THE PR. COMMISSIONER OF INCOME TAX vs. M/S APOTEX PHARMACHEM INDIA PVT LTD.

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ITA/125/2021HC KarnatakaKAHC01008062202130 September 2024Bench: S.G.PANDIT,C.M. POONACHA4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court disposed of the appeal with liberty granted to the revenue to revive it as prayed for by its counsel. The Court noted the submissions made by both parties regarding the tax effect and the applicability of CBDT Circulars No. 09/2024 and 5/2024. While the appeal was disposed of on procedural grounds related to the circulars, the substantial questions of law were expressly kept open to be adjudicated in an appropriate proceeding. Therefore, no decision was made on the merits of whether the ITAT was right in directing the bifurcation of claims or whether the miscellaneous petition was maintainable under Section 254(2) 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, against an order dated January 17, 2020, passed by the Income Tax Appellate Tribunal (ITAT), Bengaluru. The appeal pertains to Assessment Year 2011-12 and challenges the ITAT's direction to the assessing authority to call for details regarding the bifurcation of claims attributable to the manufacturing segment in miscellaneous proceedings. The ITAT's order was passed in IT(TP)A No. 2200/Bang/2016. The assessee is M/s Apotex Pharmachem India Pvt Ltd.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in directing the assessing authority to call for details regarding the bifurcation of the claim attributable to the manufacturing segment in miscellaneous proceedings when the same was not the subject matter of the original proceeding? 2. Whether, on the facts and in the circumstances of the case, the order passed by the Tribunal is perverse in nature as the Tribunal has entertained a miscellaneous petition when the conditions set out in Section 254(2) of the Act are not satisfied and when there was no mistake apparent from the record? Assessee's Contention: The learned counsel for the assessee submitted 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 CBDT Circular No. 09/2024 dated September 17, 2024, which binds the revenue. Revenue's Contention: The learned counsel for the revenue requested liberty to revive the appeal in case the matter falls within the exceptions under Circular No. 09/2024 dated September 17, 2024, and Circular No. 5/2024 dated March 15, 2024.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 254(2)

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC:41150-DB ITA No. 125 of 2021

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 30TH 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. 125 OF 2021 BETWEEN:

1.

THE PR. COMMISSIONER OF INCOME TAX 5TH FLOOR, BMTC BUILDING 80 FEET ROAD, KORAMANGALA BENGALRUU 560 095

2.

THE DEPUTY COMMISSIONER OF INCOME-TAX CIRCLE -11(1),PRESENT ADDRESS DCIT, CIRCLE 1(1)(1) 2ND FLOOR, BMTC BUILDING 80 FEET ROAD, KORAMANGALA BENGALURU 560 095 …APPELLANTS (BY SRI. M DILIP .,ADVOCATE A/W SRI. RAVIRAJ Y V, ADVOCATE)

AND:

M/S APOTEX PHARMACHEM INDIA PVT LTD. PLOT NO.1A, 4TH PHASE BOMMASANDRA INDUSTRIAL AREA BENGALURU 560 099 PAN AACCB 1658E …RESPONDENT (BY SRI. TATA KRISHNA.,ADVOCATE)

THIS ITA / INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATE ABOVE, ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME-TAX

Digitally signed by NIRMALA DEVI Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:41150-DB ITA No. 125 of 2021

APPELLATE TRIBUNAL, BENGALURU IN IT(TP)A NO. 2200/BANG/2016 DATED 17/01/2020 FOR ASSESSMENT YEAR 2011-2012 ANNEXURE D AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE -1(1)(1), BENGALURU AND ETC.

THIS APPEAL, COMING ON FOR FINAL 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

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

Heard the learned counsel Sri.Dilip M. along with Sri Raviraj Y.V., for appellants/Revenue and learned counsel Sri Tata Krishna, learned counsel for the 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 17.01.2020 passed by the Income Tax Appellate Tribunal, ‘A’ Bench, Bengaluru (for short, ‘Appellate Authority’) in IT(TP) A No.*2200/Bang/2016 for the assessment year * Corrected vide Court order dt. 21.11.2025

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NC: 2024:KHC:41150-DB ITA No. 125 of 2021

*2011-12, raising 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 directing the assessing authority to call for details regarding bifurcation of the claim attributable to manufacturing segment in Miscellaneous Proceeding when same was not subject matter of the original proceeding? 2. Whether on the facts and in the circumstances of the case, the order passed by Tribunal is perverse in nature as Tribunal has entertained miscellaneous petition when conditions set out in Section 254(2) of the Act are not satisfied and when there was no mistake apparent from record?

3.

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.

* Corrected vide Court order dt. 21.11.2025

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NC: 2024:KHC:41150-DB ITA No. 125 of 2021

4.

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.

5.

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 kept open to be adjudicated in an appropriate proceeding.

Sd/- (S.G.PANDIT) JUDGE

Sd/- (C.M. POONACHA) JUDGE

BS List No.: 1 Sl No.: 44

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