Tribunal upholds CIT(A)'s decision, dismisses Revenue's appeals. Lack of evidence cited.

The Tribunal dismissed the Revenue's appeals, upholding the CIT(A)'s decision to delete the additions. The Tribunal found that the CIT(A) had conducted a thorough analysis, considering documentary evidence provided by the assessee and various judicial precedents. It concluded that the AO's conclusions were based on presumptions without specific adverse material against the assessee, emphasizing the lack of independent verification. Both appeals were dismissed on 17/01/2022.

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Issues Involved:
1. Deletion of addition by CIT(A) without considering the merits of the case.
2. Allegation of organized scam/tax evasion activity involving bogus LTCG through penny stocks.
3. Condonation of delay in filing the appeal by the Revenue.

Detailed Analysis:

1. Deletion of Addition by CIT(A) Without Considering the Merits of the Case:
The Revenue argued that the CIT(A) erred in deleting the addition of Rs. 5,41,223 without addressing the merits and ignoring the findings of the Assessing Officer (AO). The AO had concluded that the sale of shares was a dubious arrangement designed to introduce unaccounted money as exempt income in the form of Long Term Capital Gain (LTCG). The CIT(A) deleted the addition, holding that the AO did not carry out necessary verifications, such as examining the stock brokers involved in the transactions. The CIT(A) relied on documentary evidence provided by the assessee, including sale and purchase bills, STT payment, and Demat accounts, which showed that the transactions were conducted through proper banking channels.

2. Allegation of Organized Scam/Tax Evasion Activity Involving Bogus LTCG Through Penny Stocks:
The Revenue contended that the issue pertained to an organized scam involving tax evasion through penny stocks, as highlighted by CBDT's Circular No. 23 of 2019. The AO had disallowed the LTCG claim based on an investigation that revealed a racket involving manipulated stock prices to create fictitious LTCG. The CIT(A), however, found that the AO's additions were based on general statements and not specific evidence against the assessee. The CIT(A) noted that there was no adverse evidence from the stock exchange or the company whose shares were involved, and the AO had ignored various documentary evidences in favor of the assessee.

3. Condonation of Delay in Filing the Appeal by the Revenue:
The Revenue sought condonation for a delay of 479 days in filing the appeal, citing exceptional circumstances such as the COVID-19 pandemic and subsequent lockdowns. The delay was also attributed to the issuance of CBDT's Circular No. 23/2019, which allowed filing appeals in cases of organized tax evasion activities. The Tribunal decided to condone the delay, rejecting the assessee's objection that the delay was due to the Revenue's internal reasons and not beyond their control.

Conclusion:
The Tribunal dismissed the Revenue's appeals, upholding the CIT(A)'s decision to delete the additions. The Tribunal noted that the CIT(A) had provided a detailed analysis and relied on various judicial precedents, including the judgment of the Hon'ble Delhi High Court in the case of Krishna Devi and others. The Tribunal emphasized that the AO's conclusions were based on presumptions and lacked specific adverse material against the assessee. The Tribunal also highlighted that the AO did not conduct an independent and thorough enquiry, relying instead on general information from the investigation wing.

Final Order:
Both appeals filed by the Revenue were dismissed, and the Tribunal's decision was pronounced in the open court on 17/01/2022.

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