THE COMMISSIONER OF INCOME TAX vs. M/S PRASANNA DEVELOPERS

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ITA/619/2015HC KarnatakaKAHC01046078201530 August 2019Bench: R DEVDAS,L.NARAYANA SWAMY4 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court permitted the appellant-Revenue to withdraw the appeal. The decision was based on the submission by the Revenue regarding the revised monetary limits for filing appeals as per Circular No. 17 of 2019, which increased the threshold from Rs. 50,00,000/- to Rs. 1,00,00,000/-. The Court noted that the Revenue had also referred to Circular No. 3 of 2018, which contained exceptions, and sought liberty to revive the appeal if the matter fell under any of these exceptions. A CBDT communication dated August 20, 2019, confirmed that the revised monetary limits were applicable to pending matters. Consequently, the appeal was allowed to be withdrawn, with liberty granted to the appellant to seek revival if the case met the criteria for an exception under Clause 10 of Circular No. 3 of 2018. No decision was made on the merits of the original dispute.

What were the facts?

The Commissioner of Income Tax and the Assistant Commissioner of Income-Tax (Appellants/Revenue) filed an appeal under Section 260-A of the Income Tax Act, 1961, against an order dated May 26, 2015, passed by the Income-Tax Appellate Tribunal (ITAT), Bangalore, in ITA No.1016/BANG/2013. This ITAT order had confirmed the order of the Appellate Commissioner, which in turn had confirmed the order of the Assessing Officer. The assessment year in question was 2010-2011. The appeal was filed before the High Court of Karnataka at Bengaluru. During the pendency of the appeal, the Revenue brought to the notice of the Court a Circular No. 17 of 2019, dated August 8, 2019, which enhanced the monetary limit for filing appeals. The Revenue also referred to Circular No. 3 of 2018, dated July 11, 2018, which prescribed earlier monetary limits and carved out exceptions.

What were the issues?

1. Whether the appeal filed by the Revenue is maintainable in light of the revised monetary limits for filing appeals as per Circular No. 17 of 2019, which superseded Circular No. 3 of 2018. The Revenue argued that the appeal might not be maintainable due to the revised monetary limits. They relied on Circular No. 17 of 2019 and Circular No. 3 of 2018. The Revenue also pointed out that it was not immediately clear if the case fell under any exceptions mentioned in Clause 10 of Circular No. 3 of 2018, and therefore, sought liberty to withdraw the appeal with a reservation to revive it if an exception applied. The Revenue also drew attention to a CBDT communication dated August 20, 2019, clarifying that the new monetary limits were applicable to pending matters. The judgment does not record any arguments from the Respondent (assessee).

Which sections of the Income-tax Act were involved?

Section 260-A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 30TH DAY OF AUGUST, 2019 PRESENT THE HON’BLE MR.JUSTICE L. NARAYANA SWAMY AND THE HON’BLE MR.JUSTICE R. DEVDAS INCOME TAX APPEAL NO.619/2015 BETWEEN:

1.

THE COMMISSIONER OF INCOME TAX C.R. BUILDING, QUEENS ROAD, BANGALORE.

2.

THE ASST. COMMISSIONER OF INCOME-TAX CIRCLE-2(1), NO.59, HMT BHAVAN, 6TH FLOOR, BELLARY ROAD, GANGANAGAR, BANGALORE - 560 032. ... APPELLANTS (BY SRI K.V. ARAVIND AND SRI DILIP M., ADVOCATES )

AND:

M/S. PRASANNA DEVELOPERS CITY POINT, KODAIALBAIL, MANGALORE. ... RESPONDENT (BY SMT. JINITA CHATTERJEE AND SRI S. PARTHASARATHI, ADVOCATES)

THIS ITA IS FILED UNDER SEC.260-A OF I.T. ACT, 1961, ARISING OUT OF ORDER DATED 26.05.2015 PASSED IN ITA NO.1016/BANG/2013, FOR THE ASSESSMENT YEAR 2010-2011. PRAYING TO:1. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE. II. ALLOW THE APPEAL AND SET ASIDE THE ORDER PASSED BY THE ITAT, BANGALORE IN ITA NO.1016/BANG/2013 DATED:26/05/2015 CONFIRMING THE ORDER OF THE APPELLATE COMMISSIONER AND CONFIRM THE ORDER PASSED BY THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE-2(1), BANGALORE.

THIS ITA COMING ON FOR HEARING, THIS DAY, DEVDAS J., DELIVERED THE FOLLOWING:

J U D G M E N T The learned counsel for the appellant-Revenue brings to the notice of this Court a Circular bearing No.17 of 2019 dated 08th August, 2019 wherein the further enhancement of monetary limit for filing of appeals by the Departments before the Income- Tax Appellate Tribunals, High Courts and Special Leave Petitions/Appeals before the Supreme Court stands amended, and by the said amendment the earlier monetary limit of Rs.50,00,000/- (Rupees fifty lakh) has not been raised to Rs.1,00,00,000/- (Rupees one crore). The earlier monetary limit was prescribed as per Circular No.3 of 2018 dated 11th July, 2018. In the light of the same, the learned counsel submits that

the appeal is not maintainable and in view of the Circular, the appeal may be permitted to be withdrawn. Further, the learned counsel would also draw the attention of this Court to Clause 10 of the Circular No.3 of 2018 dated 11th July, 2018 wherein certain exceptions are carved out. The learned counsel submits that at the present stage it may not be possible for him to submit whether the matter falls under any of the exceptions. Therefore, it is prayed that liberty may be reserved to the appellants to move this Court, if it is found that the matter falls within the exception carved out in Clause 10 of Circular bearing Number 3 of 2018.

2.

On the query of the Court as to whether the Circular is applicable to pending matters, the learned counsel draws the attention of this Court to the communication dated 20th August, 2019 made by the Central Board of Direct Taxation to all the Chief Commissioners of Income Tax clarifying at paragraph No.3 that the monetary limit prescribed in Circular No.17 of 2019 is applicable to all pending Special Leave Petitions, Appeals, Cross Objections and References.

3.

In view of the above, we permit the appellant to withdraw the appeal for the reasons stated above. Liberty is also granted to the appellant to seek revival of this appeal, if it is found that the matter falls within the exception carved out in Clause 10 of Circular bearing No.3 of 2018.

Sd/- JUDGE

Sd/- JUDGE

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