THE PR. COMMISSIONER OF INCOME TAX vs. M/S SREE SHIVALINGESHWRA ARECANUT TRADERS

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ITA/263/2022HC KarnatakaKAHC01022286202202 September 2024Bench: S.G.PANDIT,C.M. POONACHA5 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the appeal was not maintainable in view of Circular No. 5/2024, which prescribes a monetary limit of rupees one crore for filing appeals before the High Court. Since the monetary value involved in this appeal (Rs. 19,44,772/-) was less than the prescribed limit, the appeal was dismissed. The Court explicitly stated that the substantial questions of law raised in the appeal were kept open to be considered in an appropriate case. Therefore, there was no decision on the merits of the substantial questions of law.

What were the facts?

The appeal is filed by the Principal Commissioner of Income Tax and the Deputy Commissioner of Income Tax against an order dated 07.12.2021 passed by the Income Tax Appellate Tribunal (ITAT), Bengaluru, in ITA No. 140/Bang/2021 for Assessment Year 2013-14. The ITAT had set aside an order passed under Section 263 of the Income Tax Act, 1961. The monetary value involved in the appeal is Rs. 19,44,772/-. Subsequent to the filing of the appeal, Circular No. 5/2024 dated 15.03.2024 was issued, prescribing monetary limits for appeals to the High Court.

What were the issues?

The High Court was to decide the following substantial questions of law: 1. Whether the ITAT's order was perverse in holding that the conditions for passing an order under Section 263 of the Act were not satisfied, despite the Commissioner of Income Tax (CIT) providing findings that the assessing officer's order was prejudicial and erroneous. 2. Whether the ITAT was correct in allowing the assessee's appeal by setting aside the order under Section 263, considering that the assessing officer had not derived gross profits from unaccounted sales and purchases recorded in seized documents and had failed to conduct proper inquiry. 3. Whether the ITAT's order setting aside the Section 263 order, holding that the assessing authority correctly determined unaccepted income based on the GP rate of disclosed transactions, was in line with the CIT's findings. The Revenue contended that the ITAT's order was perverse and that the assessing authority had failed to make proper inquiries and derive gross profits from unaccounted transactions. The Revenue relied on the findings of the CIT. The judgment does not record specific arguments from the assessee.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 263,Section 265(A)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BENGALURU IN ITA

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NC: 2024:KHC:35624-DB ITA No. 263 of 2022

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 2ND 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. 263 OF 2022

BETWEEN:

1.

THE PR. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE C R BUILDING, QUEENS ROAD BENGALURU - 560 001.

2.

THE DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE NO.55/1, SHILPASHREE VIDHYARANYA COMPLEX VISHVESHWARANAGAR MYSURU - 570 008 …APPELLANTS (BY SRI. RAVI RAJ Y V .,ADVOCATE) AND:

M/S. SREE SHIVALINGESHWRA ARECANUT TRADERS 21, L BLOCK, APMC YARD SHIVAMOGGA - 577 204 PAN. AALFS3372E …RESPONDENT (BY SRI. G S NAGHARISH, ADVOCATE)

Digitally signed by BHARATHI S Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:35624-DB ITA No. 263 of 2022

THIS INCOME TAX APPEAL UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 07/12/2021 PASSED IN ITA NO. 140/BANG/2021, FOR THE ASSESSMENT YEAR 2013-2014 PRAYING TO I. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN. II. ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BENGALURU IN ITA NO. 140/BANG/2021 DATED 07/12/2021 FOR ASSESSMENT YEAR 2013-2014 ANNEXURE-C AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, MYSURU.III. TO PASS SUCH OTHER SUITABLE ORDERS AS THIS HON'BLE COURT DEEMS FIT TO GRANT IN THE FACTS AND CIRCUMSTANCES OF THE CASE IN THE INTEREST OF JUSTICE AND EQUITY 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

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NC: 2024:KHC:35624-DB ITA No. 263 of 2022

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

This appeal is filed under Section 260-A of the Income Tax Act, 1961 (for short 'the Act') questioning the correctness or otherwise of order passed by the Income Tax Appellate Tribunal, Bengaluru in ITA No.140/Bang/2021 dated 07.12.2021 for the Assessment Year 2013-14 (Annexure-C).

2.

The appeal was admitted on 06.09.2022 to examine the questions of law raised by the appellants which are extracted below:

1.

"Whether on the facts and in the circumstances of the case, the Tribunal order can be said as perverse in nature in holding that the conditions prescribed for passing order under section 263 of the Act are not satisfied when the CIT has given elaborate findings to demonstrate that the order passed by assessing authority was prejudicial as well as erroneous order"?

2.

"Whether on the facts and in the circumstances of the case, the Tribunal is right in law in allowing appeal preferred by assessee by setting aside order passed under section 263 of the Act ignoring that assessing authority had not derived gross profits from unaccounted sales and purchases recorded in seized documents and

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NC: 2024:KHC:35624-DB ITA No. 263 of 2022

assessing authority further failed to make proper enquiry before making additions"?

3.

"Whether on the facts and in the circumstances of the case, the Tribunal's order setting aside order passed under section 263 of the Act holding that the assessing authority was correct in determining the unaccented income on the basis of GP rate in disclosed transactions as per regular books of accounts ignoring findings of Commissioner of Income Tax"?.

3.

This appeal was filed on 23.05.2022 and Monetary value involved is Rs.19,44,772/-. Subsequent to filing of the appeal, Circular bearing No.5/2024 [F.No.279/Misc.142/2007- ITJ(PT.)] dated 15.3.2024 is issued under Section 265(A) of the Income Tax Act, 1961 prescribing monetary limit and the exceptions to prefer an appeal before the High Court.

4.

In view of the above Circular, the above appeal would not be maintainable since monetary value involved in this appeal is less than rupees one crore. Therefore, the above appeal would not survive for consideration and the same is dismissed.

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NC: 2024:KHC:35624-DB ITA No. 263 of 2022

5.

In view of the above, the substantial questions of law raised in the appeal are kept open to be considered in an appropriate case.

Sd/- (S.G.PANDIT) JUDGE

Sd/- (C.M. POONACHA) JUDGE

SMJ

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