Case Law Details
PCIT Vs Gokula Education Foundation (Medical) (Karnataka High Court)
In PCIT vs Gokula Education Foundation, the Karnataka High Court reviewed appeals concerning reassessments under Section 153A of the Income Tax Act for the assessment years 2011-12, 2012-13, and 2013-14. The key issue was whether the Income Tax Appellate Tribunal’s decision to delete assessed income was justified. The Revenue challenged the Tribunal’s ruling, arguing that reassessment under Section 153A requires evaluating all prior additions. However, the High Court, referencing a Supreme Court decision in Principal Commissioner of Income-tax, Central-3 v. Abhisar Buildwell (P) Ltd., found that reassessment under Section 153A is impermissible without incriminating evidence. The court confirmed that the Tribunal’s deletion of income was appropriate, as there was no new evidence to justify the reassessment. Consequently, the High Court upheld the Tribunal’s decision, dismissing the appeals by the Revenue and affirming the deletion of the assessed income.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
These appeals by the Revenue, under Section 260-A of the Income Tax Act, 1961, are against the orders dated 18.07.2022 passed by the Income Tax Appellate Tribunal, Bengaluru in ITA No.499/Bang/2021 for the Assessment Year 2011-12 (Annexure-C), in ITA No.500/Bang/2021 for the Assessment Year 2012-13 (Annexure-C) and in ITA No.501/Bang/2021 for the Assessment Year 2013-14 (Annexure-C) respectively, confirming the orders passed by the Deputy Commissioner of Income Tax, Central Circle-1(2), Bengaluru, in respect of the Assessment Years 2011-12, 201213 and 2013-14 respectively relating to the respondent – assessee.
2. In the above appeals, this Court admitted the appeals on 17.4.2023, 27.03.2023 and 15.02.2023, respectively to examine the following common substantial questions of law:
“1. Whether under the facts and in the circumstances of the case and in law the Tribunal is right in deleting the assessed income under section 153A of the Income Tax Act, 1961, wherein section 153A empowers the AO to “assess” or “reassess the income”?
2. Whether under the facts and in the circumstances of the case and in law, the Tribunal is right in deleting the assessed income u/s 153A as the Hon’ble High Court of Karnataka in the case of Canara Housing Development Co. Ltd. vs. DCIT held that “when once the proceedings are initiated under Section 153A of the Act, the legal effect is even in case where the assessment order is passed it stands reopened”?
3. Whether under the facts and in the circumstances of the case and in law, the Hon’ble Tribunal is right in right in not considering the fact that the AO has to redetermine the total income of the assessee by considering all the additions made previously while completing the order under section 153A of the Act?”
3. Heard Sri M. Dilip, learned counsel for the revenue and Sri A. Shankar, learned Senior Counsel for the assessee.
4. During the course of hearing, it is brought to our notice that the questions involved in the above appeals are covered by the decision of the Hon’ble Supreme Court in the case of Principal Commissioner of Income-tax, Central-3 v. Abhisar Buildwell (P) Ltd., reported in (2023) 149 com 399.
5. Learned Counsel Sri Dilip is not in a position to dispute the same.
6. In terms of the decision of the Hon’ble Supreme Court (supra), the appeals are dismissed. The questions raised are answered in favour of the assessee and against the revenue.
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