THE COMMISSIONER OF INCOME TAX-III vs. SRI K PRAKASH SHETTY

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ITA/468/2014HC KarnatakaKAHC01046681201406 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 noted that the ITAT had set aside the imposition of penalty by following a judgment of the High Court itself in the case of Commissioner of Income-Tax & another –vs- Manjunatha Cotton and Ginning Factory (2013) 359 ITR 565. The High Court found no justification to interfere with the impugned order of the ITAT. However, the Court acknowledged that the Revenue had preferred an appeal before the Supreme Court against the Manjunatha Cotton judgment, which was still pending. Liberty was reserved to the Revenue to revive the present appeal in the event of its success before the Supreme Court. The operative direction was to dismiss the appeal with the aforementioned liberty.

What were the facts?

The Revenue (Commissioner of Income-Tax-III and Assistant Commissioner of Income-Tax) has filed an appeal under Section 260-A of the Income Tax Act, 1961, against an order dated 05/06/2014 passed by the Income Tax Appellate Tribunal (ITAT) in ITA No.265/Bang/2014. The assessment year in question is 2006-07. The ITAT had set aside the imposition of penalty. The Revenue's appeal to the High Court challenges this decision of the ITAT. The High Court notes that the ITAT followed a judgment of the High Court itself in the case of Commissioner of Income-Tax & another –vs- Manjunatha Cotton and Ginning Factory (2013) 359 ITR 565. The Revenue also submitted that it has filed an appeal before the Supreme Court against the Manjunatha Cotton judgment, which is pending.

What were the issues?

1. Whether the Tribunal was justified in setting aside the imposition of penalty, considering the prevailing High Court judgment on the matter? (Question of law) The Revenue contended that the ITAT erred in setting aside the penalty. It relied on the High Court's judgment in Commissioner of Income-Tax & another –vs- Manjunatha Cotton and Ginning Factory (2013) 359 ITR 565, which it stated was followed by the ITAT. The Revenue also submitted that it had filed an appeal before the Supreme Court against the Manjunatha Cotton judgment and that this appeal was pending. The Revenue sought to revive this appeal if it succeeded before the Supreme Court. The Respondent (assessee, Sri K Prakash Shetty) did not present any arguments as recorded in the judgment.

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 468 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 (3), BANGALORE.

... APPELLANTS (BY SRI. E I SANMATHI, ADV.,)

AND

SRI K PRAKASH SHETTY NO. 9, ALI ASKAR ROAD CUNNINGHAM ROAD CROSS BANGALORE, PAN: AGAPS5631F.

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

This ITA is filed Under Sec.260-A of Income Tax Act 1961, arising out of order dated:05/06/2014 passed in ITA No.265/Bang/2014, for the Assessment Year 2006-07.

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/- TL

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