ITO NON CORPORATE WARD-3(3), CHENNAI V. BARAI HITENDRA SUNITA, CHENNAI

MA 11/CHNY/2021

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 3086 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 7 month(s) 3 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 25-08-2022
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 25-08-2022
• Assessment Year: 2014-2015
• Appeal Filed On: 21-01-2021
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Tax effect; Penny stocks
• Section: 268A

Judgement Text

आयकर अपीलीय अिधकरण, ‘सी’ ᭠यायपीठ, चे᳖ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI Įी महावीर ͧसंह, उपाÚय¢ एवं ᮰ी जी. मंजुनाथ, लेखा सद᭭य के समᭃ BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENTAND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ͪवͪवध याͬचका सं / M.A. No.11/CHNY/2021 (arising in I.T.A. No. 3457/CHNY/2019) Ǔनधा[रण वष[ / Assessment Year : 2014-15 The Income Tax Officer, Non-Corporate Ward – 3(3), Chennai v. M/s. Barai Hitendra Sunitha, No.35, Poes Garden, Chennai – 600 006. PAN: BKOPS 4159K (अपीलाथᱮ/Appellant) (ᮧ᭜यथᱮ/Respondent) Ĥाथ[क कȧ ओर से /Petitioner by : Shri P. Sajit Kumar, JCIT Ĥ×यथȸ कȧ ओर से/Respondent by : Shri T. Vasudevan, Advocate स ु नवाई कȧ तारȣख/ Date of hearing : 26.08.2022 घोषणा कȧ तारȣख /Date of Pronouncement : 26.08.2022 आदेश /O R D E R PER MAHAVIR SINGH, VP: By way of this Miscellaneous Application, Revenue seeks recalling of the Tribunal order in I.T.A No.3457/CHNY/2019 dated 26.02.2020. 2. At the outset, the ld. Senior DR stated that the Tribunal has dismissed the appeal of Revenue by following the CBDT Circular No.17/2019 dated 08.08.2019, as the tax effect in this appeal is below the prescribed limit. The ld. Senior DR filed copy of CBDT Circular 2 M.A No.22/CHNY/2021 No.23 of 2019 issued vide F.No.279/Misc./M-93/2018-ITJ(Pt.) dated 6 th September 2019, wherein it is resolved that in the issue of bogus Long Term Capital Gain on penny stocks, the Revenue will file appeal despite the limit prescribed as per CBDT Circular prescribing tax effect limits. The CBDT noted as under:- 2. Several references have been received by the Board that in large number of cases where organised tax-evasion scam is noticed through bogus Long-Term Capital Gain (LTCG)/Short Term Capital Loss (STCL) on penny stocks and department is unable to pursue the cases in higher judicial fora on account of enhanced monetary limits. It has been reported that in large number of cases, ITA Ts and High Court have recognized the unique modus operandi involved in such scam and have passed judgements in favour of the revenue. However, in cases where some appellate fora have not given due consideration to position of law or facts investigated by the department, there is no remedy available with the department for filing further appeal in view of the prescribed monetary limits. 3. In this context, Board has decided that notwithstanding anything contained in any circular issued U/S 268A specifying monetary limits for filing of departmental appeals before Income Tax Appellate Tribunal (IT AT), High Courts and SLPs/appeals before Supreme Court, appeals may be filed on merits as an exception to said circular, where Board, by way of special order direct filing of appeal on merit in cases involved in organised tax evasion activity. 3. When this was confronted to ld.counsel for the assessee, he opposed recalling of the order and stated that is not the case of bogus Long Term Capital Gain on penny stocks rather issue is levy of penalty u/s.271(1)(c) of the Act on the claim of Long Term Capital Gain claimed as exempt u/s.10(38) of the Act and hence, the issue is not covered by CBDT Circular. 3 M.A No.22/CHNY/2021 4. After hearing both the sides and going through the facts, we noted that the CBDT circular was inexistence in regard to the issue of exemption claimed u/s.10(38) of the Act on account of Long Term Capital Gain earned on alleged bogus share transaction or penny stock. Hence, the assessee’s case falls under exception category as provided vide CBDT Circular dated 6 th September, 2019. Hence, we recall the order of Tribunal in ITA No.3457/Chny/2019 and direct the Registry to fix this appeal for hearing on 03.10.2022. The date is announced in open court and it was made clear that no further notice will be issued to either of the parties. 5. In the result, the miscellaneous application of the Revenue is allowed. Order pronounced in the open court on 26 th August, 2022 at Chennai. Sd/- Sd/- (जी. मंजुनाथ) (G. MANJUNATHA) लेखा सद᭭य /ACCOUNTANT MEMBER (महावीर ᳲसह ) (MAHAVIR SINGH) उपा᭟यᭃ /VICE PRESIDENT चे᳖ई/Chennai, ᳰदनांक/Dated, the 26 th August, 2022 RSR आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy to: 1. ᮧाथᭅक/Petitioner 2. ᮧ᭜यथᱮ/Respondent 3. आयकर आयुᲦ )अपील(/CIT(A) 4. आयकर आयुᲦ /CIT 5. िवभागीय ᮧितिनिध/DR 6. गाडᭅ फाईल/GF.