PR. COMMISSIONER OF INCOME TAX vs. KARANTAKA VIKAS GRAMEEN BANK

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ITA/392/2022HC KarnatakaKAHC01037788202224 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 appeal should not be entertained due to the tax effect being below Rs. 2 Crores, citing CBDT Circular No. 09/2024. The revenue requested liberty to revive the appeal if it fell under exceptions mentioned in Circular No. 09/2024 and Circular No. 5/2024. In light of these submissions, the Court granted 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 questions of law.

What were the facts?

The Revenue, comprising the Pr. Commissioner of Income Tax and the Income Tax Officer, filed an appeal under Section 260-A of the Income Tax Act, 1961, against an order dated 28.02.2022 passed by the Income Tax Appellate Tribunal (ITAT), Bengaluru Bench. The appeal pertains to Assessment Year 2009-10 and challenges the ITAT's decision in ITA No. 1527/Bang/2017. The High Court admitted the appeal to consider substantial questions of law concerning the limitation period for orders under Section 201(1)/201(1A) of the Act. The assessee is Karnataka Vikas Grameen Bank. The dispute involves the applicability of Section 201(3) regarding the time limit for issuing such orders.

What were the issues?

1. Whether on facts and in the circumstances of the case, the Tribunal is correct in holding that the order under Section 201(1)/201(1A) is barred by limitation as provided under Section 201(3) without considering that the assessee has not filed a statement under Section 200 in respect of all cases of interest payment where TDS was not made? (Question of law and fact, concerning Section 201(3) and Section 200 of the Income Tax Act, 1961). 2. Whether the Tribunal's order can be said as perverse in nature in holding that the order under Section 201(1)/201(1A) is barred by limitation as provided under Section 201(3) ignoring that the assessee has not at all deducted tax at source on payment of interest on term deposits to members and these details are not furnished in the statement filed under Section 200 of the Act, which shows that no question arises of the assessee having filed the statement under Section 200 and therefore the limit of 2 years from the end of the financial year in which the statement is filed under Section 200 will not apply in the present case? (Question of law and fact, concerning Section 201(3) and Section 200 of the Income Tax Act, 1961). Assessee's Contention: The tax effect in this appeal 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 Contention: The revenue requested 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 201(1),Section 201(1A),Section 201(3),Section 200

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC:39736-DB ITA No. 392 of 2022

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. 392 OF 2022 BETWEEN:

1.

PR. COMMISSIONER OF INCOME TAX, C R BUILDING, ATTAVARA, MANGALORE.

2.

THE INCOME TAX OFFICER, TDS WARD-1, HUBLI. …APPELLANTS (BY SRI SANMATHI E I, ADVOCATE) AND:

1.

KARANTAKA VIKAS GRAMEEN BANK, P B ROAD, BELGAUM ROAD, DHARWAD-580008, PAN: AAAAK6324Q …RESPONDENT (BY SRI RAVI SHANKAR S V, ADVOCATE)

THIS APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 28/02/2022 PASSED IN ITA NO.1527/BANG/2017, FOR THE ASSESS MENT YEAR 2009-2010, PRAYING THAT THIS HON’BLE COURT MAY BE PLEASED TO: (1) 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:39736-DB ITA No. 392 of 2022

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.Ravi Shankar S.V., 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 28.02.2022 passed by the Income Tax Appellate Tribunal, ‘B’ Bench, Bengaluru (for short, ‘Appellate Authority’) in ITA.No.1527/Bang/2017 for the assessment year 2009-10.

3.

This

Court,

admitted the appeal on 10.07.2023 to consider the following substantial question of law: “1. Whether on facts and in the circumstances of the case, the Tribunal is

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NC: 2024:KHC:39736-DB ITA No. 392 of 2022

correct in holding that the order under Section 201(1)/201(1A) is barred by limitation as provided under Section 201(3) without considering that the assessee has not filed statement under Section 200 in respect of all those cases of interest payment where TDS was not made?

2.

Whether the Tribunal's order can be said as perverse in nature in holding that the order under Section 201(1)/201(1A) is barred by limitation as provided under Section 201(3) ignoring that the assessee has not at all deducted tax at source on payment of interst on term deposits to members and these details are not furnished in the statement filed under Section 200 of the Act which shows that no question arises of the assessee having filed the statement under Section 200 and therefore the limit of 2 years from the end of financial year in which statement is filed under Section 200, will not apply in present case?”

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.

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NC: 2024:KHC:39736-DB ITA No. 392 of 2022

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

MPK CT:VN List No.: 2 Sl No.: 45

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