M/S CANARA HOUSING DEVELOPMENT COMPANY V. DEPUTY COMMISIONER OF INCOME TAX

ITA/365/2022

AI Insights

The case involves M/s Canara Housing Development Company, which appealed against the orders of the Income Tax Appellate Tribunal, Bengaluru, concerning the assessment year 2008-09. The primary legal question was whether the orders of the Assessing Officer, Appellate Commissioner, and the Tribunal were without jurisdiction and thus 'vitiated', referencing a prior decision by the High Court in ITA No.38/2014. The appellant argued that following the Settlement Commission's decision, there was no further jurisdiction for the ITAT to consider the matter. The Revenue contended that the original assessment order was valid and had undergone various challenges and confirmations through different levels of tax authorities.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 693893 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 31-10-2022
• Assessment Year: misc
• Other Referred Cases: ITA No.38/2014
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: E I SANMATHI; K V ARAVIND
• Assessee Lawyers: M V SESHACHALA; ARAVIND CHAVAN
• Keywords: Assessment Year 2008-09; Income tax appeal; Jurisdiction; Settlement commission
• Section: 143(3); 263; 153A; 260-A

Judgement Text

" - 1 - ITA No. 365 of 2022 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 31ST DAY OF OCTOBER, 2022 PRESENT THE HON'BLE MR. JUSTICE P.S. DINESH KUMAR AND THE HON'BLE MR. JUSTICE T.G. SHIVASHANKARE GOWDA INCOME TAX APPEAL NO. 365 OF 2022 BETWEEN: M/S CANARA HOUSING DEVELOPMENT COMPANY REGISTERED PARTNERSHIP FIRM NO.10/11 LAKASHMINARAYANA COMPLEX PALACE ROAD BANGALORE - 560 052. REP. BY ITS PARTNER SRI. P. ASHWIN PAI …APPELLANT (BY SHRI. M.V. SESHACHALA, SENIOR ADVOCATE FOR SHRI. ARAVIND V. CHAVAN, ADVOCATE) AND: 1. DEPUTY COMMISIONER OF INCOME TAX CENTRAL CIRCLE -1(1) C.R. BUILDING QUEENS ROAD BENGALURU - 560 001 2. PRINCIPAL COMMISSIONER OF INCOME TAX CENTRAL CIRCLE C.R. BUILDING QUEENS ROAD BENGALURU - 560 001 …RESPONDENTS (BY SHRI. E.I. SANMATHI FOR SHRI. K.V. ARAVIND, SENIOR STANDING COUNSEL) Digitally signed by YASHODHA N Location: High Court Of Karnataka - 2 - ITA No. 365 of 2022 THIS INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN AND ALLOW THE APPEAL BY SETTING ASIDE THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL, BENGALURU IN ITA NO.1102/BANG/2015 DATED 25.03.2022 ANNEXURE-C FOR ASSESSMENT YEAR 2008-09 AND CONSEQUENTLY SET ASIDE THE ORDER OF THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-I(1), BENGALURU, DATED 31.12.2010 AND ORDER OF THE APPELLATE COMMISSIONER DATED 01.04.2015 IN ITA NO.TR.NO.2/DCIT/CC- I(1)/CIT(A)-11/B'LORE/2012-13 AND ETC. THIS INCOME TAX APPEAL COMING ON FOR ADMISSION, THIS DAY, P.S. DINESH KUMAR J., DELIVERED THE FOLLOWING: JUDGMENT This appeal by the Assessee, challenging the order dated 25.03.2022 in ITA No.1102/Bang/2015 passed by the ITAT1, 'B' Bench, Bangalore, has been filed to consider seven questions of law. However, Shri M.V.Seshachala, learned Senior Advocate for the appellant submitted that only the following question arises for consideration: Whether the impugned orders of the Assessing Officer, Appellate Commissioner and the Tribunal is without jurisdiction and stands \"vitiated\" as held by this Hon'ble Court in ITA No.38/2014 dated 25.07.2014 in the case of this assessee for the very same Assessment year 2008-09? 1 Income Tax Appellate Tribunal - 3 - ITA No. 365 of 2022 2. Arguing in support of this appeal, Shri Seshachala submitted that original assessment order was subject matter of ITA No.38/2014 and this Court has disposed of the said case on 25.07.2014 setting aside the order impugned therein and granting liberty to the Assessing Officer to proceed with the assessment proceedings under Section 153A of the Act2, by keeping in mind the observations made in the said order. Pursuant thereto, proceedings initiated under Section 153A of the Act have culminated in the order passed by the CIT3, Central, Bangalore, dated 19.10.2015 in Settlement Application No.KA/BL 51/2014-15/2/TT. Therefore, nothing further survived for the ITAT to consider so far as assessment year 2008-09 is concerned. Accordingly, he prayed for allowing this appeal. 3. Shri E.I.Sanmathi, learned Senior Standing Counsel for the Revenue submitted that original assessment order under Section 143(3) of the Act was 2 Income Tax Act, 1961 3 Commissioner of Income Tax - 4 - ITA No. 365 of 2022 passed on 31.12.2010. Thereafter, there was a search in the premises of the assessee on 12.04.2011. In the meanwhile, Revisional Authority namely, the Commissioner of Income Tax passed his order under Section 263 of the Act, on 28.03.2013. The said order was challenged before the ITAT and it was confirmed. On further appeal by the assessee, the matter has been remanded in ITA No.38/2014. 4. In the meanwhile, the assessee had challenged the order passed by the A.O.4 u/s 143(3) of the Act before the CIT(A), which has confirmed the original Assessment order. The said order was further challenged by the assessee before the ITAT in ITA No.1102/Bang/2015 and the same has been disposed of by the impugned order. 5. We have carefully considered the rival submissions and perused the records. 4 Assessing Officer - 5 - ITA No. 365 of 2022 6. In substance, the tax liability for the year 2008-09 has been finalised before the Settlement Commission vide order dated 19.10.2015. The impugned order passed by the ITAT stemmed out of challenge to Assessment Order under Section 143(3) of the Act before CIT(A). Therefore, ITAT ought to have disposed of the appeal holding that assessment for the A.Y. 2008-09 has stood concluded by the order passed by the Settlement Commission. However, it has heard the matter on merits and passed the impugned order. 7. Since the assessment for A.Y. 2008-09 has been concluded by Settlement Commission, order passed under Section 143(3) of the Act and all further orders by the CIT(A) and ITAT are unsustainable. Further, the Revenue has not challenged the order passed in ITA No.38/2014. 8. In view of the above, we pass the following: - 6 - ITA No. 365 of 2022 ORDER i) Assessment Order dated 31.12.2010 passed by the Deputy Commissioner of Income Tax, Central Circle-1(1), Bengaluru; ii) Order dated 01.04.2015 passed by the Commissioner of Income Tax (Appeals)-11, Bengaluru; and iii) Order dated 25.03.2022 in ITA No.1102/Bang/2015 passed by the Income tax Appellate Tribunal \"B\" Bench, Bengaluru, are set aside; iv) The question of law is answered in favour of the Assessee and against the Revenue Appeal disposed of. Sd/- JUDGE Sd/- JUDGE YN List No.: 1 Sl No.: 22 "