THE COMMISSIONER OF INCOME TAX vs. M/S KANAKAPURA PLANNING AUTHORITY

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ITA/524/2022HC KarnatakaKAHC01050271202230 September 2024Bench: S.G.PANDIT,C.M. POONACHA5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court disposed of the appeal, granting the Revenue liberty to revive it if the matter falls within exceptions of CBDT circulars. The substantial questions of law were kept open for future adjudication.

What were the facts?

The Revenue appealed against an ITAT order that granted registration under Section 12A to the assessee, Kanakapura Planning Authority. The Revenue argued that the assessee's activities, particularly providing transport services on a commercial basis and generating significant surplus, fell under the proviso to Section 2(15) of the Income Tax Act.

What were the issues?

Whether the assessee's activities, including commercial transport services and surplus generation, disqualify it from registration under Section 12A due to the proviso to Section 2(15). The applicability of CBDT circulars regarding tax effect was also a factor.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 12A,Section 2(15)

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC:41667-DB ITA No. 524 of 2022

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 30TH DAY OF SEPTEMBER, 2024 PRESENT THE HON'BLE MR JUSTICE S.G.PANDIT AND THE HON'BLE MR JUSTICE C.M. POONACHA INCOME TAX APPEAL NO. 524 OF 2022 BETWEEN:

1.

THE COMMISSIONER OF INCOME TAX EXEMPTIONS 6TH FLOOR UNITY BUILDING ANNEXE P. KALINGA RAO ROAD, BENGALURU 56 0027

2.

THE INCOME TAX OFFICER EXCEMPTIONS, WARD -3, 6TH FLOOR UNITY BUILDING ANNEXE P. KALINGA RAO ROAD, BENGALURU 560 027 …APPELLANTS (BY SRI. DILIP M, ADVOCATE A/W SRI. RAVI RAJ Y V.,ADVOCATE)

AND:

M/S KANAKAPURA PLANNING AUTHORITY KHATA NO. 469/CA, SAHAKARI RESIDENTIAL LAYOUT AGRAHARA NEW COLONY TUNGANI POST KANAKAPURA RAMANAGARA DISTRICT KARNATAKA 562117 PAN AAALK 1091R …RESPONDENT (BY SRI. GIRISH KUMAR N.,ADVOCATE)

Digitally signed by B LAVANYA Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:41667-DB ITA No. 524 of 2022

THIS ITA / INCOME TAX APPEAL IS FILED UNDER SEC.260- A OF INCOME TAX ACT 1961, PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN, ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BENGALURU IN ITA NO. 398/BANG/2022 DATED 15/07/2022 FOR ASSESSMENT YEAR 2015- 2016 ANNEXURE-C CONFIRMING THE ORDER OF THE APPELLATE COMMISSIONER AND CONFIRM THE ORDER PASSED BY THE INCOME TAX OFFICER, EXEMPTIONS, WARD-3, BENGALURU AND ETC.

THIS APPEAL, COMING ON FOR HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

CORAM: HON'BLE MR JUSTICE S.G.PANDIT and HON'BLE MR JUSTICE C.M. POONACHA

ORAL JUDGMENT (PER: HON'BLE MR JUSTICE S.G.PANDIT)

Heard the learned counsel Sri. Dilip. M., along with Sri. Raviraj. Y.V., for appellants/Revenue and learned counsel Sri. Girish Kumar. N., learned counsel for the respondent/assessee.

2.

The Revenue is in appeal under Section 260-A of the Income Tax Act, 1961 (for short, ‘the Act’) questioning the correctness and legality of order dated 15.07.2022 passed by the Income Tax Appellate Tribunal, ‘C’ Bench, Bengaluru (for short, ‘Appellate Authority’) in

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NC: 2024:KHC:41667-DB ITA No. 524 of 2022

ITA No.396/Bang/2022 for the assessment year 2013-14, raising the following substantial questions of law: “1. Whether on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that that the assessee is entitled for registration under section 12A of the Act, even when the objects of assessee will fall under the limb “any other object of General Public Utility” under section 2(15) of the IT Act and the activities of assessee under this limb will be hit by the proviso to section 2(15) of IT Act amended w.e.f. 1.4.2009 as the transport services are provided to all sections of the society on commercial basis like any other private transporter and generating such huge surplus year after year and is running its activities on commercial basis? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the assessee is entitled for registration under section 12A of the Act, even when the commercial functions clubbed with its huge surplus generated hit by proviso to section 2(15) of the Act?

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NC: 2024:KHC:41667-DB ITA No. 524 of 2022

3.

Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the assessee is entitled for registration under section 12A of the Act, even when assessee has not involved in activities which are in nature of any other general public activity?”

3.

Learned counsel for the assessee submits that the tax effect in this appeal is less than Rs.2 Crores and therefore, the appeal should not be entertained at the instance of the revenue in view of the Circular No.09/2024 dated 17.09.2024 issued by the Central Board of Direct Taxes. It is also submitted that the aforesaid Circular binds the revenue.

4.

On the other hand, learned counsel for the revenue submits that he be granted liberty to revive the appeal in case the matter falls within the exceptions under the aforesaid Circular dated 17.09.2024 and Circular No.5/2024 dated 15.03.2024.

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NC: 2024:KHC:41667-DB ITA No. 524 of 2022

5.

In view of the aforesaid submissions, the appeal is disposed of with liberty as prayed for by the learned counsel for the revenue. However, the questions of law are kept open to be adjudicated in an appropriate proceeding.

Sd/- (S.G.PANDIT) JUDGE

Sd/- (C.M. POONACHA) JUDGE

BS List No.: 4 Sl No.: 0

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