THE PR. COMMISSIONER OF INCOME TAX, CIT (A) vs. M/S. BMM ISPAT LTD.,

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ITA/685/2018HC KarnatakaKAHC01048311201801 October 2024Bench: S.G.PANDIT,C.M. POONACHA5 pages
AI SummaryDismissed

What did the High Court hold?

The High Court disposed of the appeal, granting liberty to the revenue to revive it if it falls within exceptions to the CBDT circulars. The substantial questions of law were kept open for future adjudication.

What were the facts?

The Revenue appealed against an ITAT order that held additions/disallowances were unsustainable without incriminating material found during a search. The assessee argued the appeal should not be entertained due to low tax effect, citing CBDT circulars.

What were the issues?

Whether additions/disallowances under Section 153A require incriminating material found during a search, and whether the appeal is maintainable given the tax effect and CBDT circulars.

Which sections of the Income-tax Act were involved?

Section 132,Section 132A,Section 153A,Section 260-A

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC:41178-DB ITA No. 685 of 2018

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 1ST DAY OF OCTOBER, 2024 PRESENT THE HON'BLE MR JUSTICE S.G.PANDIT AND THE HON'BLE MR JUSTICE C.M. POONACHA INCOME TAX APPEAL NO.685 OF 2018

BETWEEN:

1.

THE PR. COMMISSIONER OF INCOME-TAX, CIT (A) CENTRAL CIRCLE, C R BUILDING, QUEENS ROAD, BENGALURU 560 001.

2.

THE DEPUTY COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE - 1(2) C R BUILDING, QUEENS ROAD, BENGALURU 560 001 …APPELLANTS

(BY SRI. DILIP.M., ADVOCATE ALONG WITH SRI. RAVIRAJ Y.V., ADVOCATE)

Digitally signed by B LAVANYA Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:41178-DB ITA No. 685 of 2018

AND:

M/S. BMM ISPAT LTD., NO 114, DANAPUR, MARIYAMMANAHALLI, HOSPET - 583 222

PAN: AACCB 3556B …RESPONDENT

(BY SRI. K.R.PRADEEP, ADVOCATE)

THIS INCOME TAX APPEAL IS FILED UNDER SECTION 260-A OF INCOME TAX ACT, 1961, PRAYING TO ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BENGALURU IN ITA NO.911/BANG/2015 DATED 10/04/2018 AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(2), BENGALURU, AND ETC.

THIS APPEAL IS COMING ON FOR FINAL 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:41178-DB ITA No. 685 of 2018

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

Heard the learned counsel Sri. Dilip.M., along with Sri. Raviraj.Y.V., learned counsel for appellants/Revenue and learned counsel Sri. K.R.Pradeep 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 10.04.2018 passed by the Income Tax Appellate Tribunal, ‘C’ Bench, Bengaluru (for short, ‘Appellate Authority’) in ITA.No.911/Bang/2015 for the assessment year 2005-06.

3.

This

Court,

admitted the appeal on 28.09.2020 to consider the following substantial questions of law: “1. Whether on the facts and in the circumstances of the case the Tribunal was correct in holding that the additions/disallowances made in the order of assessment are not sustainable in the absence of any incriminating material being found and seized in the course of search conducted under section

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NC: 2024:KHC:41178-DB ITA No. 685 of 2018

132 of the Act when Section 153A of the act does not contemplate assessment on the basis of the seized material?.

2.

Whether on the facts and in the circumstances of the case, the Tribunal was correct in holding that in order to sustain addition/disallowances, the same should be on the basis of the incriminating material found and seized in the course of search, when assessment under section 153A of the Act only mandates search under section 132 or requisition under section 132A of the Act?.

3.

Whether on the facts and in the circumstances of the case, the Tribunal was correct in rewriting the provisions of Section 153A of the Act by holding that assessment under Section 153A of the Act should be on the basis of the incriminating material found and seized in the course of search, when the section does not mandate so and recorded perverse finding?”

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

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NC: 2024:KHC:41178-DB ITA No. 685 of 2018

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.

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

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