G VIJAYA W/O SOMASHEKAR REDDY V. THE DEPUTY COMMISSIONER OF INCOME-TAX

ITA/100123/2014

AI Insights

The case involves income tax appeals filed by Smt. G. Vijaya against the orders of the Income Tax Appellate Tribunal, Bangalore, which were related to the assessment years 2007-08 and 2008-09. The appeals were heard by the High Court of Karnataka, which considered various precedents and judgments, including those from the Supreme Court, to address the substantial questions of law raised. The primary issues revolved around the sufficiency of the reasons recorded by the Assessing Officer under sections 153A and 153C of the Income Tax Act, 1961, and the jurisdictional validity of the assessments made. After deliberation, the court decided to remand the matter back to the Tribunal for a detailed re-examination of both jurisdictional and merit aspects, citing the need for compliance with the legal standards set by the higher judiciary.

• Counselvise Citation: [2019] 140 COUNSELVISE.COM (IT) 726871 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 08-02-2019
• Assessment Year: misc
• Other Referred Cases: M/s Harihant Aluminium Corporation Vs. The Assistant Commissioner of Income Tax, Commissioner of Income Tax Vs. IBC Knowledge Park (Private) Limited, Commissioner of Income Tax Vs. Sinhgad Technical Education Society, M/s Evergladers Vs. Assistant Commissioner of Income Tax, Commissioner of Commissioner of Income Tax-III Vs. Calcutta Knitwears
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: Y V RAVIRAJ
• Assessee Lawyers: M V SHESHACHALA; H R KAMBIYAVAR; ARAVIND CHAVAN
• Keywords: Assessment; Income tax appeal; Jurisdiction; Search and seizure; Undisclosed income
• Section: 153A; 153C; 260A

Judgement Text

" 1 IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH DATED THIS THE 08TH DAY OF FEBRUARY, 2019 PRESENT THE HON’BLE MRS. JUSTICE B.V. NAGARATHNA AND THE HON’BLE MR. JUSTICE BELLUNKE A.S. I.T.A.NO.100123/2014 C/W I.T.A.NO.100124/2014 IN I.T.A.NO.100123/2014 BETWEEN: SMT.G.VIJAYA, W/O SOMASHEKAR REDDY, AGED MAJOR, NO.52, SIRUGUPPA ROAD, ASHOK NAGAR, HAVAMBHAVI BELLARY-583 103. …APPELLANT (BY SRI M.V.SHESHACHALA, SENIOR COUNSEL FOR SRI H.R.KAMBIYAVAR AND SRI ARAVIND V. CHAVAN ADVOCATES) AND: 1. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE -1(3), C.R.BUILDING, QUEENS ROAD, BENGALURU-560 0001. 2. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE -1, AAYAKAR BHAVAN, STAFF ROAD, FORT, BELLARY-583 102. 2 3. THE COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, C.R.BUILDING, QUEENS ROAD, BENGALURU-560001. …RESPONDENTS (BY SRI Y.V.RAVIRAJ, SENIOR STANDING COUNSEL) THIS INCOME TAX APPEAL IS FILED UNDER SECTION 260A OF THE INCOME TAX ACT, 1961, PRAYING TO SET ASIDE THE ORDERS PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE IN ITA NO.947/BANG/2013 DATED 28.08.2014 AND THE ORDER OF THE APPELLATE COMMISSIONER AND THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(3), BANGALORE. IN I.T.A.NO.100124/2014 BETWEEN: SMT.G.VIJAYA, W/O SOMASHEKAR REDDY, AGE : 58 YEARS, NO.08, SIRUGUPPA ROAD, ASHOK NAGAR, HAVAMBHAVI BELLARY-583 103. …APPELLANT (BY SRI M.V.SHESHACHALA, SENIOR COUNSEL FOR SRI H.R.KAMBIYAVAR AND SRI ARAVIND V. CHAVAN ADVOCATES) AND: 1. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE -1(3), C.R.BUILDING, QUEENS ROAD, BENGALURU-560 0001. 2. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE -1, AAYAKAR BHAVAN, STAFF ROAD, FORT, BELLARY-583 102. 3 3. THE COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, C.R.BUILDING, QUEENS ROAD, BENGALURU-560001. …RESPONDENTS (BY SRI Y.V.RAVIRAJ, SENIOR STANDING COUNSEL) THIS INCOME TAX APPEAL IS FILED UNDER SECTION 260A OF THE INCOME TAX ACT, 1961, PRAYING TO SET ASIDE THE ORDERS PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE IN ITA NO.948/BANG/2013 DATED 28.08.2014 AND THE ORDER OF THE APPELLATE COMMISSIONER AND THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(3), BANGALORE. THESE INCOME TAX APPEALS COMING ON FOR HEARING ON IA THIS DAY, NAGARATHNA, J., DELIVERED THE FOLLOWING: J U D G M E N T These appeals are listed to consider I.A.No.1/2018, which is filed for seeking modification of substantial questions of law. 2. Learned Senior Counsel appearing for the appellant–assessee and learned Senior Standing Counsel appearing for the respondents – Department have taken us through the facts of the case, the contentions raised, the substantial 4 questions of law which have been framed in the memorandum of appeal and also, the judgment of this Court in the case of M/s Harihant Aluminium Corporation Vs. The Assistant Commissioner of Income Tax in ITA No.447/2010 and other connected appeals as well as the detailed judgment of this Court in the case of Commissioner of Income Tax Vs. IBC Knowledge Park (Private) Limited reported in (2016) 287 ITR 261 (SC). We have also been appraised of the subsequent judgment of the Hon’ble Supreme Court in the case of Commissioner of Income Tax Vs. Sinhgad Technical Education Society reported in (2017) 397 ITR 344 (SC), which arose from the judgment of the Bombay High Court in (2015) 378 ITR 84 (Bombay). 3. Learned Senior Counsel for the appellant and learned Senior Standing Counsel for the 5 respondents – Department also drew our attention to another order passed by the Division Bench of this Court in the Case of M/s Evergladers Vs. Assistant Commissioner of Income Tax in ITA No.666/2016 disposed of on 30.11.2017 and submitted that having regard to the aforesaid judgment and orders, this Court may, set aside the impugned judgment of the Tribunal and remand the matter to the Tribunal to re-examine in light of the judgment of the Division Bench of this Court referred to supra. 4. In this regard, reference has also been made to another judgment of the Hon’ble Supreme Court in case of Commissioner of Commissioner of Income Tax-III Vs. Calcutta Knitwears reported in (2014) 362 ITR 673 (SC). 5. Having heard learned Senior Counsel for the appellant and learned Senior Standing Counsel 6 for the respondents, we find that the following substantial questions of law would now arise: 1. Whether the Tribunal was correct in holding that reasons recorded by the Assessing Officer of an assessee u/s. 153C of the It Act, was sufficient and that of transferring Assessing Officer u/s. 153A of the IT Act was not required to record satisfaction? 2. Whether the Tribunal was correct in holding that the words “ I am satisfied that the books of accounts belonging to the assessee has been seized” is a note showing satisfaction about documents/ assets found in the course of search showing undisclosed income to acquire jurisdiction? 3. Whether the Tribunal was correct in holding that the documents discovered in the course of search i.e., jewellery bills was brought to tax in the hands of Sri. Somashekar Reddy, is sufficient material to acquire jurisdiction u/s. 153 7 of the IT Act even though no material relating to the assessee was seized? 6. In the circumstances, the aforesaid substantial questions of law substitute the earlier substantial questions of law which were raised by this Court while admitting the appeals on 07.07.2015. 7. Having regard to the aforesaid dictum and particularly the judgment of this Court passed in M/s Harihant Aluminium Corporation and M/s Evergladers referred to above, we find that at this stage it would be unnecessary to answer the substantial questions of law which have been raised in these appeals as the appeals are being and are remitted to the Tribunal to examine on the jurisdictional aspects of the matter as well as on merits of the matter. 8. The Tribunal shall examine the aspect regarding satisfaction note recorded in the case 8 and whether same can be termed sufficient compliance or not for assessment to be initiated and to be finalized under Section 153C of the Act insofar as assessee herein is concerned. 9. The Tribunal could then also examine the case on merits for the purpose of determining additions, if any, or for the purpose of liability to pay interest, if any, afresh in accordance with law. 10. In the circumstances, the impugned order dated 28.08.2014 passed in ITA Nos.947 and 948 (Bang) 2013 for the assessment years 2007- 08 and 2008-09 impugned in these appeals is set aside. The matters are remanded to the Tribunal for reconsideration in accordance with law, in light of the aforesaid decisions of this Court as well as of the Hon’ble Supreme Court. 11. All contentions on both sides are left open. Appeals are disposed off in the aforesaid terms. 9 12. In view of the disposal of the appeals, I.A.No.1/2018 filed in both the appeals stand disposed off. Sd/- JUDGE Sd/- JUDGE EM/- "