction or circular of the Board or the Government has been held to be illegal or ultra vires the Act or otherwise constitutionally invalid, or c. Where the assessment is based on information in respect of any offence alleged to have been committed under any other law received from any of the law enforcement or intelligence agencies such as CBI, ED, DRI, SFIO, NIA, NCB, DGGI, state law enforcement agencies such as State Police, State Vigilance Bureau, State Anti-Corruption Bureau, State Excise Department, State Sales/Commercial Taxes or GST Department, or d. Where the case is one in which prosecution has been filed by the Department in the relevant case and the trial is pending in any Court or conviction order has been passed and the same has not been compounded, or e. Where strictures/adverse comments have been passed and/or cost has been levied against the Department of Revenue, CBDT or their officers, or f. Where the tax effect is not quantifiable or not involved, such as the case of registration of trusts or institutions under sections 10(23C), 12A/12AA/12AB of the Act, order passed u/s 263 of the Act etc. The reference to cases involving sections referred here, where it is not possible to quantify tax effect or tax effect is not involved, is for the purpose of illustration only. g. Where addition relates to undisclosed foreign income/undisclosed foreign assets (including financial assets)/undisclosed foreign bank account, or h. Cases involving organized tax evasion including cases of bogus capital gain/loss through penny stocks and cases of accommodation entries, or i. Where mandated by a Court's directions, or j. Writ matters, or k. Matters related to wealth tax, fringe benefit tax, equalization levy and any matter other than the Income Tax Act, or l. In respect of litigation arising out of disputes related to TDS/TCS matters in both domestic and international taxation charges: - i. Where dispute relates to the determination of the nature of transaction such that the liability to deduct TDS/TCS thereon or otherwise is under question, or ii. Appeals of International taxation charges where the dispute relates to the applicability of the provisions of a Double Taxation Avoidance Agreement or otherwise m. Any other case or class of cases where in the opinion of the Board it is necessary to contest in the interest of justice or revenue and specified so by a circular issued by Board in this regard. 5. In view of the clause C above, it is found that the appeal of the revenue is admissible and the same is to be adjudicated on its facts and merits involved. It is observed that the findings of the AO that the assessee was a trader are factually incorrect. As she was a small-time investor working on the advice of some broker. Otherwise, she is an insurance and small-time savings funds collection agent. She has been regular in investing her savings in different level in different schemes with different income generation prepositions. She has been regular in showing her income whatsoever accrues to her. 6. Investment of Rs. 4, 34,644/- by the assessee against investment as guided by the broker for earning higher returns. As no income details were shared during the year and no income accrued to her, with the help of the broker concerned anyhow she recovered the basic amount without any profit. Meaning thereby she was not the target as per the SFIO report, rather an investor with an urge to earn more and was not involved in any type of money siphoning or tax evasion. Moreover, the Ld. CIT (A) rightly pointed out her source of investment vide para 5.3 of appeal order. 7. In view of the above, we do not see any reason to interfere in the order of the Ld. CIT (A). Hence the same is confirmed and the grounds raised by the revenue are dismissed. 8. In the result, the appeal of the revenue is dismissed. Order is pronounced in the open court on the 13th Day of March 2025. Sd/- Sd/- (NARINDER KUMAR) (GAGAN GOYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Jaipur, िदनांक/ Dated: 13/03/2025 Copy of the Order forwarded to: 1. अपीलाथ\r / The Appellant , 2. \u000eितवादी/ The Respondent. 3. आयकर आयु\u0015 CIT 4. 5. गाड\u0018 फाइल/ Guard file. BY ORDER, //True Copy// (Asstt. Registrar) ITAT, Jaipur Details Date Initials Designation 1 Draft dictated on PC on 13.03.2025 Sr.PS/PS 2 Draft Placed before author 13.03.2025 Sr.PS/PS 3 Draft proposed & placed before the Second Member JM/AM 4 Draft discussed/approved by Second Member JM/AM 5. Approved Draft comes to the Sr.PS/PS Sr.PS/PS 6. Kept for pronouncement on Sr.PS/PS 7. File sent to the Bench Clerk Sr.PS/PS 8 Date on which the file goes to the Head clerk 9 Date of Dispatch of order "