PR. COMMISSIONER OF vs. RAJKUMAR C (HUF)

1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 11TH DAY OF JANUARY 2021 PRESENT THE HON’BLE MR. JUSTICE ALOK ARADHE AND THE HON’BLE MR. JUSTICE NATARAJ RANGASWAMY I.T.A. NO.504 OF 2016 BETWEEN: 1. PR. COMMISSIONER OF INCOME TAX-4

BMTC COMPLEX, KORMANGALA. 2. DEPUTY COMMISSIONER OF INCOME TAX

CIRCLE-7(1), BANGALORE. ... APPELLANTS (BY SRI. E.I. SANMATHI, ADV.,) AND: RAJKUMAR C (HUF) NO.259/B, 7TH CROSS HSR LAYOUT, SECTOR-I BANGALORE-560102 PAN:AAMHR4074B. ... RESPONDENT (BY SRI. RAJESH CHANDER KUMAR, ADV.) - - - THIS I.T.A. IS FILED UNDER SEC. 260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 27.04.2016 PASSED IN ITA NO.1380/BANG/2014 FOR THE ASSESSMENT YEAR 2006- 07, PRAYING TO: DECIDE THE FOREGOING QUESTION OF LAW AND/OR SUCH OTHER QUESTIONS OF LAW AS MAY BE FORMULATED BY THE HON'BLE COURT AS DEEMED FIT AND SET ASIDE THE APPELLATE ORDER DATED 27-04-2016 PASSED BY THE ITAT, 'A' BENCH, BENGALURU, IN APPEAL PROCEEDINGS IN ITA

2 NO.1380/BANG/2014 FOR ASSESSMENT YEAR 2006-07, AS SOUGHT FOR IN THIS APPEAL; AND TO GRANT SUCH OTHER RELIEF AS DEEMED FIT, IN THE INTEREST OF JUSTICE. THIS I.T.A. COMING ON FOR HEARING, THIS DAY, ALOK ARADHE J., DELIVERED THE FOLLOWING: JUDGMENT This appeal under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act for short) has been preferred by the revenue. The subject matter of the appeal pertains to the Assessment year 2006-07. The appeal was admitted by a bench of this Court vide order dated 21.11.2017 on the following substantial questions of law: "Whether, on the facts and in the circumstances of the case, the Tribunal is right in setting aside the re-assessment order passed by the assessing authority by holding that the are no valid reasons recorded by the assessing authority to invoke re-assessment proceedings under section 147 even when the assessing authority has given valid reasons for invoking re-assessment proceedings and

3 all the ingredients of section 147 are satisfied in the case of assessee to invoke re-assessment proceedings?". 2. Today, the appeal is admitted on the following additional substantial question of law: 'Whether on the facts and in the circumstances of the case, the tribunal is right in law in holding that re-assessment order is bad in law ignoring Section 150 read with Section 153 and Explanation 2 to Section 153 of the Act whereby Assessing Authority is empowered to include any income excluded from total income of one persona and held to be the income of another person, then an assessment of such income on such other person shall be deemed to be one made in consequence of or to give effect to any finding or direction contained in the said order?' 3. For the reasons assigned by us in the judgment passed by us today in I.T.A.No.503/2016, since, the order of assessment has been passed by the

4 tribunal without taking note of Section 150 read with Section 153 as well as Explanation 2 to Section 153 of the Act, we answer the additional substantial question of law in favour of the revenue and against the assessee. Therefore, we do not propose to deal with the rival contentions. The order passed by the tribunal dated 27.04.2016 is quashed and the tribunal is directed to decide the appeal by taking into account the provisions of Section 150 and Section 153 of the Act after affording an opportunity of hearing to the parties. In the result, the appeal is disposed of. Sd/- JUDGE Sd/- JUDGE ss