Ita/176/2010 Of Sri P Anandkumar v. The Income Tax Officer

IN THE HIGH COURT OF KARNATAKA AT BENGALURU|ON THE 28 DAY OF NOVEMBER, 2018 BEFORE THE HON BLE MR. JUSTICE RAVI MALIMATH| AND| THE HON'BLE MR. JUSTICE K. NATARAJAN) INCOME TAX APPEAL Nos.1/6-1/78 of ZOL1O BEI|WEE SRI P ANANDKUMAR,PROP. M/s. PALIATH ENTERPRISES,|No.307, THIMMAIAH ROAD,BENSON TOWN,BENGALURU - 560 O46. APPELLANT (BY SRI A SHANKAR, SENIOR COUNSELA/W SRI M LAVA, ADVOCATE) ANI THE INCOME TAX OFFICER,WARD 8(2), 3 FLOOR, |~JEEVAN SAMPIGE’,1/1, SAMPIGE ROAD,MALLESWARAM,BENGALURU - 560 OO3. .. RESPONDENT (BY SRI K V ARAVIND, ADVOCATE) THESE INCOME TAX APPEALS ARE FILED UNDERSECTION 260-A OF INCOME TAX ACT, 1961, ARISING OUT|OFORDERDATED30.11.2009|PASSEDIN|TTA.No.628/BANG/2008,C,O.No.76/BANG/2008,(ARISINGOUTOFLIA.No.628/BANG/2008),LIAL& 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 TAXAPPELLAIETRIBUNAL,|BENGALURUIN|LIA.No.628/BANG/2008,C.O.No.76/BANG/2008, (ARISING.OUTOFLIA.No.628/BANG/2008),LIAL& 982/BANG/2008, DATED 30.11.2009 VIDE ANNEXURE-A. Nos.98l1 Nos.98l1 | THESE INCOME TAX APPEALS COMING ON FORHEARING THIS DAY, RAVI MALIMATH, J., DELIVERED THE.FOLLOWING: JUDGMENT The appellant is an individual engaged in thebusiness of Interior Decoration. He filed his return of|income for the Assessment Year 2002-2003 on 31.10.2002and 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/-.Tnereafter, 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| order was set aside by the Commissioner of Income Tax,Bangalore, under Section 263 of the Act. A Survey under|Section 133A of tne 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. InJresponse, the appellant filed a return declaring a total,income of Rs.80,58,140/- by taking into account the!additional income of Rs./5,11,742/- 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|recomputedancasSeSSE€Ztne|total income.at.Rs.81,59,540/- and interest was also levied. Aggrieved by the same, an appeal was preferredbefore the Commissioner of Income Tax (Appeals)-IT,|Bangalore. The assessment for the Assessment Years.2001-2002ana2004-2005Wasconfirmed.Theassessment for the Assessment Year 2002-2003 was partly 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. Tne assessee filed a cross-appeal insofar|as tne Assessment Year JOO2Z-2003 Its concerned. Tneassessee also preferred an appeal for the Assessment|Years 2003-2004 and 2004-2005. The appeal of tne)Revenue for the Assessment Year 2002-2003 was partlyallowed and the cross-appeal by tne 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, thepresent 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 wereadmitted to consider the following substantial questions of|law: © 1)|Whether the Tribunal was Justified in notappreciatingthatthe|IncomeofRs.1,43,27,626/-WdSsrelatingtOthe|Assessment Year 7003-04 whnhicn wes alsassessed for he Assessment Year 7003-04 andonce again taxing the same for the Assessment|Year JZOOZ-03 amounts to double taxation onthe facts and circumstances of the case? 2 |By the order dated 28.10.2010, the appeals wereadmitted to consider the following substantial questions of|law: © 1)|Whether the Tribunal was Justified in notappreciatingthatthe|IncomeofRs.1,43,27,626/-WdSsrelatingtOthe|Assessment Year 7003-04 whnhicn wes alsassessed for he Assessment Year 7003-04 andonce again taxing the same for the Assessment|Year JZOOZ-03 amounts to double taxation onthe facts and circumstances of the case? If)Whetherthe|autnoritybelowhascomplied with the mandatory conditions for|reopening|andconsequentlywhetherthe assumption of jurisdiction made pursuant to Section 14/7 Is valid in law for the AssessmentYear JOO0O7-03 lil)Whether the Tribunal was Justified in law|in remanading the matter to the assessingofficer in respect of levy of interest under|Section 7234B on the facts and circumstances ofthe case ? Iv)Whether the Tribunal was Justified forthe|AssessmentYear2003-04Innot|appreciating tnat dropping the proceedings put| in motion under Section 14/7 of the act for theyear 2003-04 after having taxed tne certain|receipts in tne preceding year wnicn has|resuited in taxing the same amount twice ? Vv)Whether the Tribunal was Justified in lawin directing that the Appellant snould invoke|the provision of Section 154/264 and make|application to the concerned authority when|sucn provisions may not be applicable on tne|facts and circumstances of the case ? Vi)|Whether the Tribunal ts justified indisallowing 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 theAssessment Year J004-05 2?” 3Learned counsel for the assessee by placing relianceon the material on record contends tnat the income to an§extent of Rs.1,43,27,626/-, whnicn was for the AssessmentYear 2003-2004, was recomputed for the Assessment Year| 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 sougnt to be taxed once again for the|Assessment Year 2002-2003. Therefore, the same would|amount to double taxation. Various contentions are also|canvassed witn regard to the same. AnThe same is disputed by learned counsel for theRevenue. He supports the order of the Tribunal. | 5.|However, on considering the contentions as well asthe material on record, the same would.prima facieindicate 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 Detaxed for tne Assessment Year 2003-2004. The saidreceipts pertain to M/s. Prestige Leusures Resorts Private|Limited and M/s. Millenium Developers to an extent of. Rs.1,21,51,444 and 21,/6,182/- respectively. Therefore,in order to appreciate the facts and contentions, it would|Only be just and necessary for the Assessing Officer to re-cetermine the income for tne 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 otnerwise 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 tnat the returns already submittednaving not been processed, the same can be considered by the Revenue. 6.|Therefore, in view of the peculiar facts andcircumstances of the issue involved, we deem it just and) 6.|Therefore, in view of the peculiar facts andcircumstances of the issue involved, we deem it just and) 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 issuedunder Section 148 of the Act, are directed to be consideredin terms of Section 139(5) of the Act. That the delay, if |any, shall not be taken in to consideration wnile|considering the said revised return dated 16.11.2005. JUnder these circumstances, we find it just andnecessary 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 ofsix months from the date of receipt of copy of this order. 8.|So far as the fifth substantial question of law isconcerned, the same pertains to the Assessment Year|2004-27005. The Tribunal on the said issue nas remittedthe matter to the Assessing Officer. Tnerefore, the!question of considering the said question of law would not)arise for consideration. 9 |The appeals are disposed off with the aforesaid opservations. SD/- JUDGE | SD/-|JUDGE C=