PR. COMMISSIONER OF INCOME TAX vs. M/S PRATIBHA JEWELLARY HOUSE

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ITA/282/2021HC KarnatakaKAHC01004857202124 September 2024Bench: S.G.PANDIT,C.M. POONACHA4 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court disposed of the appeal with liberty to the revenue to revive it as prayed for by its counsel. The Court noted the submission by the assessee's counsel regarding the tax effect being less than Rs. 2 Crores and the applicability of CBDT Circular No. 09/2024. The revenue's counsel sought liberty to revive the appeal if the matter fell within the exceptions of the circulars. Consequently, the appeal was disposed of on these terms. The substantial question of law was kept open to be adjudicated in an appropriate proceeding. No specific finding was made on the perversity of the orders or the satisfaction of conditions for levying penalty under Section 271(1)(c).

What were the facts?

The Revenue, comprising the Pr. 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 26.06.2020 passed by the Income Tax Appellate Tribunal, Bengaluru. This order was in ITA No. 2403/Bang/2019 concerning Assessment Year 2011-12. The appeal was admitted by the High Court of Karnataka on 05.10.2021 to consider a substantial question of law. The dispute pertains to the deletion of penalty levied under Section 271(1)(c) of the Act by the appellate authorities.

What were the issues?

1. Whether, on the facts and in the circumstances of the case and in law, the orders of the Tribunal as well as the CIT(A) can be said to be perverse in law in deleting the penalty levied under Section 271(1)(c) of the Act for the assessment year under consideration, given that the conditions for invoking Section 271(1)(c) were fully satisfied and the Revenue's appeal challenging the deletion of additions made in the assessment order was pending adjudication before the High Court? Assessee's Contention: 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 17.09.2024, which binds the revenue. Revenue's Contention: The revenue sought liberty to revive the appeal in case the matter falls within the exceptions 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 271(1)(c)

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC:39767-DB ITA No. 282 of 2021

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 24TH 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. 282 OF 2021 BETWEEN:

1.

PR. COMMISSIONER OF INCOME TAX, BMTC COMPLEX, KORAMANGALA, BANGALORE.

2.

THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-7(2)(1), BANGALORE. …APPELLANTS

(BY SRI SANMATHI E I.,ADVOCATE)

AND:

1.

M/S PRATIBHA JEWELLARY HOUSE, NO.1/1 RAJARAM, MOHANROY ROAD, RICHMOND CIRCLE, BANGALORE-560025, PAN-AABFP 1771 G. …RESPONDENT (BY SRI LAVA M, ADVOCATE)

THIS APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 26.06.2020 PASSED IN ITA NO.2403/BANG/2019, FOR THE ASSESSMENT YEAR 2011-2012 (ANNEXURE-A), PRAYING THIS HON'BLE COURT TO: (A) DECIDE THE FOREGOING QUESTION OF LAW AND/OR SUCH OTHER QUESTIONS OF LAW AS MAY BE FORMULATED BY THE HON'BLE COURT AS DEEMED FIT AND ETC.

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

Digitally signed by B LAVANYA Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:39767-DB ITA No. 282 of 2021

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.Sanmathi.E.I., for appellants/Revenue and learned counsel Sri.Lava M 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 26.06.2020 passed by the Income Tax Appellate Tribunal, ‘A’ Bench, Bengaluru (for short, ‘Appellate Authority’) in ITA.No.2403/Bang/2019 for the assessment year 2011-12. 3. This

Court,

admitted the appeal on 05.10.2021 to consider the following substantial question of law: “Whether on the facts and in the circumstances of the case and in law, the orders of

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NC: 2024:KHC:39767-DB ITA No. 282 of 2021

Tribunal as well as CIT(A) can be said as perverse in law in deleting the penalty levied under Section 271(1)(C) of the Act for assessment year under consideration since both the appellate authorities failed to appreciate that conditions for invoking section 271(1)(C) to levy penalty were fully satisfied in case of assessee and also failed to consider the Revenue’s appeal challenging the deletion of additions made in assessment order is pending for adjudication before this Hon’ble Court?"

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

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NC: 2024:KHC:39767-DB ITA No. 282 of 2021

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

MPK List No.: 2 Sl No.: 0

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