Principal Commissioner Of Incometax, Central-2, Kolkata v. Giridharilal Goenka

ITAT/34/2022IA No.GA/2/2022 IN THE HIGH COURT AT CALCUTTASpecial Jurisdiction (Income Tax)ORIGINAL SIDE PRINCIPAL COMMISSIONER OF INCOMETAX, CENTRAL-2, KOLKATA -Versus- GIRIDHARILAL GOENKA Appearance:Mr. Soummen Bhattacharyya, Adv....for the appellant.Mr. Abhratosh Majumdar, Sr. Adv.Mr. Avra Mazumdar, Adv.Mr. Binayak Gupta, Adv....for the respondent. BEFORE: The Hon’ble JUSTICE T.S. SIVAGNANAM The Hon’ble JUSTICE BIVAS PATTANAYAK The Court : This appeal filed by the revenue under Section 260A of the Income Tax Act, 1961 (the ‘Act’ for brevity)is directed against the order dated 3[rd] January, 2020 passed by theIncome Tax Appellate Tribunal, “B” Bench, Kolkata (in short the‘Tribunal’) in IT(SS)A Nos.85, 86 & 87/Kol/2018 for the assessmentyears 2011-12, 2012-13 and 2013-14. The revenue has raised the following substantial questions of law for consideration: i) Whether the ITAT has committed substantial errorin law by not considering the CBDT’s CircularNo.23/2019 dated 6.9.2019 ? ii)Whether the ITAT in the facts and law involved inthis case grossly erred in not considering thatthe case falls squarely within the exceptionalclause as stipulated in the Circular No.23/2016dated 6.9.2019 issued by the CBDT ? We have heard Mr. Soumen Bhattacharyya, learned standingcounsel for the appellant/revenue and Mr. Abhratosh Majumdar,learned senior counsel assisted by Mr. Avra Mazumdar, learnedAdvocate appearing for the respondent/assessee. The learned tribunal had dismissed the appeal filed bythe revenue by noting the fact that the appeal is less than themonetary limit of Rs.50 lakhs fixed by the CBDT. The revenue ison appeal contesting the matter on merits. We had an occasion toconsider similar issued in the case of Principal Commissioner ofIncome Tax –1, Kolkata vs. Rakesh Kumar Khemuka in ITAT No.163 of2021 and ITAT No.172 of 2021 and by a judgment dated 20[th] July,2022 the appeal filed by the revenue was dismissed. The operativeportion of the said judgment reads as follows: “We have heard Mr. Soumen Bhattacharjee, learnedstanding Counsel appearing for the appellant and Mr. Abhratosh Majumder, learned Senior Counsel appearing for therespondent assessee. On 19[th] February, 2022 we had passed the following order: “The Court : We have heard Mr. SoumenBhattacharjee, learned Standing Counsel, appearing for theappellant/revenue and Mr. Abhratosh Majumder, learned SeniorCounsel, assisted by Mr. Avra Majumder, learned Counsel forthe respondent/assessee. An important issue is raised in this appeal as regardsthe applicability of the Circular issued by the CBDT inCircular no.23, dated 6[th] September, 2019 and the effect ofthe Office Memorandum dated 16[th] September, 2019. The HighCourt of Gujarat in Principal Commissioner of Income-tax vs.Denisha Rajendra Keshwani, reported in (2022)134 taxmann.com249 (Gujarat) and Principal Commissioner of Income-tax,(Central), Ahmedabad vs. Anand Natwarlal Sharda, reported in(2021)128 taxmann.com 376 (Gujarat) have held that the OfficeMemorandum dated 16[th] September, 2019 has to be read alongwith the Circular No.23, dated 6[th] September, 2019 and canonly have prospective effect. Learned Senior Counsel appearing for therespondent/assessee submitted that the decisions referredabove laid down the correct legal principal and identicalquestion was considered by the High Court of Chattisgarh inthe decision reported in (2021) 130 taxmann.com 291 and aSpecial Leave Petition filed by the revenue was dismissed bythe Hon’ble Supreme Court as reported in (2021) 130taxmann.com 292 (SC). We find that the order impugned before us has beenpassed by the Tribunal in a batch of cases. That apart, wealso take note of the fact that in several cases revenue hasfiled appeals with inordinate delay citing the Office Memorandum dated 16[th] September, 2019. Thus we have to examineas to the effect of the office memorandum as to whether itcan be given retrospective effect or not. Since the issue hasa larger ramification, appropriate assistance should be givento the learned standing Counsel. We find that the order impugned before us has beenpassed by the Tribunal in a batch of cases. That apart, wealso take note of the fact that in several cases revenue hasfiled appeals with inordinate delay citing the Office Memorandum dated 16[th] September, 2019. Thus we have to examineas to the effect of the office memorandum as to whether itcan be given retrospective effect or not. Since the issue hasa larger ramification, appropriate assistance should be givento the learned standing Counsel. Therefore, we direct the Commissioner of Income tax(Judicial), Kolkata to render the required assistance to thestanding Counsel appearing for the Department, supplyadequate material and also notes on submission, which can beconsidered by us on the next hearing date. List the matter on 21[st] February, 2022.” In terms of the above direction the PrincipalCommissioner of Income Tax (Judicial), Kolkata has addressedthe learned Standing Counsel for the appellant by letterdated 3[rd] March, 2022. Along with the said letter, notes onsubmission dated 7[th] March, 2022 has been appended. The saidnotes of submission reads as follows : “Noteson Submissions 1.The issue before the Hon’ble High Court is seen to be theretrospective or prospective applicability of Central Boardof Direct Taxes Circular No. 23 dated 06.09.2019 and CentralBoard of Direct Taxes OM dated 16.09.2019 by which exceptionto the tax effect was allowed for filing appeals in Long TermCapital Gain/Penny Stock in ITAT in respect of appeals whichwere dismissed by ITAT.retrospective or prospective applicability of Central Boardof Direct Taxes Circular No. 23 dated 06.09.2019 and CentralBoard of Direct Taxes OM dated 16.09.2019 by which exceptionto the tax effect was allowed for filing appeals in Long TermCapital Gain/Penny Stock in ITAT in respect of appeals whichwere dismissed by ITAT. 2.I am therefore to submit that in view of the facts of theimpugned matter, the exception to penny stock cases from thestipulation of monetary limit would be indeed operable from16.09.2019 that is only in the cases where appeal was filedon or after 16.09.2019.”impugned matter, the exception to penny stock cases from thestipulation of monetary limit would be indeed operable from16.09.2019 that is only in the cases where appeal was filedon or after 16.09.2019.” In the light of the stand taken by the Department, themonetary limit would be operable from 16[th] September, 2019,that is, only in cases where appeal was filed on or after 16[th]September, 2019.” Mr. Soumen Bhattacharyya, learned standing counsel forthe appellant/revenue would submit that though in the instant casethe appeal before the tribunal was filed in the year 2019, as onthe date when the circular was issued to take effect from16.9.2019, the appeal was pending before the tribunal. It issubmitted that in the case of Rakesh Kumar Khemuka, the departmenthad given specific instruction. In our considered view, thedepartment having taken a decision and a circular having beenissued on 6.9.2019 followed by official memorandum of 16.9.2019taking a decision that the stipulation of monetary limit would beoperable from 16.9.2019, it is of no significance as to whetherthe appeal was pending on the said date and whether the tribunalwas hearing the matter. This is so because the cut off date fixedunder the circular is that it will apply to cases where appealsare filed on or before 16.9.2019. In the instant case,admittedly, the appeal has been filed much prior to the said date.For the above reason, we find that the order passed bythe learned tribunal dismissing the appeal does not call for anyinterference. Accordingly, the appeal filed by the revenue(ITAT/34/2022) stands dismissed. Since the substantial questions of law raised in this appeal do not arise for consideration, theyare left open.Consequently, the connected application for stay (GA/2/2022) also stands closed. (T.S. SIVAGNANAM, J.) (BIVAS PATTANAYAK, J.) S.Das/A.SadhukhanAR(CR)