ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-2, AJMER V. SHRI KRISHNA KUMAR GUPTA, AJMER

MA 05/JPR/2020

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 7745 (ITAT-JAIPUR)
• Duration Of Justice: 6 month(s) 18 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 21-07-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 03-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tax effect; Bogus
• Section: 254(2); 20

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S,B JAIPUR JH JESK LH0 KEKZ] YS[KK LNL; ,OA JH FOT; IKY JKO] U;KF;D LNL; DS LE{K BEFORE: SHRI RAMESH C. SHARMA, AM & SHRI VIJAY PAL RAO, JM M.A NO. 05/JP/2020 (ARISING OUT OF ITA NO. 812/JP/2019) FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2015-16 THE DCIT, CIRCLE-2, AJMER. CUKE VS. SHRI KRISHAN KUMAR GUPTA F-7, PARBATPURA, IND. ESTATE, AJMER. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ABMPG 5751 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS @ REVENUE BY : SHRI K.C. GUPTA (JCIT) FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI SANDEEP JHANWAR LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 20/07/2020 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 21/07/2020 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. BY WAY OF THIS MISCELLANEOUS APPLICATION THE REVEN UE IS SEEKING RECALLING OF THE IMPUGNED ORDER DATED 21.08.2019 OF THIS TRIBUNAL WHEREBY THE APPEAL OF THE REVENUE WAS DISMISSED DUE TO LOW TAX EFFECT IN VIEW OF THE MANDATORY LIMIT PRESCRIBED IN CBDT C IRCULAR NO. 17/2019 DATED 08.08.2019. M.A. NO. 05/JP/2020 DCIT VS. SHRIKRISHAN KUMAR GUPTA 2 2. WE HAVE HEARD THE LD. DR AS WELL AS LD. AR AND C AREFULLY PERUSED THE IMPUGNED ORDER OF THE TRIBUNAL. THE LD. DR HAS SUBMITTED THAT IN VIEW OF THE SUBSEQUENT CBDT CIRCULAR NO. 23/2019 DA TED 06.09.2019 THE CASES ARISING FROM BOGUS LONG TERM CAPITAL GAIN AS ALE OF PENNY STOCK ARE PLACED IN THE EXCEPTION OF MANDATORY LIMI T PROVIDED IN CBDT CIRCULAR NO. 17/2019. THEREFORE, THE APPEAL OF THE REVENUE IS REQUIRED TO BE DECIDED ON MERITS INSTEAD OF DISMISSING THE A PPEAL DUE TO LOW TAX EFFECT. 3. ON THE OTHER HAND, LD. AR HAS SUBMITTED THAT THE ORDER OF THE TRIBUNAL WAS PASSED ON 21.08.2019 AND ON THE SAID D ATE THE APPEAL OF THE REVENUE WAS NOT MAINTAINABLE IN VIEW OF THE CBD T CIRCULAR NO. 17/2019 DATED 08.08.2019. A SUBSEQUENT ISSUE BY THE CBDT IS APPLICABLE ONLY ON THE PENDING APPEALS AND NOT ON T HE DECIDED APPEAL. HE HAS RELIED UPON THE DECISION OF THIS TRIBUNAL. T HE LD. AR HAS ALSO RELIED UPON THE DECISION OF THIS TRIBUNAL IN CASE O F DCIT VS. SHRI SURENDRA KUMAR PATNI IN MA NO. 68/JP/2019 DATED 24.02.2020 . 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. AT THE OUTSET, WE NOTE THAT THE TAX EFFECT IN THE APPEAL OF THE REVENUE IS UNDISPUTEDLY LESS THAN THE MANDATORY LIMIT OF M.A. NO. 05/JP/2020 DCIT VS. SHRIKRISHAN KUMAR GUPTA 3 RS. 50,00,000/- AS PROVIDED UNDER CBDT CIRCULAR NO. 17/2019 DATED 08.08.2019. THE TRIBUNAL DISMISSED THE APPEAL OF TH E REVENUE VIDE IMPUGNED ORDER WHEN IT WAS FOUND THAT THE TAX EFFEC T IN THE APPEAL IS LESS THAN THE MANDATORY LIMIT PROVIDED IN CBDT CIRC ULAR NO. 17/2019 DATED 08.08.2019. NOW THE REVENUE HAS FILED THIS MI SC. APPLICATION AND SEEKING RECALLING OF THE SAID ORDER BASED ON THE SU BSEQUENT CBDT CIRCULAR NO. 23/2019 DATED 06.09.2019 WHEREBY THE C BDT HAS BROUGHT THE PENNY STOCK MATTERS IN THE EXCEPTION PROVIDED U NDER THE CIRCULAR AND CONSEQUENTLY THE CASES WHICH FALL IN THE EXCEPT ION ARE REQUIRED TO BE DECIDED ON MERITS. IT IS PERTINENT TO NOTE THAT AS ON THE DATE OF ORDER I.E. 21.08.2019 THE APPEAL OF THE REVENUE WAS NOT M AINTAINABLE AND ACCORDINGLY, IT WAS DISMISSED IN VIEW OF CIRCULAR N O. 17/2019. SUBSEQUENT CIRCULAR OF CBDT WOULD NOT RENDER THE OR DER OF THE TRIBUNAL AS SUFFERING FROM MISTAKE AS THE SAID CIRCULAR WOUL D PUT PENNY STOCK CASES UNDER EXCEPTION WHICH WERE NOT AS PER EXISTIN G CIRCULAR AS ON THE DATE OF ORDER. THEREFORE, RE-CATEGORIZATION OF THE EXCEPTIONAL CASES BY THE SUBSEQUENT CIRCULAR WOULD NOT AMOUNT A MISTAKE IN THE ORDER FOR RECALLING OF THE SAME. EVEN OTHERWISE THE CBDT CIRC ULAR ON THE MAINTAINABILITY OF THE APPEALS IS APPLICABLE ONLY O N THE APPEALS WHICH ARE PENDING ON THE DATE OR TO BE FILED IN FUTURE. T HE APPEAL OF THE M.A. NO. 05/JP/2020 DCIT VS. SHRIKRISHAN KUMAR GUPTA 4 REVENUE WAS NOT PENDING ON THE DATE OF CBDT CIRCULA R NO. 23/2019 DATED 06.09.2019, THEREFORE, THE SAID CIRCULAR HAS NOT EFFECT ON THE IMPUGNED ORDER OF THE TRIBUNAL. THIS TRIBUNAL IN CA SE OF DCIT VS. SHRI SURENDRA KUMAR PATNI (SUPRA) HAS CONSIDERED AN IDEN TICAL ISSUE AND HELD IN PARA 9 TO 11 AS UNDER:- 9. WE ARE CONSCIOUS OF THE FACT THAT CBDT LOW TAX EFFECT CIRCULARS ISSUED FROM TIME TO TIME WHEREIN THE TAX EFFECT HAVE BEEN PROGRESSIVELY INCREASED BY THE REVENUE WI TH A VIEW TO MINIMIZE THE LITIGATION HAS BEEN READ BY TH E COURTS AND THE TRIBUNAL, AND EVEN THE CBDT HAS ALSO CLARIF IED LATTER, THAT THESE CBDT CIRCULARS SHALL APPLY NOT JUST TO F UTURE APPEALS BUT ALSO TO PENDING APPEALS AND THEREFORE, WHERE THE APPEAL HAS ALREADY BEEN FILED BY THE REVENUE AN D 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, T HE ISSUE IS REGARDING CARVING OUT AN EXCEPTION FROM SUCH LOW TA X EFFECT LIMITS AND THAT TOO, NOT JUST BY A GENERAL ORDER BU T BY WAY OF A SPECIAL ORDER WHERE SUCH APPEALS CAN BE FILED, TH EREFORE, UNLESS THE SPECIAL ORDER HAS BEEN PASSED BY THE CBD T 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 PRIO R TO ISSUANCE OF THE SPECIAL ORDER. THEREFORE, WE ARE O F THE CONSIDERED VIEW THAT THE CBDT CIRCULAR NO. 23 OF 20 19 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 F ILED ON OR AFTER 16.09.2019 BY THE REVENUE WHERE THE TAX EFFEC T MAY BE LOW BUT THE APPEAL CAN STILL BE FILED BY THE REV ENUE ON MERITS. M.A. NO. 05/JP/2020 DCIT VS. SHRIKRISHAN KUMAR GUPTA 5 10. IN THE INSTANT CASE, THE APPEAL OF THE REVENUE WAS FILED ON 16.04.2019 AND THEREFORE, THE PRESENT APPE AL WAS NOT FILED PURSUANT TO SUCH A SPECIAL ORDER OF THE C BDT DATED 16.09.2019 AND THUS, THE MATTER DOESNT FALL IN ANY EXCEPTION AS SO PRESCRIBED BY THE CBDT IN ITS EARLIER CIRCULA R DATED 8.8.2019 AND THE SPECIAL ORDER DOESNT 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. 11. IN ANY CASE, BOTH CBDT CIRCULAR NO. 23 OF 2019 AND SPECIAL ORDER DATED 16.09.2019 WERE NOT IN EXISTENC E AND THUS NOT PART OF THE RECORD AT THE TIME WHEN THE MA TTER WAS HEARD ON 23.08.2019 OR AT THE TIME OF PASSING OF OR DER BY THE TRIBUNAL ON 2.09.2019 AND THEREFORE, NON-CONSID ERATION OF SUCH CIRCULAR AND THE SPECIAL ORDER SO PASSED BY THE CBDT IS NOT A MISTAKE APPARENT FROM RECORD WHICH CAN BE RECTIFIED WITHIN THE NARROW COMPASS OF SECTION 254(2) OF THE ACT. ACCORDINGLY, WE DO NOT FIND ANY SUBSTANCE OR MERIT IN THE MISC. APPLICATION OF THE REVENUE AND THE SAME DESERVES DI SMISSED. IN THE RESULT, THE MISCELLANEOUS APPLICATION IS DI SMISSED. IN ORDER PRONOUNCED IN THE OPEN COURT ON 21/07/2020 SD/- SD/- JESK LH0 KEKZ FOT; IKY JKO (RAMESH. C. SHARMA) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 21/07/2020. M.A. NO. 05/JP/2020 DCIT VS. SHRIKRISHAN KUMAR GUPTA 6 * SANTOSH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- DCIT, CIRCLE-2, AJMER. 2. IZR;FKHZ@ THE RESPONDENT- SHRI KRISHAN KUMAR GUPTA, AJMER. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {M.A. NO. 05/JP/2020} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR