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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 18TH DAY OF AUGUST, 2015
PRESENT THE HON’BLE MR. JUSTICE VINEET SARAN
AND
THE HON’BLE MR. JUSTICE B MANOHAR
ITA No.399/2009 BETWEEN:
THE COMMISSIONER OF INCOME-TAX
CENTRAL CIRCLE, C R BUILDING, QUEENS ROAD, BANGALORE
THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE -1(3) C R BUILDING, QUEENS ROAD BANGALORE.
.. APPELLANTS
(BY SRI K V ARAVIND, ADV A/W SRI. E.I. SANMATHI, ADV.)
AND:
SHRI PRAKASH B NICHANI S-2, “K” BLOCK, GOLDEN ORCHID, LAVELLE ROAD BANGALORE SINCE DEAD BY L.Rs.
NISHA P NICHANI
W/O PRAKASH B NICHANI
AGED 40 YEARS. R
SHIVANGI, D/O PRAKASH P NICHANI
AGED 15 YEARS.
SINCE MINOR REPRESENTED BY
NATURAL GUARDIAN,
SMT.NISHA NICHANI.
AYESHA, D/O PRAKASH B NICHANI
AGED 13 YEARS.
SINCE MINOR REPRESENTED BY
NATURAL GUARDIAN,
SMT.NISHA NICHANI.
(AS PER COURT ORDER DATED
DATED 8.7.2014)
.. RESPONDENTS
(BY SRI. A. SHANKAR, ADV.)
THIS ITA IS FILED UNDER SECTION 260A OF INCOME TAX ACT, 1961 ARISING OUT OF ORDER DATED 27.02.2009 PASSED IN ITA NO.809/BNG/2008 FOR THE ASSESSMENT YEAR 1998-99 PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN AND TO ALLOW THE APPEAL AND SET ASIDE THE ORDER PASSED BY THE ITAT, BANGALORE IN ITA NO.809/BNG/2008 DATED 27.02.2009 CONFIRMING THE ORDER OF THE APPELLATE COMMISSIONER AND CONFIRM THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1(3), BANGALORE.
THIS ITA COMING ON FOR HEARING THIS DAY, VINEET SARAN,, J., DELIVERED THE FOLLOWING:
J U D G M E N T
For the assessment year 1998-99, which is in question, the assessee is said to have filed a return of income on 11.1.2000, for which he claims to have a valid receipt from the Income-Tax
Department. No order of assessment was passed on the said return for the assessment year 1998-99 and according to the assessee, the income was deemed to have been accepted under Section 143(1) of the Income Tax Act, 1961 (for short `the Act’). However, a notice dated 30.3.2005 was issued under Section 148 of the Act for reopening assessment under Section 147 of the Act. In pursuance to the said notice, an assessment order dated 31.3.2006 was passed, whereby the return of income dated 11.1.2000, re-filed by assessee in response to the notice issued under Section 148 of the Act, has been accepted in toto. The assessee challenged the said order dated 31.3.2006 by filing an appeal before the Commissioner of Income-Tax (Appeals), wherein the very notice for reopening assessment was also challenged. The said appeal by the assessee was filed with a delay of 331 days. The Appellate Commissioner dismissed the appeal on the ground of delay, which order was challenged by the assessee in appeal before the Tribunal. By impugned order dated 27.2.2009, the Tribunal, after condoning the delay in filing the appeal before the Appellate Commissioner, allowed the appeal of the assessee and remanded the
matter for fresh decision on merits to the Appellate Commissioner. Aggrieved by the said order, this appeal has been filed by the Revenue, which was admitted on two substantial questions of law, but the learned counsel for parties have jointly stated that the only one question of law arises for determination in this appeal, which is as follows: “Whether the Tribunal was correct in proceeding to set aside the order of the Appellate Commissioner by condoning the delay of 331 days without examining the reasons for such condonation and consequently recorded a perverse finding?
We heard Sri K V Aravind, learned counsel for the appellants/Revenue as well as Sri A Shankar, learned counsel for the respondent/assessee and perused the records.
Initially, no appeal was filed by the assessee against the assessment order dated 31.3.2006. The entire claim or return of assessee had been accepted by the Assessing Officer. However, subsequently a notice under Section 263 of the Act was issued in February 2007 by the Commissioner of Income-Tax for revising the assessment order dated 31.3.2006 on the ground that the same was
erroneous and prejudicial to the interest of revenue. In pursuance thereof, the order dated 4.4.2007 was passed by the Revisional Commissioner, which was against the assessee. It was in such circumstances that after notice under Section 263 of the Act was issued, the appellant filed an appeal on 27.3.2007 (which was prior to the order of Revisional Commissioner) challenging the assessment order dated 31.3.2006 passed by the Assessing Officer. Along with the appeal, an application for condonation of 331 days delay was filed, which was rejected by the Appellate Commissioner.
The Tribunal, after considering the averments made in the affidavit of the assessee filed in support of the application for condonation of delay and after holding that the assessee was under belief that filing an appeal, when there is no demand, would be a pointless exercise and that it was only after receiving the notice under Section 263 of the Act, the assessee found it necessary to challenge the order of assessment as also notice for reopening an already concluded assessment issued under Section 148 of the Act, held that there was sufficient reason for delay in filing the delay.
On having perused the order of Tribunal, we are satisfied with the reasons given by the Tribunal for condoning the delay and as such do not find any ground for interference with such order of the Tribunal. As such, we are of the opinion that the order of the Tribunal is perfectly justified in law and thus, we dismiss this appeal by answering the question of law in favour of the assessee and against the revenue. However, there shall be no order as to cost.
Since the matter has been pending for a substantial length of time, we may observe that the Commissioner of Income- Tax (Appeals) shall decide the appeal of the appellant on merits and in accordance with law, as expeditiously as possible, preferably within three months of filing a copy of this order before the concerned Commissioner of Income-Tax (Appeals).
Sd/- JUDGE
Sd/- JUDGE Bkm