THE PR COMMISSIONER OF INCOME TAX vs. M/S CONCORDE HOUSING CORPORATION PVT LTD

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ITA/238/2023HC KarnatakaKAHC01019880202326 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. The assessee contended that the tax effect was below Rs. 2 Crores, making the appeal not maintainable in light of CBDT Circular No. 09/2024. The Revenue sought liberty to revive the appeal if exceptions under the relevant circulars applied. The Court, in view of these submissions, disposed of the appeal with liberty granted to the Revenue as prayed. The substantial questions of law admitted for consideration were kept open to be adjudicated in an appropriate proceeding. No decision was rendered on the merits of the substantial questions of law.

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, against an order dated December 6, 2022, passed by the Income Tax Appellate Tribunal (ITAT), Bengaluru. The ITAT's order was in relation to ITA No. 699/Bang/2022 for the assessment year 2016-17. The High Court admitted the appeal on December 21, 2023, to consider specific substantial questions of law. The assessee, M/s Concorde Housing Corporation Pvt. Ltd., is the respondent. The appeal concerns the ITAT's decision to allow the assessee's appeal, holding an issue to be debatable and setting aside an order passed under Section 154 of the Act.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal's order is perverse, considering it allowed the assessee's appeal by holding an issue as debatable, while simultaneously upholding the Assessing Officer's finding in paragraph 11 of its order and suggesting rectification under Section 154, but then concluding that rectification cannot be made via an order under Section 154 because the issue is debatable? (Question of law and fact, turning on Section 154 of the Act). 2. Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in setting aside the order passed under Section 154 of the Act when the conditions stipulated in Section 154 were fully satisfied and the additions made in that order were in accordance with the provisions of the Act? (Question of law, turning on Section 154 of the Act). Assessee's contention: 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 September 17, 2024, which binds the Revenue. Revenue's contention: The learned counsel for the Revenue requested liberty to revive the appeal if the matter falls within the exceptions under Circular No. 09/2024 and Circular No. 5/2024 dated March 15, 2024.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 154

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC:40543-DB ITA No. 238 of 2023

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 26TH 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. 238 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-1(4), DCIT, CENTRAL CIRCLE-1(1), 3RD FLOOR, C.R. BUILDING, QUEEN'S ROAD, BENGALURU-560 001. …APPELLANTS

(BY SRI. DILIP M., A/W SRI. RAVIRAJ.Y.V., ADVOCATES)

AND:

M/S CONCORDE HOUSING CORPORATION PVT. LTD., NO.46/A, CONCORDE GROUP

Digitally signed by B LAVANYA Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:40543-DB ITA No. 238 of 2023

1ST MAIN, III PHASE, J.P.NAGAR, BENGALURU – 560 078. PAN. AADCC4087F. …RESPONDENT

(BY SRI. RAVI SHANKAR S.V., ADVOCATE)

THIS APPEAL IS FILED UNDER SECTION 260-A OF THE INCOME TAX ACT, 1961, PRAYING TO ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BENGALURU IN ITA NO.699/BANG/2022 DATED 06.12.2022 FOR ASSESSMENT YEAR 2016-17 (ANNEXURE-D) AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE- 1(4), BENGALURU, AND ETC.

THIS APPEAL IS 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

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NC: 2024:KHC:40543-DB ITA No. 238 of 2023

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

Heard the learned counsel Sri. Dilip.M., along with Sri. Raviraj.Y.V., learned counsel for the appellants/Revenue and Sri. Ravishankar.S.V., 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 06.12.2022 passed by the Income Tax Appellate Tribunal, ‘A’ Bench, Bengaluru (for short, ‘Appellate Authority’) in ITA.No.699/Bang/2022 for the assessment year 2016-17.

3.

This

Court,

admitted the appeal on 21.12.2023 to consider the following substantial questions of law: 1. "Whether on the facts and in the circumstances of the case, the Tribunal's order can be said as perverse as Tribunal has allowed the appeal preferred by assesse by holding that issue is debatable when in sharp contract the Tribunal itself

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NC: 2024:KHC:40543-DB ITA No. 238 of 2023

upheld the finding of CIT(A) in para 11 of its order. The Tribunal holds that Assessing Officer should have rectified the assessment order but at the same time, the Tribunal holds that issue is debatable and rectification cannot be made by passing order under section 154 of the Act"?

2.

"Whether on the facts and in the circumstances of the case, the Tribunal is right in law in allowing in setting aside order passed under section 154 of the of the Act when the conditions set out in section1 54 are fully satisfied in facts of present case and additions made in said order are in accordance with provisions of the Act"?

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

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NC: 2024:KHC:40543-DB ITA No. 238 of 2023

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 kept open to be adjudicated in an appropriate proceeding.

Sd/- (S.G.PANDIT) JUDGE

Sd/- (C.M. POONACHA) JUDGE

SMJ List No.: 3 Sl No.: 13

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