M/S CANFIN HOMES LIMITED vs. THE ASST. COMMISSIONER OF INCOME-TAX

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ITA/1125/2006HC KarnatakaKAHC01038682200626 September 2012Bench: B.MANOHAR,K.SREEDHAR RAO2 pages
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What did the High Court hold?

The High Court held that the revisional powers exercised by the Commissioner of Income Tax under Section 263(2) of the Income Tax Act, 1961, were barred by time, citing the Supreme Court decision in Commissioner of Income Tax Vs. Alagendran Finance Ltd., 293 ITR 1 Supreme Court. Consequently, the order of the Appellate Authority (ITAT) was also considered a nullity. The substantial questions of law 3 and 4, which presumably dealt with the time-barring of revisional powers and its effect, were answered in favour of the assessee. The other questions of law were not considered necessary for adjudication in light of this finding. The appeal was disposed of on this basis.

What were the facts?

The assessee, M/s. Canfin Homes Limited, filed an appeal under Section 260-A of the Income Tax Act, 1961, before the High Court of Karnataka. The appeal challenged an order dated January 20, 2006, passed by the Income Tax Appellate Tribunal (ITAT), Bangalore, in ITA Nos. 331 & 332/Bang/2002. These appeals before the ITAT pertained to Assessment Years 1993-94 and 1994-95. The High Court was asked to formulate substantial questions of law and set aside the ITAT's order. The revenue was represented by the Assistant Commissioner of Income Tax, Company Circle 12(3), Bangalore.

What were the issues?

1. Whether the revisional powers exercised by the Commissioner of Income Tax under Section 263(2) of the Income Tax Act, 1961, were barred by time, and consequently, whether the order of the Appellate Authority (ITAT) was a nullity? (Question of law). The assessee contended that the revisional powers exercised by the Commissioner were time-barred, rendering the subsequent order a nullity. The revenue's contentions are not recorded in the judgment. The judgment specifically mentions that substantial questions of law 3 and 4 were framed, implying there were other questions as well, but only the resolution of questions 3 and 4 was deemed necessary.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 263(2)

AI-generated summary — verify with the full judgment below

1 IN THE HIGH COURT OF KARNATAKA, BANGALORE

DATED THIS THE 26TH DAY OF SEPTEMBER, 2012

PRESENT

THE HON'BLE MR. JUSTICE K.SREEDHAR RAO

AND

THE HON'BLE MR. JUSTICE B.MANOHAR

I.T.A. No.1125 OF 2006

BETWEEN:-

M/s. Canfin Homes Limited, No.29/1, 1st Floor, Sri M.N.Krishna Rao Road, Lalbagh West Gate, Basavanagudi, Bangalore-560004, Rep. by its Managing Director, Sri K. Venkataramaiah, Aged about 57 years, S/o. Sri K. Venkataswamy. Appellant (By Sri S. Parthasarathi, Advocate)

AND:-

The Asst. Commissioner of Income Tax, Company Circle 12(3), Bangalore. Respondent (By Sri G. Kamaladhar, Advocate)

This I.T.A. is filed U/s.260-A of the I.T. Act, 1961 arising out of Order dated 20.01.2006 passed in ITA No.331 & 332/Bang/2002, for the Assessment Year 1993-94 &

2 1994-95, praying that this Hon’ble Court may be pleased to: (i) formulate the substantial questions of law stated therein and (ii) allow the appeal and set aside the order passed by the ITAT Bangalore in ITA Nos.331 & 332/Bang/2002, dated 20.01.2006, in the interest of justice and equity.

This appeal is coming on for hearing this day, SREEDHAR RAO, J., delivered the following:

J U D G M E N T

In view of the decision of the Supreme Court in Commissioner of Income Tax Vs. Alagendran Finance Ltd., 293, ITR 1 Supreme Court the revisional powers exercised by the Commissioner of Income Tax under section 263(2) is barred by time. Consequently, the order of the Appellate Authority also would be a nullity. In that view of the matter, the substantial question of law 3 and 4 framed are answered in favour of the assessee. The other questions of law are not necessary for consideration.

Accordingly the appeal is disposed of.

Sd/- JUDGE

Sd/- JUDGE psg*

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