THE PR. COMMISSIONER OF INCOME TAX CIT(A) vs. M/S MICRO FOCUS SOFTWARE INDIA PVT LTD

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ITA/759/2018HC KarnatakaKAHC01047973201815 November 2022Bench: P.S.DINESH KUMAR,T.G. SHIVASHANKARE GOWDA5 pages
AI SummaryDismissed

What did the High Court hold?

The Tribunal was correct in setting aside the reassessment order. The AO's reasons for reopening did not allege any non-disclosure by the assessee during the original assessment, making the reassessment invalid.

What were the facts?

The Revenue challenged an ITAT order that set aside a reassessment. The ITAT held that the reassessment was invalid as the Assessing Officer (AO) failed to record reasons for reopening the assessment and did not demonstrate any omission by the assessee during the original assessment.

What were the issues?

Whether the reassessment order was validly passed without proper reasons recorded for reopening and without establishing non-disclosure by the assessee during the original assessment.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BENAGALURU IN IT (TP

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ITA No. 759 of 2018

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 15TH DAY OF NOVEMBER, 2022 PRESENT THE HON'BLE MR. JUSTICE P.S.DINESH KUMAR AND THE HON'BLE MR. JUSTICE T.G.SHIVASHANKARE GOWDA

INCOME TAX APPEAL NO. 759 OF 2018

BETWEEN:

1.

THE PR. COMMISSIONER OF INCOME-TAX, CIT(A) 5TH FLOOR, BMTC BUILDING 80 FEET ROAD, KORMANGALA BENGALURU-560 095.

2.

THE ASST. COMMISSIONER OF INCOME-TAX CIRCLE-5(1)(1) PRESENT ADDRESS DCIT, CIRCLE-4(1)(2) 2ND FLOOR, BMTC BUILDING 80 FEET ROAD, KORMANGALA BENGALURU-560 095. …APPELLANTS

(BY SHRI. K.V. ARAVIND, STANDING COUNSEL)

AND:

M/s. MICRO FOCUS SOFTWARE INDIA PVT. LTD. (FORMERLY KNOWN AS NOVELL SOFTWARE DEVELOPMENT (INDIA) PVT. LTD.) NO.65/2, LAUREL BLOCK D BAGMANE TECH PARK C.V.RAMAN NAGAR BYRASANDRA

Digitally signed by YASHODHA N Location: High Court Of Karnataka

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ITA No. 759 of 2018

BENGALURU-560 093. PAN - AAACN 6992K …RESPONDENT

(BY SHRI. TANMAYEE RAJKUMAR, ADVOCATE)

THIS INCOME TAX APPEAL UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED:06.07.2018 PASSED IN IT(TP)A NO.2091/BANG/2017, FOR THE ASSESSMENT YEAR: 2009-2010, VIDE ANNEXURE-D, PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE AND ALLLOW THE APPEAL BY SETTING ASIDE THE ORDERS PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BENAGALURU IN IT (TP) A NO.2091/BANG/2017 DATED 06.07.2018 FOR ASSESSMENT YEAR 2009-10 VIDE ANNEXURE-D AND ETC.

THIS INCOME TAX APPEAL, COMING ON FOR HEARING, THIS DAY, P.S.DINESH KUMAR J., DELIVERED THE FOLLOWING:

JUDGMENT

This appeal by the Revenue challenging the order dated 06.07.2018 in ITA No.2091/Bang/2017 passed by the ITAT1, "C" Bench, Bangalore, has been admitted to consider the following question of law: "Whether, on the facts and circumstances of the case, the Tribunal is right in law setting aside the re-

1 Income tax Appellate Tribunal, Bengaluru Bench

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ITA No. 759 of 2018

assessment order passed under Section 143 (3) read with Section 147 of the Act on the ground that the same has been passed in the absence of any new material even when the ingredients of Section 147 are fully satisfied in case of assessee to pass re-assessment order under said Section?"

2.

Heard Shri K.V.Aravind, learned Standing Counsel for the appellant-Revenue and Ms.Tanmayee Rajkumar, learned advocate for the respondent-Assessee.

3.

Brief facts of the case are, after completion of assessment for the year 2009-10 and after expiry of four years, the assessment was sought to be reopened. Re-assessment was completed and certain amounts were added by the A.O.2 The CIT(A)3 has confirmed the order passed by the A.O. The ITAT has allowed assessee's appeal by the impugned order holding that no reasons were recorded for re-opening the assessment nor in the order of reassessment passed under

2 Assessing Officer 3 Commissioner of Income Tax(Appeals)

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ITA No. 759 of 2018

Section 143 (3) r/w Section 147 of the IT Act4, the A.O. has brought out the facts to show any omission on the part of the assessee to disclose fully and truly the material facts when the original assessment was completed.

4.

Ms.Tanmayee Rajkumar at the outset submitted that question of law raised by the Revenue is covered against the Revenue in various authorities. She relied upon the decision in Commissioner of Income Tax & another Vs. Hewelett Packard Digital Global Soft Ltd.5

5.

Shri Aravind does not refute the said submission.

6.

Admittedly, the reasons recorded by the A.O. did not contain the allegation that assessee had not fully and truly disclosed the material facts at the time of original assessment. Therefore, no exception can be taken to the order passed by the ITAT. Resultantly, this appeal must fail and hence the following:

4 Income Tax Act, 1961 5 ITA No.406/2007 c/w 407/2007 decided on 19.09.2011

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ITA No. 759 of 2018

ORDER i) The appeal is dismissed; ii) The question of law is answered in favour of the Assessee and against the Revenue.

No costs.

Sd/- JUDGE

Sd/- JUDGE

YN List No.: 1 Sl No.: 40

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