DCIT- CC -7(3), MUMBAI V. MANJULABEN B. PATEL, MUMBAI

MA 244/MUM/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 7259 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 9 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 03-09-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 25-09-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ANKIT BUBNA
• Keywords: Accommodation entries; Assessment record; Tax effect; Penny stocks
• Section: 143(3); 268A; 132; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , D BENCH MUMBAI BEFORE : SHRI M.BALAGANESH, A CCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE , JUDICIAL MEMBER MA NO.244/MUM/2020 (ARISING OUT OF ITA NO. 2945/ MUM/ 20 18 ( ASSESSMENT YEAR : 2008 - 09 ) DCI T - CC - 7(3) ROOM NO.655, 6 TH FLOOR AAYAKAR BHAVAN M.K. ROAD, MUMBAI 400 020 VS. MS. MANJULABEN B PATEL 501A, 1 ST FLOOR, CREEK CREST BUILDING MODEL TOWN, FOUR BUNGLOWS ANDHERI (W) MUMBAI 400 053 PAN/GIR NO. AADPP5867F (APPELLANT ) .. (RESPONDENT ) REV ENUE BY MS. AMRITA SINGH ASSESSEE BY SHRI ANKIT BUBNA DATE OF HEARING 0 3 /0 9 /2021 DATE OF PRONOUNCEMENT 03 / 09 /202 1 / O R D E R PER M. BALAGANESH (A.M) : BY VIRTUE OF THIS MISCELLANEOUS APPLICATION, THE REVENUE SEEKS TO REC ALL THE ORDER DATED 27/08/2019 PASSED BY THIS TRIBUNAL IN ITA NO.2945/MUM/2018 DISMISSING THE APPEAL OF THE REVENUE ON ACCOUNT OF LOW TAX EFFECT UNDER CBDT CIRCULAR NO.17/2019 DATED 08/08/2019. THE PRIMARY GROUND ON WHICH THE REVENUE SEEKS TO RECALL THIS O RDER IS BY PLACING RELIANCE ON CBDT CIRCULAR NO. 23/2019 DATED 06/09/2019 WHEREIN THE CIRCULAR WAS ISSUED IN RESPECT OF LONG TERM CAPITAL GAIN AND SHORT TERM M A NO . 244/MUM/2020 MS. MANJULABEN B PATEL 2 CAPITAL LOSS GENERATED THROUGH PENNY STOCKS, CITING THE SAME AS AN EXCEPTION TO APPLICATION OF LOW TAX EFFECT CIRCULAR. FOR THE SAKE OF CONVENIENCE, THE ENTIRE MISCELLANEOUS APPLICATION OF THE REVENUE IS REPRODUCED HEREUNDER: - THE APPLICANT SUBMITS THAT THE HON'BLE ITAT HAS WITHDRAW THE APPEAL SUO - MOTO IN THE CASE OF MANJULABEN B PATEL. IN ITA NO. 2 945/MUM/20 18 FOR A.Y. 2008 - 09 DATED 21.08.2019. FACT OF THE CASE: THE ASSESSEE IS FILED ITS RETURN OF INCOME ELECTRONICALLY FOR A.Y. 2008 - 09 ON 24.11.2008 DECLARING TOTAL INCOME AT RS. 55,330/ - ORDER U/S. 147 R.W.S. 143(3) OF THE INCOME TAX ACT WAS PASSED ON 29.03.2016 DETERMINING TOTAL OF RS. 1,00,55,330/ - . DURING THE ASSESSMENT PROCEEDING, THE AO MADE AN ADDITION OF RS. 1,00,00,000/ - U/S 68 OF THE ACT. DECISION OF ITAT THE ITAT HAS WITHDRAW THE APPEAL SUO - MOTO DATED 21 . 08.2019. THE CAPTIONED APPEAL IN ITA NO.2146/MUM/2019 (AS PER ANNEXURE) PREFERRED BY REVENUE, HAS LISTED BY THE REGISTRY BEFORE THE BENCH ON THE GROT,. THEY DO NOT SURVIVE FOR CONSIDERATION IN VIEW OF THE CBDT CIRCULAR NO. 17/2019 DATED 8 TH AUGUST, 2019. FURTHER, AS PER PARA 5 OF THE H ON BLE ITAT ORDER . BEFORE PARTING, WE CLARIFY THAT IF ON A LATER DATE, THE REVENUE FINDS THAT THE TAX EFFECT IN DISPUTE IN ANY OF THE CAPTIONED APPEALS IS MORE THAN LIMIT PRESCRIBED IN THE CIRCULAR DATED 08.08.2019 (SUPRA), OR IT IS PROTECTED BY ANY OF TH E EXCEPTIONS PROVIDED IN PARA 10 OF THE CBDT CIRCULAR 11.07.2018 (SUPRA), IT SHALL BE AT LIBERTY TO APPROACH THE TRIBUNAL FOR RECALL OF THE ORDER AND REINSTITUTION OF THE APPEAL FOR ADJUDICATION ON MERITS. THE TRIBUNAL SHALL CONSIDER SUCH APPLICATIONS, IF ANY, AS PER THE EXTANT LAW. HOWEVER, THIS CASES FALL UNDER EXCEPTION TO MONETARY LIMITS FOR FILING APPEALS SPECIFIED AS PER CBDT CIRCULAR NO. 17 OF 2019 DATED 08.08.2019 READ WITH PARA 10 OF THE CBDT CIRCULAR DATED 11.07.2018.. A.O.'S COMMENTS: IT IS SEE N FROM THE ASSESSMENT RECORDS THAT A SEARCH WAS CONDUCTED U/S 132 OF 1 T ACT ON 09/10/2014 AT THE OFFICE OF LOTUS/KAMDHENU/GREEN VALLEY GROUP & THEIR ASSOCIATES AND AT THE RESIDENCE OF THEIR DIRECTORS BY THE DD I T UNIT 3(2) MUMBAI, THE MAIN ALLEGATION IN TH IS SEARCH WAS THE INTRODUCTION OF UNACCOUNTED FUNDS INTO BUSINESS AND PERSONNEL ACCOUNTS. THESE FUNDS WERE ROUTED THROUGH PAPER ENTITIES BASED IN KOLKATA AND MUMBAI CREATED OR EXISTING M A NO . 244/MUM/2020 MS. MANJULABEN B PATEL 3 FOR THIS PURPOSE. IT WAS ALSO NOTICED THAT ACCOMMODATION ENTRIES IN THE SE GROUP WERE FROM COMMON ACCOMMODATION ENTRY PROVIDER. IN THE PRESENT CASE ALSO THE ADDITION U/S 68 OF 1 T ACT WAS MADE ON ACCOUNT OF UNSECURED LOAN OF RS 1,00,00, 000 / - RECEIVED BY THE ASSESSEE FROM BOGUS ENTITIES, WHICH WAS FOUND TO BE A COMPANY FORMED W ITH AN MALAFIDE INTENTION TO INTRODUCE THE UNACCOUNTED MONEY BY PROVIDING ACCOMMODATION ENTRIES. THUS THE ABOVE C OMPANY IS ENGAGED IN THE ORGANI Z ED TAX EVASION SCAM BY PROVIDING ACCOMMODATION ENTRIES. THE CBDT VIDE ITS CIRCULAR NO. 23 OF 2019 (F.NO. 279/M ISC/M - 93/2018 LTJ(PT.)DATED 06/09/2019 HAS DIRECTED IN SUCH CASES APPEALS MAY BE FILED BEFORE ITAT, HIGH COURT AND SLP/APPEALS BEFORE THE SUPREME COURT ON MERITS AS AN EXCEPTION TO THE CIRCULAR ISSUED U/S 268A SPECIFYING MONETARY LIMITS. THOUGH THE ABOVE C IRCULAR WAS IN RESPECT OF LTCG AND SHORT TERM CAPITAL LOSS GENERATED THROUGH PENNY STOCK, THE ISSUE OF ORGANIZED TAX EVASION SCAM THROUGH ACCOMMODATION ENTRIES IS INVOLVED THIS CASE. ITAT HAS DISMISSED THE APPEAL PURELY ON LOW TAX EFFECT WITHOUT THE ISSUE ON MERI T , HENCE IT IS SUGGESTED THAT MISCELLANEOUS MAY BE FILED IN HON'BLE ITAT FOR REINSTITUTION OF APPEAL ON THE GROUND THAT AN ISSUE OF ORGANIZED TAX EVASION SCA M THROUGH ACCOMMODATION ENTRIES IS INVOLVED IN THIS CASE AN D IT IS AN EXCEPTION TO THE CIRCULAR ISSUED U/S 268A SPECIFYING MONETARY LIMITS. 2. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. AT THE OUTSET WE FIND THAT THE TRIBUNAL ORDER DATED 27/08/2019 CONT AIN S ONLY FOUR PARAGRAP HS AND THERE IS NO PARA 5 IN THE SAID ORDER. HENCE, THE CONTENT IN THE MISCELLANEOUS APPLICATION OF THE REVENUE PRIMAFACIE IS INCORRECT. FIRST OF ALL THERE WAS NO PROVISION GIVEN IN THE TRIBUNAL ORDER TO RECALL THE ORDER GIVING LEEWAY OR LIBERTY TO THE REV ENUE TO APPROACH THIS TRIBUNAL FOR RECALLING OF THE ORDER. MOREOVER, THE TRIBUNAL ORDER WAS PASSED ON 27/08/2019 AND THE CBDT CIRCULAR NO.23/19 WAS ISSUED ON 06/09/2019. HENCE, ON THE DATE OF PASSING THE TRIBUNAL ORDER, THE CBDT CIRCULAR / INSTRUCTION RELI ED UPON WAS NOT IN EXISTENCE AT ALL. IN THIS VIEW OF THE MATTER, WE SEE NO MISTAKE ON RECORD IN THE ORDER PASSED BY THIS TRIBUNAL. SIMILAR VIEW WAS ALSO TAKEN BY THIS TRIBUNAL IN THE CASE OF DCIT VS. SHREE VA L JI MANJI GOTHI IN MA NO.238/MUM/2011 DATED 20/0 7/2021. ACCORDINGLY, THE MISCELLANEOUS APPLICATION OF THE REVENUE DESERVES TO BE REJECTED AS DEVOID OF LEGALLY SUSTAINABLE MERITS. M A NO . 244/MUM/2020 MS. MANJULABEN B PATEL 4 3. IN THE RESULT, MISCELLANEOUS APPLICATION OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON 03 / 09 /202 1 BY WAY OF P ROPER MENTIONING IN THE NOTICE BOARD. SD/ - ( PAVAN KUMAR GADALE ) SD/ - (M.BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 03 / 09 / 2021 K ARUNA , SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// M A NO . 244/MUM/2020 MS. MANJULABEN B PATEL 5 DATE INITIAL 1. DRAFT DICTATED ON 03/09/2021 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 03/09/2021 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APP ROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. FILE SENT TO THE BENCH CLERK SR.PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 1 0. DATE OF DISPATCH OF ORDER. 11. DICTATION PAD IS ENCLOSED