2022 (2) TMI 1153 - HC - Income Tax

Benefit of Vivad Se Vishwas Scheme (V.S.V.Scheme) - Unexplained Long Term Capital Gains(LTCG) - unexplained cash-credits u/s 68 - Whether Tribunal has committed substantial error in law in deleting the addition of undisclosed income ignoring the larger scam of organized tax evasion by way of Bogus capital gain generated in Penny Stock? - HELD THAT - As assessee by his letter to Joint Central Government advocate has acknowledged the receipt of the notice dated 05.08.2021 and also noted that the case would be fixed on 17.12.2021. The assessee further stated that he has opted for V.S.V. scheme and Form No.4 has been issued, copies of the Form Nos.1, 2, 3 and 4 were attached along with the said letter. However, in the affidavit of service which has been filed before us, those annexures/attachments do not find place. In any event, since the assessee himself by letter dated 14.12.2021 has stated that he has opted for V.S.V. Scheme, we dispose of the appeal on the said ground. Consequently, the substantial questions of law are left open.

Summary

Issues involved:
1. Delay in filing the appeal and its condonation.
2. Substantial questions of law raised by the revenue in the appeal under Section 260A of the Income Tax Act, 1961.

Analysis:

1. Delay in filing the appeal and its condonation:
The High Court addressed the delay of 326 days in filing the appeal. The respondent informed the Joint Central Government advocate about opting for the Vivad Se Vishwas Scheme (V.S.V.Scheme) and issuance of Form No.4. Considering this, the Court exercised discretion and condoned the delay in filing the appeal. The application for condonation of delay was allowed, highlighting the importance of timely compliance and adherence to procedural requirements.

2. Substantial questions of law raised by the revenue:
The appeal by the revenue under Section 260A of the Income Tax Act, 1961, challenged the order passed by the Income Tax Appellate Tribunal. Several substantial questions of law were raised for consideration by the High Court. These questions encompassed various aspects such as the treatment of unexplained Long Term Capital Gains (LTCG) under Section 68 of the Act, the deletion of undisclosed income related to organized tax evasion through bogus capital gains, and the obligation of the assessee to prove the genuineness of transactions. The Court scrutinized the Tribunal's decisions on these issues, emphasizing the need for thorough examination of facts and evidence to determine the tax implications accurately.

In conclusion, the High Court disposed of the appeal based on the respondent's acknowledgment of opting for the V.S.V. Scheme, indicating compliance with the scheme's provisions. Consequently, the substantial questions of law were left open for future consideration. The Court's decision underscored the significance of procedural regularity and adherence to legal requirements in tax matters, ensuring fair and just outcomes in line with the applicable statutory provisions.