COMMISSIONER OF INCOME TAX-III vs. SHRI M J BALACHANDER

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ITA/221/2013HC KarnatakaKAHC01021814201321 February 2023Bench: P.S.DINESH KUMAR,RAMACHANDRA D. HUDDAR3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Karnataka disposed of the appeal with a direction to the Assessing Officer (AO) to pass a rectification order. The Court noted the submission by the respondent assessee that the appeal arose out of a protective assessment and that the substantive additions were made in the hands of M/s. Venkatesha Education Society. This other assessee had paid the disputed tax under the Vivad se Vishwas scheme, and the High Court had previously dismissed the department's appeals against them. In light of FAQ No. 35 to Circular No. 9/2020, the assessee contended that the department must pass a rectification order deleting the protective additions. The revenue's counsel did not dispute this position. Therefore, the appeal was disposed of with the operative direction for the AO to pass the rectification order.

What were the facts?

This appeal was filed by the Commissioner of Income Tax-III and the Deputy Commissioner of Income Tax (appellants) against an order dated 21.12.2012 passed by the Income Tax Appellate Tribunal (ITAT), 'B' Bench, Bangalore, in ITA Nos. 93/BANG/2012 and 98/BANG/2012 for the Assessment Year 2008-09. The respondent assessee, Shri M.J. Balachander, was assessed on a protective basis. The department had made similar additions on a substantive basis in the hands of M/s. Venkatesha Education Society, against whom the department had filed appeals before the High Court. M/s. Venkatesha Education Society subsequently paid the disputed tax under the Vivad se Vishwas scheme, and the High Court dismissed the department's appeals concerning that assessee.

What were the issues?

1. Whether the present appeal survives for consideration, given that the substantive additions were made in the hands of another assessee (M/s. Venkatesha Education Society) who has since settled the dispute under the Vivad se Vishwas scheme. Assessee's Contention: The respondent assessee argued that since M/s. Venkatesha Education Society, in whose hands substantive additions were made, has paid the disputed tax under the Vivad se Vishwas scheme, and the High Court has dismissed the department's appeals against that assessee, the present appeal arising from a protective assessment does not survive. The assessee relied on FAQ No. 35 to Circular No. 9/2020, stating that the department should pass a rectification order deleting the protective additions. The assessee prayed for the dismissal of the department's appeals. Revenue's Contention: The Standing Counsel for the revenue did not dispute the submissions made by the assessee's counsel regarding the protective assessment and the need for a rectification order as per Circular No. 9/2020.

Which sections of the Income-tax Act were involved?

Section 260-A

AI-generated summary — verify with the full judgment below

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ITA No. 221/2013

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 21ST DAY OF FEBRUARY, 2023 PRESENT THE HON'BLE MR JUSTICE P.S.DINESH KUMAR AND THE HON'BLE MR JUSTICE RAMACHANDRA D. HUDDAR INCOME TAX APPEAL NO. 221 OF 2013

BETWEEN:

COMMISSIONER OF INCOME TAX-III CENTRAL REVENUE BUILDINGS QUEENS ROAD BANGALORE-560 001

2.

DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-1(2) BANGALORE …APPELLANTS

(BY SHRI. E.I. SANMATHI, STANDING COUNSEL)

AND:

SHRI. M.J. BALACHANDER 16, 1ST MAIN ROAD VASANTH NAGAR BANGALORE …RESPONDENT

(BY SHRI. S. SHARATH, ADVOCATE)

THIS ITA IS FILED UNDER SEC.260-A OF I.T. ACT, 1961, ARISING OUT OF ORDER DATED 21.12.2012 PASSED IN ITA NO.93/BANG/2012 AND ITA NO.98/BANG/2012 FOR THE ASSESSMENT YEAR 2008-09, PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN AND SET ASIDE THE APPELLATE ORDER OF THE ITAT, 'B' BENCH, BANGALORE IN ITA NOS.93/BANG/2012 AND 98/BANG/2012 DATED 21.12.2012, AS SOUGHT FOR IN THIS APPEAL.

Digitally signed by ANUSHA V Location: HIGH COURT OF KARNATAKA

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ITA No. 221/2013

THIS ITA, COMING ON FOR HEARING, THIS DAY, P.S.DINESH KUMAR, J., DELIVERED THE FOLLOWING:

JUDGMENT

Shri Sharath, learned advocate appearing for the respondent has filed a memo of even date and it reads as follows: “It is submitted that the Respondent in the above Appeals were assessed on protective basis. The department made very same additions on substantive basis in the hands of M/s. Venkatesha Education Society, where the department was in Appeal before this Hon’ble Court in ITA Nos. 248/2013, 254/2013, 255/2013, 257/2013, 258/2013. The Assessee M/s. Venkatesha Education Society paid the disputed tax under vivad se vishwas scheme.

This Hon’ble Court dismissed the department appeals of the Assessee viz., M/s. Venkatesh Education Society by order dated 10.01.2023. Thus, the Respondent Assessee being assessed on protective basis, in view of FAQ No.35 to Circular No.9/2020 the department has to pass the rectification order deleting the protective additions.

In this regard the Respondent prays before this Hon’ble Court to dismiss the Appeals of the department. ”

2.

Shri Sharath submitted that other assessee, M/s. Venkatesha Education Society, has paid tax under vivad se vishwas scheme. Therefore, this appeal does not survive for consideration. He further submitted that

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ITA No. 221/2013

this appeal arises out of protective assessment and the only thing remains to be done by the AO1 is to pass rectification order as per question No.25 in Circular No.9/2020. The same is not disputed by Shri E.I.Sanmathi.

3.

In view of the above, this appeal stands disposed of with a direction to the AO to pass rectification order.

No costs.

Sd/- JUDGE

Sd/- JUDGE

1 Assessing Officer

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