THE PR. COMMISSIONER OF INCOME TAX CENTRAL vs. M/S SHYAMARAJU AND COMPANY (INDIA) PVT LTD

PDF · subscribers
ITA/375/2023HC KarnatakaKAHC01026066202326 September 2024Bench: S.G.PANDIT,C.M. POONACHA4 pages
AI SummaryRemanded

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, citing CBDT Circular No. 09/2024. The Revenue requested liberty to revive the appeal if it met the exceptions under the mentioned circulars. The Court granted this liberty to the Revenue. Consequently, the appeal was disposed of with the liberty to revive. 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.

What were the facts?

The Revenue, represented by the Principal Commissioner of Income-Tax and the Deputy Commissioner of Income-Tax, filed an appeal under Section 260-A of the Income Tax Act, 1961, against an order dated 26.04.2022 passed by the Income Tax Appellate Tribunal, 'A' Bench, Bengaluru. The appeal pertains to assessment year 2012-13 and challenges the Tribunal's decision regarding disallowances made under Section 14A and additions under Section 115JB(1). The High Court admitted the appeal to consider substantial questions of law. During the hearing, the assessee, M/s. Shyamaraju and Company (India) Pvt. Ltd., contended that the tax effect was below Rs. 2 Crores, making the appeal non-entertainable in light of CBDT Circular No. 09/2024.

What were the issues?

1. Whether, on the facts and circumstances, the Tribunal was legally correct in not adjudicating the issue of disallowance made under Section 14A, despite the Revenue urging a specific ground in its appeal against the CIT(A)'s deletion of this disallowance? 2. Whether, on the facts and circumstances, the Tribunal was legally correct in directing the assessing authority to recompute the disallowance under Section 115JB(1)(f) independently of the disallowance computed under Section 14A, when such a direction is not warranted by the Act? 3. Whether, on the facts and circumstances, the Tribunal's order can be considered perverse due to its failure to appreciate the assessing authority's reasons for making additions? Assessee's contention: The appeal should not be entertained due to the tax effect being less than Rs. 2 Crores, as per CBDT Circular No. 09/2024, which binds the Revenue. Revenue's contention: The Revenue sought liberty to revive the appeal if the matter falls within the exceptions provided in CBDT Circulars No. 09/2024 and No. 5/2024.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 14A,Section 115JB(1)

AI-generated summary — verify with the full judgment below

- 1 -

NC: 2024:KHC:40522-DB ITA No. 375 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. 375 OF 2023 BETWEEN:

1.

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

2.

THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE -6(1)(1), PRESENT ADDRESS DCIT, CENTRAL CIRCLE-2(2), 3RD FLOOR, C.R. BUILDING, QUEENS ROAD, BENGALURU-560 001 …APPELLANTS (BY SRI. DILIP M., A/W SRI. RAVIRAJ Y.V., ADVOCATES) AND:

M/S. SHYAMARAJU AND COMPANY (INDIA) PVT. LTD., DIVYASREE CHAMBERS, 'A' WING, NO.11, 'O' SHAUGNESSY ROAD, BENGALURU-560 025. …RESPONDENT (BY SRI. AVINASH MALLYA U., ADVOCATE)

THIS ITA / INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF THE INCOME TAX ACT, 1961, PRAYING TO I. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE 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

- 2 -

NC: 2024:KHC:40522-DB ITA No. 375 of 2023

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., learned counsel for appellants/Revenue and Sri. Avinash Mallya.U., 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 26.04.2022 passed by the Income Tax Appellate Tribunal, ‘A’ Bench, Bengaluru (for short, ‘Appellate Authority’) in ITA.No.2010/Bang/2018 for the assessment year 2012-13.

3.

This Court, admitted the appeal on 24.01.2024 to consider the following substantial questions of law: "1. Whether on the facts and circumstances of the case, the Tribunal is right in law in not adjudicating the issue of disallowance made by assessing

- 3 -

NC: 2024:KHC:40522-DB ITA No. 375 of 2023

authority under section 14A of the Act, the disallowance being deleted by CIT(A) in-spite of specific ground urged by Revenue in its appeal?

2.

Whether on the facts and circumstances of the case, the Tribunal is right in law in directing the assessing authority setting to recomputed the disallowance for making addition under clause (f) of Section 115JB(1) independently of disallowance computed as per Section 14A of the Act when the same is not warranted as per provisions of the Act?

3.

Whether on the facts and circumstances of the case, the Tribunal’s order can be said as perverse in nature as Tribunal failed to appreciate the reasons recorded by assessing authority for making additions?”

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.

- 4 -

NC: 2024:KHC:40522-DB ITA No. 375 of 2023

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 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.: 18

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 →