TH COMMISSIONER OF INCOME TAX vs. SRI M M ANANTHAMURTHY
What did the High Court hold?
The High Court dismissed the review petition, noting that Circular No. 3/2011, which increased the tax effect threshold, was not retrospective. The court also stated that if the circular is held to be prospective, the Revenue can seek a review based on that.
What were the facts?
The Revenue sought to review a High Court order that dismissed their appeal due to a low tax effect, citing Circular No. 2/2005. The Revenue argued that a subsequent circular (No. 3/2011) increased the threshold and that the cumulative tax effect for two years exceeded the original limit.
What were the issues?
Whether a High Court order dismissing an appeal based on a tax effect circular can be reviewed, especially when a new circular with a higher threshold is issued. The retrospective or prospective application of the tax effect circular.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
` IN THE HIGH COURT OF KARNATAKA AT BANGALORE Dated this the 22nd day of June, 2012 PRESENT THE HON’BLE MR. JUSTICE N KUMAR AND THE HON’BLE MR. JUSTICE RAVI MALIMATH RP No. 604 of 2011 IN ITA No. 1320 of 2006 BETWEEN: 1. The Commissioner of Income Tax C.R. Building, Queens Road Bangalore 2. The Assistant Commissioner of Income Tax, Circle – 9 (2), C.R. Building, Queens Road Bangalore …Petitioners (By Sri K.V. Aravind, Advocate) AND: Sri. M.M. Ananthamurthy, 351, 6th Block,
2 Dr. Rajkumar Road, Bangalore …Respondent This Review Petition is filed under Section 260A of the Income Tax Act, praying for review of the order dated 24.8.2011 passed in ITA No. 1320 of 2006 on the file of the Hon’ble High Court of Karnataka, Bangalore. This Review Petition coming on for orders this day, N KUMAR J., made the following:- ` O R D E R The Revenue is seeking to review the order passed by this Court on 24.8.2011 whereunder this Court dismissed the appeal on the ground that the net tax effect was less than Rs.4,00,000/- and therefore covered under Circular No. 2/2005. 2. Learned counsel for the revenue submitted there was a circular issued by the Department which stated that, if the cumulative effect of tax effect for two consecutive years is more than Rs.4,00,000/- then the benefit of the said circular cannot be granted.
3 3. The same was not brought to our notice when the order was passed. However, circular No. 2/2005 is now substituted by circular No. 3/2011 wherein the net tax effect is increased to Rs.10,00,000/-. Therefore, even otherwise, the order cannot be reviewed. The Revenue submits that they are going to file an SLP questioning the order passed by this Court. However, if the order passed by this Court holding that the circular No. 3/2011 is not retrospective in nature but prospective, then it is open to the petitioner to seek review of this order. Therefore, the review petition is rejected, with the liberty as aforesaid. In that view of the matter, we do not see any justification to condone the delay. Accordingly, I.A.I/2012 for condonation of delay is also dismissed. Sd/- JUDGE Sd/- JUDGE ckl
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