Ita/180/2024 Of The Pr Commissioner Of Income Tax v. Simplex Tmc Pvt Ltd

Digitallysigned byBHARATHI SLocation:HIGHCOURT OFKARNATAKA NC: 2024:KHC:41291-DB ITA No. 180 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 30 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. 180 OF 2024 BETWEEN: 1. THE PR COMMISSIONER OF INCOME TAX, CENTRAL, 3RD FLOOR, C R BUILDING, QUEENS ROAD, BENGALURU – 560001 2. THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-1(1) PRESENT ADDRESS DCIT, CENTRAL CIRCLE-1(1)(1), 3RD FLOOR, C.R.BUILDING, QUEENS ROAD, BENGALURU - 560 001. …APPELLANTS (BY SRI. DILIP M, ADVOCATE A/W SRI. Y V RAVIRAJ., ADVOCATE) AND: SIMPLEX TMC PVT LTD, NO 116-C/1 KHB COLONY 5TH BLOCK, KORAMANGALA, BENGALURU - 560034 PAN. AADCS 5669M REP BY MANAGING DIRECTOR …RESPONDENT THIS ITA / INCOME TAX APPEAL IS FILED UNDER SEC. 260-A OF INCOME TAX ACT 1961, PRAYING TO 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 ITA NO. 736/BANG/2023 DATED 01.12.2023 FOR ASSESSMENT YEAR 2018-2019 ANNEXURE-A AND CONFIRM THE 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 ADMISSION, 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. Dilip. M., along with Sri. Raviraj. Y.V., for appellants/Revenue. 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 01.12.2023 passed by the Income Tax Appellate Tribunal, ‘B’ Bench, Bengaluru (for short, ‘Appellate Authority’) in ITA.No.736/Bang/2023 for the assessment year 2018-19, raising the following substantial questions of law: “1. Whether on the facts and in the circumstances of the case, the Tribunal is right in law in deleting the penalty levied circumstances of the case, the Tribunal is right in law in deleting the penalty levied under section 271AAB of the act based on observation that the clauses of penalty have not been correctly mentioned in showcause notice proposing to levy of penalty? observation that the clauses of penalty have not been correctly mentioned in showcause notice proposing to levy of penalty? 2. Whether on the facts and in the circumstances of the case, the Tribunal is right in law in not appreciating that undisclosed income was detected during the search proceedings and with the assessee admitting the existence of undisclosed income, the penalty under section 271AAB(1A) was accordingly levied? circumstances of the case, the Tribunal is right in law in not appreciating that undisclosed income was detected during the search proceedings and with the assessee admitting the existence of undisclosed income, the penalty under section 271AAB(1A) was accordingly levied? 3. Whether on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the levy of penalty on undisclosed income is not mandatory?”circumstances of the case, the Tribunal is right in law in holding that the levy of penalty on undisclosed income is not mandatory?” 3. It is noticedthat the tax effect in this appeal is less than Rs.2 Crores and therefore, the appeal would not be maintainable 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. 3. It is noticedthat the tax effect in this appeal is less than Rs.2 Crores and therefore, the appeal would not be maintainable 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 question of law is kept open to be adjudicated in an appropriate proceeding. Sd/- (S.G.PANDIT) JUDGE Sd/- (C.M. POONACHA) JUDGE BS List No.: 4 Sl No.: 9