2023 (9) TMI 1318 - AT - Income Tax

Condonation of delay - present appeal filed by the Department is time barred by 479 days - HELD THAT - As undisputed that the order appealed against was received by the Department on 11.12.2018 and, therefore, the last date for filing the Departmental Appeal before the ITAT was 09.02.2019. Circular No. 23 of the CBDT is dated 06.09.2019 and the OM is dated 16.09.2019. Therefore, the Circular based on which the Department has filed this appeal was issued almost seven months after the expiry of the limitation period for filing of the appeal. As further seen that even after the issuance of the Circular and OM, the present Departmental appeal was filed on 02.06.2020 i.e. almost more than nine months after the issuance of the said Circular. Even if the Department is given the benefit of relaxation in the limitation in view of the order in suo moto Writ Petition (Civil) 2020 (5) TMI 418 - SC ORDER the period from date of issue of Circular till March, 2020 is almost six months which could not be suitably explained. Therefore, unable to consider the prayer of the Department to condone the delay and dismiss the appeal as being unadmitted, being barred by limitation. Appeal of the Department stands dismissed.

Summary

Issues:
The issues involved in this case are related to the addition of long term capital gains claimed as exempt, alleged non-genuine and bogus capital gains, and the Department's appeal against the deletion of the addition.

Long Term Capital Gains Addition:
The Assessing Officer made an addition of Rs. 8,94,472 under Section 69A of the Income Tax Act, 1961, as he believed the assessee was involved in non-genuine and bogus capital gains from transactions of purchase and sales of shares. The AO contended that the shares purchased from M/s. CCL International were part of a dubious design to introduce unaccounted money as exempt income. However, the ld. First Appellate Authority deleted the addition, noting that there was no evidence linking the assessee to any arrangement for generating bogus long term capital gains.

Department's Appeal and Delay Condonation:
The Department challenged the deletion of the addition, arguing that the sale of shares was not a natural phenomenon but part of an arrangement for providing accommodation entry of long term capital gain. The Department also cited Circular No.23/2019 and subsequent OM mandating appeals in cases of bogus LTCG. The Department filed the appeal 479 days late, seeking condonation of delay based on the Circular and citing unexpected delays due to the COVID-19 lockdown. However, the Tribunal dismissed the appeal as time-barred, as the Circular was issued after the expiry of the limitation period, and the appeal was filed almost nine months after the Circular was issued.

Conclusion:
The Tribunal dismissed the Department's appeal as time-barred, emphasizing that even with the relaxation in limitation due to the COVID-19 situation, the delay in filing the appeal could not be suitably explained. Therefore, the appeal was deemed unadmitted and barred by limitation.