M/S. SWETHA REALMART LLP V. THE DEPUTY COMMISSIONER OF INCOME TAX

ITA/157/2020

AI Insights

The case involves M/s. Swetha Realmart LLP, the appellant, who contested the dismissal of their appeal by the Income Tax Appellate Tribunal, Bengaluru. The Tribunal had dismissed the appeal due to the absence of documentary evidence supporting the assessee's claim regarding the non-depreciable nature of a property sold, which was crucial for the assessment year 2016-17. The High Court found that the Tribunal erred in dismissing the appeal without examining it on merits, especially considering the inadvertent non-compliance by the assessee's senior chartered accountant in submitting the required documents. The Court emphasized that a party should not be penalized for the fault of their counsel and directed the Tribunal to reconsider the case on its merits.

• Counselvise Citation: [2020] 140 COUNSELVISE.COM (IT) 766871 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 03-11-2020
• 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: CHYTHANYA
• Keywords: Appeal Dismissal; Assessment Year 2016-17; Depreciable asset; Documentary evidence; Income Declaration; Income Tax
• Section: 143(3); 260-A

Judgement Text

"1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 3RD DAY OF NOVEMBER 2020 PRESENT THE HON’BLE MR. JUSTICE ALOK ARADHE AND THE HON’BLE MR. JUSTICE H.T.NARENDRA PRASAD I.T.A. NO.157 OF 2020 BETWEEN: M/S. SWETHA REALMART LLP (SUCCESSOR IN INTEREST OF M/S. SWETHA HEALTH RESEARCH PVT. LTD.) NO.7, SAMYAKT UTTARADHI MUTT ROAD NEAR NATIONAL COLLEGE SHANKARAPURAM, BENGALURU-560004 REPRESENTED BY ITS PARTNER MR. A.V. DHARNESH KUMAR AGED ABOUT 68 YEARS S/O LATE A.N. VAJRANABHAIAH. ... APPELLANT (BY SRI. CHYTHANYA K.K. ADV.) AND: THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-6(1)(2), BMTC BUILDING 80 FT. ROAD, 6TH BLOCK NEAR KHB GAMES VILLAGE KORAMANGALA, BENGALURU-560095. ... RESPONDENT (BY SRI. K.V. ARAVIND, ADV.) 2 THIS I.T.A. IS FILED UNDER SECTION 260-A OF I.T.ACT, 1961, PRAYING TO: I. FORMULATE THE SUBSTANTIAL QUESTION OF LAW STATED ABOVE. II. ALLOW THE APPEAL AND SET-ASIDE THE IMPUGNED ORDER OF THE INCOME TAX APPELLATE TRIBUNAL, BENGALURU 'C' BENCH BEARING IN ITA NO.2435/BANG/2019 DATED 29/05/2020 FOR THE ASSESSMENT YEAR 2016-17 AS ENCLOSED IN ANNEXURE-A & ETC. THIS I.T.A. COMING ON FOR ADMISSION, THIS DAY, ALOK ARADHE J., DELIVERED THE FOLLOWING: JUDGMENT This appeal under Section 260-A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’, for short) has been preferred by the assessee. The subject matter of the appeal pertains to the Assessment Year 2016-17. The appeal which was admitted by this Court to consider the following substantial questions of law: Whether, in the facts and circumstances of the case, the Tribunal is right in law in dismissing the Appeal instead of disposing the matter on merits. 3 2. Facts leading to filing of this appeal briefly stated are that the assessee filed return of income by declaring income of Rs.15,64,59,600/- for the Assessment Year 2016-17. The order of assessment was passed under Section 143(3) of the Act by the Assessing Officer on 21.12.2018. The assessee thereafter filed an appeal before the Commissioner of Income Tax (Appeals), who, by an order dated 30.09.2019, dismissed the appeal preferred by the assessee. The assessee thereupon approached the Income Tax Appellate Tribunal by filing an appeal. The tribunal, by an order dated 29.05.2020, dismissed the appeal inter alia on the ground that in the absence of documentary evidence in support of assessee's claim that the property sold in question was not depreciable asset, no ground is made out to interfere with the order passed by the Commissioner of Income Tax (Appeals). 4 In the aforesaid factual background, this appeal has been filed. 3. Learned counsel for the assessee submitted that the assessee had engaged a senior chartered accountant and the tribunal had directed the assessee to file the document pertaining to audited accounts and computation of income. However, the senior chartered accountant could not apprehend the same and could not comply with the directions issued by the tribunal. The tribunal, however, instead of examining the matter on merits, dismissed the appeal without adjudicating the issue on merits. It is further submitted that in case the matter is remitted to the tribunal, the assessee undertakes to file the audited documents and computation of income before the tribunal within a period of four weeks from the date of receipt of certified copy of the order passed today. On the other hand, learned counsel for the revenue has opposed the prayer. 5 4. We have considered the submissions made by the learned counsel for the parties. It is trite law that for the fault committed by a counsel, a party should not be penalized. It appears that on account of inadvertence, the senior chartered accountant engaged by the assessee could not comply with the directions of the Tribunal to file the documents. The tribunal, infact, should have adjudicated the matter on merits instead of summarily dismissing the same. 5. In view of preceding analysis, the substantial question of law framed by this Court is answered in favour of the assessee and against the revenue. In the result, the order passed by the tribunal is quashed. The matter is remitted to the tribunal. Needless to state that the assessee shall file the audited accounts and computation of income as directed by the tribunal within a period of four weeks from the date of receipt of certified copy of the order passed today, 6 before the tribunal. Thereupon, the tribunal shall proceed to adjudicate the appeal on merits. Accordingly, the appeal is allowed. Sd/- JUDGE Sd/- JUDGE RV "