RADHIKA ANANT DAMANI,MUMBAI vs. INCOME TAX OFFICER, PIRAMAL CHEMBER, MUMBAI

“The Legislature has conferred the power to condone delay by enacting section 51 of the Limitation Act of 1963 in 4514, 4515, 4516/Mum/2025; A.Y. 2012-13 order to enable the courts to do substantial justice to parties by disposing of matters on de merits". The expression “sufficient cause” employed by the Legislature is adequately elastic to enable the courts to apply the law in a meaningful manner which subserves the ends of justice that being the life-purpose of the existence of the institution of courts. It is common knowledge that this court has been making a justifiably liberal approach in matters instituted in this court. But the message does not appear to have percolated down to all the other courts in the hierarchy. And such a liberal approach is adopted on principle as it is realized that :

1. 1. Ordinarily, a litigant does not stand to benefit by lodging an appeal late.

2. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. ......................................................1.Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908, may be admitted after the prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period.” 4.2 Considering the submissions by both sides and respectfully following the observation by Hon’ble Supreme Court, I find it fit to condone the delay caused in filing the present appeal as it is not attributable to the assessee. 4.3 In any event, though the procedural law pertaining to the limitation has been drafted to construe it strictly, the fact remains that, considering such technicalities will not advance the cause of justice. Accordingly, the delay in filing present appeals filed by the assessees before for A.Y. 2012-13 before this Tribunal’s stand condoned.

Brief Facts of the case are as under:

Assessee Original ROI 143(1) Intimation filed Anant Vijay Damani 17/07/2012 Accepted returned income Radhika AnantDamani 18/07/2012 Accepted returned income NarottamDualalDamani 21/07/2012 Accepted returned income (HUF) GirirajDualalDamani (HUF) 20/07/2012 Accepted returned income 5.1 Subsequently, an information was received from the directorate of investigation regarding organised racket of generating bogus entries of long-term capital gain/short-term capital loss in penny stock, M/s. Routron International Ltd. the assessing officers of the above referred assesse’s received information regarding the transaction carried out by them in the said Penny stock during the year under consideration wherein shares were allotted to them the details of which are as under:

Assessee Date of Amount No.of allotment invested Shares Anant Vijay Damani 05/11/1011 Rs.10,00,000/- 1,00,000 Radhika AnantDamani 05/12/2011 Rs.4,00,000/- 40,000 NarottamDualalDamani(HUF) 05/12/2011 Rs.5,00,000/- 50,000 GirirajDualalDamani (HUF) 05/11/2011 Re.8,50,000/- 85,000 4514, 4515, 4516/Mum/2025; A.Y. 2012-13 5.2 Accordingly, the assessments in case of all the above assessee’s were reopened by issuing notices under section 148 of the act on 30/03/2019. The assessees accordingly filed their returns of income in lieu of the notice issued. The assessee’s were called upon to explain the source of the investments. In response to the notice issued under section 142 (1) of the act the assessee filed bank statement for financially relevant to assessment year under consideration and it was submitted that the payment towards the purchase of shares was to banking channel in favour of the company. 5.3 The assessee placed on record application made towards shares purchased, allotment letter issued by M/s. Routron International Ltd., demat account as on the date of purchase. The assessee vide its letter dated 14/12/2019 submitted that, the preference shares were purchased for face value of Rs.10 per share, without any premium thereon. It was also submitted that the shares were directly credited to the demat account of the assessee by way of corporate action and said shares were locked in for one year. 5.4 It was also clarified that in the case of Anant Vijay Damani, actual amount invested was of Rs.6 lakh only towards allotment of 60,000 shares. It was clarified that Anant Vijay Damani was a joint applicant with his wife Radhika Damani. It was a submitted that the information to that extent in case of Anant Vijay Damani was incorrect. 5.5 It was submitted that, subsequently during financial year 2013-14 relevant to assessment year 2014-15, the shares were 4514, 4515, 4516/Mum/2025; A.Y. 2012-13 sold and long-term capital gains was earned by the assessee’s that was claimed as exempt under section 10(38) of the act. 5.6 During the year 2016 assessee declared income under IDS 2016 scheme. The assessee declared following amount as income from other sources being cash generated and utilised during financial year 2012-13 for unsubstantiated LTCG in respect of Rutron International Ltd.

Assessee Amount declared in IDS 2016 Anant Vijay Damani Rs.46,65,500 Radhika AnantDamani Rs.60,70,500 NarottamDualalDamani(HUF) Rs.38,64,500 GirirajDualalDamani (HUF) Rs.87,22,000 5.7 The Ld.AO after verifying the submissions filed by the assessee was of the opinion that assessee has not declared this again made to bogus preferential share allotment in IDS. The Ld.AO was of the opinion that the assessee invested unaccounted cash generated and utilised the same during the relevant assessment year under consideration towards purchase of preferential shares in the penny stock company. The Ld.AO thus made addition of the amount invested by the assessee’s in the penny stock as unaccounted money under section 68 of the act, and also computed notional commission charged by an entry operator under such circumstances and made disallowance under section 69C the of the act.

Aggrieved by the orders passed by the Ld.AO, the assessee’s preferred appeal before the Ld.CIT(A).

4514, 4515, 4516/Mum/2025; A.Y. 2012-13 6. The Ld.CIT(A) after considering the submissions of the assessee, upheld the observations of the Ld.AO. It is further noted that the assessee could not represent its case before the Ld.CIT(A) and the impugned orders were passed based on the documents available on record in case of Giriraj Daulal Damani (HUF) and Radhika Anant Damani. In case of Anant Vijay Damani and Narottam Daulal Damani (HUF) the appeals filed by the assessee was dismissed for non-prosecution.

Aggrieved by the orders passed by the Ld.CIT(A)/NFAC, the assessee’s preferred appeals before this Tribunal.

I have perused the submissions advanced by both sides in the light of the records placed before me.

4514, 4515, 4516/Mum/2025; A.Y. 2012-13 8.2 It is also noted that the assessee has all throughout consistently submitted that, the shares were allotted directly into the demat accounts of all the assessee’s. It is also admitted by the assessee that there was a lock in period of one year from the date of purchase of these shares. Thus the assessee could have sold the shares after December 2012. 8.3 The Ld.AO merely proceeded on the report from the investigation wing and did not analyse the penny stock nature of the alleged script. The Ld.AO did not verify the details furnished by all assessee’s in accordance with law. Even Ld. CIT(A) did not carry out necessary verification of the documents that were available on the assessment records. In the interest of justice I therefore remit the issue to the Ld.CIT(A) with a direction to verify the source of investment. Assessee is directed to substantiate the source of the investments made in the alleged script in order to come out of the garb of section 68 of the act. Needless to say that proper opportunity of being heard must be granted to the assessee. Accordingly grounds raised by the all assessees for the year under consideration stands partly allowed for statistical purposes. In the result all appeals filed by the assessees for all assessment years stands partly allowed for statistical purposes. Order pronounced in the open court on 29/08/2025