M/S. OLIVIA APPARELS PRIVATE LIMITED V. THE DEPUTY COMMISSIONER OF INCOME TAX

ITA/603/2016

AI Insights

The case involves M/s. Olivia Apparels Private Limited, represented by its Managing Director, M Rajyalakshmi, as the appellant, and the Deputy Commissioner of Income-Tax Central Circle - 2(3) as the respondent. The appeal was directed against a common order by the Income Tax Appellate Tribunal (ITAT), which had remanded the matter to the Commissioner of Income Tax (Appeals) without examining the appeals on merits. The primary legal contention was regarding the validity of proceedings under Section 153C of the Income Tax Act, 1961, which the ITAT found to go to the root of the matter, leading to the setting aside of the assessment order. The High Court found that the ITAT's decision to allow the appeals for statistical purposes without examining the merits was inappropriate, leading to the setting aside of the ITAT's order and remitting the matter back for a fresh examination.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 770033 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 28-06-2022
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: K V ARAVIND
• Assessee Lawyers: BALARAM RAO
• Keywords: Assessment Order; Commissioner of Income Tax (Appeals); Income Tax; Jurisdiction; Remand; Statistical Purpose
• Section: 153C; 260-A

Judgement Text

"IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 28TH DAY OF JUNE, 2022 PRESENT THE HON’BLE MR. JUSTICE P.S. DINESH KUMAR AND THE HON’BLE MR. JUSTICE C.M. POONACHA I.T.A. NO.603 OF 2016 BETWEEN : M/s. OLIVIA APPARELS PRIVATE LIMITED REP. BY ITS MANAGING DIRECTOR M RAJYALAKSHMI NO.208, WEST MINISTER 13, CUNNINGHAM ROAD BANGALORE - 560 052. …APPELLANT (BY SHRI. BALARAM R. RAO, ADVOCATE) AND : THE DEPUTY COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE - 2(3) C.R. BUILDING QUEENS ROAD BANGALORE - 560 001. ...RESPONDENT (BY SHRI. K.V. ARAVIND, ADVOCATE) . . . . THIS ITA IS FILED UNDER SECTION 260-A OF THE INCOME TAX ACT, 1961, ARISING OUT OF ORDER DATED: 26/06/2016 PASSED IN ITA NOs.1251 TO 1253/BANG/2013 AND ITA NOs.1211 & 1212/BANG/2013 BY THE REVENUE FOR THE ASSESSMENT YEARS 2005-09 TO 2007-08, PRAYING TO FORMULATE THE SUBSTANTIAL QUESTION OF LAW AS STATED ABOVE AND ANSWER THE SAME IN FAVOUR OF THE APPELLANT AND ETC. 2 THIS ITA COMING ON FOR HEARING, THIS DAY, P.S.DINESH KUMAR, J., DELIVERED THE FOLLOWING: JUDGMENT This appeal by the assessee is directed against the common order dated 24.06.2016 in ITAs No.1251 to 1253/Bang/2013 and ITAs No.1211 and 1212/Bang/2013. It has been admitted to consider following questions of law: 1. Whether the Tribunal erred in law in not holding the assessment order is one without jurisdiction and ought to have quashed the same having regard to the facts and circumstances of the case? 2. Whether the Tribunal is justified in law in remanding the issue to the file of the Commissioner of Income Tax (Appeals) when it was its duty to call for the records and decide the issue more so when the admitted position is that no reasons have been recorded? 3. Whether the Tribunal erred in law in keeping that the issue of merits open as such issues cannot be revived on merits on the fresh order of the Commissioner of Income Tax (Appeals) if the need arises on the facts and circumstance of the case? 4. Whether the Tribunal without even adverting to the issues raised by the revenue could treat the appeal as allowed for statistical purpose and consequently 3 passed an unsustainable and perverse order on the facts and circumstance of the case? 2. Though the above questions have been framed at the time of admission, after hearing the learned Advocate for the assessee and the learned Senior Standing Counsel, in our opinion, the only question that arises for consideration is, whether the ITAT could have remitted the matter to the CIT (Appeals) only with regard to satisfaction in Section 153C of the Act and allowed the appeals filed by both assessee and the Revenue. 3. Shri. Balaram R. Rao, learned Advocate for the assessee submitted that the ITAT1, has held that the issue of validity of the proceedings under Section 153C of the Income Tax Act, 19612 goes to the root of the matter, and set aside the assessment order and remanded the matter. However, appeals filed by the assessee as well as Revenue have been allowed for statistical purposes. 1 Income Tax Appellate Tribunal, Bangalore Bench 'B' 2 'IT Act' for short 4 4. He submitted that CIT3(Appeals) had granted relief to the assessee and therefore, the remand ought to have been limited only with regard to Section 153C of the IT Act. Without examining the appeals on merits and without recording any reasons, Revenue's appeals could not have been allowed. 5. Shri. K.V. Aravind, learned Senior Standing Counsel for the Revenue, submitted that keeping open all the contentions open, the Tribunal has set-aside the order for statistical purpose and the same is just and appropriate. 6. The Tribunal has disposed of the appeals by recording thus: \"6. Since the issue of validity of proceedings under Section 153C of the Act goes to the root of the matter of assessment framed under Section 153C of the Act has been set-aside to the record of the CIT (Appeals), we do not propose to go into the other issues raised by the assessee as well as the department on merits which are kept open. 3 Commissioner of Income Tax 5 7. In the result, all appeals filed by the assessee as well as revenue are allowed for statistical purpose.\" 7. In substance, the appeals filed by the Revenue have also been allowed. 8. Shri. Balaram Rao's, contention is assessee had got relief in the hands of CIT(Appeals). Therefore, Revenue's appeals could not have been allowed without considering them on merits because the relief granted to the assessee by CIT(Appeals) is nullified without granting any opportunity to the assessee. He is right in his submission. 9. In view of the above, we are of the view that it is just and appropriate for the Tribunal to reconsider the appeals filed by the assessee as also the Revenue on merits. Hence, the following: 6 ORDER (a) Appeal is allowed. (b) Order dated dated 24.06.2016 in ITAs No.1251 to 1253/Bang/2013 and ITAs No.1211 and 1212/Bang/2013. is set-aside. (c) The questions of law are answered in favour of the assessee and against the Revenue; (d) Matter is remitted to the Tribunal for disposal of the appeals filed by the assessee as also the Revenue, afresh, in accordance with law. No costs. Sd/- JUDGE Sd/- JUDGE SPS "