9911796707
TMI Blog2023 (4) TMI 639X X X X Extracts X X X X X X X X Extracts X X X X ..... n penny stock shares of M/s. Cressanda Solutions Ltd., Kailash Auto Finance Ltd. and Rajlaxmi Industries Ltd. need no verification and enquiries ? iii) Whether the point of law has been decided by the Hon'ble Division Bench, Kolkata High Court in the matter of Pr. CIT-5-vs-Swati Bajaj reported in 2022 SCC online Cal 1572 or not ? We have heard learned Counsel on either side. After elaborately hearing the learned Advocates for the parties and carefully considering the materials on record we find that the learned Tribunal had allowed the assessee's appeal fully relying upon its earlier decision in the case of in SMT. USHA DEVI MODI vs. CIT in ITA No. 874/Kol/2019 for the assessment year 2014-15 dated 12.01.2021. Against the said decision the revenue had preferred appeal before this Court in ITAT No. 42 of 2013 which was allowed by judgement dated 30.03.2023. For better appreciation the judgement is quoted hereinbelow : "The Court : - This appeal by the revenue filed under Section 260A of the Income Tax Act, 1961 [the Act, for brevity] is directed against the order dated 12th January, 2021 passed by the Income Tax Appellate Tribunal, "A" Bench, Kolkata in ITA No.874/Kol/2019 for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. Merely because the Commissioner has not used these words or phrases occurring in Section 263 will not vitiate the assumption of jurisdiction. What is required to be seen is the content of the order and the discussion and findings rendered by the Commissioner. This is because the cardinal principle is that substance over form has to be preferred. The Commissioner while issuing the show cause notice had come to the prima facie conclusion that the assessing officer did not conduct an enquiry as required to justify such prima facie opinion. The Commissioner was required to set out as to why in his opinion the enquiry by the assessing officer was not proper or insufficient. On reading of the orders passed by the Commissioner under Section 263 which are the subject matter in ITAT No. 156 of 2021 and other similar matters, it is seen that the Commissioner has disclosed to the assessee as to why in his case the power under Section 263 has to be invoked. On reading of the orders passed by the Commissioner, we find that the order to be a reasoned order and there is nothing to conclude. The issue was pre-decided. The assessments orders which are subject matter of Section 263 action shows ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted by the stock brokers and entry operators was not even adverted to by the tribunal and the entire matter was dealt with in a very superficial manner without dwelling deep into the core of the issue. The tribunal being the last fact finding authority was required to go deeper into the issue as the matter have manifested large scale scam. Thus, the orders of the tribunal are not only perfunctory but perverse as well. The exercise that was required to be done by the tribunal is to consider the totality of the circumstances because the transactions are shown to be very complex, the meeting of minds of the "players" can never be established by direct evidence and therefore the surrounding circumstances was required to be taken note of by the tribunal which exercise has not been done. We have considered as to whether in such an event, should the matter be remanded to the tribunal for fresh consideration. We have held that there is no such requirement and that is the Court is empowered to examine! the findings recorded by the assessing officer, or the CIT (A) to arrive at a conclusion. The assessees have been harping upon the opinion rendered by the financial experts, professionals in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessees in penny stocks companies. Therefore merely because the assessee had invested in other blue chit companies had earned profit or incurred loss cannot validate the tainted transactions. It has been established by the department that the rise of the prices of the shares was artificially done by the adopting manipulative practices. Consequently whatever resultant benefits which accrue from out of such manipulative practices are also to be treated as tainted. However, the assessee had opportunity to prove that there was no manipulation at the other end and whatever gains the assessee has reaped was not tainted. This has not been proved or established by any of the assessee before us. Therefore, the assessing officers were well justified in coming to a conclusion that the so called explanation offered by the assessee was not to their satisfaction. Thus, the assessee having not proved the genuineness of the claim, the creditworthiness of the companies in which they had invested and the identity of the persons to whom the transactions were done, have to necessarily fail. In such factual scenario, the Assessing Officers as well as the CIT(A) have adopted an inferential pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
