TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 1180
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....in filing of appeal. The assessee has filed application for condonation of delay along-with an Affidavit. The delay in filing the appeal has been explained on account of the issuance of notices or order sent to previous authorized representative and assessee not being informed about the same. It has been submitted that although the assessee had duly filed Form 35 and provided a correct email address, certain notices and the final order were sent to a different email ID, resulting in the assessee remaining unaware of the proceedings and the passing of the order under section 250 of the Act by CIT(Appeals). Upon being apprised of the matter only recently, the assessee has promptly moved this appeal and sought condonation. Considering the abov....
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....fy any of the grounds of appeal during the course of the appellate proceedings." 4. The brief facts of the case are that the assessee, a Hindu Undivided Family (HUF), had filed its original return declaring income of Rs. 1,90,780/-. The Assessing Officer (AO), based on information that the assessee had transacted in a penny stock scrip named "Karma ISP," reopened the case of the assessee under section 147 of the Act. However, the assessee did not file fresh return of income in response to the notice issued by the Assessing Officer. During re-assessment proceedings, the AO observations that the assessee had sold 7,800 shares of Karma ISP for a consideration of Rs. 21,72,300/- at a rate of Rs. 278.50 per share, despite having purchased the s....
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....ment order under section 144 of the Act. The AO also noted that the assessee's 1118% return from a single scrip in just 15-16 months was not supported by any commercial justification and also matched with findings of the Investigation Wing and CBDT guidelines on penny stock manipulations. The Assessing Officer point out that Karma ISP was among the penny scrips identified as part of a wider scheme to generate fictitious exempt long-term capital gains. The CIT(A), after reviewing the submissions and remand report, held that the AO had correctly reopened the case and validly treated the transaction as non-genuine. This was further supported by the fact that there was lack of any further trading activity by the assessee in this stock (being a ....
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....te that this purchase made by the assessee was a onetime, isolated transaction in this share with no pattern of further purchase of this share. Fourthly, the company in question (Karma ISP) had no apparent business operations or financial fundamentals that could justify such an exponential increase in market value. In fact, there was no intrinsic value or economic basis to support the increase in share price from Rs.22.65 to Rs.278.50 per share within such a short time frame. We note that the conduct of the assessee and the nature of the transaction must be tested on the yardstick of human probabilities and commercial prudence. This principle is now well-settled in Indian jurisprudence. The Hon'ble Supreme Court in CIT v. Durga Prasad More ....