SRI MUDDANNA CHANNAKESHAVA vs. ASSISTANT COMMISSIONER OF INCOME TAX

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WP/14599/2024HC KarnatakaKAHC01031009202411 June 2024Bench: S SUNIL DUTT YADAV6 pages
AI SummaryRemanded

What did the High Court hold?

The High Court set aside the order of the CIT(A) dated 22.03.2024, which had rejected the application for condonation of delay and consequently the appeal for AY 2016-17. The Court reasoned that the CIT(A) had adopted a hyper-technical approach, similar to what was observed in a related case for AY 2011-12 concerning the same assessee. The Court found that the contention regarding the proceedings being without jurisdiction, due to potential abatement under the Canara Housing Development Co. decision, constituted a sufficient ground for condoning the delay. The Court emphasized that no view was expressed on the merits of the case, including the abatement contention, and all such contentions were to be considered after remand. The matter was remitted to the CIT(A) for fresh consideration of the appeal on its merits. The operative direction was to set aside the impugned order and remit the matter.

What were the facts?

The petitioner, Sri. Muddanna Channakeshava, challenged an order dated 22.03.2024 passed by the Commissioner of Income Tax (Appeals) (CIT(A)) rejecting his application for condonation of delay and consequently his appeal for Assessment Year (AY) 2016-17. The appeal was against a second assessment order dated 30.09.2021 passed under Section 153A of the Income Tax Act, 1961. The delay in filing the appeal before the CIT(A) was 117 days. The petitioner also sought to quash the assessment order and direct a fresh re-assessment. The High Court noted a previous common order for AY 2011-12 and 2016-17 in a related writ petition where the order rejecting condonation of delay was set aside.

What were the issues?

1. Whether the delay of 117 days in filing the appeal before the CIT(A) for AY 2016-17 should be condoned, considering the petitioner's contention that the assessment proceedings under Section 153A may have abated in light of the law declared in Canara Housing Development Co. Vs. DCIT (2014) 49 taxmann.com 98. Assessee's Contention: The petitioner argued that the proceedings for assessment were subject to abatement as per the cited precedent, and this position of law constituted sufficient cause for the delay. They contended that if the assessment order was without jurisdiction, the delay should not impede challenging it. Revenue's Contention: The judgment does not record specific arguments from the revenue regarding the condonation of delay. However, the CIT(A)'s order rejected the delay on the grounds that the cause presented was not 'sufficient cause'.

Which sections of the Income-tax Act were involved?

Section 153A

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC:20499 WP No. 14599 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 11TH DAY OF JUNE, 2024 BEFORE THE HON'BLE MR JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 14599 OF 2024 (T-IT) BETWEEN: SRI. MUDDANNA CHANNAKESHAVA, S/O LATE MUDDANNA, AGED 55 YEARS, R/AT NO. 96, BILISHIVALE VILLAGE, HENNUR MAIN ROAD, KOTHANUR POST, BENGALURU - 560 077. …PETITIONER (BY SRI. M.V. SESHACHALA, SENIOR ADVOCATE FOR SRI. NAGHARISH G.S., ADVOCATE) AND: 1. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE -1(2), C.R. BUILDING, QUEENS ROAD, BENGALURU - 560 001. 2. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE -1(2), C.R. BUILDING, QUEENS ROAD, BENGALURU - 560 001. 3. TAX RECOVERY OFFICER (CENTRAL), C.R. BUILDING, QUEENS ROAD, BENGALURU - 560 001. 4. PRINCIPAL COMMISSIONER OF INCOME TAX CENTRAL, Digitally signed by VIJAYA P Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:20499 WP No. 14599 of 2024 C.R. BUILDING, QUEENS ROAD, BENGALURU - 560 001. 5. COMMISSIONER OF INCOME TAX APPEALS (11), ROOM NO. 322, 3RD FLOOR, C.R. BUILDING, QUEENS ROAD, BENGALURU - 560 001. …RESPONDENTS (BY SRI. M. DILIP, JR. STANDING COUNSEL)

THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DATED 22/03/2024 PASSED BY THE FIFTH RESPONDENT IN APPEAL NO. CIT(A)-11/BNG/10005/2019-20 ANNEXURE-E FOR AY 2016-17 REJECTING THE APPLICATION FOR CONDONATION OF DELAY AND CONSEQUENTLY THE APPEAL ITSELF AND DIRECT THE FIFTH RESPONDENT TO CONSIDER THE APPEAL ON MERITS.

THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, THE COURT MADE THE FOLLOWING: ORDER I.A.No.1/2024 is allowed. The petitioner is dispensed with the production of certified copy of Annexure-E. 2. The petitioner has called in question the correctness of the order dated 22.03.2024 passed by respondent No.5 rejecting the application for condonation of delay and consequently rejecting the appeal itself for the assessment year 2016-17. The petitioner has also

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NC: 2024:KHC:20499 WP No. 14599 of 2024 sought for issuance of writ of certiorari to quash the second assessment order dated 30.09.2021 passed by respondent No.1 for the assessment year 2016-17 and has sought for directions to pass fresh re-assessment under Section 153A of the Income Tax Act, 1961 (for short 'the Act')

3.

The petitioner has challenged the assessment order passed under Section 153A of the Act by way of an appeal and there was a delay of 117 days which however was declined to be condoned as per the order by the Commissioner of Income Tax (Appeals) at Annexure-'E'. 4. It is noticed that the order in the appeal previously was a common order as regards the assessment year 2011-12 and 2016-17 which was subject matter of consideration of W.P.No.14546/2024, this Court by a detailed order has set aside the order rejecting the condonation of delay.

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NC: 2024:KHC:20499 WP No. 14599 of 2024 5. In the present case, it is noticed that in the application for condonation of delay filed contention taken up is that the proceedings for assessment which is subject matter of appeal stood abated in light of law declared in Canara Housing Development Co. Vs. DCIT reported in (2014) 49 taxmann.com 98. It is stated that in light of such position of law, delay of 117 days may be condoned. 6. The order by the Commissioner of Income Tax (Appeals) has rejected to accept the cause as 'sufficient cause' for a period of 117 days delay in filing of an appeal for assessment year 2016-17 was declined to be condoned. 7. The approach of the Commissioner of Income Tax (Appeals) considering condonation of delay has been dealt with as regards the year 2011-12 in W.P.No.14546/2024 observing that the Commissioner of Income Tax (Appeals) has taken a hyper technical approach.

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NC: 2024:KHC:20499 WP No. 14599 of 2024 8. Taking note that as regards the very same assessee in the previous year delay has been condoned, in the present case also the cause as made out in the application would constitute a sufficient ground and if on merits contention of the petitioner is to be upheld, then the order of assessment would be one without jurisdiction and accordingly, the delay ought not come in the way of challenging such order. 9. It is made clear that no view is expressed on merits and all contentions on merit are to be taken note of after remand. However, the reason assigned in the affidavit filed in support of the appeal in the proceedings contending that proceedings are without jurisdiction by itself would constitute a sufficient cause. 10. It is made clear that observations made herein would not come in the way of the authority deciding the matter on its merits including as regards the contention that proceedings stands abated.

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NC: 2024:KHC:20499 WP No. 14599 of 2024 11. Accordingly, the order of the Commissioner of Income Tax (Appeals) dated 22.03.2024 at Annexure-'E' is set aside and matter is remitted for fresh consideration as regards the assessment year 2016-17 to be decided. Accordingly, petition is disposed off. All contentions are kept open. Sd/- JUDGE MCR

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