INCOME TAX OFFICER-33(3) (3), MUMBAI , MUMBAI V. SHRI SANAJY MAHABIR MAHESHKA , MUMBAI

MA 346/MUM/2022

AI Insights

The case involves two Miscellaneous Applications (MA No.346/Mum/2022 and MA No.347/Mum/2022) filed by the Income Tax Officer against Shri Sanjay Mahabir Maheshka concerning the assessment years 2011-12 and 2012-13, respectively. The Revenue sought rectification of the Tribunal's earlier decision to dismiss their appeals due to the low tax effect, citing a CBDT Circular dated 08/08/2019. However, the Revenue argued that the case fell under exceptions specified in a subsequent CBDT Office Memo dated 16/09/2019, which addresses issues related to penny stocks and bogus capital gains. The Tribunal, upon reviewing the submissions and the relevant CBDT Memo, acknowledged the oversight and recalled the earlier order, restoring the appeals for re-examination.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 300219 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 8 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 02-02-2023
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 22-12-2022
• Assessment Year: 2011-2012
• Appeal Filed On: 24-11-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Tax effect; Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC”, BENCH MUMBAI BEFORE: SHRI VIKAS AWASTHY, JUDICIAL MEMBER MA. No.346/Mum/2022 (Arising out of ITA No.6168/Mum/2019) (Asse ssment Year : 2011-12) MA. No.347/Mum/2022 (Arising out of ITA No.6169/Mum/2019) (Asse ssment Year : 2012-13) Income Tax Officer – 33(1)(1) R. No.945, 9 th Floor Kautilya Bhawan Bandra Kurla Complex Bandra East Mumbai – 400 051 Vs. Shri Sanjay Mahabir Maheshka Flat No.1702, No.4B, Whispering Palms Lokhandwala Complex, Kandivali (East) Mumbai – 400 101 PAN/GIR No.AAFPM5407L (Applicant) .. (Respondent) Assessee by Shri Bhupendra Shah Revenue by Shri R.A. Dhyani Date of Hearing 23/12/2022 Date of Pronouncement 03/02/2023 आदेश / O R D E R PER VIKAS AWASTHY (JM): These two Miscellaneous Applications have been filed by the Revenue u/s.254(2) of the Income Tax Act, 1961 (hereinafter referred to as ‘Act’) with a prayer to rectify / recall order of Tribunal dated 19/05/2022 vide which appeals of the Revenue in ITA No.6168 & 6169/Mum/2019 were dismissed. MA No.346 & 347/Mum/2022 Shri Sanjay Mahabir Maheshka 2 2. Shri R.A. Dhyani representing the Department submitted that the Tribunal had dismissed appeal of the Revenue on the pretext that tax effect involved in the appeals of the Revenue is less than the threshold limit for filing of the appeal before the Tribunal in terms of CBDT Circular dated 08/08/2019. The ld. DR pointed that undisputedly, the tax effect in the appeals is less than the monetary limit for filing of the appeals as prescribed by CBDT, however, the said Circular would not apply in the instant case as the issue involved in the present appeals is of long term capital gain on penny stocks which is covered by exceptions notified by CBDT vide Office Memo dated 16/09/2019. 3. Per contra, Shri Bhupendra Shah appearing on behalf of the assessee vehemently defended the order of Tribunal and prayed that the Miscellaneous Applications filed by the Revenue be dismissed. 4. Both sides heard. The Revenue is seeking rectification / recall of the Tribunal order dated 19/05/2022 vide which the appeals of the Revenue were dismissed on the ground of low tax effect. The DR has placed on record a copy of Office Memo dated 16/09/2019 issued by CBDT. A perusal of the said Office Memo shows that the CBDT has carved out exception from the low tax effect monetary limit circular in respect of appeals involving bogus long term capital gains / short term capital loss through penny stock. The said Memo was not brought to the notice of Bench by the DR when the aforesaid appeals were heard, thus resulting in error in the order of Tribunal. In the light of aforesaid CBDT Office Memorandum, the Tribunal order dated 19/05/2022 is recalled and the appeals of Revenue in ITA No.6168/Mum/2019 and 6169/Mum/2019 are MA No.346 & 347/Mum/2022 Shri Sanjay Mahabir Maheshka 3 restored to their original number. The Registry is directed to fix the appeals for hearing in due course after notice to both the sides. 4. In the result, the Miscellaneous Applications filed by the Revenue are allowed. Order pronounced in the open Court on 3 rd the day of February 2023 (VIKAS AWASTHY) JUDICIAL MEMBER Mumbai; Dated 03/02/2023 KARUNA, 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//