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

The Ld.AR submitted that there is a delay of 3 months to 2 years in filing above appeals before this Tribunal. Affidavit

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

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.

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 7 ITA Nos. 4513, 4514, 4515, 4516/Mum/2025; A.Y. 2012-13

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. 7. The Ld.AR submitted that all assessee’s have filed declaration under IDS 2016 in Form 1 and the same was accepted by the Department by issuing Form 4. He submitted that both these documents are placed in the paper book of the relevant assessee’s. The Ld.AR emphasised that, undisclosed income as per the declaration made in IDS is out of the cash generated during financial year 2012-13 (relevant to assessment year 2013-14) for unsubstantiated LTCG in respect of shares of Rutron International Ltd. 7.1 The Ld.AR further emphasise that during the year under consideration to investment made by the assessee in the shares of alleged penny stock was through banking channels and the shares were directly credited to the demand account of all assesse’s. It was submitted that, there is no documentary evidence for any live link with the Department to come to the conclusion that the assessee was involved in the price rigging of Rutron International Ltd.

2 On the contrary, the Ld.DR vehemently supported the orders passed by the authorities below and submitted that in the present facts, of the case the investment made by the assessee in the alleged penny stock has been questioned during the assessment proceedings. Whereas in IDS-2016 declaration filed by the assessee in the year 2016, is regarding unaccounted cash with all assessee’s out of the sale of shares of the alleged penny stock. I have perused the submissions advanced by both sides in the light of the records placed before me. 8. It is noted that, impugned orders are passed without considering the evidence/submissions of the assessee, due to non re presentation as the authorised representative of the assessee was not keeping good health. 8.1 Upon perusal of the documents furnished in the paper book it is noted that, the authorities below have not verified the cash flow statement of the assessee for the year under consideration. From the banks statements placed in the paper book apparently the investment in the shares of the alleged penny stock company was made through proper channel. However it is noted that before the date of payment to the alleged company, there was deposits in the bank account of the assessee of similar amounts, which has not been substantiated by the assessee’s. The assessing officer invoked section 68 of the act questioning the source of the investments made in the alleged shares of the penny stock company.

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 (BEENA PILLAI)