PR. COMMISSIONER OF INCOME TAX-1 vs. SHRI OM PRAKASH BADAYA

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 65/2021 Pr. Commissioner Of Income Tax-1, Jaipur ----Appellant Versus Shri Om Prakash Badaya, Huf, 42, Agrasen Nagar, Jaipur. ----Respondent For Appellant(s) : Ms. Parinitoo Jain, Adv., though V.C. For Respondent(s) : HON'BLE MR. JUSTICE PRAKASH GUPTA HON'BLE MR. JUSTICE SAMEER JAIN Judgment / Order 18/05/2022 1. Present appeal is filed by Revenue under Section 260A of the Income Tax Act, 1961 against the order dated 19.11.2020 passed by learned Income Tax Appellate Tribunal, Jaipur Bench, Jaipur in ITA No.217/JP/2020 for the assessment year 2015-16 whereby the appeal was allowed. 2. The learned counsel for the revenue has submitted that the appeal is filed on following Substantial Questions of Law which reads as under: “1. Whether on the facts and in the circumstances of the case the Tribunal has erred in law in holding that the Pr. CIT himself ought to have made some enquiry regarding impugned transactions before setting aside the case to the file of the Assessing Officer by completely ignoring the Statutory Provision of section 263 of the Income Tax Act as amended by the Finance Act, 2015?

(2 of 5) [ITA-65/2021] 2. Whether on the facts and in the circumstances of the case the Tribunal has erred in law in holding that it is not a case where the Assessing Officer has not made any enquiry regarding the impugned transactions specifically when the Assessing Officer failed to examine the transaction in the light of information from the Investigation Wing, Kolkata?” 3. Learned counsel for the revenue has not rebutted that the controversy involved in the matter has been recently decided by the Hon’ble Court in D.B. I.T. Appeal No.1/2021 titled as Pr. Commissioner of Income Tax-I Vs. Prakash Chand Sharma and D.B. I.T. Appeal No.54/2021 titled as Pr. Commissioner of Income Tax-I, Jaipur Vs. Ritu Agarwal wherein similar controversy pertaining to penny stock and other case involved in organized tax evasion activity were involved and were put to rest. 4. Though the learned counsel for the revenue submitted that the Tribunal has not considered the appeal on merits and has dismissed the case on the ground of monetary limit yet the learned Commissioner Appeals has given enough reasoning to justify the claim of the department/revenue. The matters pertaining to alleged tax revenue activity qua issue of penny stocks which was duly considered in D.B. I.T. Appeal No.1/2021 titled as Pr. Commissioner of Income Tax-I Vs. Prakash Chand Sharma, D.B. I.T. Appeal No.22/2021 titled as Pr. Commissioner of Income Tax, Jaipur-2, Jaipur Vs. Shri Sanjay Chhabra and in D.B. I.T. Appeal No.54/2021 titled as Pr. Commissioner of Income tax-I, Jaipur Vs. Ritu Agarwal, the relevant portion of the order in Prakash Chand Sharma (supra) reproduced below: “2 By the Present IT appeal, the following Substantial Question of Law are proposed:-

(3 of 5) [ITA-65/2021] (I) Whether in view of the Circular No. 23/2019 dated 06/09/2019 which provides for filing of appeal on merits in cases of penny stocks and other cases involved in organized tax evasion activity, irrespective of the tax effect involved, the orders passed by the Tribunal, vide which the appeal and the misc. application of the appellant has been dismissed solely on account of low tax effect, are sustainable? (II) Whether, the orders passed by the Tribunal are contrary to Circular No. 23/2019 dated 06/09/2019 and Special Order dated 16/09/2019 issued by CBDT?” 3. At the outset, learned counsel for the appellant submits that the matter is covered by D.B. IT Appeal No.22/2021 titled as Pr. Commissioner of Income Tax, Jaipur-2, Jaipur Vs. Shri Sanjay Chhabra. 4. We have considered the submissions. 5. On going through the contents of the order of learned ITAT dated 06.07.2020, it is observed that before rendering the judgment the learned ITAT has considered entire facts of the case, and has given a categorical finding that, in the case in hand, the assessee produced all the documentary evidence to establish the genuineness of transaction. The learned Assessing Officer, as per the learned ITAT, has failed to produce contrary material evidences to rebut the claim of the assessee and documents produced by him. Learned ITAT has considered the bank statement, demat account, books of account, contract notes which were external documents not in the control of the assessee and therefore the claim of the department of manipulation and for treating the transaction in question as sham and bogus were not proven and found untenable. 6. On perusal of the order of learned ITAT and reasonings given therein, this court is of the view that the substantial questions of law formulated above does not arise as learned ITAT has logically dealt with questions of fact and law involved by way of reasoned order.

(4 of 5) [ITA-65/2021] 7. Placing reliance upon the Apex Court judgment of Steel Authority of India Ltd. Vs. Designated Authority, Directorate General of Anit Dumping & Allied Duties and Ors.:2017 (349) E.L.T 193 (SC), wherein the question of admission of an appeal, on substantial question of law was considered and it was held as under:- “(i) The question raised must involve a substantial question of law which has not been answered or, on which, there is a conflict of decisions necessitating a resolution. (ii) If the Tribunal, on consideration of the material and relevant facts, had arrived at a conclusion which is a possible conclusion, the same must be allowed to rest even if this Court is inclined to take another view of the matter. (iii) The Tribunal had acted in gross violation of the procedure or principles of natural justice occasioning a failure of justice. 8. We are of the view that learned ITAT, on consideration of material and relevant facts arrived at a logical conclusion and the same must be allowed to rest. There is no gross violation of principles of natural justice and no error has crept in the order of the learned ITAT. The Coordinate Bench of this court in D. B. IT Appeal No. 54/2021 titled as Pr. Commissioner of Income Tax-I, Jaipur Vs. Ritu Agarwal, in the similar facts and circumstances, has already taken a view that in the appeal at hand, under Section 260A of the Act, no substantial question of law arises. 9. In the light of above discussions, the present appeal under Section 260A of the Act does not call for interference and is hereby dismissed, as no substantial question of law worth consideration arises.” 5. On consideration of the above findings of the judgment of Division Bench of this court, we are of the view that the matter is similar to those appeals and no Substantial Question of Law

(5 of 5) [ITA-65/2021] arises for consideration before this court. Further, the order of the Tribunal on account of monetary limit and on account of circular dated 06.09.2019 are set aside only to the extent of monetary limits and not on merits. The findings, though not considered by learned ITAT but by CIT(A) and assessing officers, is required to be reversed as pertaining to similar issue of penny stocks in similar facts and circumstances, with consent of learned counsel for the revenue, we are not remitting the matter to the ITAT but disposing of the same in light of Prakash Chand Sharma (supra) that the similar Substantial Questions of Law in the same circumstances were dismissed by this Hon’ble High Court. 6. On perusal of order of ITAT and impugned orders of CIT(A) and assessment order, this court is of the opinion that no ground for interference is called for in this appeal, as no Substantial Question of Law exists. 7. For the reasons stated above, the appeal is dismissed. All pending applications also stand disposed of. (SAMEER JAIN),J (PRAKASH GUPTA),J JKP/8