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TMI Blog2022 (2) TMI 1452X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 16.09.2019, in our view, the same shall apply when assessee has earned / claimed bogus LTCG/STCL through penny stocks. There is nothing to suggest that the Circular read with Memorandum would apply with equal force even if the assessee has shown sale and purchase of such alleged penny stocks as income from business or profession in its return of income. In our view, the language of Circular read with Memorandum is very categorical and does not suggest any scope for a wider interpretation so as to cover within its scope even business income from purchase and sale of alleged penny stocks. A perusal of the return of income and the computation of income filed by the assessee shows that the assessee has filed return of income declaring incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2019. The ld. counsel for the assessee pointed out that the limit prescribed vide aforesaid Circular is less than Rs. 50 lakhs while the tax effect involved in the present appeal was only Rs. 3,51,871/-. 3. The ld. Departmental Representative on the other countered by stating that the assessee s case is covered by Circular Number 23 dated 6th September, 2019 and Office Memorandum F. No. 279/MISC./M-93/2018- ITJ(PT.) dated 16-9-2019, which carves out an exception to the above Circular and states that the monetary limit fixed for filing appeal before the ITAT shall not apply in case of assessees claiming bogus gains / losses through penny stocks and appeals in such cases shall be filed on merits. 4. The ld. counsel for the assessee responded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 16th September 2019 (which is to the effect that monetary limits fixed for filing appeals before ITAT shall not apply in case of assesses claiming bogus LTCG/STCL through penny stocks). 6. In order to appreciate the submissions made by the ld. AR of the assessee and the Ld. DR, it would be beneficial to reproduce the operative part of Circular dated 6-9-2019 and Office Memorandum dated 16-9-2019: Circular No. 23 of 2019 dated 6-9-2019 2. Several references have been received by the Board that in large number of cases where organised tax evasion scam is noticed through bogus Long Term Capital Gain (LTCG)/Short Term Capital Loss (STCL) on penny stocks and department is unable to pursue the cases in higher judicial fora on account of en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that notwithstanding anything contained in any Circular issued under Section 268A specifying monetary limits for filing of departmental appeals before the Income Tax Appellate Tribunal (ITAT), High Courts and SLPs/ Appeals before the Supreme Court, appeals may be filed on merits as the exception to the said Circular, where the Board by way of special order direct filing of appeals on merits in cases involved in organized tax evasion activity. The Office Memorandum dated 16.09.2019 was issued pursuant to the said circular dated 06.09.2019 stating inter alia that by virtue of the powers of CBDT under Section 268A of the Income Tax Act, the monetary limits fixed for filing appeals before ITAT/High Court and SLPs/Appeals before Supreme Court sh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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