The Pr. Commissioner of Income Tax and The Deputy Commissioner of Income Tax V. Global Associates

ITA/366/2022

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The Income Tax Appeal No. 366 of 2022 was filed by the Principal Commissioner of Income Tax and the Deputy Commissioner of Income Tax against M/s. Global Associates, challenging the order of the Income Tax Appellate Tribunal, Bengaluru. The Tribunal had annulled the re-assessment order for the assessment year 2005-06, citing procedural lapses in obtaining necessary approvals under the Income Tax Act. The Revenue contended that the Tribunal's decision was perverse and ignored the satisfaction recorded by the Commissioner of Income Tax (Central) for reopening the assessment under section 147. The appeal was admitted to consider substantial questions of law regarding the procedural correctness of the Tribunal's decision and the applicability of sections 144, 147, 151, and 292B of the Act.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 687879 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 27-09-2024
• Assessment Year: misc
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: TATA KRISHNA
• Assessee Lawyers: DILIP; RAVI RAJ
• Keywords: Approval under Section 151; Assessment year 2005-2006; Income tax appeal; Re-assessment; Mistake curable under Section 292B
• Section: 147; 144; 151(1); 292B; 151(2); 260-A

Judgement Text

" - 1 - NC: 2024:KHC:40424-DB ITA No. 366 of 2022 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 27TH DAY OF SEPTEMBER, 2024 PRESENT THE HON'BLE MR JUSTICE S.G.PANDIT AND THE HON'BLE MR JUSTICE C.M. POONACHA INCOME TAX APPEAL NO.366 OF 2022 BETWEEN: 1. THE PR. COMMISSIONER OF INCOME TAX 5TH FLOOR, BMTC BUILDING, 80 FEET ROAD, KORMANGALA, BENGALURU-560095. 2. THE DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-1(4), PRESENT ADDRESS ITO, WARD-1(2)(1), 2ND FLOOR, BMTC BUILDING, 80 FEET ROAD, KORMANGALA, BENGALURU-560095. …APPELLANTS (BY SRI. DILIP.M., ADV. A/W SRI. RAVIRAJ Y.V., ADVOCATE) Digitally signed by B LAVANYA Location: HIGH COURT OF KARNATAKA - 2 - NC: 2024:KHC:40424-DB ITA No. 366 of 2022 AND: M/S. GLOBAL ASSOCIATES NO.14, GENEVA HOUSE, CUNNINGHAM ROAD, BENGALURU-560052. PAN: AAGFG 0074L. …RESPONDENT (BY SRI. TATA KRISHNA, ADVOCATE) THE ITA/INCOME TAX APPEAL IS FILED UNDER SEC.260- A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 30/09/2021 PASSED IN ITA NO.602/BANG/2015, FOR THE ASSESSMENT YEAR 2005-2006 PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN AND TO ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BENGALURU IN ITA NO. 602/BANG/2015 DATED 30/09/2021 FOR ASSESSMENT YEAR 2005-2006 ANNEXURE-C AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE INCOME TAX OFFICER, WARD-1(2)(1), BENGLAURU AND ETC. THIS APPEAL, COMING ON FOR HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S.G.PANDIT and HON'BLE MR JUSTICE C.M. POONACHA - 3 - NC: 2024:KHC:40424-DB ITA No. 366 of 2022 ORAL JUDGMENT (PER: HON'BLE MR JUSTICE S.G.PANDIT) Heard the learned counsel Sri. Dilip.M., along with Sri. Raviraj.Y.V., learned counsel for the appellants/Revenue and Sri. Tata Krishna, learned counsel for the respondent/assessee. 2. The Revenue is in appeal under Section 260-A of the Income Tax Act, 1961 (for short, ‘the Act’) questioning the correctness and legality of order dated 30.09.2021 passed by the Income Tax Appellate Tribunal, ‘A’ Bench, Bengaluru (for short, ‘Appellate Authority’) in ITA.No.602/Bang/2015 for the assessment year 2005-06. 3. This Court, admitted the appeal on 03.01.2023 to consider the following substantial questions of law: 1. \"Whether on the facts and in the circumstances of the case, the order passed by Tribunal is perverse in nature holding that assessment order passed under section 144 read with section 147 is void on the - 4 - NC: 2024:KHC:40424-DB ITA No. 366 of 2022 ground that the approval under section 151(2) of the Act should have been taken from Joint Commissioner of Income Tax whereas in present case, it was taken under section 151(1) of the Act ignoring that Commissioner of Income Tax (Central) has recorded satisfaction that present case is fit for re-opening of assessment under section 147 of the Act vide his letter dated 22/3/2012 and only after recording his satisfaction, file was forwarded by Additional CIT\"? 2. 'Whether on the facts and in the circumstances of the case, the order passed by Tribunal is perverse in nature in annulling the re-assessment order even though the conditions set out in section 147, 148 and Section 151 were fully satisfied in present case\"? Without prejudice to aforesaid SQL:- 3. \"Whether on the facts and circumstances of the case, the Tribunal failed to observe that even under Section 292B of the Act, the mistake if any in question is curable under said section as in sum and substance all required conditions were met\"? 4. Learned counsel for the assessee submits that the tax effect in this appeal is less than Rs.2 Crores and therefore, the appeal should not be entertained at the instance of the revenue in view of the Circular No.09/2024 - 5 - NC: 2024:KHC:40424-DB ITA No. 366 of 2022 dated 17.09.2024 issued by the Central Board of Direct Taxes. It is also submitted that the aforesaid Circular binds the revenue. 5. On the other hand, learned counsel for the revenue submits that he be granted liberty to revive the appeal in case the matter falls within the exceptions under the aforesaid Circular dated 17.09.2024 and Circular No.5/2024 dated 15.03.2024. 6. In view of the aforesaid submissions, the appeal is disposed of with liberty as prayed for by the learned counsel for the revenue. However, the question of law is kept open to be adjudicated in an appropriate proceeding. Sd/- (S.G.PANDIT) JUDGE Sd/- (C.M. POONACHA) JUDGE SMJ List No.: 4 Sl No.: 38 "