The Issue As To Whether The Authority Could Have Exercised Power Under Section 153-A Of The Act In The Absence Of Incriminating Material Is No More Res-Integra, v. Sd/- (S.g.pandit) Judge

Digitally signedbyMARIGANGAIAHPREMAKUMARILocation: HIGHCOURT OFKARNATAKA NC: 2024:KHC:33147-DBITA No. 388 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 19 DAY OF AUGUST, 2024 PRESENT THE HON'BLE MR JUSTICE S.G.PANDIT AND THE HON'BLE MR JUSTICE C.M. POONACHA INCOME TAX APPEAL NO. 388 OF 2023 BETWEEN: 1. THE PR. COMMISSIONER OF INCOME TAX, CENTRAL, 3 FLOOR, C R BUILDING, QUEEN’S ROAD, BENGALURU 560001. 2. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2 (2) 3 FLOOR, C R BUILDING, QUEEN’S ROAD, BENGALURU-560001. …APPELLANTS (BY SRI A SHANKAR, SR.ADV. FOR SRI MADHUSUDHAN U.A., ADV.) AND: M/S. BARBEQUE NATION HOSPITALITY LTD., NO.62, SITE NO.13, 16 CROSS, N S PALYA, BTM LAYOUT, BENGALURU-560076 PAN: . …RESPONDENT (BY SRI. RAVI RAJ Y.V., A/W SRI DILIP M., ADV.) THIS INCOME TAX APPEAL IS FILED UNDER SECTION 260-A OF THE INCOME TAX ACT, 1961, PRAYING TO I). FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE; II). ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME-TAX APPELLATE TRIBUNAL, - 2 - BENGALURU IN ITA NO.486/BANG/2022 DATED 19.12.2022 FOR ASSESSMENT YEAR 2012-2013 ANNEXURE-C AND CONFIRM THE ORDER OF THE U/S 263 CONFIRMING THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-2(2), BENGALURU AND ETC. THIS APPEAL, COMING ON FOR ORDERS, 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) This appeal is admitted on 12.06.2023 to examine 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 allowing appeal filed by assessee by holding that issues involved in the order passed under Section 143(3) r/w/s 153A are not based on incriminating materials found during course of search and as such assessment order cannot be said as erroneous and prejudicial to interest of Revenue ignoring that Section 153A do not stipulate that there must be incriminating material to pass order under said section and as such there was no such requirement in law? - 3 - 2. Whether on the facts and in the circumstances of the case, the Tribunal’s order can be said as perverse in nature in not appreciating that conditions set out in Section 263 r/w Explanation 2 were fully satisfied to take up assessment order for revision proceedings? 3. Whether on the facts and in the circumstances of the case, the Tribunal’s order can be said as perverse in nature in ignoring mandate of Section 263 as well as Section 153-A of the Act? 2. Heard learned counsel Sri.Y.V.Raviraj along with Sri.Dilip M, learned counsel for the revenue/appellants and learned senior counsel Sri.A.Shankar for Sri.Madhusudhan U.A., learned counsel for respondent-assessee. 3. Learned counsel Sri.Y.V.Raviraj appearing for the appellants/revenue submits that when there is no challenge to Section 153-A order by the respondent-assessee, in a proceedings under Section 263 initiated by revenue, the finding could not have been recorded with regard to the order passed under Section 153-A. It is an admitted fact that there were no incriminating material to - 4 - proceed and pass order under Section 153-A of the Income Tax Act, 1961. 4. The issue as to whether the Authority could have exercised power under Section 153-A of the Act in the absence of incriminating material is no more res-integra,as decided by the Honb'le Apex Court in PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL-3 v/s ABHISAR BUILDWELL PRIVATE LIMITED reported in (2023) Taxmann.com 399. Following the above said decision of the Honb'le Apex Court, the present appeal stands disposed of, answering the substantial questions of law against the revenue and in favour of the assessee. Sd/- (S.G.PANDIT) JUDGE Sd/- (C.M. POONACHA) JUDGE MPK CT:bms List No.: 1 Sl No.: 0