THE PR COMMISSIONER OF INCOME TAX vs. SHRI ASHOK SHETTY

PDF · subscribers
ITA/117/2016HC KarnatakaKAHC01023851201625 September 2024Bench: S.G.PANDIT,C.M. POONACHA5 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court disposed of the appeal based on the submissions made by both parties concerning the tax effect and the CBDT circulars. The Court granted liberty to the Revenue to revive the appeal if the matter falls within the exceptions mentioned in Circular No. 09/2024 and Circular No. 5/2024. The substantial question of law framed by the Court was kept open to be adjudicated in an appropriate proceeding. No decision was made on the merits of the substantial question of law regarding the entitlement to deduction under Section 10A/10B of the Act.

What were the facts?

The Revenue, comprising the Principal Commissioner of Income Tax and the Deputy Commissioner of Income-Tax, filed an appeal under Section 260-A of the Income Tax Act, 1961. The appeal challenges an order dated 14.08.2015 passed by the Income Tax Appellate Tribunal, Bengaluru Bench, in ITA No. 1562/Bang/2014. This order pertains to the assessment year 2011-2012 and concerns the assessee, Shri Ashok Shetty, proprietor of M/s. Ashok Impex. The High Court admitted the appeal on 03.10.2017 to consider a substantial question of law regarding the assessee's entitlement to deductions under Section 10A/10B of the Act.

What were the issues?

1. Whether the Tribunal is correct in law in holding that the assessee is entitled for deduction under section 10A/10B of the Act when the assessee had failed to satisfy all the requirements under said section and as it is a case of exemptions the strict interpretation was required to be done in the case of assessee? (Question of law) Assessee's contention: The assessee argued that the tax effect in this appeal is less than Rs. 2 Crores, and therefore, the appeal should not be entertained by the Revenue in view of CBDT Circular No. 09/2024 dated 17.09.2024, which binds the Revenue. Revenue's contention: The Revenue requested liberty to revive the appeal if the matter falls within the exceptions provided under Circular No. 09/2024 dated 17.09.2024 and Circular No. 5/2024 dated 15.03.2024.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 10A,Section 10B

AI-generated summary — verify with the full judgment below

- 1 -

NC: 2024:KHC:39915-DB ITA No. 117 of 2016

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25TH DAY OF SEPTEMBER, 2024 PRESENT THE HON'BLE MR JUSTICE S.G.PANDIT AND THE HON'BLE MR JUSTICE C.M. POONACHA INCOME TAX APPEAL NO.117 OF 2016

BETWEEN:

1.

THE PR. COMMISSIONER OF INCOME TAX, CIT(A), ATTAVARA, C.R. BUILDING, MANGALURU - 575 001.

2.

THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-1, AAYAKAR BHAVAN, MALPE ROAD, AADIUDUPI, AMBALAPODI PO, UDUPI - 576 103. …APPELLANTS

(BY SRI. SANMATHI E.I, ADVOCATE)

Digitally signed by B LAVANYA Location: HIGH COURT OF KARNATAKA

- 2 -

NC: 2024:KHC:39915-DB ITA No. 117 of 2016

AND:

SHRI. ASHOK SHETTY, PROP: M/S. ASHOK IMPEX, RAJ TOWERS, OPP: CITY BUS STAND, UDUPI - 576 101, PAN: ADBPM 5671P. …RESPONDENT

(BY SRI. M. LAVA, ADVOCATE)

THIS ITA / INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED14/08/2015 PASSED IN ITA NO.1562/BANG/2014, FOR THE ASSESSMENT YEAR 2011-2012 PRAYING TO 1. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE.

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

CORAM: HON'BLE MR JUSTICE S.G.PANDIT and HON'BLE MR JUSTICE C.M. POONACHA

- 3 -

NC: 2024:KHC:39915-DB ITA No. 117 of 2016

ORAL JUDGMENT (PER: HON'BLE MR JUSTICE S.G.PANDIT)

Heard the learned counsel Sri.Sanmathi.E.I., for appellants/Revenue and learned counsel Sri. M.Lava for respondent/assessee.

2.

The Revenue is in appeal under Section 260-A of the Income Tax Act, 1961 (for short, ‘the Act’) questioning the correctness and legality of order dated 14.08.2015 passed by the Income Tax Appellate Tribunal, ‘B’ Bench, Bengaluru (for short, ‘Appellate Authority’) in ITA.No.1562/Bang/2014 for the assessment year 2011-12.

3.

This Court, admitted the appeal on 03.10.2017 to consider the following substantial question of law:

1.

"Whether the Tribunal is correct in law in holding that the assessee is entitled for deduction under section 10A/10B of the Act when the assessee had failed to satisfy all the requirements under said section and as it is a case of exemptions the strict

- 4 -

NC: 2024:KHC:39915-DB ITA No. 117 of 2016

interpretation was required to be done in the case of assessee"?

4.

Learned counsel for the assessee submits that the tax effect in this appeal is less than Rs.2 Crores and therefore, the appeal should not be entertained at the instance of the revenue in view of the Circular No.09/2024 dated 17.09.2024 issued by the Central Board of Direct Taxes. It is also submitted that the aforesaid Circular binds the revenue.

5.

On the other hand, learned counsel for the revenue submits that he be granted liberty to revive the appeal in case the matter falls within the exceptions under the aforesaid Circular dated 17.09.2024 and Circular No.5/2024 dated 15.03.2024.

6.

In view of the aforesaid submissions, the appeal is disposed of with liberty as prayed for by the learned counsel for the revenue. However, the question of law is

- 5 -

NC: 2024:KHC:39915-DB ITA No. 117 of 2016

kept open to be adjudicated in an appropriate proceeding.

Sd/- (S.G.PANDIT) JUDGE

Sd/- (C.M. POONACHA) JUDGE

SMJ List No.: 2 Sl No.: 0

More judgments on Section 260-A

All 2,570 judgments and leading authorities on Section 260-A →

Recent GST High Court judgments

Search GST case law →