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Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT
Before: SMT. ANNAPURNA GUPTA & SHRI SIDDHARTHA NAUTIYAL
O R D E R
PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER:
This appeal has been filed by the assessee against the order passed by the Ld. CIT(Appeals)-13, (in short “CIT(A)”), Ahmedabad in Appeal No. CIT(A)-13/Intl. Taxn./Ahd/136/2019-20 vide order dated 12.10.2020 passed for Assessment Year 2012-13.
2. The assessee has taken the following grounds of appeals:-
“1. The Ld. Commissioner of Income Tax, (Appeals) - 13, Ahmedabad [hereinafter referred to as "Ld. A.O." erred in passing the assessment order dismissing the appeal filled by the appellant u/s. 246A of the Act the Income Tax Act, 1961 [hereinafter referred to as 'Act'] by Subir Yudhisthir Das vs. CIT(A) Asst.Year –2012-13 determining total Assessed Income of the Appellant at Rs.8,83,030/- without appreciating the facts and circumstances of the case.
During the course of assessment we have provided all the relevant submission to the Ld. A.O.
3. The Appellant is an individual, NRI staying in Abu Dhabi, UAE since 2008 holding UAE Residence Visa. Having NRI status in the A.Y. 2012-13, the Appellant was not having any source of Income in India during the Financial Year 2011-12 relevant to the A.Y. 2012-13.
4. During the course of Assessment Proceeding the Appellant has submitted before the Ld. A.O. for sale of shares of Infosys through BSE online platform being provided by the ICICI Securities Ltd. (Brokering Firm) and the details of such shares (Acquisition Cost, Date of purchases, and Capital Loss out of sales of such shares) was maintained by the Brokering firm (ICICI -Securities Ltd.) has submitted.
5. On presumption the Ld. A.O. has considered entire investment in shares as Capital Income' However, actually there is a 'Capital Loss'
The Ld. A. O. erred in levying penalty proceedings u/s. 271 (1) © of the Act without appreciating the fact that the appellant denies his liability to the same.
7. During the course of Assessment the appellant has submitted all the documents related to his status of NRI and sources of Income, the Investment was made in shares out of Appellant Salary Income which was earned out of India, the necessary documents such as Pay- slips, Subir Yudhisthir Das vs. CIT(A) Asst.Year –2012-13 Bank Statements where salary credited was submitted before the Ld. A.O.
8. The Ld. A.O. has not considered such submitted documents on the ground that these are ‘additional documents’.
The Appellant plea: Statement of Capital Loss to be considered and consider the matter of facts i.e. consider the Capital Loss instead of Capital Gain on entire receipt.
Thus, the Income considered by the Ld. A.O. is not at all justified and the same may be deleted.
The Appellant craves leave to add, alter, rescind or amend any of the Grounds and submission of further additional documents.”
At the outset, we observe that the appeal is time-barred by 405 days. Before us, the counsel for the assessee submitted that the date of service or communication of the order of Ld. CIT(Appeals) was 30-10-2020, and therefore, the appeal was time-barred owing to the Covid pandemic. We note that the assessee company received the order of Ld. CIT(Appeals) on 30-10-2020. However, in view of the nation-wide lockdown from 24th March 2020, the Apex Court in Cognizance for Extension of Limitation, In re[2021] 127 taxmann.com 72 (SC), took suo motu cognizance of the situation arising out of the challenge faced by the country on account of COVID-19 Virus and resultant difficulties that could be faced by the litigants across the country. Consequently, it was directed vide order dated 23-3-2020 that the period of limitation in filing petitions / applications / Subir Yudhisthir Das vs. CIT(A) Asst.Year –2012-13 suits / appeals / all other proceedings, irrespective of the period of limitation prescribed under the general or special laws, shall stand extended with effect from 15-3-2020 till further orders. The suo motu proceedings were, disposed of issuing the directions as to in computing the period of limitation for any suit, appeal, application or proceeding, the period from 15-3-2020 till 14-3-2021 shall stand excluded. Consequently, the balance period of limitation remaining as on 15-3-2020, if any, shall become available with effect from 15-3-2021. Thereafter, in the case of Cognizance for Extension of Limitation, In re [2022] 134 taxmann.com 307 (SC), held that in view of spread of new variant of COVID-19 and drastic surge in number of COVID cases across the country, period from 15-3-2020 till 28-2-2022 shall stand excluded for purpose of limitation as may be prescribed under any general or special law in respect of all judicial or quasi-judicial proceedings. in cases where limitation would have expired during period between 15-3- 2020 till 28-2-2022, notwithstanding actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 1-3- 2022; in event actual balance period of limitation remaining, with effect from 1-3-2022, is greater than 90 days, that longer period shall apply In view of the above, since the delay of 405 days in filing appeal is falling within the Covid pandemic period, the delay is hereby being condoned.
On merits, the brief facts of the case are that assessee had not filed return of income u/s 139 (1) of the Act and therefore, notice under section 148 was issued by the Department on 31-03-2019. In response, the assessee filed return of income 01-06-2019, disclosing “Nil” income. During the course of assessment, the assessing officer observed that the assessee had Subir Yudhisthir Das vs. CIT(A) Asst.Year –2012-13 sold shares of Infosys Tech on BSE platform and accordingly, the necessary details were called for. During the course of assessment, the AO also observed that there were credits in the assessee’s bank account held with ICICI Bank amounting to ₹ 8,80,044/-. In absence of details of investment and amount of investment, the AO treated the investment to be unexplained and assessment was completed determining the total income of ₹ 8,83,030/-.
In appeal, the assessee submitted that the assessee had incurred short- term capital loss of ₹ 56,664/- on purchase and sale of shares of Infosys Tech. As additional evidence, the assessee furnished statements of share transactions with ICICI direct, during the impugned year under consideration. However, the Ld. CIT(Appeals) dismissed the appeal of the assessee on the ground that the assessee has not shown that purchase of shares were out of his income earned outside of India and further he declined to send the additional evidence filed by the assessee, with respect to purchase and sale of shares on the ICICI direct platform, to the assessing officer under Rule 46A on the ground that this may not serve any fruitful purpose. While dismissing the appeal of the assessee, the Ld. CIT(Appeals) made the following observations:
“5.3 In this context the system generated statement alleged to be generated by the capital gain calculator tool provided by ICICI Securities Ltd. on ICICIdirect.com has been perused which is an additional evidences being not produced before the AO. It is seen that the shares were purchased on various dates in January 2011 and sold on various dates in April 2011 (and to this extent the appellant was not correct in stating during the assessment proceedings that the shares Subir Yudhisthir Das vs. CIT(A) Asst.Year –2012-13 were held for more than 12 months) and that there was loss of Rs.56,664.59. The statement does not cover the details of payments made to ICICI Securities Ltd. for purchase of the shares and no evidence has been filed as to the sources of funds for purchases of those shares. It is also not clear as to whether the appellant has other purchases and sales of other shares during the year and in other years. It is thus not possible to determine whether the transactions have taken to be business or investment (for capital gains). It is also evident that the appellant does not intend to furnish the details so as to cover the grounds on which the AO made the addition and determined the total income.
5.4 Under the circumstances I am also of the considered opinion that sending this additional evidences (print outs of icicidirect.com) to the AO under Rule 46A of Income Tax Rule may not serve any fruitful purpose. It is also noted that the appellant has not shown that the purchases of shares were out of his income earned outside India.
5.5 Under the circumstances I find no basis to interfere with the assessment made. The addition is confirmed.”
6. The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(Appeals) dismissing the appeal of the assessee. Before us, the counsel for the assessee submitted that Ld. CIT(Appeals) has erred in facts and in law in not referring the additional evidence regarding short-term capital loss on sale of shares of Infosys Tech (which was done on the ICICI direct platform) to the AO under Rule 46A of the IT Rules. Further, the counsel for the assessee drew our attention to page 40 of the paper book Subir Yudhisthir Das vs. CIT(A) Asst.Year –2012-13 (certificate issued by Punj Lloyd) to the effect that the assessee was employed as General Manager of Punj Lloyd at Malaysia from the period to 22nd November 2008 till 24 August 2012. Accordingly, the counsel for the assessee submitted that the aforesaid purchase of shares of Infosys Tech was financed through salary income earned by the assessee from Punj Lloyd. Accordingly, the source of investment in such shares was duly explained. Further, the counsel for the assessee also furnished before us details of shares purchased and sold along with capital loss working (refer page 49 of the paper book). Accordingly, the counsel for the assessee submitted that both the source of investment was duly explained (which was salary income earned by the assessee as General Manager with Punj Lloyd in Malaysia) and also that during the year under consideration the assessee had incurred short-term capital loss of ₹ 56,664/- on sale of shares of Infosys Tech. Further, the counsel for the assessee submitted that in the instant facts, Ld. CIT(Appeals) also erred in facts and law in not referring the matter to the AO for his comments with respect to statement of ICICI direct regarding short-term capital loss on sale of shares. Accordingly, looking into the instant facts, the order passed by Ld. CIT(Appeals) being erroneous, is liable to be set aside.
In response, the Ld. DR placed reliance on the observations made by the Ld. CIT(Appeals) and Assessing Officer in their respective orders.
We have heard the rival contentions and perused the material on record. Firstly, we observe that during the course of appellate proceedings before Ld. CIT(Appeals), the assessee had sought to file details/statement of ICICI Direct regarding loss on sale of shares on ICICI Direct platform. Subir Yudhisthir Das vs. CIT(A) Asst.Year –2012-13 However, the same was not admitted and referred to the file of AO for his observations. Accordingly, in our considered view, Ld. CIT(Appeals) has erred in facts and law in not allowing opportunity of assessee to place on record the relevant facts/information in support of its case. Secondly, we observe that the counsel has also filed certificate from Punj Lloyd to the effect that the assessee was working as General Manager, Malaysia with the aforesaid concern during the period under consideration, and accordingly, the source of investment in the shares of Infosys Tech was duly explained. Accordingly, looking into the facts of the instant case, we are of the considered view that no addition is called for in the hands of the assessee. Therefore, we direct that the order passed by Ld. CIT(Appeals) may be set aside.