THE PR COMMISSIONER OF INCOME TAX vs. M/S KANSUR DEVELOPERS INDIA PVT LTD

PDF · subscribers
ITA/250/2023HC KarnatakaKAHC01019894202330 September 2024Bench: S.G.PANDIT,C.M. POONACHA4 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 argued that the tax effect was below Rs. 2 Crores, making the appeal not maintainable under CBDT Circular No. 09/2024. The Revenue sought liberty to revive the appeal if the case fell under the exceptions mentioned in the circulars. The Court granted this liberty. Consequently, the appeal was disposed of with the liberty as prayed for by the Revenue. The substantial questions of law were kept open to be adjudicated in an appropriate proceeding. No decision was made on the merits of the substantial questions of law raised by the Revenue.

What were the facts?

The Revenue, comprising the Principal Commissioner of Income Tax and the Assistant Commissioner of Income Tax, Bengaluru, filed an appeal before the High Court of Karnataka against an order dated 28.10.2022 passed by the Income Tax Appellate Tribunal, Bengaluru. The appeal pertains to Assessment Year 2009-10 and challenges the Tribunal's decision in ITA No.1441/Bang/2018. The Tribunal had confirmed the order of the Appellate Commissioner, which in turn had confirmed the order of the Assistant Commissioner. The dispute revolves around additions made under Section 68 of the Income Tax Act, 1961, concerning remittances made in India by a non-resident investor company. The amount in dispute is not explicitly stated, but the appeal is filed under Section 260-A of the Act.

What were the issues?

The Tribunal had to decide the following substantial questions of law: 1. Whether the Tribunal's order was perverse in holding that Section 68 is not applicable to remittances made in India by a non-resident and that it was not the company's onus to prove the source of the investor-company (Question of law). 2. Whether the Tribunal was right in law in deleting the addition made under Section 68 when all conditions for invoking the section were satisfied and the assessee failed to discharge its prima facie burden to establish the investor's creditworthiness (Question of law). 3. Whether the Tribunal failed to observe that the assessing authority had taken all necessary steps to make an addition under Section 68 as required by law and as per Apex Court principles (Question of law). 4. Whether the Tribunal was right in holding that what is not taxable under Section 5(2) cannot be taxed under Section 68 when Section 5(2) is not applicable to the instant case (Question of law). Assessee's contentions: The tax effect 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 contentions: Liberty to revive the appeal if the matter falls within the exceptions under Circular No. 09/2024 and Circular No. 5/2024 dated 15.03.2024.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 68,Section 5(2)

AI-generated summary — verify with the full judgment below

- 1 -

NC: 2024:KHC:41274-DB ITA No. 250 of 2023

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. 250 OF 2023 BETWEEN:

1.

THE PR COMMISSIONER OF INCOME TAX CENTRAL 3RD FLOOR C R BUILDING QUEENS ROAD BENGALURU 560001

2.

THE ASSISTNAT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 1(4) 3RD FLOOR C R BUILDING QUEENS ROAD BENGALURU 560001 …APPELLANTS (BY SRI. DILIP M.,ADVOCATE A/W SRI. RAVIRAJ Y V, ADVOCATE)

AND:

M/S KANSUR DEVELOPERS INDIA PVT LTD NO 2650, GROUND FLOOR 37TH B CROSS 28TH MAIN 9TH BLOCK JAYANAGAR BENGALURU 560009 PAN AACCK 9866F …RESPONDENT (BY SRI. G. S. NAGHARISH.,ADVOCATE)

THIS ITA / INCOME TAX APPEAL UNDER SEC.260-A OF THE INCOME TAX ACT, 1961, PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE, ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME-TAX APPELLATE TRIBUNAL, BENGALURU IN ITA NO.1441/BANG/2018

Digitally signed by BHARATHI S Location: HIGH COURT OF KARNATAKA

- 2 -

NC: 2024:KHC:41274-DB ITA No. 250 of 2023

DATED 28.10.2022 FOR ASSESSMENT YEAR 2009-2010 ANNEXURE - C CONFIRMING THE ORDER OF THE APPELLATE COMMISSIONER AND CONFIRM THE ORDER PASSED BY THE ASST. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1(4), BENGALURU AND ETC.

THIS APPEAL, COMING ON FOR ORDERS, 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. G.S. Nagharish., 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 28.10.2022 passed by the Income Tax Appellate Tribunal, ‘A’ Bench, Bengaluru (for short, ‘Appellate Authority’) in ITA. No.1441/Bang/2018 for the assessment year 2009-10, raising 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 in holding that Section 68 is not applicable to remittance

- 3 -

NC: 2024:KHC:41274-DB ITA No. 250 of 2023

made in India by a non-resident and that it was not the company’s onus to prove the source of investor-company? 2. Whether on the facts and circumstances of the case, the Tribunal is right in law deleting the addition made under section 68 of the Act when all the conditions for invoking said section are satisfied in present case and when assesse had failed to discharge prima facie burden to establish credit worthiness of the investor? 3. Whether on the facts and in the circumstances of the case, the Tribunal failed to observe that assessing authority had taken all steps to make addition under section 68 of the Act as required under the law and as per principles laid down by Hon’ble Apex Court in various cases? 4. Whether on the facts and circumstances of the case, the Tribunal is right in holding that what is not taxable under section 5(2) of the Act cannot be taxed under section 68 of the Act when the provisions of section 5(2) are not applicable to instant case?”

- 4 -

NC: 2024:KHC:41274-DB ITA No. 250 of 2023

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.

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.: 4 Sl No.: 3

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 →