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NC: 2024:KHC:39398-DB ITA No. 151 of 2021
IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 23RD DAY OF SEPTEMBER, 2024 PRESENT THE HON'BLE MR JUSTICE S.G.PANDIT AND THE HON'BLE MR JUSTICE C.M. POONACHA INCOME TAX APPEAL NO. 151 OF 2021
BETWEEN:
THE PR. COMMISSIONER OF INCOME TAX, CENTRAL CIRCE, C.R. BUILDING, QUEENS ROAD, BENGALURU-560 001.
THE ASST. COMMISSIONER OF INCOME –TAX, EXEMPTIONS, CIRCLE-1, (PRESENT ADDRESS) DCIT, CIRCEL-1, C. R. BUILDING, ATTAVARA, MANGALURU-575 001.
…APPELLANTS (BY SRI. SUSHAL TIWARI N.,ADVOCATE) AND:
M/S. NAVODAYA GRAMA VIKAS CHARITABLE TRUST, 14-7-1005, SC DCC BANK LTD., HEAD OFFICE BUILDING, KODIALBAIL, MANGALURU-575 003, PAN - AAATN7594E.
…RESPONDENT (BY SRI. S. ANNAMALIAI.,ADVOCATE)
Digitally signed by BHARATHI S Location: HIGH COURT OF KARNATAKA
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NC: 2024:KHC:39398-DB ITA No. 151 of 2021
THIS ITA / INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE, ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BENGALURU IN ITA NO. 553/BANG/2018 DATED 16/10/2020 FOR ASSESSMENT YEAR 2014- 2015 ANNEXURE-C AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER AND CONFIRMING THE ORDER PASSED BY THE ASST. COMMISSIONER OF INCOME TAX, EXEMPTIONS, CIRCLE-1, MANGALURU AND ETC.
THIS APPEAL IS COMING ON FOR FINAL HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR JUSTICE S.G.PANDIT and HON'BLE MR JUSTICE C.M. POONACHA
ORAL JUDGMENT (PER: HON'BLE MR JUSTICE S.G.PANDIT)
Heard the learned counsel Sushal Tiwari, for appellants/Revenue and learned counsel Sri S.Annamalai, for the respondent/assessee.
The Revenue is in appeal under Section 260-A of the Income Tax Act, 1961 (for short, ‘the Act’) questioning the correctness and legality of order dated 16.10.2020 passed by the Income Tax Appellate Tribunal, ‘C’ Bench, Bengaluru (for short, ‘Appellate Authority’) in ITA.No.553/Bang/2018 for the assessment year 2014-15, raising the following substantial questions of law:
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NC: 2024:KHC:39398-DB ITA No. 151 of 2021
“Whether on the facts and in the circumstances of the case, the Tribunal is right in law in holding that loans advanced to the Self Help Groups is an application of income by relying upon CBDT’s Circular No.11 of 1973 dated 24/1/1973 without appreciating that it is applicable only in the context of student and scholarship loans but not to the loans granted to SHG’s and further failed to notice that assessee borrows from SCDCC Bank and in turn appropriates the same to SHG’s for higher rate of interest which is not a charitable activity?”
Learned counsel for the assessee submits that the tax effect in this appeal is less than Rs.2 Crores and therefore, the appeal should not be entertained at the instance of the revenue in view of the Circular No.09/2024 dated 17.09.2024 issued by the Central Board of Direct Taxes. It is also submitted that the aforesaid Circular binds the revenue.
On the other hand, learned counsel for the revenue submits that he be granted liberty to revive the appeal in case the matter falls within the exceptions under the aforesaid Circular dated 17.09.2024 and Circular No.5/2024 dated 15.03.2024.
In view of the aforesaid submissions, the appeal is disposed of with liberty as prayed for by the learned counsel for
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NC: 2024:KHC:39398-DB ITA No. 151 of 2021
the revenue. However, the questions of law are kept open to be adjudicated in an appropriate proceeding.
Sd/- (S.G.PANDIT) JUDGE
Sd/- (C.M. POONACHA) JUDGE
ND List No.: 3 Sl No.: 12