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

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ITA/114/2023HC KarnatakaKAHC01012772202318 July 2023Bench: P.S.DINESH KUMAR,T.G. SHIVASHANKARE GOWDA4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court of Karnataka, in its judgment dated July 18, 2023, dismissed the appeal filed by the Revenue. The Court noted that the assessee's counsel submitted that the issues involved in the appeal were covered by the Hon'ble Apex Court's decision in Principal Commissioner of Income-tax, Central-3 vs. Abhisar Buildwell (P.) Ltd. (2023) 149 taxmann.com 399 (SC), dated April 24, 2023. This submission was not disputed by the Revenue's counsel. Consequently, the High Court held that both substantial questions of law were answered in favour of the assessee and against the Revenue. The appeal was dismissed, and the order of the ITAT was implicitly upheld. No specific finding was recorded on the merits of the ITAT's decision regarding the absence of incriminating materials or the object of Section 153A, as the appeal was disposed of based on the Supreme Court's precedent.

What were the facts?

The Revenue, represented by the Principal Commissioner of Income Tax and the Assistant Commissioner of Income Tax, has filed an appeal under Section 260-A of the Income Tax Act, 1961, challenging an order passed by the Income-tax Appellate Tribunal (ITAT), Bengaluru. The ITAT's order, dated September 20, 2022, in ITA No. 760/Bang/2021, pertains to Assessment Year 2013-2014. The Revenue seeks to set aside the ITAT's decision which had quashed an assessment order passed under Section 143(3) read with Section 153A of the Act. The Revenue's appeal is directed against the assessee, M.G. Anand Reddy.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal is right in law 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 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 to be 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 of the Act 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 of the Act? Assessee's Contention: The assessee argued 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. on April 24, 2023. Revenue's Contention: The Revenue did not dispute the assessee's submission regarding the applicability of the Supreme 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:25154-DB ITA No. 114 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. 114 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 QUEEN S ROAD, BENGALURU-560 001

…APPELLANTS (BY SRI. DILIP M.,ADV.) AND: 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. 760/BANG/2021 DATED 20/09/2022 FOR ASSESSMENT YEAR 2013-2014 ANNEXURE- C AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY Digitally signed by MALA K N Location: HIGH COURT OF KARNATAKA

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NC: 2023:KHC:25154-DB ITA No. 114 of 2023 THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 1(4), BENGALURU.

THIS APPEAL, COMING ON FOR FINAL HEARING, 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.760/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 assessment order under said section as same is not stipulated in Section 153A nor under Section 132 of the Act?” 1 the 'Act' for short 2 Income-tax Appellate Tribunal

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NC: 2023:KHC:25154-DB ITA No. 114 of 2023 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-3 -vs- Abhisar

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NC: 2023:KHC:25154-DB ITA No. 114 of 2023 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.: 8 3 [2023] 149 taxmann.com 399 (SC)

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