THE PR COMMISSIONER OF INCOME TAX vs. M/S CONFIDENT PROJECTS INDIA PVT LTD

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ITA/469/2022HC KarnatakaKAHC01044573202219 August 2024Bench: S.G.PANDIT,C.M. POONACHA6 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeals filed by the Revenue. The Court noted that subsequent to the filing of the appeals, Circular No. 5/2024 was issued, which prescribes monetary limits for preferring appeals before the High Court. As the monetary value involved in these appeals (₹76,50,017 and ₹74,56,741) was less than the prescribed limit of rupees one crore, the appeals were held to be not maintainable. Consequently, the appeals were dismissed on this procedural ground. The Court explicitly stated that the substantial questions of law raised in both appeals were kept open to be considered in an appropriate case, implying no decision was made on the merits of the case.

What were the facts?

These appeals were filed by the Revenue (Principal Commissioner of Income-Tax and Deputy Commissioner of Income-Tax) against the orders of the Income Tax Appellate Tribunal (ITAT) for Assessment Years (AY) 2011-12 and 2012-13. The ITAT had set aside orders passed under Section 263 of the Income Tax Act, 1961, which were revisionary orders passed by the Principal Commissioner of Income-Tax. The appeals were filed on September 22, 2022. The monetary value in dispute for ITA No. 469/2022 was ₹76,50,017, and for ITA No. 470/2022 was ₹74,56,741. Subsequent to the filing of these appeals, Circular No. 5/2024, dated March 15, 2024, was issued under Section 265A of the Act, prescribing monetary limits for preferring appeals before the High Court.

What were the issues?

1. Whether, on the facts and in the circumstances of the case and law, the Tribunal is right in law in setting aside the order passed under Section 263 of the Act by holding that the order reviewed by the Commissioner in proceedings initiated under Section 263 of the Act is not based on incriminating materials, ignoring that Section 153A does not stipulate that an order under Section 143(3) read with Section 153A has to be based on incriminating material and when the Commissioner rightly took up suo motu revision as conditions set out in Section 263 are fully satisfied? 2. Whether, on the facts and in the circumstances of the case and law, the Tribunal's order can be said as perverse in holding that directions issued by the Commissioner under Section 263 of the Act cannot be sustained in law, ignoring the mandate of Sections 263 and 153A of the Act? 3. Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the Pr.CIT is seeking to revise the assessment orders completed under Section 143(3) read with Section 153A of the I.T. Act when the Assessing Officer in an order passed under Section 143(3) read with Section 153A of the I.T. Act cannot deny the claim of deduction under Section 80IB of the I.T. Act (in absence of incriminating material), therefore, the Pr.CIT in a revisionary proceeding cannot direct the Assessing Officer to disallow the claim of deduction? 4. Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that there is no error in the assessment orders completed under Section 143(3) read with Section 153A of the I.T. Act (since there is no incriminating material found during the course of search pertaining to the claim of deduction under Section 80IB of the I.T. Act), warranting interference by Pr.CIT under Section 263 of the I.T. Act, when the assessing authority had failed to consider that conditions set out in Section 80IB were not fully satisfied in the case of the assessee to allow the claim made under the said section and when original assessments passed on 10.05.2013 and 14.08.2014 for AY 2011-12 and 2012-13 under Section 143(3) were abated as per proviso to Section 153A of the Act? Revenue's Contention: The Revenue argued that the conditions for revision under Section 263 were satisfied and that the ITAT erred in setting aside the revisionary orders, particularly concerning the deduction under Section 80IB. The Revenue contended that the assessment orders were erroneous and prejudicial to the interest of the revenue. Assessee's Contention: The assessee argued that the assessment orders were not erroneous or prejudicial to the revenue and that the revisionary proceedings under Section 263 were not sustainable, especially in the absence of incriminating material to deny the deduction under Section 80IB.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 263,Section 143(3),Section 153A,Section 80IB,Section 265A

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC:33055-DB ITA No. 469 of 2022 C/W ITA No. 470 of 2022

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 19TH DAY OF AUGUST, 2024 PRESENT THE HON'BLE MR JUSTICE S.G.PANDIT AND THE HON'BLE MR JUSTICE C.M. POONACHA INCOME TAX APPEAL No. 469 OF 2022 C/W INCOME TAX APPEAL No. 470 OF 2022

IN ITA No.469/2022

BETWEEN:

1.

THE PR. COMMISSIONER OF INCOME -TAX CENTRAL CIRCLE, C.R.BUILDING QUEEN’S ROAD, BENGALURU - 560 001.

2.

THE DEPUTY COMMISSIONER OF INCOME -TAX CENTRAL CIRCLE-1(4) C.R.BUILDING QUEEN’S ROAD, BENGLAURU - 560 001. …APPELLANTS

(BY SRI RAVI RAJ Y V, ADVOCATE)

AND:

M/s. CONFIDENT PROJECTS INDIA PVT. LTD., No.574 PARK HOUSE, 8TH BLOCK KORAMANGALA BENGLAURU - 560 095. PAN: AACCC 7506L. …RESPONDENT

(BY SRI M.S. RAJENDRA, ADVOCATE FOR

Digitally signed by BHARATHI S Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:33055-DB ITA No. 469 of 2022 C/W ITA No. 470 of 2022

SRI VIVEK HOLLA, HOLLA AND HOLLA, ADVOCATE)

THIS ITA IS FILED UNDER SECTION 260-A OF INCOME TAX ACT 1961, PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN AND ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BENGALURU IN ITA No. 336/BANG/2021 DATED 13/05/2022 FOR ASSESSMENT YEAR 2012-2013 ANNEXURE-C AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE PR. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, BENGLAURU AND ETC.,

IN ITA No.470/2022

BETWEEN:

1.

THE PR. COMMISSIONER OF INCOME -TAX CENTRAL CIRCLE, C.R.BUILDING QUEEN’S ROAD, BENGALURU - 560 001.

2.

THE DEPUTY COMMISSIONER OF INCOME -TAX CENTRAL CIRCLE-1(4) C.R.BUILDING QUEEN’S ROAD, BENGLAURU - 560 001. …APPELLANTS

(BY SRI RAVI RAJ Y V, ADVOCATE)

AND:

M/s. CONFIDENT PROJECTS INDIA PVT. LTD., No.574 PARK HOUSE, 8TH BLOCK KORAMANGALA BENGLAURU - 560 095. PAN: AACCC 7506L. …RESPONDENT

(BY SRI M.S. RAJENDRA, ADVOCATE FOR SRI VIVEK HOLLA, HOLLA AND HOLLA, ADVOCATE)

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NC: 2024:KHC:33055-DB ITA No. 469 of 2022 C/W ITA No. 470 of 2022

THIS ITA IS FILED UNDER SECTION 260-A OF INCOME TAX ACT 1961, PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN AND ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BENGALURU IN ITA No. 409/BANG/2021 DATED 13/05/2022 FOR ASSESSMENT YEAR 2011-2012 ANNEXURE-C AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE PR. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, BENGLAURU AND ETC.,

THESE APPEALS COMING ON FOR ADMISSION THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

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)

1.

ITA No.469/2022 is filed by the Revenue questioning the order passed by the Income Tax Appellate Tribunal, Bengaluru1 in ITA No.336/Bang/2021 dated 13.05.2022 for the assessment year 2012-13 and ITA No.470/2022 is also filed by the Revenue questioning the order passed by the Tribunal in ITA No.409/Bang/2021 dated 13.05.2022 for the assessment year 2011-12.

1 Hereinafter referred to as the ‘Tribunal’

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NC: 2024:KHC:33055-DB ITA No. 469 of 2022 C/W ITA No. 470 of 2022

2.

In both the appeals the Revenue has raised the following substantial questions of law: 1. "Whether, on the facts and in the circumstances of the case and law, the Tribunal is right in law in setting aside order passed under section 263 of the Act by holding that order reviewed by Commissioner in proceedings initiated under section 263 of the Act are not based on incriminating materials ignoring that section 15# do not stipulate that order under section 143(3) read with section 153A has tobe based on incriminating material and when the Commissioner rightly took up suo motu revision as conditions set out in Section 263 are fully satisfied"? 2. "Whether, on the facts and in the circumstances of the case and law, Tribunal's order can be said as perverse in holding that directions issued by Commissioner under section 263 of the Act cannot be sustained in law ignoring mandate of sections 263 of the Act and as well as 153A of the Act"?

3.

"Whether on the facts and in the circumstances of the case, the Tribunal is right in law holding that the Pr.CIT is seeking to revise the assessment orders completed u/s 143(3) r.w.s. 153A of the I.T.Act when the Assessing Officer in order passed under section 143(3) r.w.s. 153A of the I.T.Act, cannot deny the claim of deduction u/s 80IB of the I.T.Act (in absence of incriminating material), therefore, the Pr.CIT in a revisionary proceeding cannot direct the assessing officer to disallow the claim of deduction"?

4.

"Whether on the facts and in the circumstances of the case, the Tribunal is right in law in holding that there is no error in the assessment orders completed u/s 143(3) r.w.s. 153A of the I.T.Act (since there is no incriminating material found during the course of search pertaining to the claim of deduction under section 80IB of the I.T.Act), warranting interference by Pr.CIT u/s 263 of the I.T.Act when assessing

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NC: 2024:KHC:33055-DB ITA No. 469 of 2022 C/W ITA No. 470 of 2022

authority had failed to consider that conditions set out Section 80IB were not fully satisfied in case of assessee to allow the claim made under said section and when original assessments passed on 10.05.2013 and 14.08.2014 for A.Y. 2011-12 and 2012-13 under section 143(3) were abated as per proviso to Section 153A of the Act"?

3.

Appeals were filed on 22.09.2022. Monetary value involved in ITA No.469/2022 is `76,50,017/- and in ITA No.470/2022 is `74,56,741/- respectively. Subsequent to filing of the appeals, Circular bearing No.5/2024 [F.No.279/Misc.142/2007-ITJ(PT.)] dated 15.3.2024 is issued under Section 265(A) of the Income Tax Act, 1961 prescribing monetary limit to prefer an appeal before the High Court.

4.

In view of the above Circular, the above appeals would not be maintainable since monetary value involved in these appeals is less than rupees one crore. Therefore, the above appeals would not survive for consideration and they are dismissed.

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NC: 2024:KHC:33055-DB ITA No. 469 of 2022 C/W ITA No. 470 of 2022

5.

In view of the above, the substantial questions of law raised in both the appeals are kept open to be considered in an appropriate case.

Sd/- (S.G.PANDIT) JUDGE

Sd/- (C.M. POONACHA) JUDGE

BS List No.: 1 Sl No.: 10

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