The Income Tax Officer, Ward-1 (1) (1), Rajkot V. Smt. Hansaben R. Tilala, Rajkot

MA 5/RJT/2020

AI Insights

The case involves a Miscellaneous Application by the Department against an earlier ITAT order that dismissed the Revenue's appeal concerning an addition of Rs. 1,00,34,939 made by the Assessing Officer on account of bogus LTCG through penny stocks. The Department argued that the case falls within the exceptions of Circular No. 23/2019, which allows for a recall of the ITAT order if the appeal involves organized tax evasion through bogus LTCG/STCG on penny stocks. However, the assessee countered by citing a Gujarat High Court decision that the circular applies prospectively, not retrospectively, to appeals filed after its issuance. The ITAT upheld the original decision, dismissing the Department's application.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 124054 (ITAT-RAJKOT)
• Duration Of Justice: 3 year(s) 9 month(s) 6 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 02-11-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 17-08-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 27-01-2020
• Other Referred Cases: Denisha Rajendra Keshwani vs. State of Gujarat
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 268A; 72

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT [CONDUCTED THROUGH VIRTUAL COURT ] Before: Shri Waseem Ahmed, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member The I TO , War d- 1( 1 ) ( 1 ), Ra j ko t (A p p e ll a n t) V s S m t. Ha ns ab en R . Til ar a, C / o Me t f l ow C as t P vt. L td . Su r v e y N o . 79 , Pl ot N o . 45 , S h ap ar ( Ve r a v a l) , T a: K o td a Sa nga ni , R a jk ot PA N: A A O PT 72 4 8 P ( R e s p on de nt ) A s s es se e b y : S hr i Me h u l R a np ur a, A .R. R e v e n ue by : S hr i A s his h K u m ar Pa nd ey, Sr. D .R . D at e of he ar in g : 1 8- 0 8 - 2 0 2 3 D at e of pr o n ou nc e me nt : 03- 1 1 - 20 23 आदेश/ORDER PER : SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER:- This Miscellaneous Application filed by the Department against the order passed by ITAT, Rajkot Bench vide order dated 20-08-2019 dismissing the appeal of the Revenue. M.A. No. 05/Rjt/2020 (In ITA No. 321/Rjt/2017) Assessment Year 2013-14 M.A. No. 05/Ahd/2020 (In I.T.A No. 321/Rjt/2017) A.Y. 2013-14 Page No. ITO vs. Smt. Hansaben R. Tilara 2 2. The brief facts of the case are that addition of Rs. 1,00,34,939/- was made by the Assessing Officer on account of bogus LTCG taken through the penny scrip namely M/s. Global Securities Ltd.. The Department had filed appeal against the order of ld. CIT(A), Rajkot dated 26-07-2017 before ITAT Rajkot, which dismissed the appeal of the Revenue vide order dated 20-08-2014. While passing the order, ITAT had categorically mentioned that if the case falls within the ambit of exception clause of Circular 23/2019, then the Revenue will be at liberty to file Miscellaneous Application to recall the Tribunal Order in such appeals. 3. Before us, the Department has contended that in view of Circular No. 23/2019 dated 06-09-2019 wherein the cases related to bogus LTCG or STCL related to penny scrip has been considered as exception to the mandatory limit for filing appeals specified in previous Circular issued u/s. 268A of the Act. Accordingly, the Department submitted that since the case categorically falls within the ambit of exception provided vide Circular No. 23/2019 dated 06-09- 2019, it is a fit case where the order of the Tribunal may be recalled. 4. In response, the ld. counsel for the assessee placed reliance on the case of Denisha Rajendra Keshwani 134 taxman.com 249 (Gujarat), in which the Gujarat High Court held that CBDT Circular No. 23/2019 dated 06-09-2019 and Memorandum no 279 dated 16-09-2019, both providing that cases involving organized tax evasion or scam through bogus LTCG/STCG on penny stocks are not subject to monetary limits prescribed for filing appeals, would apply to appeals prospectively filed on or after 16-09-2019. It was submitted that in the instant case, the ITAT order was pronounced on 20-08-2019 i.e. before date of Circular (06-09-2019) and therefore, in view of the jurisdictional High Court Decision, the matter is not liable to be recalled. M.A. No. 05/Ahd/2020 (In I.T.A No. 321/Rjt/2017) A.Y. 2013-14 Page No. ITO vs. Smt. Hansaben R. Tilara 3 5. We have heard the rival contentions and perused the material on record. In the aforesaid cases of Denisha Rajendra Keshwani supra, the Gujarat High Court has specifically held that CBDT Circular No. 23/2019 would apply prospectively to appeals filed on or before 16-09-2019. Since we observe that in the instant case, the appeal was heard by ITAT on 20-08-2019 i.e. before the date of passing of aforesaid Circular, the exemption provided by the aforesaid Circular would not apply to the instant case. 6. Accordingly, we find no infirmity in the order of ITAT, Rajkot so as to call for any interference. 7. In the result, the Miscellaneous Applications filed by the Department is dismissed. Order pronounced in the open court on 03-11-2023 Sd/- Sd/- (WASEEM AHMED) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad : Dated 03/11/2023 आदेश क त ल प अ े षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order, Assistant Registrar, Income Tax Appellate Tribunal, Rajkot