THE COMMISSIONER OF INCOME TAX-III vs. SRI V LAKSHMINARAYANA

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ITA/462/2014HC KarnatakaKAHC01040013201406 March 2015Bench: S.SUJATHA,VINEET SARAN2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the Revenue's appeal. The Court found no justification to interfere with the ITAT's order, which had set aside the penalty by following the High Court's own judgment in Commissioner of Income-Tax & another –vs- Manjunatha Cotton and Ginning Factory (2013) 359 ITR 565. The Court acknowledged that the Revenue had preferred an appeal before the Supreme Court against the Manjunatha Cotton and Ginning Factory judgment, which was still pending. Liberty was reserved to the Revenue to revive the present appeal in the event of their success in the Supreme Court. The operative direction was the dismissal of the appeal, with the aforementioned liberty.

What were the facts?

The Revenue, comprising the Commissioner of Income-Tax-III and the Assistant Commissioner of Income-Tax, Central Circle 1(2), Bangalore, filed an appeal under Section 260-A of the Income Tax Act, 1961. The appeal challenges an order dated 05/06/2014 passed by the Income Tax Appellate Tribunal (ITAT) in ITA No. 869/BANG/2010 for the assessment year 2000-2001. The ITAT had set aside the imposition of penalty. The Revenue's appeal to the High Court is based on the ITAT's decision to follow a High Court judgment in the case of Commissioner of Income-Tax & another –vs- Manjunatha Cotton and Ginning Factory.

What were the issues?

1. Whether the Tribunal was justified in setting aside the imposition of penalty, considering the High Court's judgment in Commissioner of Income-Tax & another –vs- Manjunatha Cotton and Ginning Factory (2013) 359 ITR 565? Assessee's Contention: The judgment does not record any specific contentions made by the assessee before the High Court. However, the ITAT's decision to set aside the penalty implies that the assessee likely argued that the penalty was not leviable based on the prevailing legal position, as reflected in the Manjunatha Cotton and Ginning Factory case. Revenue's Contention: The Revenue argued that the ITAT erred in setting aside the penalty by relying on the Manjunatha Cotton and Ginning Factory judgment. The Revenue's appeal is predicated on challenging this reliance. The Revenue also submitted that an appeal against the Manjunatha Cotton and Ginning Factory judgment was pending before the Hon'ble Supreme Court.

Which sections of the Income-tax Act were involved?

Section 260-A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 6TH DAY OF MARCH 2015

PRESENT

THE HON'BLE MR. JUSTICE VINEET SARAN

AND

THE HON’BLE MRS. JUSTICE S.SUJATHA

ITA NO 462 OF 2014

BETWEEN

1.

THE COMMISSIONER OF INCOME TAX-III C R BUILDING, QUEENS ROAD BANGALORE-560 001.

2.

THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1 (2) BANGALORE.

... APPELLANTS

(BY SRI. E I SANMATHI, ADV.)

AND

SRI V LAKSHMINARAYANA NO.968, 17TH MAIN 14TH MAIN, BANASHANKARI II STAGE, BANGALORE 560 070.

... RESPONDENT

(BY SRI. A SHANKAR & SRI. M LAVA, ADVS.)

This ITA filed Under Sec.260-A of Income Tax Act 1961, arising out of order dated:05/06/2014 passed in ITA No. NO.869/BANG/2010, FOR THE ASSESSMENT YEAR 2000-2001.

THIS ITA COMING ON FOR ORDERS THIS DAY, VINEET SARAN J. DELIVERED THE FOLLOWING:

JUDGMENT

The Revenue has preferred this appeal challenging the order passed by the Tribunal which has set aside the imposition of penalty following a judgment of this Court passed in the case of Commissioner of Income-Tax & another –vs- Manjunatha Cotton and Ginning Factory in (2013) 359 ITR 565. Therefore, we do not see any justification to interfere with the impugned order and allow this appeal. However, it is submitted that the Revenue has preferred an appeal before the Hon’ble Supreme Court against the said judgment of this Court and it is still pending. In the event of the revenue succeeding in the appeal, liberty is reserved to the revenue to revive this appeal.

With the said observation, the appeal is dismissed.

Sd/-

JUDGE

Sd/-

JUDGE TL

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