2022 (11) TMI 251 - HC - Income Tax

High Court ruling on appeal delay, tax claims, exemptions, circulars, and dismissals.

PRINCIPAL COMMISSIONER OF INCOME TAX, -5, KOLKATA Versus VASUDHA JAIN

The High Court of Calcutta addressed various issues in the appeal, including a delay in filing, the validity of Long Term Capital Gain claims, tax ... Maintainability of appeal against ITAT order - low tax effect - addition of bogus LTCG - penny stocK purchases - Tribunal had dismissed the appeal filed by the revenue by noting the fact that the appeal is less than the monetary limit of Rs.50 lakhs fixed by the CBDT - HELD THAT:- It is not disputed before us that the issue involved in this appeal was decided by this Court in an earlier matter in the case of Principal Commissioner of Income Tax (1) Kolkata Vs. Rakesh Kumar Khemuka [2022 (7) TMI 1336 - CALCUTTA HIGH COURT] and the appeal filed by the revenue was dismissed and held the exception to penny stock cases from the stipulation of monetary limit would be indeed operable from 16.09.2019 that is only in the cases where appeal was filed on or after 16.09.2019 - the department having taken a decision and a circular having been issued on 6.9.2019 followed by official memorandum of 16.9.2019 taking a decision that the stipulation of monetary limit would be operable from 16.9.2019, it is of no significance as to whether the appeal was pending on the said date and whether the tribunal was hearing the matter. This is so because the cut off date fixed under the circular is that it will apply to cases where appeals are 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 by the learned tribunal dismissing the appeal does not call for any interference. Accordingly, the appeal filed by the revenue stands dismissed. Issues involved:- Delay in filing the appeal- Allowability of Long Term Capital Gain- Tax exemption under section 10(38)- Applicability of Circular No. 23 dated 6th September, 2019 and Office Memorandum dated 16th September, 2019Delay in filing the appeal:The High Court of Calcutta addressed a delay of 1113 days in filing the appeal. Despite unconvincing reasons provided in the affidavit, the court decided to exercise discretion and condone the delay, ultimately allowing the application.Allowability of Long Term Capital Gain:The appeal filed by the revenue under section 260A of the Income Tax Act, 1961 contested the order granting Long Term Capital Gain benefit to the assessee. The court considered whether the scripts of a company were bogus and if the claim of LTCG was valid, sailing against the findings of the Assessing Officer and CIT [Appeals]. The court noted that the issue had been decided in earlier matters and followed previous decisions where similar appeals were dismissed.Tax exemption under section 10(38):The court examined whether the Assessee was entitled to tax exemption under section 10(38) when the alleged Long Term Capital Gain was a result of manipulated tax evasion practices. The court referred to previous cases where similar issues were addressed and dismissed appeals filed by the revenue.Applicability of Circular No. 23 dated 6th September, 2019 and Office Memorandum dated 16th September, 2019:The court analyzed the retrospective or prospective applicability of Circular No. 23 dated 6th September, 2019 and Office Memorandum dated 16th September, 2019. The court considered whether the exception to the monetary limit for filing appeals in Long Term Capital Gain cases was operable from 16th September, 2019, and examined the significance of the date of appeal filing in relation to the issuance of the circular and memorandum. The court ultimately dismissed the appeal filed by the revenue, stating that the order passed by the tribunal did not warrant interference, and the substantial questions of law raised were deemed irrelevant.In conclusion, the High Court of Calcutta addressed various issues related to the appeal, including the delay in filing, the validity of Long Term Capital Gain claims, tax exemptions, and the applicability of specific circulars and memorandums. The court referred to previous decisions to support its rulings and ultimately dismissed the appeal filed by the revenue, determining that the substantial questions of law raised did not require consideration.