Ita/161/2021 Of The Pr Commissioner Of Income Tax, Central Circle v. M/S R R Gold Palace

Digitallysigned byBHARATHI SLocation:HIGHCOURT OFKARNATAKA NC: 2024:KHC:39401-DB ITA No. 161 of 2021 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 23 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. 161 OF 2021 BETWEEN: 1. THE PR. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, C R BUILDING, QUEENS ROAD, BENGALURU 560001 CENTRAL CIRCLE, C R BUILDING, QUEENS ROAD, BENGALURU 560001 2. THE DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 1 (1), C R BUILDING, QUEENS ROAD, BENGALURU 560001 …APPELLANTS (BY SRI. RAVI RAJ Y V.,ADVOCATE A/W SRI. DILIP M, ADVOCATE) AND: M/S R R GOLD PALACE NO. 88, BETWEEN 6TH AND 7TH CROSS, SAMPIGE ROAD, MALLESHWARAM, PAN …RESPONDENT (BY SRI. ANNAMALAI., ADVOCATE) THIS ITA / INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, PRAYING FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BENGALURU IN C.O. NO.58/BANG/2018 IN ITA NO. 906/BANG/2018 DATED 31/08/2020 FOR ASSESSMENT YEAR 2011-2012 ANNEXURE-C AND CONFIRM THE TO ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(1), BENGALURU AND ETC. THIS APPEAL, COMING ON FOR FINAL 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 ORAL JUDGMENT (PER: HON'BLE MR JUSTICE S.G.PANDIT) Heard the learned counsel Sri Raviraj Y.V, along with learned counsel Sri Dilip M, for appellants/Revenue and learned counsel Sri S.Annamalai, 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 31.08.2020 passed by the Income Tax Appellate Tribunal, ‘A’ Bench, Bengaluru (for short, ‘Appellate Authority’) in C.O No.58/Bang/2018 in ITA.No.906/Bang/2018 for the assessment year 2011-12, raising the following substantial questions of law: “1. Whether on the facts and circumstances of the case, the Tribunal is justified in setting aside the assessment order by holding that the assessee firm was not existent at the time of search as well as at time of assessment as assessment order when notice under section 153A was rightly issued in the name of the Firm M/s. R.R. Gold Palace for assessment years under consideration.” 2. Whether on the facts and in the circumstances of the case, the Tribunal is right in law in not appreciating that in the instant the firm and the Company continued their business in the same premises and the partnership firm was not dissolved by way of a Registered Deed and PAN of the assessee was still holding good and no information of discontinuation of the business by the assessee firm was provided to the assessing authority as required under section 176(3) of the Act? 3. Whether on the facts and in circumstances of the case, the Tribunal’s order can be said as perverse in holding that Search warrant issued in the name of non-existing firm when warrant was issued in the name of both the entities and both the entities were in existence on the date of search and seizure proceedings and as such assessment order was validly passed under section 143(3) read with section 153A of the Act? 4. Whether on the facts and in circumstances of the case, the Tribunal’s order can be said as perverse in nature as Tribunal has relied upon decisions which are not applicable to facts of present case and has ignored that notices issued under section 153A are contested by assessee on merits of the case without raising any objections on validity of notice?” 3. Whether on the facts and in circumstances of the case, the Tribunal’s order can be said as perverse in holding that Search warrant issued in the name of non-existing firm when warrant was issued in the name of both the entities and both the entities were in existence on the date of search and seizure proceedings and as such assessment order was validly passed under section 143(3) read with section 153A of the Act? 4. Whether on the facts and in circumstances of the case, the Tribunal’s order can be said as perverse in nature as Tribunal has relied upon decisions which are not applicable to facts of present case and has ignored that notices issued under section 153A are contested by assessee on merits of the case without raising any objections on validity of notice?” 3. 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 dated 17.09.2024 issued by the Central Board of Direct Taxes. It is also submitted that the aforesaid Circular binds the revenue. 4. 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. 5. 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 questions of law are kept open to be adjudicated in an appropriate proceeding. Sd/- (S.G.PANDIT) JUDGE Sd/- (C.M. POONACHA) JUDGE