THE PR COMMISSIONER OF INCOME TAX vs. M/S KWALITY BISCUITS PVT LTD

THE PR COMMISSIONER OF INCOME TAX 5TH FLOOR, BMTC BUILDING, 80 FEET ROAD, KORMANGALA, BENGALURU 560095

THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE -11 (5), PRESENT ADDRESS ITO, WARD-4(3)(3), 2ND FLOOR, BMTC BUILDING, 80 FEET ROAD, KORMANGALA, BENGALURU 560095 …APPELLANTS (BY SRI. DILIP M.,ADVOCATE A/W SRI. RAVIRAJ Y V, ADVOCATE)

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 17.10.2022 passed by the Income Tax Appellate Tribunal, ‘C’ Bench, Bengaluru (for short, ‘Appellate Authority’) in ITA.No.675/Bang/2020 for the assessment year 2006-07, raising the following substantial questions of law:

Whether under the facts and circumstances of the case, the Tribunal was correct in giving relief to the assessee on the ground of reopening of assessment u/s 147 of the Income Tax Act, which decision is against the Explanation 1 to the provision of Section 147 of the Income tax Act, as the reason for reopening emanates from the books of accounts of the assessee from which the material evidence of escapement of LTCG has been discovered by the Assessing Officer with due diligence required for reopening of the assessment?

Whether under the facts and circumstances of the case, the Tribunal was right in quashing the reassessment order relying on the decision of CIT vs. Kelvinator of India Ltd. (2010) 320 ITR 561 (SC) which is easily distinguishable as in the instant case, the reopening of assessment is not the change of opinion of the Assessing Officer?

Whether under the facts and circumstances of the

Whether the Tribunal was correct in law in quashing the re-assessment proceedings, without appreciating the facts that producing document before the Assessing Officer is not sufficient reason to treat as full disclosure as explained in SL Lumax Ltd (2021) 437 ITR 549 (Madras)?”

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.

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

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.