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

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ITA/262/2021HC KarnatakaKAHC01026989202125 September 2024Bench: S.G.PANDIT,C.M. POONACHA5 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 liberty to the revenue to revive the appeal if exceptions under the circular apply, keeping the questions of law 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 and thus invalid. The High Court admitted the appeal on substantial questions of law.

What were the issues?

Whether an unsigned re-assessment notice is curable under Section 292B, and whether the Tribunal's order was perverse considering the assessee's conduct and the tax effect.

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:40085-DB ITA No. 262 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.262 OF 2021

BETWEEN:

1.

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

2.

THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE - 10 (1), BMTC COMPLEX, KORMANGALA, BENGALURU. …APPELLANTS

(BY SRI. SANMATHI E.I., ADVOCATE)

Digitally signed by BHARATHI S Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:40085-DB ITA No. 262 of 2021

AND:

M/s. STAR ELECTRICALS, NO.25, Y NO.8/2, AMBALIPURA VILLAGE, SARJAPURA ROAD, BENGALURU - 560 034.

…RESPONDENT

THIS ITA / INCOME TAX APPEAL IS FIELD UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 03/02/2021 PASSED IN ITA NO. 1177/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:

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

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NC: 2024:KHC:40085-DB ITA No. 262 of 2021

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

Heard the learned counsel Sri.Sanmathi.E.I., for appellants/Revenue.

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.1177/Bang/2016 for the assessment year 2007-08.

3.

This

Court,

admitted the appeal on 24.08.2021 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"?

(2) "Whether the order passed by Tribunal is perverse in law as Tribunal has failed to observe that

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NC: 2024:KHC:40085-DB ITA No. 262 of 2021

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.

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:40085-DB ITA No. 262 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

SMJ

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