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DATE: January 15, 2021 (Date of pronouncement)
DATE: January 27, 2021 (Date of publication)
AY: 2015-16
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CITATION:
S. 10(38) Bogus Capital Gains from Penny Stock: The fact that there was an astounding 4849.2% jump in the share price within two years, which is not supported by the financials, does not justify the AO's conclusion that the assessee converted unaccounted money into fictitious exempt LTCG to evade taxes. The finding is unsupported by material on record & is purely an assumption based on conjecture. The theory of human behavior and preponderance of probabilities, based on Sumati Dayal v. CIT 214 ITR 801 (SC), cannot be cited as a basis to turn a blind eye to the evidence

The startling spike in the share price and other factors may be enough to show circumstances that might create suspicion; however the Court has to decide an issue on the basis of evidence and proof, and not on suspicion alone. The theory of human behavior and preponderance of probabilities cannot be cited as a basis to turn a blind eye to the evidence produced by the Respondent

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DATE: January 13, 2021 (Date of pronouncement)
DATE: January 14, 2021 (Date of publication)
AY: AY 2019-20
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CITATION:
Extension of due date for filing ROI: (i) The CBDT has vide order dated 11.01.2021 decided not to grant further extension of time. The Court cannot go into the issues which weighed with the CBDT in taking the decision and substitute the same with its own view. Interference by the Court, at this point of time, in matters relating to the Revenue may have far reaching implications. It may upset the entire functioning of the Government and may lead to undesirable results. (ii) However, the CBDT may consider issuing an appropriate circular taking a lenient view as regards the consequences of late filing of the Tax Audit Reports as provided u/s 271B of the Act. We leave it to the better discretion of the CBDT.

It is the case of the CBDT that it has declined to exercise its power under Section 119 of the Act as the conditions for exercise of such power do not exist. It is the case of the Revenue that the issue of hardship was dealt with considerably at the relevant point of time and that is the reason why three times the time limit came to be extended. The Board has now thought fit in the interest of the Revenue not to extend the time period any further. There are so many vital issues which the Revenue needs to keep in mind before taking such decision. The question is whether this Court should go into all such issues which weighed with the CBDT in taking a particular decision one way or the other and substitute the same with that of this Court on the ground that if the time limit is not extended, then the people at large would be put immense hardships? Interference at the end of this Court, at this point of time, in the matters relating to the Revenue may have far reaching implications. This Court may find it very easy to issue a writ of mandamus, as prayed for, saying that if the time limit has been extended in the past on three occasions, then why not for one last time upto 31st March 2021. However, such a line of reasoning or approach may upset the entire functioning of the Government and may lead to undesirable results.

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DATE: April 29, 2020 (Date of pronouncement)
DATE: April 30, 2020 (Date of publication)
AY: 2017-18
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CITATION:
Grant of refund u/s 143(1): Till AY 2016-17, if a scrutiny notice u/s 143(2) is issued, the return is not required to be processed u/s 143(1) for grant of refund to the assessee. From AY 2017-18 & onwards, a different regime is prescribed by Parliament. S. 241-A requires separate recording of satisfaction on part of the AO that having regard to the issue of notice u/s 143(2), the grant of refund is likely to adversely affect the revenue. The withholding of refund requires the previous approval of the PCIT with reasons to be recorded in writing.

In the premises, we hold that in respect of Assessment Years ending on 31st March 2017 or before, if a notice was issued in conformity with the requirements stated in sub-section (2) of Section 143 of the Act, it shall not be necessary to process the refund under subsection (1) of Section 143 of the Act and that the requirement to process the return shall stand overridden. However, insofar as returns filed in respect of assessment year commencing on or after the 1st April, 2017, a different regime has been contemplated by the Parliament. Section 241-A of the Act requires a separate recording of satisfaction on part of the Assessing Officer that having regard to the fact that a notice has been issued under sub-section (2) of Section 143, the grant of refund is likely to adversely affect the revenue; whereafter, with the previous approval of the Principal Commissioner or Commissioner and for reasons to be recorded in writing, the refund can be withheld.

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