THE COMMISSIONER OF INCOME TAX vs. M/A A S CHINNASWAMY RAJU

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ITA/45/2007HC KarnatakaKAHC01019930200728 October 2013Bench: N.KUMAR,RATHNAKALA4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the Revenue's appeal based on the tax effect being less than Rs. 10 lakhs, following a previous judgment that made CBDT instructions retrospective. Liberty was granted to revive the appeal if the Supreme Court overturns the precedent.

What were the facts?

The ITAT allowed the assessee's appeal, granting all claimed deductions and reducing the tax liability. The Revenue appealed this decision to the High Court.

What were the issues?

Whether the appeal filed by the Revenue is maintainable given the tax effect being below the threshold stipulated by CBDT instructions, and the retrospective application of these instructions.

Which sections of the Income-tax Act were involved?

Section 158BC,Section 158BD,Section 260-A

AI-generated summary — verify with the full judgment below

- 1 - IN THE HIGH COURT OF KARNATAKA AT BANGALORE

DATED THIS THE 28TH DAY OF OCTOBER 2013

PRESENT

THE HON’BLE MR.JUSTICE N.KUMAR

AND

THE HON’BLE MRS.JUSTICE RATHNAKALA

INCOME TAX APPEAL NO.45 OF 2007

BETWEEN:

1.

The Commissioner of Income-Tax, Central Circle, C.R. Building, Queens Road, Bangalore.

2.

The Deputy Commissioner of Income-Tax Central Circle – 2(1), C. R Building, Queens Road, Bangalore.

.. APPELLANTS

(By Sri K. V. Aravind, Adv.)

AND:

M/s. A.S. Chinnaswamy Raju Brothers Family Trust, No.294, 16th Cross, Upper Palace Orchards, Sadashivanagar, Bangalore.

..RESPONDENT

(By Sri.A.Shankar & Sri.M.Lava, Advs.)

- 2 - This appeal is filed under Section 260-A of I.T. Act 1961, arising out of Order dated 28-06-2006 passed in ITA No. 126/Bang/2004, for the Block Assessment Period 1991-92 to 2001-2002, praying that this Hon'ble Court may be pleased to:

i. formulate the substantial questions of law stated therein,

ii. allow the appeal and set aside the order passed by the ITAT, Bangalore in IT(SS)A 126/Bang/2004 dated 28-06- 2006 & confirm the order of the Appellate Commissioner confirming the order passed by the Dy. Commissioner of Income Tax, Central Circle-2(1), Bangalore, in the interest of justice and equity.

This Appeal coming on for Hearing this day, KUMAR J., delivered the following:

J U D G M E N T

This appeal is preferred against the order passed by the Tribunal allowing the appeal of the assessee.

2.

The assessments were made under Section 158BC read with Section 158BD of the Income Tax Act, 1961. A sum of Rs.43,44,416/- was added as an undisclosed income. Aggrieved by the same, assessee preferred an appeal to the Commissioner of Income Tax (Appeals), who allowed the addition to the extent of Rs.33,40,245/- and sustained the assessment order in respect of Rs.10,04,171/-. Aggrieved by the said order, the assessee preferred an appeal to the Tribunal. The Tribunal has

- 3 - allowed the appeal and allowed the entire deductions claimed by the assessee. The tax liability, if at all is Rs.6,02,502/-.

3.

In view of the judgment of this Court in the case of Commissioner of Income Tax & Another –vs- Ranka and Ranka reported in 2012(72) DTR (Kar) 270, wherein it was held that notwithstanding Clause 11 of CBDT Instruction No.3 of 2011 dated 9th February 2011, expressly providing that the instructions will apply to appeals filed on or after 9th February 2011 and appeals filed earlier will be governed by contemporaneous instructions, the application of said instructions needs to be extended to appeals pending as on 9th February 2011. In other words, the said instruction was held to be retrospective. In view of the said instructions, the appeal preferred by the Revenue where the tax effect is less than Rs.10 lakhs is not maintainable.

Accordingly, without going into the merits of the appeal, it is dismissed on the ground of tax effect being less than Rs.10 lakhs.

- 4 -

The said judgment of this Court in the case of Ranka & Ranka referred to supra, is said to be now pending before the Apex Court. In the event of the Apex Court reversing the judgment of this Court, liberty is reserved to the Revenue to seek for revival of this appeal. Ordered accordingly.

Sd/-

JUDGE

Sd/-

JUDGE

KNM/-

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