9911796707
TMI Blog2020 (11) TMI 374X X X X Extracts X X X X X X X X Extracts X X X X ..... ed Principal Commissioner Of Income Tax - 16, New Delhi passed u/s 263 of The Act on 30th of March 2020. 4. Identical grounds of appeal have been raised in both these above appeals as Under:- "1. That under the facts and circumstances, the asstt. order u/s. 143(3) Dtd.22.11.17 is neither erroneous nor prejudicial to the interest of revenue and there exists no such circumstances which provides for invoking Sec.263, hence, jurisdiction u/s.263 has been wrongly assumed. 2. That under the facts and circumstances and in view of provisions of SeC.245F and other related sections, only the Hon'ble ITSC was having the jurisdiction, hence the order passed u/s.263 bv POT is outside the scope and powers of Ld. POT. 3. That the order passed u/s.263 is unsustainable in law so much so that SCN has been issued for different issue and the findings and directions are given on different 4. That Ld. POT exceeded his jurisdiction in invoking Sec.263 for fresh examining the issue of STCG as the same stood properly examined and adjudicated on merit by Ld. A.O. during regular proceedings u/s. 143(3) of the I.T. Act. 5. That Ld. POT further erred in law in directing to pass denovo asstt. order, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has claimed STCG of Rs. 22,504,526/- u/s 111 A on purchase of various shares at Rs. 50,601,612/- and sale of shares at Rs. 73,106,138/-. All the purchases and sale of shares has been carried out between April, 2014 and September, 2014. The assessee has carried out shares transaction in 35 listed companies. Majority of shares have been purchased during the month of April and May, 2014 and these are sold during the month of June, July and September 2014. The average period of holding around 3 - 4 months. The purchases of the same script were made in lots on different dates. Holding period is also less and intention is to make quick money from the purchase and sale of large number of shares over a relatively short period of time." Thereafter, the CIT referred to CBDT circular number 4/2007 and 6/2016 wherein the tests are laid down between the shares held as stock in trade and shares held as investment. Thereafter it was noted that:- "the purchase and sale of shares with the motive of earning a profit, would result in the transactions being in the nature of trade/adventure in the nature of trade, but where the objective of the investment in shares of a company is to deriv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e shares, name and address of party from whom purchases were made, Demat account from whom such shares are purchased, how the shares were purchased without payment of a single rupee at the time of purchase, how the payments are made to the seller only after realization of sale proceeds and stating that it shows that the real date of purchase and the same date is a sale as per the transactions in the Demat statement. Accordingly, CIT noted that since no investment was made by the assessee out of his own funds and purchases if any made only on credit basis and purchases/sales of shares were made frequently which clearly shows that the transactions were made to earn profit without making any investment which is assessable under the head business income rather than capital gains. This issue was also not examined. With respect to the agricultural income, it was noted that agricultural income of Rs. 5.90 lakhs were shown when there is no agricultural land holding. On the third issue, it was noted that when the property in Chanakyapuri is self occupied it need to examine in which year it was purchased. The fourth issue that was stated that assessee has purchases right of Vimal brand for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings are pending before the AO or notice u/s 148 would have been issued. However for the assessment year 2015 - 16 proceedings u/s 263 is already pending for that year for examining the information received in consequence of the survey on Varun capital services private limited. Therefore reopening u/s 148 and assessment u/s 147 of the act would not have been possible in this case. Therefore it was stated that the application of the assessee for settlement in assessment year 2015 - 16 is not valid. Accordingly the objection of the assessee on this issue was rejected. 11. Thereafter considering the whole facts of the case and the examination of records before him after considering the explanation of the assessee, the learned CIT set-aside the assessment for to the file of the AO for making de novo assessment after giving proper opportunity to the assessee limiting the sphere of examination as Under:- a. Short-term capital gain and its nature and quantum, whether it is bogus or not, whether. Of holding shares is only 1 - 2 days as per the Demat account or 4 - 5 months as claimed, whether it is to be taxed at the rate of 15% or 30%, whether 1 - 2% commission is to be added for ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not possible whereas the income tax settlement commission has already held that reopening u/s 147 and 148 could have been done for assessment year 2015 - 16. He further referred to the judicial precedent in case of 103 taxmann.com 301, 88 taxmann.com 77, ITA number 468/Kol/2009 and 19 taxmann.com 176. c. Adverting to ground number 5 and 6, the learned authorised representative referred to show cause notice issued on 27/9/2018 and such submitted that this notice was issued for taxing the short-term capital gain as business income whereas the finding of the learned CIT was on the issue and examination of the genuineness of the short-term capital gain. Therefore it was submitted that in absence of any show cause notice on this issue the directions contained in order u/s 263 are without jurisdiction as same could not have been issued. For this proposition he relied on the decision of the honourable Delhi High Court in 295 CTR (Del) 181 as well as 22 DTR (Del) 158 and honourable Punjab and Haryana High Court in 140 ITR 490. d. Adverting to ground number 1, 3 and 4 he submitted that the order of the learned assessing officer is neither erroneous nor prejudicial to the interest of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tated that on filing of the petition before the settlement commission on 5 December 2019 and after receipt of order u/s 240 5D (1) on 18 December 2019, the assessee on his own submitted a letter dated 20 December 2019 in forming the CIT for filing the petition and the order of the settlement commission of admission. Therefore after that, this order was passed on 30th of March 2020 on ITBA. He therefore submitted that when the last hearing concluded on 21st of October 2019 and the order was passed only on 30th of March 2020 after more than six months from the last date of hearing is clearly violative of the principles of natural justice and no reasonable and adequate opportunity of hearing to the assessee was provided therefore such order is not sustainable in law. He relied on the decision of the honourable Delhi High Court in 305 ITR 83 (Del), 194 taxmann 57 (Del). h. With respect to the applicability of the order u/s 263 of the act with respect to inadequate enquiry, conceivably two opinions et cetera et cetera several judicial precedents were relied upon. 14. The learned and CIT DR vehemently opposed the arguments of the learned authorised representative and supported the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication before the settlement commission i.e. on 5 December 2019. Explanation to Section 245A specifies the proceedings Under is to which a settlement application can be filed which are as Under:- a. where a proceeding u/s 147, initiated by issue of notice u/s 148, is pending for an assessment year and any assessment years for which a notice u/s 148 could have been issued on such date. b. Where as fresh assessment proceedings, initiated pursuant to an order u/s 254 or 263 or 264, setting aside or cancelling an assessment, is pending c. Search and seizure -related cases covered by issue of notice u/s 153A or 153C d. where regular assessment proceedings are pending. 16. A proceeding can be said to be "pending" after its commencement and till it is concluded. In the present case it is not the case where fresh assessment pursuance of an order u/s 254 or 263 of the 264 has been made setting aside or cancelling an assessment order already passed. It is also not a case of search assessment u/s 153A or 153C. The regular assessment has also commenced at the time the return of income and furnished by the assessee and assessment order has been passed. The date of conclusion of an as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 263 of the act on 30th of March 2020 is not proper. 17. Further the only issue in the revisionary proceedings is assessment of the short-term capital gain earned by the assessee on sale of shares. This issue has already been considered by the settlement commission which has been offered by the assessee as an additional income on which tax at appropriate rate is payable. Therefore even otherwise there is no prejudice caused to the revenue because assessee has already offered the above income as additional income before the settlement commission. Further the only grievance of the revenue to say that the order is erroneous and prejudicial to the interest of the revenue for the reason that assessee has been saved from penalty and prosecution on the issue. We have carefully considered the argument of the learned CIT DR on this aspect and find that when a specific authority is given to the settlement commission u/s 245H of the act to grant immunity from prosecution and penalty. Therefore, when a settlement commission is given a special power to grant immunity from prosecution and penalty Under the income tax act itself, it cannot be said that assumption of jurisdiction by the settlement ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
