THE COMMISSIONER OF INCOME TAX vs. M/S.SRI LAKSHMI NARASIMHA DISTILLERIES PVT LTD

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ITA/220/2007HC KarnatakaKAHC01017652200728 August 2012Bench: B.MANOHAR,K.SREEDHAR RAO3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court noted that the tax rate for block assessment depends on a Supreme Court decision regarding the retrospective or prospective nature of an amendment to Section 113. The court also deferred a decision on the applicability of a circular regarding monetary limits pending another Supreme Court ruling.

What were the facts?

The Assessing Officer levied tax for block assessment at the rate applicable for the year of search. A question arose whether an amendment to Section 113 of the IT Act was retrospective or prospective.

What were the issues?

The primary issues were the retrospective or prospective applicability of an amendment to Section 113 of the IT Act and the applicability of a circular on monetary limits to pending cases.

Which sections of the Income-tax Act were involved?

Section 113

AI-generated summary — verify with the full judgment below

1 IN THE HIGH COURT OF KARNATAKA, BANGALORE

DATED THIS THE 28TH DAY OF AUGUST, 2012

PRESENT

THE HON'BLE MR. JUSTICE K.SREEDHAR RAO

AND

THE HON'BLE MR. JUSTICE B.MANOHAR

I.T.A. No. 220 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-1(2), C.R. Building, Queens Road, Bangalore. Appellants (By Sri K.V. Aravind, Advocate)

AND:-

M/s. Sri Lakshmi Narasimha Distilleries P. Ltd., No.190, Sankey Road, Sadashivanagar, Bangalore. Respondent (By M/s. K.R. Prasad, Advocates)

This I.T.A. is filed U/s.260-A of the I.T. Act, 1961 arising out of Order dated 31.08.2006 passed in IT(SS)A

2 No.159/Bang/2004, for the Block Assessment Period 01-04- 1991 to 27-04-2001, praying that this Hon’ble Court may be pleased to: (i) formulate the substantial questions of law stated therein and (ii) allow the appeal and set aside the order passed by the Income Tax Appellate Tribunal, Bangalore in IT(SS)A No.159/Bang/2004, dated 31.08.2006 confirming the order of the Appellate Commissioner and confirm the order passed by the Deputy Commissioner of Income Tax, Central Circle-1(2), Bangalore in the interest of justice and equity.

This appeal is coming on for final hearing this day, SREEDHAR RAO, J., delivered the following:

J U D G M E N T In respect of the block assessment, the Assessing Officer levied the tax for the previous years at the rate applicable for the year in which search took place. In respect of the amendment effected to Sec.113 of the I.T. Act, the question arose whether the amendment was retrospective or prospective. The Supreme Court has held that in the case of Commissioner of Income Tax Vs. Suresh Gupta the amendment is by way of clarification and the law as it stood even before the amendment permitted to levy of tax at the rate applicable for the year of search. The decision of the Supreme Court in Suresh Gupta’s case is referred to the Larger Bench in Commissioner of Income Tax Vs. Vatika Township Pvt. Ltd., which is pending decision. In view of

3 the above facts, it is to be noted that the rate of tax applicable for the block assessment should be dependant upon the decision of the Supreme Court in Vatika Township and other connected cases referred to the larger Bench.

2.

In respect of monetary limit as prescribed under the Circular No.3/11 whether it applies to pending cases should also be the subject to the decision of the Supreme court in Ranka and Ranka Case pending in Special Leave Petition. In the event the decision of the Supreme Court is in favour of the revenue, the appellant is permitted to make an application for revival of the appeal for disposal in accordance with the decision of the Supreme Court. Accordingly, for the present the appeal is disposed of.

Sd/- JUDGE

Sd/- JUDGE psg*

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