M/S TEJAS NETWORKS LIMITED vs. THE DEPUTY COMMISSIONER OF INCOME-TAX CIRCLE - 12(4)

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ITA/105/2021HC KarnatakaKAHC01016331202014 October 2026Bench: CHIEF JUSTICE,K.S. HEMALEKHA4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court disposed of the present appeal with liberty to the assessee to revive it, subject to the outcome of the Revenue's pending appeal (W.A.No.2473/2015). The Court acknowledged that the assessee's appeal was filed under Section 260A of the Income Tax Act, 1961, impugning the ITAT's order. The Court noted that the ITAT had remanded the issue of scientific research and development expenses to the AO. The assessee informed the Court that while the deduction was subsequently allowed, the basis of the impugned orders was a Single Judge's decision that was under appeal. The Court reasoned that the final determination of the present appeal could be contingent on the outcome of the pending appeal. Therefore, the Court granted the assessee the liberty to revive the appeal, indicating that a decision on the merits would be deferred until the related appeal was decided.

What were the facts?

The assessee, M/s. Tejas Networks Limited, filed an appeal before the High Court of Karnataka against an order dated 01.10.2019 passed by the Income Tax Appellate Tribunal (ITAT) in IT(TP)A No. 281/Bang/2014 for Assessment Year 2009-10. The ITAT's order was in appeal against an Assessment Order dated 31.01.2014 passed by the Assessing Officer (AO) under Section 143(3) read with Section 144C(13) of the Income Tax Act, 1961, pursuant to directions from the Dispute Resolution Panel (DRP). The ITAT had accepted the assessee's contention regarding scientific research and development expenses and remanded the matter to the AO for reconsideration after providing an opportunity to be heard. The assessee stated that the AO had subsequently passed an order allowing the deduction, but the impugned ITAT order and the Assessment Order relied on a Single Judge's decision which was under appeal before the High Court.

What were the issues?

1. Whether the High Court should consider the appeal when the underlying issue depends on the outcome of a pending appeal before the same Court (Section 260A of the Income Tax Act, 1961)? Assessee's Contention: The assessee submitted that the impugned ITAT order and the Assessment Order were passed relying on a decision of the High Court's Single Judge in W.P.No.7004/2014. An appeal against this Single Judge's order, W.A.No.2473/2015, was pending and had been heard. The assessee argued that if the Revenue were to succeed in that appeal, further questions might arise from the impugned ITAT order. Therefore, the assessee sought liberty to revive the present appeal based on the outcome of the pending appeal. Revenue's Contention: The judgment does not record any specific contentions made by the Revenue in this appeal.

Which sections of the Income-tax Act were involved?

Section 260A,Section 143(3),Section 144C(13)

AI-generated summary — verify with the full judgment below

HC-KAR IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 14TH DAY OF OCTOBER, 2026

PRESENT

THE HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE

AND

THE HON'BLE MRS. JUSTICE K.S. HEMALEKHA

INCOME TAX APPEAL NO.105 OF 2021

BETWEEN:

M/S. TEJAS NETWORKS LIMITED REPRESENTED BY ITS CEO & MANAGING DIRECTOR, SRI SANJAY NAYAK, PLOT NO.25, 5TH FLOOR, J.P. SOFTWARE PARK, ELECTRONIC CITY PHASE-1, HOSUR ROAD, BANGALORE – 560100. …APPELLANT

(BY SRI. ANNAMALAI S., & SRI. M. LAVA, ADVOCATE)

AND:

THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE – 12(4), BMTC BUILDING, 80 FEET ROAD, KORAMANGALA, BANGALORE – 560095. …RESPONDENT

(BY SRI. RAVI RAJ Y.V., ADVOCATE)

Digitally signed by MAHALAKSHMI B M Location: High Court of Karnataka HC-KAR THIS INCOME TAX APPEAL IS FILED UNDER SECTION 260A OF INCOME TAX ACT, 1961, PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW AS STATED ABOVE AND ANSWER THE SAME IN FAVOUR OF THE APPELLANT; TO DIRECT THE TRIBUNAL TO CONSIDER THE GROUNDS NOT ADJUDICATED BY THEM AND TO THAT EXTENT HOLD THAT THE ORDER OF THE TRIBUNAL IS BAD IN LAW AND FURTHER SET ASIDE THE FINDINGS TO THE EXTENT AGAINST THE APPELLANT IN THE ORDER PASSED BY THE TRIBUNAL IN IT(TP)A NO.281/BANG/2014 DATED 01.10.2019 FOR THE ASSESSMENT YEAR 2009-2010 IN RESPECT OF THE ISSUES RAISED IN THIS APPEAL (ANNEXURE-A).

THIS APPEAL, COMING ON FOR FINAL HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

CORAM: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE and HON'BLE MRS. JUSTICE K.S. HEMALEKHA

ORAL JUDGMENT

(PER: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE)

1.

The Assessee has filed the present appeal under Section 260A of the Income Tax Act, 1961 [the Act] impugning the order dated 01.10.2019 [the impugned order] passed by the learned Income Tax Appellate Tribunal [the ITAT] in HC-KAR IT(TP)A.No.281/Bang/2014 in respect of Assessment Year [AY] 2009-10. 2. The Assessee had preferred the said appeal impugning the Assessment Order dated 31.01.2014 passed by the Assessing Officer [the AO] under Section 143(3) read with Section 144C(13) of the Act pursuant to directions issued by the Dispute Resolution Panel [the DRP]. 3. The learned ITAT accepted the Assessee’s contention in regard to the scientific research and development expenses and remanded the matter to the AO to consider the same after providing an Assessee opportunity to be heard. 4. The learned counsel appearing for the Assessee submits that the AO has passed an order dated 30.06.2021 and the deduction claimed by the Assessee on scientific research, has been allowed. He, however, submits that the impugned order as well as the Assessment Order have been passed by relying on the decision of this Court passed by the learned Single Judge in W.P.No.7004/2014 [T-IT] dated 24.04.2015 and an appeal against the said order [W.A.No.2473/2015] has been pending since been HC-KAR heard. He submits that in the event, the Revenue succeeds in the said appeal, then further questions may arise out of the impugned order. 5. In view of the above, we dispose of the present appeal with liberty to the Assessee to revive the same, subject to the outcome of the Revenue's appeal [W.A.No.2473/2015].

Sd/- (VIBHU BAKHRU) CHIEF JUSTICE

Sd/- (K.S. HEMALEKHA) JUDGE

AT List No.: 2 Sl No.: 12

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