Principal Commissioner Of Income Tax, (Central), Surat v. Rashmi Rajesh Bafna

IN THE HIGH COURT OF GUJARAT AT AHMEDABADR/TAX APPEAL NO. 151 of 2021 ==========================================================PRINCIPAL COMMISSIONER OF INCOME TAX, (CENTRAL), SURAT VersusRASHMI RAJESH BAFNA ========================================================== Appearance:MRS MAUNA M BHATT(174) for the Appellant(s) No. 1 for the Opponent(s) No. 1 ========================================================== CORAM: HONOURABLE MS. JUSTICE BELA M. TRIVEDIandHONOURABLE DR. JUSTICE ASHOKKUMAR C. JOSHI Date : 28/06/2021 ORAL ORDER (PER : HONOURABLE MS. JUSTICE BELA M. TRIVEDI) 1. The present appeal has been filed by the Principal Commissionerof Income Tax (Central), Surat under Section 260-A of the IncomeTax Act, 1961, challenging the order dated 14.8.2019 made by theIncome Tax Appellate Tribunal (ITAT), Ahmedabad Bench “A” inIT(SS)A No.332/Ahd/2018 for the A.Y. 2012-13 in respect of therespondent – Assessee.of Income Tax (Central), Surat under Section 260-A of the IncomeTax Act, 1961, challenging the order dated 14.8.2019 made by theIncome Tax Appellate Tribunal (ITAT), Ahmedabad Bench “A” inIT(SS)A No.332/Ahd/2018 for the A.Y. 2012-13 in respect of therespondent – Assessee. 2. The learned Sr. Standing Counsel Mrs.Mauna Bhatt for theappellant submits that the appeal has been filed, challenging theimpugned order passed by the Tribunal, on the ground that the caseof the respondent fell under the exceptions carved out in theCircular dated 8.8.2019 read with the Circular No.23/2019 dated6.9.2019 and Office Memorandum dated 16.9.2019, whichprovided that the monetary limits for filing appeals shall not applyto the cases where Assessee has claimed bogus LTCG/STCLthrough penny stocks. Of course, she submitted that the appellantappellant submits that the appeal has been filed, challenging theimpugned order passed by the Tribunal, on the ground that the caseof the respondent fell under the exceptions carved out in theCircular dated 8.8.2019 read with the Circular No.23/2019 dated6.9.2019 and Office Memorandum dated 16.9.2019, whichprovided that the monetary limits for filing appeals shall not applyto the cases where Assessee has claimed bogus LTCG/STCLthrough penny stocks. Of course, she submitted that the appellant had filed Misc. Application No.77/2020 in ITA No.1274/2019 andother Misc. Applications under Section 254(2) for the rectificationof the impugned order dated 14.8.2019, on the same ground, andthat the Tribunal having rejected the said applications vide theorder dated 9.9.2019, the appellant had filed the Special CivilApplication No.7520 of 2021 before this Court, and that this Courtvide the order dated 24.6.2021 has dismissed the said Special CivilApplication in limine. had filed Misc. Application No.77/2020 in ITA No.1274/2019 andother Misc. Applications under Section 254(2) for the rectificationof the impugned order dated 14.8.2019, on the same ground, andthat the Tribunal having rejected the said applications vide theorder dated 9.9.2019, the appellant had filed the Special CivilApplication No.7520 of 2021 before this Court, and that this Courtvide the order dated 24.6.2021 has dismissed the said Special CivilApplication in limine. 3. In view of the above submission of Mrs.Bhatt, it may be noted thatthough not stated in the memo of appeal, it is not disputed that thecommon order dated 14.8.2019 passed by the Tribunal in about628 appeals was sought to be reviewed at the instance of theappellant Department by filing the Misc. Application No.77 of2020 and others under Section 254 of the IT Act for rectification,on the ground that the cases of some of the Assessees fell withinthe exceptions carved out in the Circular dated 8.8.2019 read withthe Circular dated 6.9.2019 and Office Memorandum dated16.9.2019. The Tribunal vide the order dated 9.9.2020 haddismissed the said Misc. Application No.77/2020 along with theother Misc. Applications by holding that there was no mistakeapparent on the face of record in the order dated 14.8.2019, whichcould be rectified within the narrow compass under Section 254(2)of the said Act, and after holding inter alia that the said Circulardated 6.9.2019 should be read along with the OfficeMemorandum dated 16.9.2019 in respect of the appeals to be filedpursuant to the Special Order of CBDT, and shall apply to suchappeals that may be filed on or after 16.9.2019 by the Revenue.The said order having been challenged by the appellant Revenuebefore this Court by filing SCA No.7520 of 2021, this Court videorder dated 24.6.2021 has dismissed the same in limine. The relevant part thereof is reproduced as under:- relevant part thereof is reproduced as under:- “7. From the bare reading of the Circular dated 06.09.2019, itappears that the CBDT had decided that notwithstanding anythingcontained in any Circular issued under Section 268A specifyingmonetary limits for filing of departmental appeals before the IncomeTax Appellate Tribunal (ITAT), High Courts and SLPs/ Appealsbefore the Supreme Court, appeals may be filed on merits as theexception to the said Circular, where the Board by way of specialorder direct filing of appeals on merits in cases involved inorganized tax evasion activity. The Office Memorandum dated16.09.2019 was issued pursuant to the said circular dated06.09.2019 stating inter alia that by virtue of the powers of CBDTunder Section 268A of the Income Tax Act, the monetary limitsfixed for filing appeals before ITAT/High Court and SLPs/Appealsbefore Supreme Court shall not lie in case of assessees claimingbogus LTCG/STCL through penny stocks and appeals/ SLPs insuch cases appeals shall be filed on merits. There is nothing tosuggest in the said Circular/ Office Memorandum that they shallhave retrospective effect. On the contrary, from the languageemployed in the said Circular dated 06.09.2019, it clearly transpiresthat the appeals may be filed on merits as an exception to the otherCirculars issued earlier, where the Board by way of special orderdirect filing of Appeals on merits in the cases involved in organizedtax evasion activity. Therefore, by virtue of the said Circular dated06.09.2019, the appeals could be filed on merits, irrespective of themonetary limits fixed in earlier cases, if the Board passes specialorder for filing appeals in cases involving tax evasion activity. Thesaid Circular speaks about the Appeals that may be filed with thespecial order of the Board in future, and hence could not beconstrued to have retrospective effect. The Tribunal interpreting thesaid Circular/ Office Memorandum in the impugned order hasrightly observed that in respect of each case or category of caseswhether an appeal should be filed in view of the Circular dated06.09.2019 or not shall be decided by the Board by way of specialorder, and thus a specific requirement of issuance of special orderby CBDT is a must. The Tribunal therefore has rightly held that theCBDT Circular No. 23/2019 dated 06.09.2019 should be read alongwith the Office Memorandum dated 16.09.2019, in respect of theappeals to be filed pursuant to such special orders of CBDT andshall apply to all the appeals filed on or after 16.09.2019 by therevenue, where the tax effect may be low but the appeal could stillbe filed by the revenue on merits. 8. The appeals including the appeal in case of the respondent,which were disposed of by the Tribunal vide the common orderdated 14.08.2019 could not be said to have been filed pursuant tothe special order of the CBDT in view of the Circular dated06.09.2019 read with the Office Memorandum dated 16.09.2019, and therefore it could not be said that the Tribunal had committedany mistake apparent from the record, which would requirerectification as envisaged in Section 254(2) of the said Act. 9. In that view of the matter, the Court does not find any illegality orinfirmity in the impugned order dated 09.09.2020 passed by theTribunal dismissing the Miscellaneous Application filed by thepetitioner. The petition being devoid of merits is dismissed inlimine.” 8. The appeals including the appeal in case of the respondent,which were disposed of by the Tribunal vide the common orderdated 14.08.2019 could not be said to have been filed pursuant tothe special order of the CBDT in view of the Circular dated06.09.2019 read with the Office Memorandum dated 16.09.2019, and therefore it could not be said that the Tribunal had committedany mistake apparent from the record, which would requirerectification as envisaged in Section 254(2) of the said Act. 9. In that view of the matter, the Court does not find any illegality orinfirmity in the impugned order dated 09.09.2020 passed by theTribunal dismissing the Miscellaneous Application filed by thepetitioner. The petition being devoid of merits is dismissed inlimine.” 4. In view of the aforesaid premises, the appellant having alreadyfiled the rectification applications before the Tribunal, seekingrectification of its order dated 14.8.2019, and the said applicationshaving been dismissed by the Tribunal vide order dated 9.9.2020,and the said order dated 9.9.2020 having been challenged by theappellant by filing the Special Civil Application No.7520 of 2021,the appellant should not and could not have filed the present appealchallenging the original order dated 14.8.2019. In any case, thisCourt having upheld the order dated 9.9.2020 by dismissing theSpecial Civil Application as stated above, the present appeal doesnot survive and stands dismissed accordingly.filed the rectification applications before the Tribunal, seekingrectification of its order dated 14.8.2019, and the said applicationshaving been dismissed by the Tribunal vide order dated 9.9.2020,and the said order dated 9.9.2020 having been challenged by theappellant by filing the Special Civil Application No.7520 of 2021,the appellant should not and could not have filed the present appealchallenging the original order dated 14.8.2019. In any case, thisCourt having upheld the order dated 9.9.2020 by dismissing theSpecial Civil Application as stated above, the present appeal doesnot survive and stands dismissed accordingly. (BELA M. TRIVEDI, J) V.V.P. PODUVAL (A. C. JOSHI,J)