PRINCIPAL COMMISSIONER OF INCOME TAX vs. SHREE BHAGYALAXMI SAHAKARI SAKKARE KARKHANE NIYAMIT

PDF · subscribers
ITA/100012/2025HC KarnatakaKAHC02011209202518 August 2025Bench: S.SUNIL DUTT YADAV,VIJAYKUMAR A.PATIL4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court disposed of the appeal as withdrawn based on the CBDT circular regarding monetary limits. The substantial questions of law were kept open for future adjudication.

What were the facts?

The Revenue filed an appeal before the High Court challenging an ITAT order concerning the set-off of brought forward business losses against income from other sources. The tax effect in the appeal was below the monetary limit prescribed by CBDT circulars.

What were the issues?

Whether brought forward business losses can be set off against income from other sources, and whether lease rent is to be treated as business income or income from other sources.

Which sections of the Income-tax Act were involved?

Section 72,Section 56(2)(ii),Section 260A,Section 263

AI-generated summary — verify with the full judgment below

- 1 -

HC-KAR NC: 2025:KHC-D:10330-DB ITA No. 100012 of 2025

IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 18TH DAY OF AUGUST, 2025 PRESENT THE HON'BLE MR. JUSTICE S.SUNIL DUTT YADAV AND THE HON'BLE MR. JUSTICE VIJAYKUMAR A.PATIL INCOME TAX APPEAL NO.100012 OF 2025 BETWEEN: 1. PRINCIPAL COMMISSIONER OF INCOME TAX, C.R. BUILDING, NAVANAGAR, HUBBALLI 580025.

2.

INCOME TAX OFFICER-WARD-2, BELAGAVI, 2ND FLOOR, FEROZ KHIMJIBHAI COMPLEX, DR. B.R. AMBEDKAR ROAD, BELAGAVI 590001. - APPELLANTS (BY SRI. M. THIRUMALESH AND SMT. ROOPA ANAVEKAR, ADVOCATES)

AND: SHREE BHAGYALAXMI SAHAKARI SAKKARE KARKHANE NIYAMIT, KUPPATGIRI, KHANAPUR, BELAGAVI 591302. PAN: AAAAS6744C - RESPONDENT

THIS INCOME TAX APPEAL IS FILED UNDER SECTION 260A OF THE INCOME TAX ACT, 1961, PRAYING TO SET ASIDE THE ORDER PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, PANAJI BENCH IN ITA NO.66/PAN/2020 DATED 22.08.2023 FOR THE A.Y.2013-14 MARKED AS ANNEXURE-A AND ORDER DATED 14.01.2020 PASSED BY THE CIT(A) IN APPEAL NO.10418/CIT(A)BGM/2018-19 ANNEXURE-D AND CONFIRM THE ASSESSMENT ORDER PASSED BY THE SECOND APPELLANT & ETC.

THIS ITA COMING ON FOR ORDERS THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

CORAM: THE HON'BLE MR. JUSTICE S.SUNIL DUTT YADAV AND THE HON'BLE MR. JUSTICE VIJAYKUMAR A.PATIL

Digitally signed by VINAYAKA B V Location: High Court of Karnataka, Dharwad Bench

- 2 -

HC-KAR NC: 2025:KHC-D:10330-DB ITA No. 100012 of 2025

ORAL JUDGMENT (PER: THE HON'BLE MR. JUSTICE S.SUNIL DUTT YADAV)

The appeal has been filed under Section 260-A of the Income Tax Act challenging the order passed in I.T.A. No. 66/PAN/2020 relating to assessment year 2013-14. It is noticed that the tax effect in the appeal in terms of the circular dated 17.09.2024 is below Rs. 2 crores.

2.

Learned counsel for the appellants has filed a memo which reads as under: “That the appellants have filed the above mentioned appeal challenging the ITAT order dated 30.11.2023. As per the CBDT Circular dated 17.09.2024 the matter falls under the Below Monetary Limit, i.e., 2 crore and the tax effect is less than 2 crore. Therefore, the above appeal needs to be withdrawn as per the Circular.”

3.

The substantial questions of law raised are as follows:

a) Whether the ITAT and CIT(A) are right in holding that the assessee society was entitled for set off of brought forward business losses against income from

- 3 -

HC-KAR NC: 2025:KHC-D:10330-DB ITA No. 100012 of 2025

other sources when the provisions of Section 72 of the Act specifically prohibits such set off?

b) Whether the ITAT and CIT(A) are right in holding that the lease rent received by the society is to be treated as income from business and profession overlooking the provisions of Section 56(2)(ii) which provides for taxation of such lease rental as income from other sources?

c) Whether the Tribunal is right in upholding the order of the CIT(A) without appreciating that the same Bench of the Tribunal has set aside the order dated 03-10-2018 passed by CIT(A) for the AY:2014-15 and remanded back to the CIT(A) for de novo adjudication vide order dated 29-08-2023 in ITA No.460/PAN/2018?

d) Whether the ITAT and CIT(A) erred in not appreciating that the assessing authority had passed the assessment order dated 21.12.2018 pursuant to directions of Pr. CIT dated 21.02.2018 u/s 263 and hence when this order had not been challenged in appeal the assessee could not have challenged the assessment order before the CIT(A)?

4.

Copy of the circular dated 17.09.2024 of the Central Board of Direct Taxes is enclosed. In the light of the

- 4 -

HC-KAR NC: 2025:KHC-D:10330-DB ITA No. 100012 of 2025

subject matter of the appeal being below monetary limit in terms of the Circular, the proceedings cannot be continued. 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 dated15.03.2024.

5.

In view of the aforesaid submissions, the appeal is disposed off with the liberty as prayed for by the revenue.

6.

The substantial questions of law raised above are kept open to be adjudicated in appropriate proceedings.

Sd/- (S.SUNIL DUTT YADAV) JUDGE

Sd/- (VIJAYKUMAR A.PATIL) JUDGE BVV,CT:VP LIST NO.: 1 SL NO.: 41

More judgments on Section 72

All 386 judgments and leading authorities on Section 72 →

Recent GST High Court judgments

Search GST case law →