While stating that the income tax appellate tribunal (ITAT) at Kolkata had committed a serious error in setting aside the orders of the commissioner of I-T for appeals (CIT(A)), the Calcutta High Court (HC) ruled in favour of the tax department. The case is related to bogus claims of long-term capital gains (LTCG) using penny stocks. The HC also relied upon a detailed report prepared by Dhruv P Singh, an officer from the Indian Revenue Services (IRS), which unearthed the bogus trading in penny stocks worth Rs38,000 crore.
In its order, the bench of justice TS Sivagnanam and justice Hiranmay Bhattacharyya says, “We hold that the Tribunal committed a serious error in setting aside the orders of the CIT(A) who had affirmed the orders of the assessing officer (AO) and equally the Tribunal committed a serious error both on law and fact in interfering with the assumption of jurisdiction by the commissioner under section 263 of the (I-T) Act.”
I-T department had filed these appeals against a common order passed by the ITAT on 26 June 2019 in a batch of 90 appeals.
During the hearing, the assessees contended that the tax department did not file appeals within the period of limitation, and hence their vested right to avail the benefit of the Vivad Se Viswas (VSV) Scheme was taken away. The HC, however, rejected the contention stating, “…merely because in certain cases, appeals were preferred within the relevant time enabling, those assessees to avail the benefit of the…
