PRINCIPAL COMMISSIONER OF INCOME TAX, (CENTRAL), SURAT vs. RASHMI RAJESH BAFNA

TAXAP/150/2021HC GujaratGJHC24020803202128 June 2021Author: HONOURABLE MS. JUSTICE BELA M. TRIVEDI,HONOURABLE DR. JUSTICE ASHOKKUMAR C. JOSHI4 pages
AI SummaryDismissed

What were the facts?

The appeal is filed by the Principal Commissioner of Income Tax (Central), Surat against an order dated 14.8.2019 passed by the Income Tax Appellate Tribunal (ITAT) for Assessment Year 2011-12 concerning the assessee, Rashmi Rajesh Bafna. The Revenue sought to challenge the ITAT's order based on exceptions to monetary limits for filing appeals, as outlined in Circular dated 8.8.2019 read with Circular No.23/2019 dated 6.9.2019 and Office Memorandum dated 16.9.2019. These exceptions pertained to cases involving bogus Long Term Capital Gains (LTCG)/Short Term Capital Gains (STCL) through penny stocks. The Revenue had filed Miscellaneous Applications before the ITAT for rectification of the original order, which were rejected. Subsequently, the Revenue filed a Special Civil Application before the High Court, which was also dismissed in limine.

What did the High Court hold?

The High Court held that the Circular dated 6.9.2019 and the Office Memorandum dated 16.9.2019 were not retrospective in effect. The Court noted that the language employed in the circular clearly indicated that appeals could be filed on merits as an exception where the Board, by way of a special order, directed filing of appeals in cases involved in organized tax evasion activity. The Court found no indication that these circulars were intended to have retrospective effect. The Tribunal had rightly interpreted that the applicability of the circulars for filing appeals would be decided by the Board through a special order and that a specific requirement of such an order was a must. Therefore, the appeals disposed of by the Tribunal on 14.8.2019 could not be considered as filed pursuant to a special order of the CBDT under the circulars dated 6.9.2019 and 16.9.2019. Consequently, the Tribunal had not committed any mistake apparent from the record that required rectification under Section 254(2). The High Court upheld the Tribunal's order dismissing the Miscellaneous Applications and, in view of the prior dismissal of the Special Civil Application, dismissed the present appeal.

What were the issues?

1. Whether the exceptions carved out in the Circular dated 8.8.2019, Circular No.23/2019 dated 6.9.2019, and Office Memorandum dated 16.9.2019, regarding filing appeals on merits in cases of bogus LTCG/STCL through penny stocks, applied retrospectively to the ITAT's order dated 14.8.2019, thereby allowing the Revenue to challenge it despite the original order being passed before the effective date of these circulars. (Question of law) Assessee's Contention: The judgment does not record any specific arguments made by the assessee in this appeal. Revenue's Contention: The Revenue argued that the case fell under the exceptions provided in the aforementioned circulars and office memorandum, allowing them to file appeals on merits irrespective of the monetary limits, and that the ITAT's order should have been rectified to reflect this. They relied on the Circular dated 8.8.2019, Circular No.23/2019 dated 6.9.2019, and Office Memorandum dated 16.9.2019.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 254(2),Section 268A

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
C/TAXAP/150/2021 ORDER DATED: 28/06/2021 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 150 of 2021 ========================================================== PRINCIPAL COMMISSIONER OF INCOME TAX, (CENTRAL), SURAT Versus RASHMI RAJESH BAFNA ========================================================== Appearance: MRS MAUNA M BHATT(174) for the Appellant(s) No. 1 for the Opponent(s) No. 1 ========================================================== CORAM: HONOURABLE MS. JUSTICE BELA M. TRIVEDI and HONOURABLE DR. JUSTICE ASHOKKUMAR C. JOSHI Date : 28/06/2021

ORAL ORDER (PER : HONOURABLE MS. JUSTICE BELA M. TRIVEDI)

1.

The present appeal has been filed by the Principal Commissioner of Income Tax (Central), Surat under Section 260-A of the Income Tax Act, 1961, challenging the order dated 14.8.2019 made by the Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench “A” in IT(SS)A No.331/Ahd/2018 for the A.Y. 2011-12 in respect of the respondent – Assessee.

2.

The learned Sr. Standing Counsel Mrs.Mauna Bhatt for the appellant submits that the appeal has been filed, challenging the impugne

The order continues below.

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