SRI P ANANDKUMAR V. THE INCOME TAX OFFICER

ITA/176/2010

AI Insights

The case involves Sri P Anandkumar, proprietor of M/s. Paliath Enterprises, who appealed against the orders of the Income Tax Appellate Tribunal, Bengaluru, concerning the assessment years 2002-2003, 2003-2004, and 2004-2005. The primary contention was regarding the double taxation of certain incomes and the validity of reassessments under various sections of the Income Tax Act, 1961. The Tribunal's decision was challenged on grounds that it led to double taxation and did not properly consider the legal provisions for reassessment and interest levies. The High Court of Karnataka, after hearing the arguments, directed a reassessment for the specific incomes in question for the year 2003-2004 to ascertain the correct tax liabilities and dismissed other appeals based on the findings of double taxation.

• Counselvise Citation: [2010] 140 COUNSELVISE.COM (IT) 755057 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 28-11-2010
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: K V ARAVIND
• Assessee Lawyers: A SHANKAR; M LAVA
• Keywords: Assessment Year; Depreciation disallowance; Double taxation; Income Tax; Interest Levy; Reassessment
• Section: 148; 143(3); 263; 234B; 133A; 139(5); 260-A

Judgement Text

" 1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU ON THE 28TH DAY OF NOVEMBER, 2018 BEFORE THE HON'BLE MR. JUSTICE RAVI MALIMATH AND THE HON'BLE MR. JUSTICE K. NATARAJAN INCOME TAX APPEAL Nos.176-178 of 2010 BETWEEN SRI P ANANDKUMAR, PROP. M/s. PALIATH ENTERPRISES, No.307, THIMMAIAH ROAD, BENSON TOWN, BENGALURU - 560 046. ... APPELLANT (BY SRI A SHANKAR, SENIOR COUNSEL A/W SRI M LAVA, ADVOCATE) AND THE INCOME TAX OFFICER, WARD 8(2), 3RD FLOOR, “JEEVAN SAMPIGE”, 1/1, SAMPIGE ROAD, MALLESWARAM, BENGALURU – 560 003. ... RESPONDENT (BY SRI K V ARAVIND, ADVOCATE) 2 THESE INCOME TAX APPEALS ARE FILED UNDER SECTION 260-A OF INCOME TAX ACT, 1961, ARISING OUT OF ORDER DATED 30.11.2009 PASSED IN ITA No.628/BANG/2008, C.O.No.76/BANG/2008, (ARISING OUT OF ITA No.628/BANG/2008), ITA Nos.981 & 982/BANG/2008 FOR THE ASSESSMENT YEAR 2002-03, PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN AND ALLOW THE APPEAL AND SET ASIDE THE ORDER PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BENGALURU IN ITA No.628/BANG/2008, C.O.No.76/BANG/2008, (ARISING OUT OF ITA No.628/BANG/2008), ITA Nos.981 & 982/BANG/2008, DATED 30.11.2009 VIDE ANNEXURE-A. THESE INCOME TAX APPEALS COMING ON FOR HEARING THIS DAY, RAVI MALIMATH, J., DELIVERED THE FOLLOWING: J U D G M E N T The appellant is an individual engaged in the business of Interior Decoration. He filed his return of income for the Assessment Year 2002-2003 on 31.10.2002 and declared the total income of Rs.5,46,400/-. The return of income was processed accepting the declared income and determining a refund of Rs.1,78,270/-. Thereafter, the return was processed under Section 143(3) of the Income Tax Act, 1961 (‘Act’ for short) determining the total income at Rs.6,47,802/-. The said assessment 3 order was set aside by the Commissioner of Income Tax, Bangalore, under Section 263 of the Act. A survey under Section 133A of the Act was conducted in the business premises of the appellant on 08.08.2005. A notice under Section 148 of the Act was issued on 29.09.2005. In response, the appellant filed a return declaring a total income of Rs.80,58,140/- by taking into account the additional income of Rs.75,11,742/- considering certain receipts and expenses, which were already offered to tax for the Assessment Year 2003-04. Pursuant to the same, a notice under Section 143(2) of the Act was issued and served on him on 17.11.2005. The Assessing Officer recomputed and assessed the total income at Rs.81,59,540/- and interest was also levied. Aggrieved by the same, an appeal was preferred before the Commissioner of Income Tax (Appeals)-II, Bangalore. The assessment for the Assessment Years 2001-2002 and 2004-2005 was confirmed. The assessment for the Assessment Year 2002-2003 was partly 4 allowed. Aggrieved by the same, an appeal was preferred before the Tribunal for the Assessment Years 2002-2003, 2003-2004 and 2004-2005. A common order was passed by the Tribunal. The assessee filed a cross-appeal insofar as the Assessment Year 2002-2003 is concerned. The assessee also preferred an appeal for the Assessment Years 2003-2004 and 2004-2005. The appeal of the Revenue for the Assessment Year 2002-2003 was partly allowed and the cross-appeal by the assessee was dismissed. The assessee’s appeal for the Assessment Year 2003-2004 was dismissed and for the Assessment Year 2004-2005, it was partly allowed. Hence, the present appeals for the Assessment Years 2002-2003, 2003-2004 and 2004-2005 by the assessee. 2. By the order dated 28.10.2010, the appeals were admitted to consider the following substantial questions of law: 5 “ i) Whether the Tribunal was justified in not appreciating that the income of Rs.1,43,27,626/- was relating to the Assessment Year 2003-04 which was also assessed for he Assessment Year 2003-04 and once again taxing the same for the Assessment Year 2002-03 amounts to double taxation on the facts and circumstances of the case? ii) Whether the authority below has complied with the mandatory conditions for reopening and consequently whether the assumption of jurisdiction made pursuant to Section 147 is valid in law for the Assessment Year 2002-03 ? iii) Whether the Tribunal was justified in law in remanding the matter to the assessing officer in respect of levy of interest under Section 234B on the facts and circumstances of the case ? iv) Whether the Tribunal was justified for the Assessment Year 2003-04 in not appreciating that dropping the proceedings put 6 in motion under Section 147 of the act for the year 2003-04 after having taxed the certain receipts in the preceding year which has resulted in taxing the same amount twice ? v) Whether the Tribunal was justified in law in directing that the Appellant should invoke the provision of Section 154/264 and make application to the concerned authority when such provisions may not be applicable on the facts and circumstances of the case ? vi) Whether the Tribunal is justified in disallowing depreciation of Rs.1,17,263/- on the ground that for the Assessment Year 2003- 04 there was not carry forward depreciation which consequently could be set off for the Assessment Year 2004-05 ?” 3. Learned counsel for the assessee by placing reliance on the material on record contends that the income to an extent of Rs.1,43,27,626/-, which was for the Assessment Year 2003-2004, was recomputed for the Assessment Year 7 2002-2003. However, the proceedings initiated under Section 148 of the Act with respect to the Assessment Year 2003-2004 were dropped. Therefore, by this action, the said receipts are sought to be taxed once again for the Assessment Year 2002-2003. Therefore, the same would amount to double taxation. Various contentions are also canvassed with regard to the same. 4. The same is disputed by learned counsel for the Revenue. He supports the order of the Tribunal. 5. However, on considering the contentions as well as the material on record, the same would prima facie indicate that the impugned orders cannot be sustained on the ground that the same would amount to double taxation. That the receipts already being taxed so far as the Assessment Year 2002-2003 is concerned, could not be taxed for the Assessment Year 2003-2004. The said receipts pertain to M/s. Prestige Leusures Resorts Private Limited and M/s. Millenium Developers to an extent of 8 Rs.1,21,51,444 and 21,76,182/- respectively. Therefore, in order to appreciate the facts and contentions, it would only be just and necessary for the Assessing Officer to re- determine the income for the Assessment Year 2003-2004 so far as it pertains to M/s. Prestige Leusures Resorts Private Limited and M/s. Millenium Developers. It is only on doing such an exercise, that the true picture on double taxation or otherwise could be ascertained. However, learned counsel for the Revenue contends that the question of re-considering the returns already submitted would be improper. That in terms of Section 139(5) of the Act, the assessee is required to file a fresh return, which would be considered by the Revenue. The same is objected on the ground that the returns already submitted having not been processed, the same can be considered by the Revenue. 6. Therefore, in view of the peculiar facts and circumstances of the issue involved, we deem it just and 9 necessary, not only in the interest of the assessee, but also in the interest of Revenue, that the returns as furnished by the assessee, subsequent to the notice issued under Section 148 of the Act, are directed to be considered in terms of Section 139(5) of the Act. That the delay, if any, shall not be taken in to consideration while considering the said revised return dated 16.11.2005. 7. Under these circumstances, we find it just and necessary that questions (i) to (iv) and (vi) as raised for consideration in these appeals need not be considered by us. Therefore, the matter is remitted to the Assessing Officer for a reconsideration so far as it pertains to Assessment Year 2003-2004 only with reference to the receipts from M/s. Prestige Leusures Resorts Private Limited and M/s. Millenium Developers, within a period of six months from the date of receipt of copy of this order. 10 8. So far as the fifth substantial question of law is concerned, the same pertains to the Assessment Year 2004-2005. The Tribunal on the said issue has remitted the matter to the Assessing Officer. Therefore, the question of considering the said question of law would not arise for consideration. 9. The appeals are disposed off with the aforesaid observations. SD/- SD/- JUDGE JUDGE mv "