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TMI Blog2023 (5) TMI 462X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst which I had filed an appeal before the Id. CIT(A) on 02-01-2019. Which was decided by the Hon'ble CIT (A) vide Order dtd 01-01-2022. The aforesaid order was passed ex parte by Honorable CIT (A) which I had not received. It was noticed by me when I received the Show cause notice u/s 271(1)(c) from the Income Tax Department. It was then I realised that the Order u/s 250 was already passed without any hearing Once I came to know, I appointed the Chartered Accountant and compiled the data and documents from the earlier Chartered Accountant and file the appeal which is delayed on such account. Since the delay caused is not due to any neglect but due to circumstances beyond my control I depose this statement to support my application for delay in filing appeal before the Hon'ble ITAT Mumbai to condone the delay and hear my appeal on merit. Whatever is stated herein is true to the best of my knowledge and belief." 3. Ld. DR objected to the submissions of the assessee on delay condonation and he submitted that all the relevant details are already available in ITR portal, therefore the submissions of the assessee cannot be relied upon. 4. Considered the submissions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nefit by lodging an appeal late (2) Refusing to condone delay can result in a meritorious matter being thrown at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. (3) 'Every day's delay must be explained' does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational, commonsense and pragmatic manner. (4) When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right in injustice being done because of a non deliberate delay. (5) There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk. (6) It must be grasped that the judiciary is respected not on account of its power to legalise injustice on technical grounds but because it is capable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay in filing the appeal. When compared to 21 years, 2819 days cannot be considered to be inordinate or excessive. Furthermore, the Chennai Tribunal by majority opinion in the case of People Education and Economic Development Society (PEEDS) v. ITO (100 ITD 87) (Chennai) (TM ) condoned more than six hundred days delay. It is pertinent to mention herein that the view taken by the present author in that case was overruled by the Third Member. 6.4. The Madras High Court in the case of Sreenivas Charitable Trust (supra) held that no hard and fast rule can be laid down in the matter of condonation of delay and the Court should adopt a pragmatic approach and the Court should exercise their discretion on the facts of each case keeping in mind that in construing the expression "sufficient cause" the principle of advancing substantial justice is of prime importance and the expression "sufficient cause" should receive a liberal construction. Therefore, this Judgment of the Madras High Court (supra) clearly says that in order to advance substantial justice which is of prime importance, the expression "sufficient cause" should receive a liberal construction. In this case, the issue on merit r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liament conferred power on this Tribunal with the intention that this Tribunal would deliver justice rather than legalise injustice on technicalities. Therefore, when this Tribunal was empowered and capable of removing injustice, in our opinion, the delay of 2819 days has to be condoned and the appeal of the assessee has to be admitted and disposed of on merit. 6.7 In view of the above, we condone the delay of 2819 days in filing the appeal and admit the appeal for adjudication." 5. Respectfully following the above said decision and for the sake of overall justice we condone the delay and admit the appeal for adjudication. 6. On merits, we observe that assessee has filed its return of income on 29.07.2011 declaring total income of Rs..6, 67,900/-. Based on the information received from the Investigation Wing that the assessee has dealt in sale and purchase of shares of M/s. VAS INFRASTRUCTURE LIMITED, which is a penny stock company. Accordingly, the case of the assessee was reopened by issue of notice u/s. 148 of the Act and served on the assessee. Assessee submitted the return of income in compliance to the notice u/s. 148 of the Act. The assessee was provided with the reasons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a period of time. In my opinion, the Assessing Officer has simply acted on the information received from the Investigation Wing without verifying the details furnished by the assessee The assessee has also produced best possible evidence to support its claim. Consequently the addition made by the Assessing Officer cannot be sustained. As per Hon'ble Jurisdictional High Court in the case cited as CIT Vs Vishal Holding and Capital Pvt. Ltd. vide order dated 9th August 2010. Nothing has been brought on record to show that the persons investigated, including entry operators or stock brokers, have named that the assessee was in collusion with them. In absence of such finding how is it possible to link their wrong doings with the assessee. In fact the investigation wing is a separate department which has not been assigned assessment work and has been delegated the work of only making investigation. The assessee is not having any intention to book bogus loss as the assesse itself is having various carry forward losses which is not yet been set-off till date, why would assessee be indulge in such transaction to create additional loss as it would be resulting in addition to previou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not get a buyer. In this particular case price of share increased from 45.80 in April 2010 to 123.05 in December 2010 i.e., within a short period of 8 months. This price rise has happened without there being any positive change in the business financials of the company. EPS of the share is negligible, and net worth is very low. Under such circumstances the increase in the share price could not be explained. Appellant has contended that she has purchased these shares through registered brokers therefore, the transactions cannot be doubted. I find that merely entering into transaction through registered brokers is not sufficient to establish the genuineness of the transaction. She has no knowledge of the activities of company whereas she is a regular dealer in shares. The assessee could not reply that for what motive she has purchased the shares which is a penny stock and which had no scope of rising. Appellant has contended that transactions were done through banking channel and registered share broker, I note that in order to prove the transaction as genuine, the form is important but just because form and formalities have been observed, the transaction does not per se become genui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s claimed by the assessee as well as proceeded to make the sale proceeds as undisclosed income. The similar issue was dealt with by the Coordinate Bench in the case of Rajiv Rameshchander v. Income Tax Officer (supra) and decided the issue in favour of the assessee, for the sake of clarity it is reproduced below: - "9. It was also brought to the notice of the AO that the assessee has purchased and sold the shares during the year under consideration and there is no Short Term Capital Gain(STCG)/Long Term Capital Gain (LTCG)/Short Term Capital loss claimed in the return. Thus, according to the assessee the transaction carried out by the assessee in regard to the share of M/s. SSTL are genuine and bonafide and therefore fully allowable. However, according to assessee, the AO/Ld. CIT(A) has not appreciated the facts in the right perspective and has disallowed the business loss of the assessee while trading in this scrip. It is found that Assessee is a trader in shares which fact has been discerned from the facts discussed (supra). Therefore, the shares traded are his stock-in-trade. And once assessee is found to be a trader, the loss incurred during business need to be allowed as bus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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