COMMISSIONER OF INCOME TAX III vs. M/S SKILL TECH ENGINEERS & CONTRACTORS PVT LTD

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ITA/348/2012HC KarnatakaKAHC01044260201218 March 2013Bench: B.MANOHAR,N.KUMAR3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the doctrine of res judicata does not apply to income tax assessments as each year is a fresh case. Therefore, even if the appeal is dismissed, the authorities can still collect tax in subsequent years if the tax effect is higher.

What were the facts?

The Revenue appealed against an ITAT order that deleted additions made on account of disallowance under Section 40A(ia). The net tax effect was Rs. 9,46,864, which was below the threshold for appeal maintainability. The Revenue argued the issue was recurring in nature.

What were the issues?

Whether an appeal with a net tax effect below the prescribed limit is maintainable when the issue is recurring in nature. The applicability of the doctrine of res judicata in income tax assessments.

Which sections of the Income-tax Act were involved?

Section 40A(ia),Section 260A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA AT BANGALORE

DATED THIS THE 18TH DAY OF MARCH 2013

PRESENT

THE HON’BLE MR. JUSTICE N.KUMAR AND THE HON’BLE MR. JUSTICE B.MANOHAR

I.T.A. NO.348/2012

BETWEEN :

1.

Commissioner of Income Tax-III,

Central Revenue Buildings,

Queens Road, Bangalore-560 001.

2.

The Additional Commissioner

Of Income Tax, Range-1,

Opp.Sterling Talkies,

Vishweshwaranagar, Mysore – 570 008. ...APPELLANTS

(BY Sri. E.I.Sanmathi, Adv.)

AND :

M/s.Skill Tech Engineers & Contractors Pvt. Ltd., No./218/k-30, N.S.Road, Mysore – 570 024. …RESPONDENT

. . . .

This I.T.A. is filed under Section 260A of the Income Tax Act, 1961 praying to (i) formulate the substantial question of law stated therein, (ii) set-aside the appellate order passed dated 16,.05.2012 passed in ITA No.106/Bang/2011 by the Income Tax Appellate Tribunal, `B’ Bench, Bangalore as sought for in this appeal.

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This I.T.A. coming on for orders, this day, N.Kumar J., delivered the following:

JUDGMENT

This appeal is preferred by the Revenue against the order of the Tribunal where additions made on account of the disallowance under Section 40a(ia) on the amounts paid by the assessee are deleted.

2.

The net tax-effect is Rs.9,46,864/-. This appeal is presented on 06.11.2012. In view of instruction No.3 of 2011 as the net tax-effect is less than Rs.10 lakhs, this appeal is not maintainable. However, the learned counsel appearing for the appellant submits that it is recurring in nature and therefore, the said instruction, has no application.

3.

It is well settled that in income-tax jurisprudence the Doctrine of res judicata does not apply as every year assessment is a fresh case. Therefore, if it is recurring in nature, in the coming year, if the tax is less than Rs.10 lakhs, the authorities

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can recover the same. The dismissal of the appeal will not come in the way of the authorities for collecting tax.

Appeal stands dismissed.

Sd/- JUDGE

Sd/- JUDGE

SPS

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