MRS.MAINA SHETTY vs. THE DY. COMMISSIONER OF INCOME TAX

PDF · subscribers
ITA/751/2009HC KarnatakaKAHC01073837200914 August 2015Bench: B.MANOHAR,VINEET SARAN6 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that the notice issued under Section 148 was not valid as it was issued beyond the limitation period prescribed by Section 149, following the Apex Court's decision in M/s.Spences Hotels (P) Limited.

What were the facts?

The assessee's return for AY 1997-98 was accepted. Later, based on a Tribunal order for AY 1998-99, the Assessing Officer issued a notice under Section 148 for AY 1997-98. The assessee argued this reopening was time-barred.

What were the issues?

The primary issue was the validity of reopening the assessment beyond the prescribed limitation period. The court also considered the validity of unexplained investments and levy of interest.

Which sections of the Income-tax Act were involved?

Section 148,Section 149,Section 150,Section 143(1),Section 234A,Section 234B,Section 234D

AI-generated summary — verify with the full judgment below

1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 14TH DAY OF AUGUST 2015

PRESENT

THE HON’BLE MR.JUSTICE VINEET SARAN AND THE HON’BLE MR.JUSTICE B MANOHAR ITA No.751 OF 2009

BETWEEN :

Mrs.Maina Shetty No.4-3-431, Kodialguthlu M G Road, Mangalore-575003.

..Appellant

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

AND: The Dy. Commissioner of Income Tax Central Circle, C R Building, Attavara, Mangalore-575001.

..Respondent

(By Sri K V Arand a/w Sri G Kamaladhar, Advs.)

This ITA is filed u/s.260-a of I.T.Act, 1961 arising out of order dated 26-06-2009 passed in ITA No.95/BNG/2009, for the assessment year 1997-98, praying that this Hon'ble Court may be

2 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 ITA No.95/BNG/2009, dated 26-06-2009.

This appeal coming on for final hearing this day, VINEET SARAN, J. delivered the following:

JUDGMENT

This is an appeal filed by the assessee challenging the order of the Tribunal whereby reopening of assessment for the assessment year 1997-98 has been held to be valid. The appeal was admitted on 21.4.2010 on the following questions of law: “(i) Whether the Tribunal was right in law in upholding notice issued under section 148 is valid on the facts and circumstance of the case?

(ii) Whether the Tribunal was justified in law in holding that the sum of Rs.4,97,046/- represents unexplained investments in the construction of the building for the A.Y.1997-98 on the facts and circumstance of the case?

3 (iii) Whether the Tribunal was justified in law in appreciating the levy of interest u/s 234A, B, D of the Act on the facts and circumstances of the case?

2.

Brief facts of the case are that for the assessment year 1997-98, appellant – assessee filed its return of income on 18.8.1997. The said return has been accepted by the Assessing Officer under Section 143(1) of the Income Tax Act, 1961 (`the Act’ for short) on 15.10.1997. Then on 17.4.2006, the Tribunal, in the case of assessee for the assessment year 1998-1999, passed an order giving certain observations with regard to the income relating to the assessment year 1997-1998. Pursuant to such order of Tribunal, a notice for reopening of assessment under Section 148 of the Act for the assessment year 1997-1998 was issued by the Assessing Officer on 23.10.2006.

4 3. It is contended by the learned counsel for the appellant that limitation for reopening of assessment provided under Section 149 read with Section 150 of the Act would be six years, which would be expiring on 31.3.2004 and thus reopening notice issued after 31.3.2004 would be barred by limitation, as the extended time limit would not be available for the present case because the order of Tribunal passed on 7.4.2006 was itself passed beyond the said period. In support of this submission, Sri A Shankar, learned counsel for the appellant relies on the decision of the Apex dated 20th September, 2012 in the case of M/s.Spences Hotels (P) Limited –vs- Deputy Commissioner of Income Tax (Civil Appeal No.6745/2012), wherein it has been held that in similar circumstances, where the reopening was on the basis of an order passed by the Tribunal beyond the period of

5 limitation specified in Section 149 of the Act, the reopening was held to be in valid.

4.

Sri K V Aravind, learned counsel for the respondent does not dispute the position that the ratio of the said judgment in the case of M/s.Spences Hotels (P) Limited (supra) directly applies to the facts of the present case. As such, in view of the aforesaid, we answer to the first question in favour of the assessee and against the respondent and hold that in the facts and circumstances of the case, notice issued under Section 148 of the Act was not valid.

5.

In view of the aforesaid, since the first question has been answered in favour of the assessee, learned counsel for the parties agree that the other two questions would only be academic and need not be answered.

Appeal stands allowed. No order as to costs.

Sd/- JUDGE

Sd/- JUDGE

Bkm.

More judgments on Section 148

All 35,022 judgments and leading authorities on Section 148 →

Recent GST High Court judgments

Search GST case law →