PRINCIPAL COMMISSIONER OF INCOMET TAX-7 vs. SRI S KUMAR

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ITA/177/2021HC KarnatakaKAHC01015090202025 September 2024Bench: S.G.PANDIT,C.M. POONACHA4 pages
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What did the High Court hold?

The High Court disposed of the appeal with liberty granted to the Revenue to revive it if exceptions under relevant CBDT circulars apply. The substantial question of law was kept open for future adjudication.

What were the facts?

The Revenue appealed against an ITAT order that dismissed their appeal due to low tax effect. The assessee argued that the tax effect was below the threshold specified in CBDT circulars, making the appeal non-maintainable.

What were the issues?

Whether the ITAT was correct in dismissing the Revenue's appeal based on low tax effect, considering exceptions in CBDT circulars, and if the assessee's submission on low tax effect is binding on the Revenue.

Which sections of the Income-tax Act were involved?

Section 260-A

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC:39916-DB ITA No. 177 of 2021

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25TH 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. 177 OF 2021 BETWEEN: 1. PRINCIPAL COMMISSIONER OF INCOME TAX-7, BMTC COMPLEX, KORAMANGALA, BENGALURU.

2.

THE INCOME TAX OFFICER, WARD-1, TIPTUR. ...APPELLANTS (BY SRI. SANMATHI E.I, ADVOCATE) AND: SRI. S. KUMAR, CHIKKA RANGAPURA, RANGAPURA POST, TIPTUR TALUK - 572 201, PAN NO: AQIPK0572D. ...RESPONDENT (BY SRI. M. LAVA, ADVOCATE) THIS ITA / INCOME TAX APPEAL IS FILED UNDER SECTION 260-A OF INCOME TAX ACT, 1961, PRAYING TO SET ASIDE THE APPELLATE ORDER DATED 05.11.2018 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, 'A' BENCH, BENGALURU, IN APPEAL PROCEEDINGS IN ITA NO.2211/BANG/2016 (ANNEXURE-A) FOR THE ASSESSMENT YEAR 2008-09 AS SOUGHT FOR INT HIS APPEAL AND TO GRANT SUCH OTHER RELIEF AS DEEMED FIT, IN THE INTEREST OF JUSTICE.

Digitally signed by B LAVANYA Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:39916-DB ITA No. 177 of 2021

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.Sanmathi.E.I., for appellants/Revenue and learned counsel Sri. M.Lava 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 05.11.2018 passed by the Income Tax Appellate Tribunal, ‘A’ Bench, Bengaluru (for short, ‘Appellate Authority’) in ITA.No.2211/Bang/2016 for the assessment year 2008-09.

3.

This

Court,

admitted the appeal on 06.09.2022 to consider the following substantial question of law:

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NC: 2024:KHC:39916-DB ITA No. 177 of 2021

"Whether on the facts and circumstances of the case and in law, the Tribunal is right in law in dismissing the appeal preferred by the Revenue on the ground of low tax effect even though the case falls under the exception clause of 10(c) of Circular No.3/2018 dated: 11-7-2018 since Revenue Audit Objection had been accepted by the Department ?"

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

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NC: 2024:KHC:39916-DB ITA No. 177 of 2021

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

SMJ List No.: 2 Sl No.: 0

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