THE PR.COMMISSIONER OF INCOME TAX vs. K G KRISHNA

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ITA/593/2022HC KarnatakaKAHC01056719202230 September 2024Bench: S.G.PANDIT,C.M. POONACHA4 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court noted that the tax effect in the appeal was less than Rs. 2 Crores. Consequently, the appeal was not maintainable at the instance of the Revenue in view of Circular No. 09/2024 dated September 17, 2024, issued by the Central Board of Direct Taxes (CBDT), which binds the Revenue. The Revenue's counsel requested liberty to revive the appeal if the matter fell within the exceptions of the aforementioned circulars (Circular No. 09/2024 and Circular No. 5/2024 dated March 15, 2024). The Court disposed of the appeal with 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 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 before the High Court of Karnataka against an order dated June 24, 2022, passed by the Income Tax Appellate Tribunal (ITAT), Bengaluru. The appeal pertains to Assessment Year 2011-12 and challenges the ITAT's deletion of additions made by the assessing authority. The assessing authority's order was confirmed by the Appellate Commissioner. The Revenue's appeal is filed under Section 260-A of the Income Tax Act, 1961. The respondent is K G Krishna, identified by PAN APGPK 8490K.

What were the issues?

The High Court was required to decide the following substantial questions of law: 1. Whether the Tribunal was right in deleting additions made by the assessing authority by holding that there were no incriminating materials, despite materials being found during a search under Section 132 of the Act against the assessee? 2. Whether the Tribunal's order was perverse in holding that additions made by the assessing authority could not be sustained, ignoring the mandate of Sections 153A and 132 of the Act? 3. Whether the Tribunal was right in deleting additions, ignoring the findings of the assessing authority? 4. Whether the lapse of time for issuing a notice under Section 143(2) of the Act should be considered as the conclusion of assessment proceedings under that section, when not specifically stipulated? The Revenue contended that the Tribunal erred in deleting additions without considering incriminating materials found during a search and by ignoring the mandate of Sections 153A and 132, as well as the assessing authority's findings. The Revenue also questioned the Tribunal's view on the lapse of time for Section 143(2) notices. No specific arguments from the assessee were recorded in this portion of the judgment.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 132,Section 153A,Section 143(2)

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC:41271-DB ITA No. 593 of 2022

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 30TH 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. 593 OF 2022 BETWEEN:

1.

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

2.

THE DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE -1(4) PRESENT ADDRESS DCIT, CENTRAL CIRCLE-2(4) 3RD FLOOR, C.R.BUILDING, QUEENS ROAD, BENGALURU-560 001. …APPELLANTS (BY SRI. DILIP M, ADVOCATE A/W SRI. RAVI RAJ Y V.,ADVOCATE)

AND:

K G KRISHNA NO.1680/55, JAYAKRISHNA NILAYA 5TH A CROSS, 10TH MAIN ROAD, 2ND BLOCK, BANASHANKARI 1ST STAGE, BENGALURU-560 060. PAN APGPK 8490K. …RESPONDENT (RESPONDENT SERVED)

THIS ITA / INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961 PRAYING TO FORMULATE THE

Digitally signed by BHARATHI S Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:41271-DB ITA No. 593 of 2022

SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE, ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME-TAX APPELLATE TRIBUNAL, BENGALURU IN ITA NO. 311/BANG/2020 DATED 24.06.2022 FOR ASSESSMENT YEAR 2011-2012 ANNEXURE C AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL RANGE 1(4), BENGALURU AND ETC.

THIS APPEAL, COMING ON FOR HEARING, 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)

Heard the learned counsel Sri. Dilip. M., along with Sri. Raviraj. Y.V., 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 24.06.2022 passed by the Income Tax Appellate Tribunal, ‘C’ Bench, Bengaluru (for short, ‘Appellate Authority’) in ITA.No.311/Bang/2020 for the assessment year 2011-12, raising the following substantial questions of law: “1. Whether on the facts and in the circumstances of the case and law, the

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NC: 2024:KHC:41271-DB ITA No. 593 of 2022

Tribunal is right in law in deleting the additions made by assessing authority by holding that there are no incriminating materials on which additions are made ignoring that the incriminating materials were found against assessee in search conducted in case of assessee in pursuance to the provisions of Section 132 of the Act? 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 additions made by assessing authority cannot be sustained in law ignoring mandate of sections 153A and 132 Act? 3. Whether on the facts and in the circumstances of the case, the Tribunal is right in law deleting additions ignoring findings of the assessing authority? 4. Whether on the facts and in the circumstances of the case, the lapse of time for issuance of notice under Section 143(2) of the Act be considered as conclusion of assessment proceedings under section 143(2) of the Act when same is not specifically stipulated under the provisions of the Act?”

3.

It is noticed that the tax effect in this appeal is less than Rs.2 Crores and therefore, the appeal would not

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NC: 2024:KHC:41271-DB ITA No. 593 of 2022

be maintainable 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.

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

BS - List No.: 4 Sl No.: 0

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