Principal Commissioner Of Incometax-1, Kolkata v. M/S. Effervescent Commercial Pvt.ltd

OD-21&22 ITAT/104/2021IA No.GA/1/2021IA No.GA/2/2021 IN THE HIGH COURT AT CALCUTTASpecial Jurisdiction (Income Tax)ORIGINAL SIDE PRINCIPAL COMMISSIONER OF INCOMETAX-1, KOLKATA -Versus- M/S. EFFERVESCENT COMMERCIAL PVT.LTD. Appearance:Mr. Smarajit Roychowdhury, Adv.Mr. Asok Bhowmick, Adv....for the appellant. Mr. Vivek Murarka, Adv.Mr. Dibanath Dey, Adv....for the respondents. BEFORE: The Hon’ble JUSTICE T.S. SIVAGNANAM -And- The Hon’ble JUSTICE HIRANMAY BHATTACHARYYA Date : 4[th] March, 2022. The Court : We have heard Mr. Smarajit Roychowdhury,learned standing counsel assisted by Mr. Asok Bhowmick, learnedadvocate for the appellant/revenue and Mr. Vivek Murarka, learnedcounsel for the respondent/assessee. There is a delay of 702 days in filing the appeal.We have perused the affidavit in support of the application for condonation of delay and we find except for placing reliance on an Office Memorandum issued by the CBDT dated16[th] September, 2019, there is no explanation for the inordinatedelay.Learned standing counsel for the revenue would submitthat by the said Office Memorandum dated 16[th] September, 2019, incase of assessees claiming bogus LTCG/STCL through penny stock,the appeal should be filed though the monetary limit is below thethreshold fixed in the circular issued under Section 268A of theAct.Learned counsel appearing for the respondent/assesseesubmitted that though the issue for which assessment was completedvide order dated 28[th] December, 2016 may arise for a penny stockissue, it is not a matter concerning any claim for bogusLTCG/STCL. In this regard, learned counsel has drawn ourattention to the reply to the show cause notice filed by theassessee before the assessing officer which has been noted in theassessment order dated 28[th] December, 2016 wherein the assessee hasspecifically stated that they have not claimed any long termcapital gain or they have not claimed any short term capital loss.The assessing officer while completing the assessment has made anaddition with regard to the revenue from operation and this isalso clear from the income tax computation form appended to theassessment order. If such is the fact, the appellant revenuecannot seek to rely upon the Office Memorandum dated 16[th] September, 2019 to state that the delay in filing the appealshould be condoned. Learned counsel appearing for the respondent submittedthat the circular cannot be given retrospective effect. In thisregard, reliance was placed in the decision of High Court ofGujarat at Ahmedabad in Principal Commissioner of Income Tax vs.Anand Natwarlal Sharda in C/SCA/7520/2021 dated 24[th] June, 2021.In our considered view, we need not examine as to whetherthe Office Memorandum issued by the CBDT dated 16[th] September, 2019is prospective or retrospective in operation as we are onlyconsidering as to whether sufficient cause has been shown by therevenue for condoning the inordinate delay of 702 days. Asmentioned above, if the assessing officer has completed theassessment and accepted the contention of the assessee that theyhave not made any claim for LTCG or STCL, then the revenue cannotrely upon the Office Memorandum dated 16[th] September, 2019. If thesaid memorandum is eschewed, then there is no explanation for theinordinate delay.Therefore, the application for condonation of delay (IANo.GA/1/2021) is dismissed. Consequently, the appeal stands rejected. The issue relating to whether the Office Memorandum dated16[th] September, 2019 is prospective or retrospective in operationis left open. With the dismissal of the appeal, the connectedapplication for stay (IA No.GA/2/2021) also stands closed. (T.S. SIVAGNANAM, J.) (HIRANMAY BHATTACHARYYA, J.) S.NathA/s.