Karnataka High Court
Vijay Kumar Saboo (Huf) vs The Asst Commissioner on 18 July, 2011
Bench: N.Kumar, Ravi Malimath
BE7WE1:N,_; ' ' I . , IN THE HIGH COURT OF KARNATAKA AT
Daied this the 18"1£i'5zy 0fJuiy,.V2€'}-£11 M PREsE§T, ;
THE HON'BLE M:§,'JUs'r:'<:1:: rs:
ékéi % % THE HON'BLE Mi'<._ %J':;ts2t;1f::vc:"I<':.'1[:.§3'.a*1 MALIMATH . ITA N--o:::.a.
1 Sri.._Vij"a§z'Kti1rr1ar Sabyjo' /0; Sri. Rear: ..N'1'a§aS' .Sé{b<jcJ No. 1 1. 2?. Keé'r:1m:_ Pi-§;;:¥:'i:z«.
Nagarrthpeé' 'V A V _ Bangéfiofe ~_560*.0O2 '~ 2 Sfi K:/H1131 KiS'i';0f€ Saboe V _S/»e3"§3fi.VRam Nivag Sabao _ «:\2~a;":..;'?.;.':»:.e"er:hi :>:a;»:a . Nagéirihxéei B.;::dg?fi0r€ « 5&5} G82 ;.,é;§3pz3§}2*:n:s {By Sri A Sh:;mkar & Lana. P:C1"<«'£)§?E?.§€?$} K \ /'// Mn 2' AN E) :
Tm: A831 C0mmiss:'<me;"
of Income Tax, Circle 4E2} V « & .; _ «_ V V .
Bemgaiore A. {By Sri M V Sesizgzcthaziéx.V_E3{<jve:;><:;:zi;é}fl_' These ITAs fi1€e:i under L':3e<iE¢:'<:>11 2€j0A c5f YE?' Act 1961 arising out of ordr?/r dated 21«E}-QQCH1 fiassed ir:'ITAv'N0s, 1015 <3: 1018/Bang/2002 far'it;é'«.ass.1es$:11E3;3};Vyéaér £99091 praying to
1) fbrmulate the subsiari{ia'i' q'e1_¢1é:{:Q11SL[V.Q*§7uI:m; stated therein. ii} anew the appeal and s§:t_;"a.sid<3 *;h€""'Qré:i€5;~.. :31' {he income Tax Appellate Tribégirzai dated' v.;21 ~9;»2Q0s; rm 310.1015 & 1 0 1 8/Bang/ ,Ea3séSSI31c"ht 9999 1} €10, Thesé m5;;~;§,'mi-hé';;ri':1g this day, N. KUMAR J d€1i\?e1'¢;gi__j,héVféi1€:%z2§(jng:.,_" ' " «.
_'Fhesé'~.app<:-33.3 A2;_ré*'by the assessee against {he erder of §Lh5:Z::5"Tffb.'LI17§Efl v$hi::h----~'hz1s upheld ihfi order pasged by ihe ' --'f2€3''r;m1i:s4s'in3:1s5%;4':a.$ weli as tbs Assegsing Au'{,h0ri':,y wha have hstki th21iff'j_;issessee is Iiabie '£0 {gay int/sregi uncle? Sec£:1'a.:1V"'?;3fi}%3 sf ihs Inétorms 'Tax Asia, The fiied reriurrz (>2: 2Ei3f}9. EEEQG wider S;<:*z:[:i:;'<;m 23% {)5 éhzzié §n<?é:>:r:{% 'E/':12; ;%<ié, Q52, 59:' ::;%20:*£, ?:é3:*=$i:§2>£ic:* I e referI*ed to as the flirt'. The ezreier under Seeiiem 24.06199} Came to be passed aeeep{;i::g Rs.30,.5S3i3--Q{) fiied by the assesseef"--?fhe1fe21£}e.ef;\:,'4;2reeeedi;;ge'j ' were initiated uncier Section 14'?
eseapemem of meeme. In pi»1;ieiianeeA.ef'._:f:e_f)Leeie.e"'Is5fied, the assessee filed 2: revisefi retigr-nVVV:A.en"3Q.1fi.}'§93 Heihcwing the ineame of Rs.1,5O,59O:'C2Li)..~A to be passed 0::
such revised ;fe"u;rn cf the Act an
28.Q}.E99%2..-V ¢i3f:e"z';S'5éessi:"ig'§]Autherit}/' levied interesfi difference of the amount by whgeh determined an the basis of the rewassessméeni. er, vise-Vis the return filed by the essessee'. A V .
7 e. ».4"'iT?e:1:e:...assessee preferred an appeai ehaiienging' the if}3,p%Vi)SiU_¢'}.1"E'"'%e}_i~'i'§'3i€i'E'€Si. zznéer See/Lien 234~B and 3153 the periofi fer wfiieh the eeiid imereet Eeevieci. The Cemrzziesiener of §:iee~me~T32<; ézfixggpeais} deismieseei the gzppeai, affixrming the €}f(i€F i}? the Aseeeeizzgg Qff'§§T'.('3§"., £:g_.:g:'§eved by the ssgmzex {he aesessee \««'$*r preferred an appeal E0 the Tribunai The 'F{*i§3:1:';'飣 =f;hc dscision of éhs Bangalore Bézxchgfi. .e:_>_§ ihé"Tfi:€§,;r£.::i _'i.;1 _ N{::.}O?7fBang/2002 and also Shri':4Ra:'::T %;:1;:{':'?1r3§§s0 . {ha judicial p1'{)f1OL£f1C€'£}1€3f}'£' C}§_V the'A-H{5r2'b1e i?iE:<>"h_VVCgfiuri Madras in the case of 'Shri Aéfff' {250 FIR
335) and aiso the of; Claurt of Karziazaka Er: thcgcase Qf reportad in 26} PPR 8§O.{ by the said order, the »?;:~§s€~$é§:€ has Uri~:§sV'app€a1, 4A admittéd on 10.11.2010 :0 <:or13i<:i_€r 'Vf'Q§1owingSxiiiiétantial qu€sti0ns Qf iaw:
{:3 VVh€ff?:¢?" in §;F':efa{:is and circzznzsfiances Qf the . Tz'ibz£zH7fa§ was righi in {aw in haldéng Zha: in V T.-?§,':'"..T{:i/éigir admissicn iha: iniirnaztiarz under Section }é§:3&€; 2j}_:'éz;,?VV§r: an ardegn, {he 'E'rz'b:::2<2E erred in hafiing Esiifiii prgvisians C§fS€fCEZiO?"é 2348 are appéfcabie?
{ii} E«%'?2,e£§z::r {:3 sVE:€ §'<:zC:s ogrgd <:ire::a:Vms:;::2:i€es of {he ::%a:~:é;: she €}?':C§€:'?' €31' rssasgessmssmf made? zm<:rE§'3:' $8{?§[fQIZ 5 12%?' is czssessmem' made far {he fz'rst;""£:§;3i§3 .___j:z5S.__ envisaged in Expianaiien 2 :0 Seeéion E 4?? . "
{iii} 'i'£/Fheifzer in zehefcuiés c:i':::} C.?:f'CE£ffLS:Z£Z,?;iC§€S W ease interest, maid be charged iinder Secé.eioz';A 2§34B:;ir1 VA {he order Qf I'£i'ClSS€SS??1t':'i'"i'E3«xii/?'§1€??, i3"1Vi'3f'L_£3'iZ'.?'T?£§'Z'?"£.'=i3f.Z arder n 0 inieresi' was C_harged'?~--« ' {iv} Wheiher inéeresais masking the pravisiqn 03¢': Secieien .23.%§B[3}A'e::§%:'d. Sectierz 234B{ 3 ,3 of Ir:<;=3;7ie4_Téz,3<';;4CL$._:o_{i' éEf:efae':es gzid cireumsziances of the ea,sei§:. ' V 'T x V V
5. --. 'Atv egxgument, the learned Counsel 3pp€a1"iflg""fQr"€héVVi£*.Sér3§€€':"_§~I1 View of the judgment sf this Court in 'ease oi°';L'hri Ram Sabea Vsé Aseisiantg Cammissiener Qf f!'1-*','Q;'I'J£ §f§3I1(i€I"€d in I'1"A E66;'O3§ fairly ceneecied thai, the A533; has re{mspe<:E.ive effeci: and the A V TTheLrefo:"e,: the szabséaniiai {§Ll€$Ei€)I1 of E32237 {1} and {iii} i'rame§ in asse«$eec:" is.«E'iab§e {:0 pay inieresz; under the Séiid ;::r«::evis:Qns. ' .unda':
E3 ibis appeai is .:msw€r€d in faveur Qf the z'a;*€;*é'z*;";:Té:' .21i';ri 'ag2r';11«s$£L' "
the as$€sse€+.
6. Howeven he COf:'i;€fi\(Z§€{i thai in :héA..&:i:3..<;:;;::=t Casr:,L' the arder of assessment paSS€V(§'>VVQV';# ufiiier Section Iii»? of {he Act £3 not 1":1:3A¢A::i%A% for the first time as envisagfad in 14'? and iherefore S€CE'idI .'@:'§i!34ffi3{3} 3,33 Sfisciion g34_ 8(1) of the 'V ' V' ' '2". Ii:'1' ?f:>r§ié;9:i iQ "x'(§L'p§f¢_:Ci2L{€ {his Conieniion, it is F1€C€SSaF:\,;'v{{}'f€§31'Vi-sf)V'fhL3S;é"15I'O\7iSiOI}S., Sectien 234~-B deajg vxmh :fn:er:3si "f-3;" éisfaulis iii paymené'; cf advgu/ice 13;}; it reads as 2~T.:;.;§i:b'feC€ :0 Eihe 0:22:22' prc:r:2isir:>r:s of {this A se:{:~zVis9;€}' wfzerez, {:1 aVng jincznciai year: an asSesse:3 is Eiabie {:9 pczay advance Ewe: u/nde::*r Seciian . Ems; fs:Lz'Z<2d £0 gag; 33:03': im: :32: i£Jh€}"é:' £136
--7i::{iL:azz::e {ax g;:a2'e:§ fag; 3255324 535383388 zmdez" ihgé IO reassessmerzt or recoz'np:1£:c::;ie:}n sxcxgeris __O2:f' , A' the zicjzai inceme <:ie3iermine<:i under sui3~::ét:€i:3r.:_ V513? Qf secigian E 43 or an the __}3.:::z:5_:s qj" iziieu E_"E?g l',1Z§:i§T assessmen: ajbresaid.
10. If an order passe{j..} %:V3der mafia for ihfi: first iime, the? fe~a'égsessment GI' rewcomputatian made _Th€n, {ha assesgee shad} be habig pay fiaie of 1% for every nienth from' *%fiw§ fsliowing {he date af subsection (1) of Section 143 zigld -aseeésmeni is made as referred to in sub--se%:fi:Qf1 {1} date of such regular assessment; 'L131 fiinz date a;-fu15s"»asséssment or re~c0n1put2d;i{:rn under Section fi1r1<.°,&_ by which the {tax an the total income {is-t.ef;n:i1<1_eCi V0r: }~i:he basis Qf re«assessr:1en'£ or recompuiation EX?/€€C§Ss i:a:>,<: an i,<:}:a£ incoma de:ie:*n"1:n€d unfiér 3uI:2»s€<:i:i<3:':
E1) of Ei§f:<:tVi::v:; £43 or 3:': the basia sf reguiar assessment;
" V' ;1i'§§§~$$aid, LA I1
11. A ha:*moni0L1s reading 0:' ihe €;.'. 'f'1:iifii'f'3._EL-¥;f3'~'":5§Jii)f:. makés it: clear tha: if no aévam::e3 tAaxA»V:3,p:«1ici of ii:?::;f; 'i:~__pVa:"d_V is . kiss "than Q{)% Qf ihfi agsesseci £;3:>»:. 1{',If1€ .?f1'SS'€?SS:€f3"1S.}iE§b§é"f;(§ fi21}?' i§':"E€I'€:SE on the diffemnce in t'i':€":~::gxV. F0-5 Uixe pL11*p.:§se..{t:f'~i€vyi:':g' £33: it 13 Computed fromfifirst _Ap_1:i1 dgfli; {ii} the date of determination vcief X ész§vb ~ Se.;:'iion {1} cf" $€3CUOf1 143 01' from that.d;:}; tili}/A":}:v;e;.. gpifréé:_V:i§f5,aésessmé:ni. If in 2. given Case, u¢f"{ax under sub~seC*:ia:m, {1} of and the assessment is made fiféyr '1j;:Vfi:'t.£V¢1° _S_:f;£i0n 14? such asgessméni is also trexérégci' 5.3':1:fnfgfiiézrgas:§essment and intereagt is payable irony-'ihe §'1:f§2';_ of Afirii next following UH the date of "~¢.,asS6:~3:sr:1e3nt"~- AQrder. ""BLV:t if proceedings under Section 147 is __if:it_ié'u=-§:i"«._iVf:»v:'£A.::::¥;;se W'h€I'€3 {h€i'€ is <:Eete:"n1i:r1ation sf :3}: under $::b¥'Sec§:0t:f'j{ :25 Seittiezz £43 01* where a reguiar assessmeni arrdéf §Stp.aséed unfier subwseciian {3} 0f S€CUOf3 343, then the ..:""»Gt'{V:'fE7£T' passéé unésr 3€3*Qii02": E4? is u"€a:;e{§_ 8.3 an order 0? re~ :;3;':;3s€ssm€ni; €22' §€~<:<>mpL2§,a:Viz:3n, En the: {T3136 :3? 3166? i3? re- :
A 28% ' pr:>eee&§:§ge E£7€E"€': iniiieiecé Lzniier 8eei;i{>n 147 e§ the Aiti. L": 12 assessmerlt or 1*e~e0mp:.u[atien, the interest is Ee_vf:aI:'i'e.V_';:-<>_£i 5-:j_d::_1 the first day sf April next foilewing. €iAa{.e e»§ d€{€I"T1'1if}I:1{,iOI1 of tax under $ub»sé:etiQt:_{_1}'of."S'eeiii:ez*:v-eeA_1é§:.3er order of regular assessment under Se=:éi;i'e11 1«%»3'{:i§},v'_ "Fheref<;:'eV;e. when the assessment order is :5veet'i:L}:1 147 anfi that is made the ba§'$..,,',_fer Assessing Authority has to find made for the first time undgx' of renaseessment er re~eomputa€§ier%:"ue}ie'i= *1.;f;:7V:":.§f}e'pending on that finding, the in'eefe'e t"ie: from the date of {fret day of ApriI:"'n54§.:.'t itfénegeiai year or frem the eiaie of dei;erminatiL<i>":1 C:ft,9',--X i,;:_I1Ci€:i' subsection (1) ofSeetiC>r1 143 or " '~ regtifigzr ;:L;seeVsemef:1:ve::::Eer Section 1433)' ,__};:2:,, V' -- instant ease, {here was a éeterminatiexl of tax__iii:e1e_r.'Se_c:f:E{:»:1 1é£3{E}{a} and return {fled by the assescsee ",:deeiari:':g°:.his ineeme as Rs.3{3,59Q-O0 was accepted by the 1,:i1}e;pe;1ff;n1e::é by iie. eifier éaiefi 24.€38.39§1, E': is Ehereaiiezf', 13 pu:'Suz::1<:€ 05 ribs: r:<:s{i«;?<:> isszmd, revised f€f,'£IFi1..:{?{§éiS~. fi§§jfi§5.g§}i?_ BO. E2§199i3 éefiizzrixzg 'L116 inc:~o:n€ sf that miyurn, the Ofdfif tank: to bf? ;3:ei;ss€j<i;1f:1&::r.' $ €i--7ti:;t:V.L__14.:3{3} an 28,iZ}L99éi~. Therrsferfi, ii isfr:-Qt 2:1 <}fasé'r)f as:§'€s =3» tI1er:tV";z11é.c§é", for the first time. It is a case of Vic':-.2';uSTs'{'=;s§i1'Vr";»§1€r1f. or r€- Campmatien undér Secii%3::¢_ {h€3'iv£1"'l'.fiV}€S'{ is to be Calculated from demrmination of tax was the Act. To that extent, the _ji?:€:"._:a:;ihorities is illegai and requires. s§azbsEan£,Vial questions of {aw {2} and :54} weV«'1é'i::f§cgffed'":f--::_]E::>o:zr Qf {he assessee and against me reveimea. 'AppeaVl$.Aaré";J} a'ftly allowed. Sfiim §%::£g% 35% Eiéégggzw