THE PR.COMMISSIONER OF INCOME-TAX vs. SRI.M.G. ANAND REDDY

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ITA/110/2023HC KarnatakaKAHC01012770202318 July 2023Bench: P.S.DINESH KUMAR,T.G. SHIVASHANKARE GOWDA4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court, in view of the submission made by the assessee and not disputed by the Revenue, held that the issues involved in the appeal are covered by the decision of the Hon'ble Apex Court in Principal Commissioner of Income-tax, Central-3 vs. Abhisar Buildwell (P.) Ltd. Consequently, the appeal filed by the Revenue was dismissed. Both substantial questions of law were answered in favour of the assessee and against the Revenue. The High Court also dismissed an interlocutory application (I.A.No.2/2023) as it did not survive for consideration due to the dismissal of the appeal. No costs were awarded.

What were the facts?

The Revenue, represented by the Principal Commissioner of Income-Tax and the Assistant Commissioner of Income-Tax, filed an appeal under Section 260-A of the Income Tax Act, 1961, before the High Court of Karnataka. The appeal challenged an order passed by the Income-Tax Appellate Tribunal (ITAT), Bengaluru, in ITA No. 759/Bang/2021, dated September 20, 2022. The ITAT's order pertained to Assessment Year 2012-2013. The Revenue sought to set aside the ITAT's order and confirm the orders of the Appellate Commissioner and the Deputy Commissioner of Income Tax. The assessee is Sri. M.G. Anand Reddy.

What were the issues?

The High Court was asked to decide the following substantial questions of law: 1. Whether the Tribunal was correct in quashing the assessment order passed under Section 143(3) read with Section 153A of the Act by holding that the said orders were passed in the absence of incriminating materials, ignoring that there is no requirement of incriminating materials to pass an assessment order under Section 153A, as stipulated in Section 153A or Section 132 of the Act? 2. Whether the Tribunal's order was perverse in law in quashing the assessment order passed under Section 143(3) read with Section 153A of the Act, ignoring the object of Section 153A, which stipulates that once a search takes place, all pending assessments are abated and the assessing authority is required to pass an assessment order under Section 153A? Contentions: Assessee: Argued that the issues involved are covered by the decision of the Hon'ble Apex Court in Principal Commissioner of Income-tax, Central-3 vs. Abhisar Buildwell (P.) Ltd. on April 24, 2023. Revenue: Did not dispute the assessee's submission regarding the applicability of the Apex Court's decision.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 143(3),Section 153A,Section 132

AI-generated summary — verify with the full judgment below

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NC: 2023:KHC:25135-DB ITA No. 110 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 18TH DAY OF JULY, 2023 PRESENT THE HON'BLE MR JUSTICE P.S.DINESH KUMAR AND THE HON'BLE MR JUSTICE T.G. SHIVASHANKARE GOWDA INCOME TAX APPEAL NO. 110 OF 2023 BETWEEN: 1. THE PR.COMMISSIONER OF INCOME-TAX CENTRAL, 3RD FLOOR, C.R. BUILDING QUEEN S ROAD, BENGALURU-560 001 2. THE ASST. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-2(1), PRESENT ADDRESS DCIT

CENTRAL CIRCLE-1(4), 3RD FLOOR, C.R. BUILDING QUEENS ROAD, BENGALURU-560 001 …APPELLANTS (BY SRI. DILIP M.,ADVOCATE) AND: SRI.M.G. ANAND REDDY SY.NO.46/1 AND 46/2 YADAVANAHALLI VILLAGE ANEKAL TALUK, ATTIBELE HOBLI BENGALURU-562107. PAN-AARPA 3047J …RESPONDENT (BY SRI. SHANKAR A. SR. ADV. FOR SRI. MADHUSUDHAN U A.,ADV.) THIS ITA IS FILED UNDER SEC.260-A OF THE INCOME TAX ACT 1961, PRAYING THAT THIS HONBLE COURT MAY BE PLEASED TO I. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE. II. ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME-TAX APPELLATE TRIBUNAL, BENGALURU IN ITA NO. 759/BANG/2021 DATED Digitally signed by MALA K N Location: HIGH COURT OF KARNATAKA

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NC: 2023:KHC:25135-DB ITA No. 110 of 2023 20/09/2022 FOR ASSESSMENT YEAR 2012-2013 ANNEXURE- C AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 1(4), BENGALURU.

THIS APPEAL, COMING ON FOR ORDERS, THIS DAY, P.S.DINESH KUMAR, J., DELIVERED THE FOLLOWING: JUDGMENT This appeal by the Revenue under Section 260(A) of the Income Tax Act, 19611 against the order passed by the I.T.A.T.2, Bengaluru in I.T.A. No.759/Bang/2021 dated 20.09.2022 is filed to consider the following substantial questions of law: "1. Whether on the facts and in the circumstances of the case, the Tribunal is right in law in quashing assessment order passed under section 143(3) r/w/s 153A of the Act by holding that the said orders are passed in the absence of incriminating materials ignoring that there is no requirement of incriminating materials to pass 1 the 'Act' for short 2 Income-tax Appellate Tribunal

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NC: 2023:KHC:25135-DB ITA No. 110 of 2023 assessment order under said section as same is not stipulated in Section 153A nor under Section 132 of the Act?” 2. Whether on the facts and circumstances of the case and in law, the Tribunal's order can be said as perverse in law in quashing assessment order passed under section 143(3) r/w/s 153A of the Act ignoring object of Section 153A of the Act which stipulates that once search takes place all pending assessments are abated and assessing authority is required to assessment order under Section 153A of the Act ?.” 2. Heard Shri.M.Dilip, learned Standing Counsel for the Revenue and Shri.A.Shankar, learned Senior Advocate for the assessee. 3. Shri.A.Shankar, submits that the issues involved in this appeal are covered by the decision of Hon'ble Apex Court in favour of the assessee in Principal Commissioner of Income-tax, Central-

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NC: 2023:KHC:25135-DB ITA No. 110 of 2023 3 -vs- Abhisar Buildwell (P.) Ltd.3 on 24.04.2023. The said submission is not disputed by Shri.M.Dilip. 4. In view of the above, this appeal is dismissed. 5. Both the questions are answered in favour of the assessee and against the Revenue. 6. In view of the dismissal of the appeal, I.A.No.2/2023 does not survive for consideration and it is accordingly dismissed. No costs.

Sd/- JUDGE Sd/- JUDGE PA CT:HS List No.: 1 Sl No.: 6 3 [2023] 149 taxmann.com 399 (SC)

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