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NC: 2024:KHC:39713-DB ITA No. 59 of 2021
IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 24TH 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. 59 OF 2021 BETWEEN:
PRINCIPAL COMMISSIONER OF INCOME TAX – 4, BMTC COMPLEX, KORMANAGALA, BENGALURU.
DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-4(1)(1), BMTC COMPLEX, KORMANAGALA, BENGALURU. …APPELLANTS (BY SRI SANMATHI E I, ADVOCATE)
AND:
M/S. KUMAR ORGANIC PRODUCTS LTD., 819/C, USHA KRISHAN CENTRE, 13TH CROSS, 7TH BLOCK, (WEST), JSS COLLEGE, CIRCLE, JAYANAGAR BENGALURU-560082. PAN AAACK 6745P. …RESPONDENT (BY SRI CHANDRASEKHAR V, ALONG WITH SRI M LAVA, ADVOCATE)
Digitally signed by B LAVANYA Location: HIGH COURT OF KARNATAKA
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NC: 2024:KHC:39713-DB ITA No. 59 of 2021
THIS APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 19/07/2019 PASSED IN ITA NO.1062/BANG/2019, FOR THE ASSESSMENT YEAR 2015-2016, PRAYING THIS COURT TO: 1. 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 AND ETC.
THIS APPEAL, COMING ON FOR FINAL 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.Sanmathi.E.I., for appellants/Revenue and learned counsel Sri.Chandrashekar V., along with Sri.M.Lava, learned counsel for respondent/assessee.
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 19.07.2019 passed by the Income Tax Appellate Tribunal,
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NC: 2024:KHC:39713-DB ITA No. 59 of 2021
‘B’ Bench, Bengaluru (for short, ‘Appellate Authority’) in ITA.No.1062/Bang/2019 for the assessment year 2015-16.
This
Court,
admitted the appeal on 29.07.2021 to consider the following substantial question of law: "1. Whether on the facts and circumstances of the case, the Tribunal is right in allowing deduction under Section 35 (2AB) of the Act when the assessee has failed to submit Form 3CL, which qualifies the quantum of expenditure incurred on scientific research by Department of Scientific and Industrial Research (DSIR) and even when the DSIR has not issued Form 3CL due to the failure of the assessee to submit the required documents and relevant details by way of audited accounts?
Whether the on the facts and circumstances of the case, the Tribunal is right in holding that once the Research and Development facility has been approved by the DSIR, the deduction under Section 35(2AB) of the Act has to be allowed without satisfying the other conditions laid down in section 35(2AB) of the Act and when the mandatory conditions set out in section 35(2AB) of the Act are not fulfilled by the assessee?
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NC: 2024:KHC:39713-DB ITA No. 59 of 2021
Whether on the facts and circumstances of the case, the Tribunal is right in not appreciating that the DSIR is only appropriate Authority which certifies the expenditure incurred on scientific research and quantum of amount in Form 3CL for allowing deduction under Section 35(2AB) of the Act and in the absence of such Form 3CL the weighted deduction under section 35(2AB) of the Act cannot be allowed?"
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.
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:39713-DB ITA No. 59 of 2021
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 question of law is kept open to be adjudicated in an appropriate proceeding.
Sd/- (S.G.PANDIT) JUDGE
Sd/- (C.M. POONACHA) JUDGE
MPK CT:VN List No.: 2 Sl No.: 0