PR. COMMISSIONER OF INCOME TAX - 2 vs. M/s. STAR ELECTRICALS

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ITA/263/2021HC KarnatakaKAHC01026990202125 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 CBDT circulars regarding tax effect, granting liberty to the revenue to revive the appeal if exceptions apply. The substantial questions of law were kept open.

What were the facts?

The Revenue appealed against an ITAT order that quashed a re-assessment order. The ITAT had held that the notice issued for re-assessment was unsigned, which was a curable defect. The Revenue argued that the assessee delayed raising this issue.

What were the issues?

Whether an unsigned re-assessment notice is curable under Section 292B, and whether the assessee's conduct in delaying the objection invalidated the re-assessment order.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 292B,Section 148,Section 144

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC:40081-DB ITA No. 263 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. 263 OF 2021 BETWEEN:

1.

PR. COMMISSIONER OF INCOME TAX - 2, BMTC COMPLEX, KORAMANGALA, BANGALORE.

2.

THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 4(2)(1), BMTC COMPLEX, KORMANGALA, BENGALURU …APPELLANTS (BY SRI. SANMATHI E.I., ADVOCATE) AND:

M/s. STAR ELECTRICALS, NO.25, Y NO.8/2, AMBALIPURA VILLAGE, SARJAPURA ROAD, BENGALURU - 560 034 …RESPONDENT (BY SRI. A.MAHESH CHOWDHARY, ADVOCATE)

THIS ITA / INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 03/02/2021 PASSED IN ITA NO.1178/BANG/2016 FOR THE ASSESSMENT YEAR 2007-2008 PRAYING TO DECIDE THE FOREGOING QUESTION OF LAW AND / OR SUCH OTHER QUESTIONS OF LAW AS MAY BE FORMULATED BY THE HONBLE COURT AS DEEMED FIT AND ETC.

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

Digitally signed by BHARATHI S Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:40081-DB ITA No. 263 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. Mahesh Chowdhary 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 03.02.2021 passed by the Income Tax Appellate Tribunal, ‘C’ Bench, Bengaluru (for short ‘Appellate Authority’) in ITA.No.1178/Bang/2016 for the assessment year 2007-08.

3.

This Court, admitted the appeal on 24.8.2021 to consider the following substantial questions of law:

(1) "Whether the Tribunal was right in law in quashing re-assessment order by holding that notice issued is unsigned when same is curable under section 292B of the Act which provides for cure of any mistake, defect or omission in such notice"?

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NC: 2024:KHC:40081-DB ITA No. 263 of 2021

(2) "Whether the order passed by Tribunal is perverse in law as Tribunal has failed to observe that re-assessment order passed in present case is valid since assessee failed to raise the issue of immediately on receipt of notice under section 148 of the Act but deliberately raised issue of validity of notice only after one so that assessing authority had no time to re-issue the same within period of limitation"?

(ii)" Whether on the facts and in the circumstances of the case, the Tribunal's order can be said as perverse in nature as Tribunal failed to consider the conduct of assessee which resulted in passing order under section 148 read with section 144 of the Act"?

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.

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NC: 2024:KHC:40081-DB ITA No. 263 of 2021

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.

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.: 19

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