THE PR COMMISSIONER OF INCOME TAX CENTRAL vs. M/S KARTHIK ESTATE

THE PR.COMMISSIONER OF INCOME TAX CENTRAL, 3RD FLOOR, C.R.BUILDING QUEENS ROAD BANGALORE - 560 001.

THE ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE - 1 C.R.BUILDING, ATTAVARA MANGALORE - 575 001.

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 24.08.2022 passed by the Income Tax Appellate Tribunal, Bengaluru (for short, ‘Appellate Authority’) in ITA.No.432/Bang/2022 for the assessment year 2018-19.

This Court, admitted the appeal on 10.01.2023 to consider the following substantial questions of law: "1. Whether in the facts and circumstances of the case and law, the Tribunal’s order is perverse in nature in holding that the Pr. Commissioner of Income Tax was not justified invoking revision proceedings when the Assessing Officer has not made any enquiry or verification with regard to the source of additional income declared by the managing partner during course of search proceedings?

Whether in the facts and circumstances of the case and law, the Tribunal is correct in law not appreciating that Pr. Commissioner of Income Tax has power to set-aside the assessment order and send the matter for assessing authority, if he is satisfied that impugned order is erroneous and prejudicial to the interest of the Revenue?

Whether in the facts and circumstances of the case and law, the Tribunal’s order is perverse in nature in quashing the order passed by revisional authority under section 263 of the Act when the all the conditions prescribed under said section are fully satisfied?"

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.

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

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.