THE PRL COMMISSIONER OF INCOME vs. M/S NIRANI SUGARS LTD.,

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ITA/100033/2022HC KarnatakaKAHC02014136202229 July 2025Bench: S.SUNIL DUTT YADAV,VIJAYKUMAR A.PATIL4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court noted that the appeal fell under the monetary limit specified in a CBDT circular, indicating the matter should be withdrawn. Consequently, the appeal was disposed of without adjudicating the substantial questions of law.

What were the facts?

The Income Tax Department appealed against an ITAT order concerning assessment year 2004-05. The appeal raised substantial questions of law regarding the validity of penalty proceedings initiated under Section 271(1)(c). The tax effect was Rs. 1,01,46,103/-.

What were the issues?

The primary issues revolved around the validity of a penalty notice under Section 271(1)(c) due to alleged defects in its issuance and whether such defects were curable. The court also considered if the ITAT was right in deciding the validity of the notice without it being specifically raised before lower authorities.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 274,Section 292B,Section 260A

AI-generated summary — verify with the full judgment below

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HC-KAR NC: 2025:KHC-D:9335-DB ITA No. 100033 of 2022

IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 29TH DAY OF JULY, 2025 PRESENT THE HON'BLE MR. JUSTICE S.SUNIL DUTT YADAV AND THE HON'BLE MR. JUSTICE VIJAYKUMAR A.PATIL INCOME TAX APPEAL NO.100033 OF 2022 BETWEEN: 1. THE PRL. COMMISSIONER OF INCOME TAX, NAVANAGAR, HUBLI.

2.

ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, BELAGAVI. - APPELLANTS (BY SRI. THIRUMALESH M.M. AND SMT. ROOPA R.A, ADVOCATES)

AND: M/S NIRANI SUGARS LTD., KULAKI CROSS, MUDHOL, DIST. BAGALKOT. (PAN: AABCN 2166 J) - RESPONDENT (NOTICE TO RESPONDENT IS SERVED)

THIS ITA FILED UNDER SECTION 260A OF THE INCOME-TAX ACT, 1961, PRAYING TO SET ASIDE THE ORDERS PASSED BY THE INCOME-TAX APPELLATE TRIBUNAL, PANAJI BENCH, PANAJI IN ITA NO.126/PAN/2018, DATED 01.04.2022 FOR THE ASSESSMENT YEAR 2004-05 MARKED AS ANNEXURE-A AND CONFIRM THE ORDER UNDER SECTION 271 (1)(C) DATED 05.09.2014 PASSED BY THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, BELAGAVI FOR THE ASSESSMENT YEAR 2004-05 AT ANNEXURE-C & ETC.

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

CORAM: THE HON'BLE MR. JUSTICE S.SUNIL DUTT YADAV AND THE HON'BLE MR. JUSTICE VIJAYKUMAR A.PATIL

RAKESH S HARIHAR Digitally signed by RAKESH S HARIHAR Location: High Court of Karnataka, Dharwad Bench Date: 2025.08.04 11:44:56 +0530

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HC-KAR NC: 2025:KHC-D:9335-DB ITA No. 100033 of 2022

ORAL JUDGMENT (PER: THE HON'BLE MR. JUSTICE S.SUNIL DUTT YADAV)

The appeal has been filed under Section 260-A of the Income Tax Act challenging the order passed in I.T.A. No. 126/PAN/2018 relating to assessment year 2004-05. It is noticed that the tax effect in the appeal in terms of the memo dated 29.07.2025 is Rs.1,01,46,103/- raising the following substantial questions of law: 1. Whether omission of the Assessing Officer to explicitly mention that penalty proceedings are being initiated for furnishing of inaccurate particulars or that for concealment of income, makes the penalty order liable for cancellation even when the Assessing Officer has recorded his ‘satisfaction’ in the order of assessment that since the assessee has furnished inaccurate particulars of his total income, penalty proceedings u/s 271(1)(c) are initiated separately, thereby clearly putting the assessee to notice, the grounds which he has to meet specifically in the penalty proceedings?

2.

Whetherthe Income Tax Appellate Tribunal is right in holding that since the Assessing Officer ha snot struck out the irrelevant part of the notice u/s 274 r/w/s 271(1)(c) of the Income Tax Act, 1961,

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HC-KAR NC: 2025:KHC-D:9335-DB ITA No. 100033 of 2022

the notice is faulty, when it is merely a technical mistake curable under Section 292B of the Income Tax Act, 1961 considering the fact that the Assessing Officer has recorded his ‘satisfaction’ in the order of assessment prior to the initiation of penalty proceedings that since the assessee has furnished inaccurate particulars of his total income, penalty proceedings u/s 271(1)(c) are initiated separately?

3.

Whether on the facts and in the circumstances of the case and in law the Tribunal was right in deciding the validity of the penalty notice issued in the absence of a specific ground on the issue not having been raised by the assessee respondent before the Assessing Authority or in the appellate proceedings before the Commissioner of Income Tax (Appeals) nor the Tribunal?

2.

Learned counsel for the appellants has filed a memo which reads as under: “That the appellant has filed the above appeal challenging the ITAT order. As per the Circular No. 09/2024 dated 17.09.2024 the above matter falls under the Below Monetary Limit, i.e., 2 crore and the tax effect is Rs.1,01,46,103.. Hence the matter needs to be withdrawn as per the Circular.”

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HC-KAR NC: 2025:KHC-D:9335-DB ITA No. 100033 of 2022

3.

Copy of the circular dated 17.09.2024 of the Central Board of Direct Taxes is enclosed. In the light of the subject matter of the appeal being below monetary limit in terms of the Circular, the proceedings cannot be continued. Accordingly, the appeal stands disposed off.

4.

The substantial questions of law raised above are kept open to be adjudicated in appropriate proceedings.

Sd/- (S.SUNIL DUTT YADAV) JUDGE

Sd/- (VIJAYKUMAR A.PATIL) JUDGE

BVV, CT:VP LIST NO.: 1 SL NO.: 50

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