Pr. Commissioner Of Income Tax, Udaipur v. Order

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 49/2021 Pr. Commissioner Of Income Tax, Udaipur. ----Appellant Versus Smt. Vidushi Kothari, 30-31, Kothari Bhawan, New Grain Mandi,Kota. ----Respondent For Appellant(s) : Ms. Parinitoo Jain, Adv., though V.C.For Respondent(s): HON'BLE MR. JUSTICE PRAKASH GUPTA HON'BLE MR. JUSTICE SAMEER JAIN 18/05/2022 Order 1.Present appeal is filed by Revenue under Section 260Aof the Income Tax Act, 1961 against the order dated 09.12.2020passed by learned Income Tax Appellate Tribunal, Jaipur Bench,Jaipur in Misc. Application No.27/JP/2020 and in ITANo.157/JP/2019 for the assessment year 2015-16. 2.At the outset learned counsel for the revenue submittedthat the tax effect involved in the appeal is Rs.26,56,605/- whichis less than the limit prescribed in circular dated 08.08.2019 ofCBDT. However, the case falls under exception as per circulardated 06.09.2019. Learned tribunal while passing the impugnedorders under rectification as well as under main appeal has notconsidered the same as they were subsequent CBDT circulars andthe order was passed on 22.08.2019. Therefore, the appeal aswell as misc. application was dismissed. That apart from above the learned counsel for the revenue has submitted that the appeal isfiled on following Substantial Questions of Law which reads asunder: “1. Whether the Tribunal was legally justified indismissing the misc. application of thedepartment and holding that the appeal of thedepartment was not maintainable specificallywhen the CBDT itself had issued a SpecialCircular No.23/2019 dated 06.09.2019 whichcontained a non obstante clause stating that“notwithstanding anything contained in anycircular issued u/s.268A specifying monetarylimits…..” and carved an exception for the pennystock cases where the appeal was to be decidedon merits? 2. Whether the Tribunal was legally justified indismissing the misc. application of the revenuefor recalling the order dated 22.08.2019 fordeciding the appeal on merits specifically whenvide order dated 22.08.2019 the Tribunal itselfhad granted a liberty to the revenue to file misc.application if the case fell in any of theexceptions of the Circular and the instant case iscovered under the exception laid down by theCBDT in Circular No.23/2019 dated 06.09.2019? 3. Whether on the facts and circumstances ofthe case and in law the Tribunal was justified innot deciding the issue on merits specificallywhen the assessee was not able to satisfactorilydischarge his onus u/s.68 with regard tounexpected cash credits/the receipt ofRs.1,11,00,396/- in respect of penny stocktransaction? 4. Whether on the facts and circumstances ofthe case and in law, the Tribunal was justified innot deciding the issue on merits specificallywhen the assessee was not able to satisfactorilydischarge his onus u/s.69C with regardunexplained expenditure of Rs.2,22,008/- forcommission to acquire accommodation entry? 3.Learned counsel for the revenue has not rebutted thatthe controversy involved in the matter has been recently decidedby the Hon’ble Court in D.B. I.T. Appeal No.1/2021 titled as Pr.Commissioner of Income Tax-I Vs. Prakash Chand Sharmaand D.B. I.T. Appeal No.54/2021 titled as Pr. Commissioner of Income Tax-I, Jaipur Vs. Ritu Agarwal wherein similarcontroversy pertaining to penny stock and other case involved inorganized tax evasion activity were involved and were put to rest. 4. Whether on the facts and circumstances ofthe case and in law, the Tribunal was justified innot deciding the issue on merits specificallywhen the assessee was not able to satisfactorilydischarge his onus u/s.69C with regardunexplained expenditure of Rs.2,22,008/- forcommission to acquire accommodation entry? 3.Learned counsel for the revenue has not rebutted thatthe controversy involved in the matter has been recently decidedby the Hon’ble Court in D.B. I.T. Appeal No.1/2021 titled as Pr.Commissioner of Income Tax-I Vs. Prakash Chand Sharmaand D.B. I.T. Appeal No.54/2021 titled as Pr. Commissioner of Income Tax-I, Jaipur Vs. Ritu Agarwal wherein similarcontroversy pertaining to penny stock and other case involved inorganized tax evasion activity were involved and were put to rest. 4.Though the learned counsel for the revenue submittedthat the Tribunal has not considered the appeal on merits and hasdismissed the case on the ground of monetary limit yet thelearned Commissioner Appeals has given enough reasoning tojustify the claim of the department/revenue. The matterspertaining to alleged tax revenue activity qua issue of pennystocks which was duly considered inD.B. I.T. AppealNo.1/2021 titled as Pr. Commissioner of Income Tax-I Vs.Prakash Chand Sharma, D.B. I.T. Appeal No.22/2021 titledas Pr. Commissioner of Income Tax, Jaipur-2, Jaipur Vs.Shri Sanjay Chhabra and in D.B. I.T. Appeal No.54/2021titled as Pr. Commissioner of Income tax-I, Jaipur Vs. RituAgarwal, the relevant portion of the order in Prakash ChandSharma (supra) reproduced below: “2 By the Present IT appeal, the followingSubstantial Question of Law are proposed:-Substantial Question of Law are proposed:- (I)Whether in view of the Circular No.23/2019 dated 06/09/2019 which provides forfiling of appeal on merits in cases of pennystocks and other cases involved in organized taxevasion activity, irrespective of the tax effectinvolved, the orders passed by the Tribunal, videwhich the appeal and the misc. application of the appellant has been dismissed solely on accountof low tax effect, are sustainable? (II)Whether, the orders passed by the Tribunal arecontrary to Circular No. 23/2019 dated 06/09/2019 andSpecial Order dated 16/09/2019 issued by CBDT?” 3. At the outset, learned counsel for the appellantsubmits that the matter is covered by D.B. IT AppealNo.22/2021 titled as Pr. Commissioner of IncomeTax, Jaipur-2, Jaipur Vs. Shri Sanjay Chhabra. 4.We have considered the submissions. 5.On going through the contents of theorder of learned ITAT dated 06.07.2020, it isobserved that before rendering the judgment thelearned ITAT has considered entire facts of the case,and has given a categorical finding that, in the casein hand, the assessee produced all the documentaryevidence to establish the genuineness oftransaction. The learned Assessing Officer, as perthe learned ITAT, has failed to produce contrarymaterial evidences to rebut the claim of theassessee and documents produced by him. LearnedITAT has considered the bank statement, demataccount, books of account, contract notes whichwere external documents not in the control of theassessee and therefore the claim of the departmentof manipulation and for treating the transaction inquestion as sham and bogus were not proven andfound untenable. 6.On perusal of the order of learned ITATand reasonings given therein, this court is of theview that the substantial questions of lawformulated above does not arise as learned ITAThas logically dealt with questions of fact and lawinvolved by way of reasoned order. 7.Placing reliance upon the Apex Courtjudgment of Steel Authority of India Ltd. Vs.Designated Authority, Directorate General ofAnit Dumping & Allied Duties and Ors.:2017(349) E.L.T 193 (SC), wherein the question ofadmission of an appeal, on substantial question oflaw was considered and it was held as under:- 6.On perusal of the order of learned ITATand reasonings given therein, this court is of theview that the substantial questions of lawformulated above does not arise as learned ITAThas logically dealt with questions of fact and lawinvolved by way of reasoned order. 7.Placing reliance upon the Apex Courtjudgment of Steel Authority of India Ltd. Vs.Designated Authority, Directorate General ofAnit Dumping & Allied Duties and Ors.:2017(349) E.L.T 193 (SC), wherein the question ofadmission of an appeal, on substantial question oflaw was considered and it was held as under:- “(i) The question raised must involve asubstantial question of law which has not been answered or, on which, there is aconflict of decisions necessitating aresolution. (ii) If the Tribunal, on consideration of thematerial and relevant facts, had arrived ata conclusion which is a possibleconclusion, the same must be allowed torest even if this Court is inclined to takeanother view of the matter. (iii) The Tribunal had acted in grossviolation of the procedure or principles ofnatural justice occasioning a failure ofjustice. 8.We are of the view that learned ITAT, onconsideration of material and relevant facts arrivedat a logical conclusion and the same must beallowed to rest. There is no gross violation ofprinciples of natural justice and no error has creptin the order of the learned ITAT. The CoordinateBench of this court in D. B. IT Appeal No.54/2021 titled as Pr. Commissioner of IncomeTax-I, Jaipur Vs. Ritu Agarwal, in the similarfacts and circumstances, has already taken a viewthat in the appeal at hand, under Section 260A ofthe Act, no substantial question of law arises. 9.In the light of above discussions, thepresent appeal under Section 260A of the Act doesnot call for interference and is hereby dismissed, asno substantial question of law worth considerationarises.” 5. On consideration of the above findings of the judgment of Division Bench of this court, we are of the view that the matter is similar to those appeals and no Substantial Question of Lawarises for consideration before this court. Further, the order of theTribunal on account of monetary limit and on account of circulardated 06.09.2019 are set aside only to the extent of monetarylimits and not on merits. The findings, though not considered bylearned ITAT but by CIT(A) and assessing officers, is required toreversed as pertaining to similar issue of penny stocks in similar facts and circumstances, with consent of learned counsel for therevenue, we are not remitting the matter to the ITAT but disposingof the same in light of above that the similar SubstantialQuestions of Law in the same circumstances were dismissed bythis Hon’ble High Court while entertaining appeal under Section260A of the I.T. Act. 6.On perusal of order of ITAT and impugned orders ofCIT(A), assessment order, this court is of the opinion that noground for interference is called for in this appeal. 7.For the reasons stated above, the appeal is dismissed. (SAMEER JAIN),J (PRAKASH GUPTA),J JKP/7