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The High Court disposed of the present appeal with liberty to the assessee to revive it, subject to the outcome of the Revenue's pending appeal (W.A.No.2473/2015). The Court acknowledged that the assessee's appeal was filed under Section 260A of the Income Tax Act, 1961, impugning the ITAT's order. The Court noted that the ITAT had remanded the issue of scientific research and development expenses to the AO. The assessee informed the Court that while the deduction was subsequently allowed, the basis of the impugned orders was a Single Judge's decision that was under appeal. The Court reasoned that the final determination of the present appeal could be contingent on the outcome of the pending appeal. Therefore, the Court granted the assessee the liberty to revive the appeal, indicating that a decision on the merits would be deferred until the related appeal was decided.
The High Court of Karnataka disposed of the appeal. The Court noted the submission by the assessee that the appeal had become infructuous because the Income-Tax Appellate Tribunal (ITAT) had remanded the matter to the Assessing Officer (AO), but the AO failed to pass an order within the stipulated period. The assessee had subsequently filed a writ petition seeking a refund, which was allowed by an order dated 07.11.2025, directing the Revenue to refund amounts for assessment years 2006-07, 2007-08, and 2008-09. The Revenue did not prefer a writ appeal against this order and processed the refund, thereby accepting the writ court's direction. The Revenue's counsel did not dispute these facts but requested liberty to revisit the matter if the assessee's statements were found to be incorrect. The appeal was disposed of on these terms.
The High Court held that the question of law raised in the present appeal was covered by its own previous decision in ITA.No.148/2026. This earlier decision arose from the same impugned order passed by the ITAT in IT(TP)A.No.639/Bang/2025 for Assessment Year 2014-15. Consequently, the Court found that no substantial question of law arose for consideration in the present appeal. The appeal was accordingly dismissed. The specific reasoning for the decision in ITA.No.148/2026 is not detailed in this judgment, but it formed the basis for dismissing the current appeal.
The High Court held that the substantial questions of law projected by the Revenue did not arise from the impugned order passed by the ITAT in the Revenue's appeal. The Court noted that the questions pertained to the allowance for deduction under Section 35(2AB) of the Act, which was the subject matter of the Assessee's appeal before the ITAT (IT(TP)A.No.281/Bang/2014), and not the Revenue's appeal (IT(TP)A.No.237/Bang/2014). The Revenue had filed a separate appeal, ITA.No.155/2020, against the ITAT's order in the Assessee's appeal. Consequently, the present appeal was deemed misconceived. The Court did not decide on the merits of the disallowance under Section 35(2AB) or any other provision. The operative direction was to dismiss the appeal.
The High Court of Karnataka, in its judgment, relied on a coordinate bench's decision in SAP Labs India (P) Ltd. v. Income Tax Officer. The court held that the selection or exclusion of comparables is a factual and data-driven exercise, and the Transfer Pricing Officer (TPO) cannot reject taxpayer comparables merely to substitute them with a standard departmental set. Such determination must strictly conform to Rule 10B of the Income-tax Rules. The Tribunal had excluded M/s Infosys Ltd., M/s Persistent Systems Ltd., and M/s Thirdware Solutions Ltd. because they were functionally dissimilar to the assessee, a software development service provider. Infosys owned significant intangibles and had revenue from software products, Persistent Systems was engaged in product development and design services, and Thirdware Solutions was involved in product development and earned revenue from license sales. The court found these exclusions justified, noting that these companies were part of a standard departmental set, a practice deprecated by the coordinate bench. The court also noted that M/s Cigniti Technologies Ltd. and M/s SQS India BFSI Ltd. were restored to the TPO for fresh consideration, meaning the Revenue was not aggrieved by this finding. Consequently, the substantial questions of law were answered in favor of the assessee and against the Revenue.
The High Court held that no substantial question of law arises for consideration in this appeal. Regarding the comparables excluded by the TPO, the Tribunal rightly remanded the matter back to the TPO for verification of their FAR with that of the assessee, as the TPO had not provided sufficient reasons for rejection. The Revenue was not aggrieved by this remand. Concerning M/s Annanya Interface & Controls Pvt. Ltd. and Dembla Valves Ltd., the Tribunal's factual finding of functional dissimilarity was supported by the record, and the Revenue failed to demonstrate perversity. For Abak Elcerofab Engg Pvt. Ltd., the remand was due to unclear manufacturing activity. For Limitorque India Ltd., Flowserve India Controls Pvt. Ltd., and Koso India Ltd., the Tribunal remanded the matter to verify the RPT filter at 15%, which is a rational approach. The Court relied on its coordinate bench's decision in SAP Labs India (P) Ltd. v. Income Tax Officer, which held that the selection or exclusion of comparables is a factual and data-driven exercise and that the TPO cannot arbitrarily substitute comparables. The Revenue failed to point out any perversity or incorrect factual findings by the Tribunal. Therefore, the appeal was rejected.
The High Court held that export incentives, such as DEPB, which arise from the assessee's business of exporting gherkins, have a direct nexus with its export activity and therefore cannot be excluded from operating income. Relying on the Bombay High Court's decision in CIT v. Welspun Zucchi Textiles Ltd., the Court found the Tribunal justified in directing the TPO to treat export incentives as part of operating income for determining the Arm's Length Price (ALP). Consequently, substantial question of law No.1 was answered in favour of the assessee. Regarding the second substantial question of law, the Court agreed with the Tribunal's finding that comparables selected by the TPO were not functionally similar to the assessee's business of growing, processing, and exporting gherkins, as they were involved in general food processing. The Court found no perversity in the Tribunal's decision to remand the matter for fresh consideration of comparables. Thus, substantial question of law No.2 was also answered against the Revenue. The appeal was dismissed.
The High Court observed that the ITAT had answered grounds 3 to 7 and 20, but incorrectly recorded that no other grounds were urged. The Court noted that grounds 8 to 19 were raised in the appeal memorandum and elaborately recorded by the Tribunal in its paragraph 4. Since the Tribunal had the submissions on record, it ought to have answered these grounds. Consequently, the impugned order of the ITAT was set aside specifically concerning the non-consideration of grounds 8 to 19. The matter was remitted back to the ITAT for consideration of these grounds. The substantial questions of law and contentions of both parties were left open for the Tribunal to decide.
The High Court, in its judgment, referred to a coordinate bench's decision in SAP Labs India (P) Ltd. V. Income Tax Officer (dated 28.08.2026). The Court found that the principle laid down in SAP Labs India (P) Ltd. was aptly applicable to the present case. Specifically, the Court highlighted the finding that the selection or exclusion of comparables is essentially a factual and data-driven exercise, and the TPO cannot reject the taxpayer's comparables merely to substitute them with a standard departmental set. Such determination must strictly conform to the requirements of Rule 10B of the Rules. The Court noted that the present appeal pertained to the exclusion of M/s. Larsen and Tourbo Infotech Ltd. for being functionally dissimilar to the assessee. The Court observed that the assessee provides software development services, while M/s. Larsen and Tourbo Infotech Ltd. is involved in multiple business segments including services, industrials, and telecom, and operates in various domains like banking, financial services, insurance, media, and entertainment. Given this factual scenario, the Court agreed that M/s. Larsen and Tourbo Infotech Ltd. is not functionally similar to the assessee. The Court also noted that the Revenue's counsel failed to point out any perversity in the Tribunal's factual finding on functional dissimilarity. Therefore, the Court concluded that the substantial questions of law admitted in the appeal should be answered in favour of the assessee and against the Revenue. The appeal filed by the Revenue was dismissed.
The High Court upheld the Single Judge's decision, finding that the penalty orders and demand notices were indeed issued beyond the period of limitation prescribed under Section 275(1)(c) of the Income Tax Act, 1961.
The High Court held that viewed from any angle, the impugned penalty orders and demand notices dated 23.05.2025 and 26.05.2025 could not be sustained on the ground of limitation. The action taken by the Revenue for levying penalty under Section 271DA of the Act was clearly beyond the period of limitation prescribed under Section 275(1)(c) of the unamended Act. The Court noted the divergent views of the co-ordinate benches in K. Umesh Shetty and Ganesh Agarwal regarding the commencement of the limitation period. However, it found that in the present case, whether the limitation commenced from the date of the assessment order (as per Umesh Shetty) or from the date of receipt of the proposal by the Joint Commissioner (as per Ganesh Agarwal), the show cause notice issued on 12.12.2024 was beyond the prescribed six-month period. Therefore, the appeals were dismissed, upholding the learned Single Judge's decision.
The High Court held that viewed from any angle, the impugned penalty orders and demand notices dated 23.05.2025 and 26.05.2025 could not be sustained on the ground of limitation. The action taken by the Revenue for levying penalty under Section 271DA of the Act was clearly beyond the period of limitation prescribed under Section 275(1)(c) of the unamended Act. The Court noted the divergent views of the co-ordinate benches in K. Umesh Shetty and Ganesh Agarwal regarding the commencement of the limitation period. However, it found that in the present case, whether the limitation commenced from the date of the assessment order (as per Umesh Shetty) or from the date of receipt of the proposal by the Joint Commissioner (as per Ganesh Agarwal), the show cause notice issued on 12.12.2024 was beyond the prescribed six-month period. Therefore, the appeals were dismissed, upholding the learned Single Judge's decision.
The High Court held that the assessee failed to produce sufficient evidence to substantiate the claim of business loss. The Court agreed with the Tribunal that once amounts are treated as bad and doubtful debts, they cannot be treated as business loss without adequate proof.
The High Court held that the limitation period under Section 275(1)(c) of the Income Tax Act, 1961, for imposing penalty under Section 271DA commences from the date of issuance of notice under Section 274 of the Act by the Joint Commissioner of Income Tax. The Court reasoned that a proposal or reference forwarded by the Assessing Officer to the Joint Commissioner for consideration of penalty initiation cannot be construed as the initiation of proceedings. Proceedings are initiated only upon the issuance of a notice under Section 274 by the Joint Commissioner. The six-month period prescribed under Section 275(1)(c) for passing a penalty order shall commence from the end of the month in which such notice is issued. Furthermore, the Joint Commissioner must issue the Section 274 notice within six months from the end of the month in which the proposal/reference is received from the Assessing Officer. If the notice is issued beyond this period, the proceedings are time-barred. The Court found that in some of the appeals (WA Nos. 1991, 1994, 1996, 2021), the notices were issued beyond six months from the date of the Assessing Officer's proposal, rendering the penalty orders time-barred. In the remaining cases, the notices were issued within the prescribed period. Accordingly, the penalty orders in the former set of appeals were declared time-barred, while those in the latter set were upheld.
The High Court held that the limitation period under Section 275(1)(c) of the Income Tax Act, 1961, for imposing penalty under Section 271DA commences from the date of issuance of notice under Section 274 of the Act by the Joint Commissioner of Income Tax. The Court reasoned that a proposal or reference forwarded by the Assessing Officer to the Joint Commissioner for consideration of penalty initiation cannot be construed as the initiation of proceedings. Proceedings are initiated only upon the issuance of a notice under Section 274 by the Joint Commissioner. The six-month period prescribed under Section 275(1)(c) for passing a penalty order shall commence from the end of the month in which such notice is issued. Furthermore, the Joint Commissioner must issue the Section 274 notice within six months from the end of the month in which the proposal/reference is received from the Assessing Officer. If the notice is issued beyond this period, the proceedings are time-barred. The Court found that in some of the appeals (WA Nos. 1991, 1994, 1996, 2021), the notices were issued beyond six months from the date of the Assessing Officer's proposal, rendering the penalty orders time-barred. In the remaining cases, the notices were issued within the prescribed period. Accordingly, the penalty orders in the former set of appeals were declared time-barred, while those in the latter set were upheld.
The High Court held that the limitation period under Section 275(1)(c) of the Income Tax Act, 1961, for imposing penalty under Section 271DA commences from the date of issuance of notice under Section 274 of the Act by the Joint Commissioner of Income Tax. The Court reasoned that a proposal or reference forwarded by the Assessing Officer to the Joint Commissioner for consideration of penalty initiation cannot be construed as the initiation of proceedings. Proceedings are initiated only upon the issuance of a notice under Section 274 by the Joint Commissioner. The six-month period prescribed under Section 275(1)(c) for passing a penalty order shall commence from the end of the month in which such notice is issued. Furthermore, the Joint Commissioner must issue the Section 274 notice within six months from the end of the month in which the proposal/reference is received from the Assessing Officer. If the notice is issued beyond this period, the proceedings are time-barred. The Court found that in some of the appeals (WA Nos. 1991, 1994, 1996, 2021), the notices were issued beyond six months from the date of the Assessing Officer's proposal, rendering the penalty orders time-barred. In the remaining cases, the notices were issued within the prescribed period. Accordingly, the penalty orders in the former set of appeals were declared time-barred, while those in the latter set were upheld.
The High Court held that the limitation period under Section 275(1)(c) of the Income Tax Act, 1961, for imposing penalty under Section 271DA commences from the date of issuance of notice under Section 274 of the Act by the Joint Commissioner of Income Tax. The Court reasoned that a proposal or reference forwarded by the Assessing Officer to the Joint Commissioner for consideration of penalty initiation cannot be construed as the initiation of proceedings. Proceedings are initiated only upon the issuance of a notice under Section 274 by the Joint Commissioner. The six-month period prescribed under Section 275(1)(c) for passing a penalty order shall commence from the end of the month in which such notice is issued. Furthermore, the Joint Commissioner must issue the Section 274 notice within six months from the end of the month in which the proposal/reference is received from the Assessing Officer. If the notice is issued beyond this period, the proceedings are time-barred. The Court found that in some of the appeals (WA Nos. 1991, 1994, 1996, 2021), the notices were issued beyond six months from the date of the Assessing Officer's proposal, rendering the penalty orders time-barred. In the remaining cases, the notices were issued within the prescribed period. Accordingly, the penalty orders in the former set of appeals were declared time-barred, while those in the latter set were upheld.
The High Court held that the limitation period under Section 275(1)(c) of the Income Tax Act, 1961, for imposing penalty under Section 271DA commences from the date of issuance of notice under Section 274 of the Act by the Joint Commissioner of Income Tax. The Court reasoned that a proposal or reference forwarded by the Assessing Officer to the Joint Commissioner for consideration of penalty initiation cannot be construed as the initiation of proceedings. Proceedings are initiated only upon the issuance of a notice under Section 274 by the Joint Commissioner. The six-month period prescribed under Section 275(1)(c) for passing a penalty order shall commence from the end of the month in which such notice is issued. Furthermore, the Joint Commissioner must issue the Section 274 notice within six months from the end of the month in which the proposal/reference is received from the Assessing Officer. If the notice is issued beyond this period, the proceedings are time-barred. The Court found that in some of the appeals (WA Nos. 1991, 1994, 1996, 2021), the notices were issued beyond six months from the date of the Assessing Officer's proposal, rendering the penalty orders time-barred. In the remaining cases, the notices were issued within the prescribed period. Accordingly, the penalty orders in the former set of appeals were declared time-barred, while those in the latter set were upheld.
The High Court held that the limitation period under Section 275(1)(c) of the Income Tax Act, 1961, for imposing penalty under Section 271DA commences from the date of issuance of notice under Section 274 of the Act by the Joint Commissioner of Income Tax. The Court reasoned that a proposal or reference forwarded by the Assessing Officer to the Joint Commissioner for consideration of penalty initiation cannot be construed as the initiation of proceedings. Proceedings are initiated only upon the issuance of a notice under Section 274 by the Joint Commissioner. The six-month period prescribed under Section 275(1)(c) for passing a penalty order shall commence from the end of the month in which such notice is issued. Furthermore, the Joint Commissioner must issue the Section 274 notice within six months from the end of the month in which the proposal/reference is received from the Assessing Officer. If the notice is issued beyond this period, the proceedings are time-barred. The Court found that in some of the appeals (WA Nos. 1991, 1994, 1996, 2021), the notices were issued beyond six months from the date of the Assessing Officer's proposal, rendering the penalty orders time-barred. In the remaining cases, the notices were issued within the prescribed period. Accordingly, the penalty orders in the former set of appeals were declared time-barred, while those in the latter set were upheld.
The Tribunal held that for STA No. 07/2025, the revision order dated 30.04.2024 passed by the SMR Authority under Section 64(1) of the KVAT Act was barred by limitation. The original order was dated 28.02.2015, and while a letter calling for records was issued on 11.01.2018 (within four years), the revision order itself was passed beyond five years from the original order. Therefore, the order was set aside. Similarly, for STA No. 05/2025, the revision order dated 21.10.2024 was found to be barred by limitation as it was passed beyond five years from the order dated 13.09.2019 sought to be revised. Consequently, this order was also set aside. For STA No. 2/2025, the revision order dated 31.07.2024 was held to be barred by limitation, being passed beyond five years from the order dated 29.09.2018. This order was also set aside. In STA No. 03/2023, the appeal was allowed in part, and the order of the SMR Authority dated 16.11.2022 was set aside and remitted for fresh consideration. The substantial questions of law were left unanswered. In STA No. 11/2022, the appeal was allowed, and the order of the SMR Authority dated 29.06.2022 was set aside. In STA No. 12/2022, the appeal was partly allowed, with some questions answered in favour of the assessee and others in favour of the revenue, and the order of the SMR Authority dated 28.06.2022 was set aside to the extent indicated.
The High Court held that the limitation period under Section 275(1)(c) of the Income Tax Act, 1961, for imposing penalty under Section 271DA commences from the date of issuance of notice under Section 274 of the Act by the Joint Commissioner of Income Tax. The Court reasoned that a proposal or reference forwarded by the Assessing Officer to the Joint Commissioner for consideration of penalty initiation cannot be construed as the initiation of proceedings. Proceedings are initiated only upon the issuance of a notice under Section 274 by the Joint Commissioner. The six-month period prescribed under Section 275(1)(c) for passing a penalty order shall commence from the end of the month in which such notice is issued. Furthermore, the Joint Commissioner must issue the Section 274 notice within six months from the end of the month in which the proposal/reference is received from the Assessing Officer. If the notice is issued beyond this period, the proceedings are time-barred. The Court found that in some of the appeals (WA Nos. 1991, 1994, 1996, 2021), the notices were issued beyond six months from the date of the Assessing Officer's proposal, rendering the penalty orders time-barred. In the remaining cases, the notices were issued within the prescribed period. Accordingly, the penalty orders in the former set of appeals were declared time-barred, while those in the latter set were upheld.
The Court held that the limitation for penalty proceedings under Section 275(1)(c) commences from the date of issuing notice under Section 274 by the Joint Commissioner. It clarified that the Joint Commissioner must issue this notice within six months of receiving the Assessing Officer's proposal, and the penalty order must be passed within six months from the end of the month the notice was issued. The Court also held that recording satisfaction by the Joint Commissioner is not a statutory requirement.
The High Court held that the limitation period under Section 275(1)(c) of the Income Tax Act, 1961, for imposing penalty under Section 271DA commences from the date of issuance of notice under Section 274 of the Act by the Joint Commissioner of Income Tax. The Court reasoned that a proposal or reference forwarded by the Assessing Officer to the Joint Commissioner for consideration of penalty initiation cannot be construed as the initiation of proceedings. Proceedings are initiated only upon the issuance of a notice under Section 274 by the Joint Commissioner. The six-month period prescribed under Section 275(1)(c) for passing a penalty order shall commence from the end of the month in which such notice is issued. Furthermore, the Joint Commissioner must issue the Section 274 notice within six months from the end of the month in which the proposal/reference is received from the Assessing Officer. If the notice is issued beyond this period, the proceedings are time-barred. The Court found that in some of the appeals (WA Nos. 1991, 1994, 1996, 2021), the notices were issued beyond six months from the date of the Assessing Officer's proposal, rendering the penalty orders time-barred. In the remaining cases, the notices were issued within the prescribed period. Accordingly, the penalty orders in the former set of appeals were declared time-barred, while those in the latter set were upheld.
The High Court held that the limitation period under Section 275(1)(c) of the Income Tax Act, 1961, for imposing penalty under Section 271DA commences from the date of issuance of notice under Section 274 of the Act by the Joint Commissioner of Income Tax. The Court reasoned that a proposal or reference forwarded by the Assessing Officer to the Joint Commissioner for consideration of penalty initiation cannot be construed as the initiation of proceedings. Proceedings are initiated only upon the issuance of a notice under Section 274 by the Joint Commissioner. The six-month period prescribed under Section 275(1)(c) for passing a penalty order shall commence from the end of the month in which such notice is issued. Furthermore, the Joint Commissioner must issue the Section 274 notice within six months from the end of the month in which the proposal/reference is received from the Assessing Officer. If the notice is issued beyond this period, the proceedings are time-barred. The Court found that in some of the appeals (WA Nos. 1991, 1994, 1996, 2021), the notices were issued beyond six months from the date of the Assessing Officer's proposal, rendering the penalty orders time-barred. In the remaining cases, the notices were issued within the prescribed period. Accordingly, the penalty orders in the former set of appeals were declared time-barred, while those in the latter set were upheld.
The High Court set aside the Single Judge's order and remitted the matter back. This was done in light of a Supreme Court order that addressed similar issues arising from amendments to the Income Tax Act, particularly the insertion of Section 147A.
The tribunal held that granting less than seven days to respond to a show-cause notice violates the SOP and principles of natural justice. Consequently, the assessment order and consequential proceedings were set aside.
The High Court condoned the petitioner's lapse in filing the reply due to illness and set aside the assessment order. The matter was remitted to the stage of reply to the show-cause notice for reconsideration.
The High Court noted that the appeal was dismissed solely on the ground of limitation, without considering the merits. Therefore, the order-in-original was set aside and the matter was remitted back to the stage of reply to the show cause notice for fresh consideration.
The High Court held that the notice under Section 148 was issued beyond the permissible time limit, following the Supreme Court's concession in similar cases. Consequently, the impugned proceedings and assessment order were set aside.
The High Court held that the appellant's case should be considered for complete adjudication, especially since new documents were produced. The matter was restored to the Tribunal for reconsideration of the addition under Section 69.
The High Court held that interest earned from deposits made in co-operative banks is not eligible for deduction under Section 80P(2)(d) due to Section 80P(4) of the Act, following a previous judgment. The matter of interest income from other investments was remanded to the Assessing Officer.
The High Court held that the assessment order passed against a deceased person was unsustainable in law, as the Assessing Officer had knowledge of the death. It set aside both the Tribunal's remand order and the original assessment order, without remanding the case.
The Court held that the limitation period for passing an order after a Tribunal's remand expired on March 31, 2024. Any action taken thereafter was without jurisdiction. Consequently, the proceedings were barred by limitation.
The High Court quashed the order of the Central Information Commission dated April 12, 2019. The Court held that income tax returns and financial records, furnished by an assessee to the Income Tax Department, are held in a fiduciary capacity. This information is considered third-party information under the RTI Act and is exempt from disclosure under Section 8(1)(e) unless a larger public interest is established. The Court noted that the CIC had relied on an earlier order in W.P. No. 18778/2017 (Smt. Jammalu Padma Manjari v. CPIO & DCIT) but found that the specific facts and the application of Section 8(1)(e) were not adequately considered in that context. The Petitioner's rejection of the RTI application was therefore upheld. The Court also issued comprehensive guidelines for disclosure of financial records in maintenance proceedings, emphasizing safeguards like sealed cover procedures, confidentiality undertakings, and prohibition on misuse, but these guidelines were not directly applicable to the present RTI matter.
The Tribunal was justified in rejecting the Revenue's appeals. Mere higher profit margins in related concerns do not automatically attract Section 13(1)(c) without proof of diversion of funds. Consistency with earlier assessment years where similar payments were accepted was also a key factor.
The Tribunal held that since the income was voluntarily offered and declared in the return, the assessee could not seek exclusion of this admitted income. However, the addition of Rs. 24,00,000/- was deleted.
The High Court noted that the appeal was not maintainable due to the tax effect being below the threshold specified in CBDT Circular No. 09/2024. The appeal was disposed of with liberty to revive.
The High Court held that payment of admitted tax is a mandatory condition for admitting an appeal under Section 249(4)(a). However, considering the assessee's request to auction seized assets for tax payment, the matter was remitted.
The High Court held that the substantial questions of law raised in the appeal were already answered by its previous judgments. Therefore, no substantial question of law arose for consideration.
The Tribunal upheld the finding that a transfer of land occurred in AY 2005-06. However, it held that if the capital gains from this transfer were already taxed in subsequent years (AY 2007-08 and 2008-09), they should not be taxed again in AY 2005-06 to avoid double taxation.
The High Court held that the issue regarding the applicability of Section 115JB to banking companies was already decided by a previous judgment of the same court. Therefore, no substantial question of law arose.
The High Court noted that the substantial questions of law raised in the appeal were covered by its previous decision in ITA No.118/2025. Consequently, the present appeal was disposed of in terms of the order passed in the said precedent case.
The High Court noted that similar issues were decided in a previous appeal (ITA No.55/2025) which was dismissed. The Court clarified that remand proceedings should be conducted independently, uninfluenced by ITAT's observations, and in accordance with Supreme Court rulings.
The High Court deleted a specific observation from the Tribunal's order regarding the notice under Section 143(2) being issued on the basis of a belated revised return. All contentions regarding the validity of the notice were kept open for adjudication by the CIT(A).
The High Court held that the appeal is not maintainable in view of Circular No. 9/2024, which stipulates that appeals with a tax effect below Rs. 2,00,00,000/- are not maintainable.
The Tribunal held that additions to a concluded assessment under Section 153C are unsustainable if not based on material found during the search. The High Court agreed, finding no substantial question of law.
The High Court held that the fuel farm facility is an integral part of the airport and thus eligible for deduction under Section 80-IA, as it has an agreement with a statutory body (BIAL). The interest on hedge transactions was also allowed, following Supreme Court precedent.
The Tribunal held that the belated valuation report had no value in the eyes of law as per Section 142A(6) of the Act. Consequently, the Assessing Officer did not get the benefit of the extended period under Section 153, and the Principal Commissioner's order under Section 263 was not justified.
The High Court of Karnataka noted that the appellant's counsel filed a memo dated January 22, 2026, seeking leave to withdraw the appeal. The reason provided for withdrawal was that a fresh Assessment Order has been passed on remand. The Court accepted the memo and placed it on record. Consequently, the appeal was dismissed as infructuous. The Court did not decide on the merits of the original dispute that led to the ITAT's order. The operative direction was to dismiss the appeal.
The High Court found no reason to interfere with the ITAT's order of remand for fresh consideration of interest income from nominal members. However, it clarified that the remand proceedings should be conducted independently, uninfluenced by the ITAT's prior observations on merits.