THE PR COMMISSIONER OF INCOME TAX vs. M/S HARIYAPPA KOTIAN

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ITA/58/2023HC KarnatakaKAHC01005939202301 October 2024Bench: S.G.PANDIT,C.M. POONACHA5 pages
AI SummaryDismissed

What did the High Court hold?

The High Court disposed of the appeal with liberty to the revenue to revive it if exceptions under the CBDT circulars apply. The substantial questions of law were kept open for future adjudication.

What were the facts?

The Revenue appealed against an ITAT order that quashed a revision order passed by the Principal Commissioner under Section 263. The assessee argued that the appeal should not be entertained due to low tax effect as per CBDT circulars.

What were the issues?

Whether the ITAT was justified in quashing the revision order, and if the appeal is maintainable given the tax effect and CBDT circulars.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 263

AI-generated summary — verify with the full judgment below

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NC: 2024:KHC:41183-DB ITA No. 58 of 2023

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.58 OF 2023 BETWEEN:

1.

THE PR. COMMISSIONER OF INCOME TAX CENTRAL, 3RD FLOOR, C R BUILDING, QUEENS ROAD, BENGALURU-560 001.

2.

THE DEPUTY COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-I, C R BUILDING, ATTAVARA, MANGALORE-575 001. …APPELLANTS

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

AND:

M/S. HARIYAPPA KOTIAN, KARTHIK COMPLEX,

Digitally signed by B LAVANYA Location: HIGH COURT OF KARNATAKA

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NC: 2024:KHC:41183-DB ITA No. 58 of 2023

MALPE MAIN ROAD, UDUPI-576 108.

PAN NO: AECPK7269M. …RESPONDENT

(BY SRI. MADHUSUDHAN U.A., 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 IT(TP)A NO.431/BANG/2022 DATED 19.09.2022 FOR ASSESSMENT YEAR 2018-2019 (ANNEXURE-C) AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1, MANGALURU AND ETC.,

THIS APPEAL IS 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:41183-DB ITA No. 58 of 2023

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. Madhusudhan.U.A., 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 19.09.2022 passed by the Income Tax Appellate Tribunal, "B" Bench, Bengaluru (for short, ‘Appellate Authority’) in IT(TP)A.No.431/Bang/2022 for the assessment year 2018-19.

3.

This Court, admitted the appeal on 20.02.2023 to consider the following substantial questions of law:

"1. Whether on the facts and in the circumstances of the case in law, the Tribunal’s in quashing order passed by Commissioner under section 263 of the Act by relying on its earlier order passed in case of M/s.Karthik estates in ITA No.432/Bang/2022 dated 24/8/2022 wherein it was held that the Pr.Commissioner of Income Tax was not justified in revisiting the order of assessing authority for examining the source of income which was already offered to tax as business income during assessment

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NC: 2024:KHC:41183-DB ITA No. 58 of 2023

proceedings without appreciating that assessee had offered Rs.3 Crores as additional income in course of search proceedings and not in the course of business and even when the said amount is not recorded in books of account of assessee?

2.

Whether on the facts and in the circumstances of the case and in law, the Tribunal’s order can be said as perverse in nature as Tribunal has failed to consider the facts that Pr.Commissioner of Income Tax has power to set aside the assessment order and send the matter for fresh assessment if he is satisfied that impugned order is erroneous and prejudicial to interest of Revenue?

3.

Whether on the facts and in the circumstances of the case in law, the Tribunal’s in quashing order passed by Commissioner under section 236 of the Act ignoring that conditions for invoking revision under Section 263 of the Act are fully satisfied in case of assessee?"

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:41183-DB ITA No. 58 of 2023

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.: 10

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