Principal Commissioner Of Income Tax Central 2 Kolkata v. Giridharilal Goenka

OD-7 ITAT/34/2022 IA No.GA/2/2022

IN THE HIGH COURT AT CALCUTTA

Special Jurisdiction (Income Tax) ORIGINAL SIDE PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL-2, KOLKATA -VersusGIRIDHARILAL GOENKA Appearance:

Mr. Soummen Bhattacharyya, Adv.

...for the appellant.

Mr. Abhratosh Majumdar, Sr. Adv.

Mr. Avra Mazumdar, Adv.

Mr. Binayak Gupta, Adv.

...for the respondent.

BEFORE:

The Hon'ble JUSTICE T.S. SIVAGNANAM -And- The Hon'ble JUSTICE BIVAS PATTANAYAK Date : 25th July, 2022.

The Court : This appeal filed by the revenue under Section 260A of the Income Tax Act, 1961 (the 'Act' for brevity) is directed against the order dated 3rd January, 2020 passed by the Income Tax Appellate Tribunal, "B" Bench, Kolkata (in short the 'Tribunal') in IT(SS)A Nos.85, 86 & 87/Kol/2018 for the assessment years 2011-12, 2012-13 and 2013-14.

The revenue has raised following substantial questions of law for consideration:

i) Whether the ITAT has committed substantial error in law by not considering the CBDT's Circular No.23/2019 dated 6.9.2019 ?

ii) Whether the ITAT in the facts and law involved in this case grossly erred in not considering that the case falls squarely within the exceptional clause as stipulated in the Circular No.23/2016 dated 6.9.2019 issued by the CBDT ?

We have heard Mr. Soumen Bhattacharyya, learned standing counsel for the appellant/revenue and Mr. Abhratosh Majumdar, learned senior counsel assisted by Mr. Avra Mazumdar, learned Advocate appearing for the respondent/assessee. The learned tribunal had dismissed the appeal filed by the revenue by noting the fact that the appeal is less than the monetary limit of Rs.50 lakhs fixed by the CBDT. The revenue is on appeal contesting the matter on merits. We had an occasion to consider similar issued in the case of Principal Commissioner of Income Tax -1, Kolkata vs. Rakesh Kumar Khemuka in ITAT No.163 of 2021 and ITAT No.172 of 2021 and by a judgment dated 20th July, 2022 the appeal filed by the revenue was dismissed. The operative portion of the said judgment reads as follows: "We have heard Mr.

Soumen Bhattacharjee, learned standing appellant and Mr.

Abhratosh Majumder, learned Senior Counsel appearing for the respondent assessee.

On 19th February, 2022 we had passed the following order: "The Court :

We have heard Mr.

Soumen Bhattacharjee, learned Standing Counsel, appearing for the appellant/revenue and Mr. Abhratosh Majumder, learned Senior Counsel, assisted by Mr. Avra Majumder, learned Counsel for the respondent/assessee.

An important issue is raised in this appeal as regards the applicability of the Circular issued by the CBDT in Circular no.23, dated 6th September, 2019 and the effect of the Office Memorandum dated 16th September, 2019. The High Court of Gujarat in Principal Commissioner of Income-tax vs. Denisha Rajendra Keshwani, reported in (2022)134 taxmann.com 249 (Gujarat) and Principal Commissioner of Income-tax, (Central), Ahmedabad vs. Anand Natwarlal Sharda, reported in (2021)128 taxmann.com 376 (Gujarat) have held that the Office Memorandum dated 16th September, 2019 has to be read along with the Circular No.23, dated 6th September, 2019 and can only have prospective effect.

Learned Senior respondent/assessee submitted that the decisions referred above laid down the correct legal principal and identical question was considered by the High Court of Chattisgarh in the decision reported in (2021) 130 taxmann.com 291 and a Special Leave Petition filed by the revenue was dismissed by Hon'ble Supreme Court as reported in (2021) taxmann.com 292 (SC).

We find that the order impugned before us has been passed by the Tribunal in a batch of cases. That apart, we also take note of the fact that in several cases revenue has filed appeals with inordinate delay citing the Office

Memorandum dated 16th September, 2019. Thus we have to examine as to the effect of the office memorandum as to whether it can be given retrospective effect or not. Since the issue has a larger ramification, appropriate assistance should be given to the learned standing Counsel.

Therefore, we direct the Commissioner of Income tax (Judicial), Kolkata to render the required assistance to the standing Department, supply adequate material and also notes on submission, which can be considered by us on the next hearing date.

List the matter on 21st February, 2022."

In terms of above direction Principal Commissioner of Income Tax (Judicial), Kolkata has addressed the learned Standing Counsel for the appellant by letter dated 3rd March, 2022. Along with the said letter, notes on submission dated 7th March, 2022 has been appended. The said notes of submission reads as follows :

"Notes on Submissions

1. The issue before the Hon'ble High Court is seen to be the retrospective or prospective applicability of Central Board of Direct Taxes Circular No. 23 dated 06.09.2019 and Central Board of Direct Taxes OM dated 16.09.2019 by which exception to the tax effect was allowed for filing appeals in Long Term Capital Gain/Penny Stock in ITAT in respect of appeals which were dismissed by ITAT.

2. I am therefore to submit that in view of the facts of the impugned matter, the exception to penny stock cases from the stipulation of monetary limit would be indeed operable from 16.09.2019 that is only in the cases where appeal was filed on or after 16.09.2019."

In the light of the stand taken by the Department, the monetary limit would be operable from 16th September, 2019, that is, only in cases where appeal was filed on or after 16th September, 2019."

Mr. Soumen Bhattacharyya, learned standing counsel for the appellant/revenue would submit that though in the instant case the appeal before the tribunal was filed in the year 2019, as on the date when the circular was issued to take effect from 16.9.2019, the appeal was pending before the tribunal. It is submitted that in the case of Rakesh Kumar Khemuka, the department had given specific instruction. In our considered view, the department having taken a decision and a circular having been issued on 6.9.2019 followed by official memorandum of 16.9.2019 taking a decision that the stipulation of monetary limit would be operable from 16.9.2019, it is of no significance as to whether the appeal was pending on the said date and whether the tribunal was hearing the matter.

This is so because the cut off date fixed under the circular is that it will apply to cases where appeals are filed on or before 16.9.2019. In the instant case, admittedly, the appeal has been filed much prior to the said date. For the above reason, we find that the order passed by the learned tribunal dismissing the appeal does not call for any interference. Accordingly, the appeal filed by the revenue (ITAT/34/2022) stands dismissed.

of law raised in this appeal do not arise for consideration, they are left open.

Consequently, connected application stay (GA/2/2022) also stands closed.

(T.S. SIVAGNANAM, J.) (BIVAS PATTANAYAK, J.) S.Das/A.Sadhukhan AR(CR)