PR COMMISSIONER OF INCOME TAX vs. M/S PATIBHA JEWELLARY HOUSE

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ITA/284/2021HC KarnatakaKAHC01004879202124 September 2024Bench: S.G.PANDIT,C.M. POONACHA4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court disposed of the appeal based on a CBDT circular regarding tax effect. The court granted the revenue liberty to revive the appeal if exceptions under the circular apply, keeping the question of law open.

What were the facts?

The Revenue appealed against an order of the Income Tax Appellate Tribunal concerning assessment year 2005-06. The appeal questioned the deletion of penalty levied under Section 271(1)(C) of the Income Tax Act.

What were the issues?

Whether the Tribunal's order deleting the penalty was perverse, and if the appeal should be entertained given the tax effect and CBDT circulars.

Which sections of the Income-tax Act were involved?

Section 271(1)(C),Section 260-A

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC:39723-DB ITA No. 284 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. 284 OF 2021 BETWEEN:

1.

PR. COMMISSIONER OF INCOME TAX, BMTC COMPLEX, KORAMANGALA, BANGALORE.

2.

THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-7(2)(1), BANGALORE. …APPELLANTS

(BY SRI SANMATHI E I, ADVOCATE)

AND:

1.

M/S PRATIBHA JEWELLARY HOUSE, NO.1/1 RAJARAM MOHANROY ROAD, RICHMOND CIRCLE, BANGALORE-560025, PAN AABFP 1771 G. …RESPONDENT

(BY SRI LAVA M, ADVOCATE)

THIS APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 26.06.2020 PASSED IN ITA NO.2397/BANG/2019, FOR THE ASSESSMENT YEAR 2005-2006, PRAYING THIS HON'BLE COURT TO: (A) 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 HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

Digitally signed by B LAVANYA Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:39723-DB ITA No. 284 of 2021

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.Lava M for 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 26.06.2020 passed by the Income Tax Appellate Tribunal, ‘A’ Bench, Bengaluru (for short, ‘Appellate Authority’) in ITA.No.2397/Bang/2019 for the assessment year 2005-06. 3. This

Court,

admitted the appeal on 05.10.2021 to consider the following substantial question of law: “Whether on the facts and in the circumstances of the case and in law, the orders of

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NC: 2024:KHC:39723-DB ITA No. 284 of 2021

Tribunal as well as CIT(A) can be said as perverse in law in deleting the penalty levied under Section 271(1)(C) of the Act for assessment year under consideration since both the appellate authorities failed to appreciate that conditions for invoking section 271(1)(C) to levy penalty were fully satisfied in case of assessee and also failed to consider the Revenue’s appeal challenging the deletion of additions made in assessment order is pending for adjudication before this Hon’ble Court?"

4.

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. 5. 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

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NC: 2024:KHC:39723-DB ITA No. 284 of 2021

the aforesaid Circular dated 17.09.2024 and Circular No.5/2024 dated 15.03.2024.

6.

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 List No.: 2 Sl No.: 0

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