PR.COMMISSIONER OF INCOME TAX vs. M/S SHRI. K. A. RAME GOWDA

PDF · subscribers
ITA/446/2023HC KarnatakaKAHC01032321202325 September 2024Bench: S.G.PANDIT,C.M. POONACHA5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court disposed of the appeal with liberty granted to the Revenue to revive it as prayed for by its counsel. The Court noted the submission by the assessee regarding the tax effect being less than Rs. 2 Crores and the applicability of CBDT Circular No. 09/2024. The Revenue sought liberty to revive the appeal in case the matter fell within the exceptions of the cited circulars. Consequently, the appeal was disposed of on these terms, with the substantial questions of law kept open to be adjudicated in an appropriate proceeding. No decision was made on the merits of the ITAT's order regarding the deletion of the addition or the procedural aspects raised.

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 12.11.2021 passed by the Income Tax Appellate Tribunal (ITAT), 'C' Bench, Bengaluru. The appeal pertains to Assessment Year 2012-2013 and challenges the ITAT's deletion of an addition of Rs. 4,65,11,898. The ITAT's order was in appeal proceedings bearing ITA No. 456/Bang/2019. The Revenue sought to set aside the ITAT's order and grant other reliefs.

What were the issues?

1. Whether the Tribunal's order is perverse in deleting the addition of Rs. 4,65,11,898 by holding that Section 41(1) of the Income Tax Act, 1961, invoked by the assessing officer, is not applicable, despite the assessing authority disallowing the amount on the grounds that loans to that extent were not explained with substantial proof and were therefore taxable? (Question of law and fact, concerning Section 41(1)). 2. Whether the Tribunal's order is perverse in not calling for evidence to verify credits or in failing to set aside the matter to the assessing authority for verification of facts, considering that the mistake committed by the assessing authority was curable under Section 292B of the Act? (Question of law and fact, concerning Section 292B). 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 41(1),Section 292B

AI-generated summary — verify with the full judgment below

- 1 -

NC: 2024:KHC:39904-DB ITA No. 446 of 2023

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25TH 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.446 OF 2023 BETWEEN:

1.

PR. COMMISSIONER OF INCOME TAX, KORMANGALA, BANGALORE.

2.

THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 2 (3) 1, EXEMPTION, BANGALORE.

…APPELLANTS

(BY SRI. SANMATHI E.I., ADVOCATE)

AND:

M/S. SHRI. K.A.RAME GOWDA C/O VAGUS SUPER SPECIALTY, HOSPITALS, NO.6 AND 7, 8TH, 4TH MAIN, 18TH CROSS, MALLESHWARAM, BANGALORE-560 003

Digitally signed by BHARATHI S Location: HIGH COURT OF KARNATAKA

- 2 -

NC: 2024:KHC:39904-DB ITA No. 446 of 2023

PAN: AFDPG7452A

…RESPONDENT

THIS INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 12/11/2021 PASSED IN ITA NO.456/BANG/2019, FOR THE ASSESSMENT YEAR 2012-2013 PRAYING TO DECIDE THE FOREGOING QUESTION OF LAW AND / OR SUCH OTHER QUESTIONS OF LAW AS MAY BE FORMULATED BY THE HONBLE COURT AS DEEMED FIT AND SET ASIDE THE APPELLATE ORDER DATED 12.11.2021 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, 'C' BENCH, BENGALURU, AS SOUGHT FOR, IN THE RESPONENT-ASSESSEE'S CASE, IN APPEAL PROCEEDINGS IN ITA NO.456/BANG/2019 FOR ASSESSMENT YEAR 2012-2013 (ANNEXURE-A) AND GRANT SUCH OTHER RELIEF AS DEEMED FIT, IN THE INTEREST OF JUSTICE.

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

- 3 -

NC: 2024:KHC:39904-DB ITA No. 446 of 2023

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

Heard the learned counsel Sri. E.I.Sanmathi for appellants/Revenue.

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 12.11.2021 passed by the Income Tax Appellate Tribunal, ‘C’ Bench, Bengaluru (for short ‘Appellate Authority’) in ITA.No.456/Bang/2019 for the assessment year 2012-13, raising the following substantial questions of law: 1. "Whether on the facts and in the circumstances of the case, the Tribunal's order is perverse in in deleting the addition of rs.4,65,11,898 by holding that Section 4191) invoked by the assessing officer at the end of the order is not applicable in the present case ignoring that assessing authority made disallowance by holding that loans to the extent of said amount have not been explained with substantial proof and therefore the same is taxable"?

- 4 -

NC: 2024:KHC:39904-DB ITA No. 446 of 2023

2.

"Whether on the facts and in the circumstances of the case, the Tribunal is perverse in nature in not calling evidences for verification of credits or ought to have set aside the matter to file of assessing authority for verification of facts as mistake committed by assessing authority was curable under section 292B of the Act"?

3.

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.

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.

- 5 -

NC: 2024:KHC:39904-DB ITA No. 446 of 2023

5.

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.: 2 Sl No.: 1

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 →