PRINCIPAL COMMISSIONER OF INCOME TAX-4 vs. M/S MAINI PRECISION PRODUCTS LTD

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ITA/81/2021HC KarnatakaKAHC01007322202005 July 2022Bench: P.S.DINESH KUMAR,C.M. POONACHA5 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that if there is no failure on the part of the assessee to make a true and correct disclosure, the Revenue cannot pursue further judicial scrutiny. The appeal was dismissed based on this principle.

What were the facts?

The Revenue appealed against an ITAT order that annulled a reassessment order. The ITAT found no failure on the part of the assessee to fully and truly disclose material facts necessary for assessment.

What were the issues?

Whether the Tribunal was right in annulling the reassessment order when there was no failure by the assessee to disclose material facts. Whether the reassessment was validly initiated under Section 147.

Which sections of the Income-tax Act were involved?

Section 147

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 5TH DAY OF JULY, 2022 PRESENT THE HON'BLE MR. JUSTICE P.S.DINESH KUMAR AND THE HON’BLE MR. JUSTICE C.M. POONACHA I.T.A.No. 81 of 2021 BETWEEN:

1 . PRINCIPAL COMMISSIONER OF INCOME TAX-4

BMTC COMPLEX

KORAMANGALA

BENGALURU

2 . ASSISTANT COMMISSIONER OF INCOME TAX

CIRCLE 4(1) (2)

BMTC COMPLEX

KORAMANGALA, BENGALURU ...APPELLANTS

(BY SRI SANMATHI E.I, ADVOCATE)

AND

M/s. MAINI PRECISION PRODUCTS LTD., B-165, 3RD CROSS, IST STAGE PEENYA INDUSTRIAL ESTATE BENGALURU-560 058 PAN AABCM 8269 R

…RESPONDENT

(BY SRI CHYTHANYA K.K., SENIOR ADVOCATE FOR SRI TATA KRISHNA, ADVOCATE)

THIS INCOME TAX APPEAL IS UNDER SEC.260-A OF INCOME TAX ACT. 1961, ARISING OUT OF ORDER DATED 06/09/2019 PASSED IN ITA No.798/BANG/201, FOR THE ASSESSMENT YEAR 2010-2011 PRAYING TO i) DECIDE THE FOREGOING QUESTION OF LAW AND / OR SUCH OTHER QUESTIONS OF LAW AS MAY BE FORMULATED BY THE HON'BLE COURT AS DEEMED FIT. ii) SET ASIDE THE APPELLATE ORDER DATED 06/09/2019 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, A BENCH, BENGALURU, IN APPEAL PROCEEDINGS NO. ITA 798/BANG/2019 (ANNEXURE-A) FOR THE ASSESSMENT YEAR 2010-2011 AS SOUGHT FOR IN THIS APPEAL, AND TO GRANT SUCH OTHER RELIEF AS DEEMED FIT, IN THE INTEREST OF JUSTICE.

THIS INCOME TAX APPEAL COMING ON FOR ADMISSION through physical hearing/video conferencing, THIS DAY P.S. DINESH KUMAR J., DELIVERED THE FOLLOWING:

ORDER

The Revenue has preferred this appeal raising the following two questions of law; "1. Whether on the facts and circumstances of the case, the Tribunal is right in annulling the re-assessment order passed by the Assessing Officer by holding that there was no failure on the part of the assessee to fully and truly disclose all material facts necessary for

3 assessment without appreciating that the reopening of assessment was done following due process of law satisfying all the conditions laid down under section 147 of the Act?

2.

Whether on the facts and circumstances of the case, the Tribunal is right in law in setting aside the reassessment order without going into the merits of the case even when the assessee had failed to disclose fully and truly all material facts before the assessing authority and without appreciating that mere production is not sufficient but the assessee has to bring to notice of the assessing authority the correctness and all related documents in respect of each claim made in the return of income?"

2.

Sri Sanmathi E.I., learned standing counsel for the Revenue submits that the Income Tax Appellate Tribunal has nullified the re-assessment only on the basis that there was no failure on the part of the assessee to fully and truly disclose all material facts.

4 3. Sri Chythanya, learned senior advocate appearing for the assessee, placing reliance on paragraph 4 of CIT vs. Chaitanya Properties Pvt. Ltd., [2016-TIOL-603-HC- KAR-IT] submitted that where there is no failure on the part of the assessee to make true and correct disclosure, there should be no further judicial scrutiny at the instance of the Revenue. He further submitted that the Revenue's case was taken up for re-assessment because of the audit objection. This shows that there was failure on the part of Revenue Authorities and not on the part of the assessee.

4.

In reply, Sri Sanmathi submitted that assesee had failed to make true and correct disclosure and the same is raised as second question in this appeal.

5.

It is settled that the Tribunal is last fact finding authority and based on the records, it has returned a finding in paragraph 16 of the order that there was no failure on the part of the assessee. In that view of the matter, following the authority in the case of CIT vs.

5 Chaitanya Properties Pvt. Ltd., this appeal must fail and the same is accordingly dismissed.

No costs.

Sd/-

JUDGE

Sd/-

JUDGE

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