AND 7 OTHERS
IN ITA NO. 292/2022:
BETWEEN:
1. SRI ADICHUNCHANAGIRI SHIKSHANA TRUST
REP BY ITS GENERAL SECRETARY
SRI PURUSHOTHAMANADANATHA SWAMIJI
SON OF SRI VENKATEGOWDA
AGED ABOUT 76 YEARS
1ST B MAIN VIJAYANAGAR
BENGALURU-560040
PAN-AAATS3584P
...APPELLANT
(BY SRI. A.SHANKAR, SENIOR COUNSEL,
S.ANNAMALAI, ADVOCATE)
AND:
1. THE ASSISTANT COMMISSIONER OF INCOME TAX
CENTRAL CIRCLE -2(4)
C R BUILDING, QUEENS ROAD, BENGALURU-560001.
...RESPONDENT
(BY SRI. RAVI RAJ Y V. AND SRI.M.DILIP, ADVOCATES)
THIS INCOME TAX APPEAL IS UNDER SECTION 260-A OF
INCOME TAX ACT 1961, PRAYING TO FORMULATE THE
SUBSTANTIAL QUESTIONS OF LAW AS STATED ABOVE AND
ANSWER THE SAME IN FAVOUR OF THE APPELLANT AND TO
ALLOW THE APPEAL AND SET ASIDE THE FINDINGS TO THE
EXTENT AGAINST THE APPELLANT IN THE COMMON ORDER
PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, 'C'
BENCH, BENGALURU IN MP NOS. 70 TO 76/BANG/2021 (IN
ITA NOS. 3007, 3028 TO 3033/BANG/2018 AND CO NOS. 147
TO 153/BANG/2018 DATED 26/11/2021 FOR THE
ASSESSMENT YEARS 2007-08 TO 2013-14 RESPECTIVELY
VIDE ANNEXURE-A, ETC.
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AND 7 OTHERS
IN ITA NO. 305/2022:
BETWEEN:
1. SRI HEMANTH KUMAR BOTHRA
S/O SRI CHANDANMAL PUKHRAJ BOTHRA,
AGED ABOUT 45 YEARS,
NO.14, 7TH CROSS, JAI BHARATNAGAR,
BENGALURU-560033
PAN AAAPH9863N
...APPELLANT
(BY SRI. A.SHANKAR, SENIOR COUNSEL,
S. ANNAMALAI, ADVOCATE)
AND:
1. THE ASSISTANT COMMISSIONER OF INCOME TAX
CIRCLE-7(1)(1)
BMTC BUILDING, 80 FEET ROAD,
6TH BLOCK, NEAR KHB GAMES VILLAGE,
KORAMANGALA, BENGALURU-560095
...RESPONDENT
(BY SRI. RAVI RAJ Y V AND SRI.M.DILIP, ADVOCATES)
THIS INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF
INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED
26/11/2021 PASSED IN MP NO. 88/BANG/2021 (IN ITA NO.
3044/BANG/2018), FOR THE ASSESSMENT YEAR 2009-2010,
PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF
LAW AS STATED ABOVE AND ANSWER THE SAME IN FAVOUR
OF THE APPELLANT AND TO ALLOW THE APPEAL AND SET
ASIDE THE FINDINGS TO THE EXTENT AGAINST THE
APPELLANT IN THE ORDER PASSED BY THE INCOME TAX
APPELLATE TRIBUNAL BENCH, BENGALURU IN MP NO.
88/BANG/2021 (IN ITA NO. 3044/BANG/2018) DATED
26/11/2021 FOR THE ASSESSMENT YEAR 2009-2010 VIDE
ANNEXURE-A, ETC.
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AND 7 OTHERS
THESE APPEALS HAVING BEEN HEARD AND RESERVED
FOR JUDGMENT ON 26.09.2025, COMING ON FOR
PRONOUNCEMENT THIS DAY, D K SINGH J., PRONOUNCED
THE FOLLOWING:
CORAM: HON'BLE MR. JUSTICE D K SINGH
and
HON'BLE MR. JUSTICE VENKATESH NAIK T
CAV COMMON JUDGMENT
(PER: HON'BLE MR. JUSTICE D K SINGH)
This batch of Income Tax Appeals are directed
against the common order dated 22.02.2021 passed by
the Income Tax Appellate Tribunal, "C" Bench, Bangalore.
2. The Tribunal after considering the facts and
circumstances of the case has set aside the orders of the
CIT(A)-11 and remanded the matter back to the
respective jurisdictional CIT(A) to decide the appeals
afresh in accordance with the law after due opportunity of
hearing to the parties. The Additional grounds taken by
the Revenue in the appeals were also allowed.
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AND 7 OTHERS
3. The Tribunal did not go into the merits of the appeals
filed by the Revenue. All the appeals and cross-objections
were allowed for statistical purposes.
4. In all these cases the assessment orders were
finalized by the Assessing Authority after search
operations were conducted under Section 132 of the
Income Tax Act, 1961 (for short 'the IT Act').
Substantial additions to the returned income were made
by the Assessing Authorities while finalizing the
assessment under Section 143 r/w Section 147 and
Section 153C r/w Section 143(3) of the IT Act. The
Director General of Income Tax (Investigation) Karnataka
and Goa, Bengaluru, issued a show-cause notice to the
then Commissioner of Income Tax (Appeals)-11,
Bangalore 560 001, on Appellate orders passed in the case
of one assessee for the assessment years 2008-2009 and
2012-2013. The Director General of Income Tax
(Investigation) was of the opinion that the additions made
by the assessing officers were based on the ceased
material, which were confronted to the assessee, and the
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AND 7 OTHERS
statement of the parties involved in the transactions were
also duly recorded. Therefore, the predecessor CIT(A) in
the original order under Section 250 of the IT Act dated
25.06.2016 had dismissed the assessee's appeal based on
the detailed reasons mentioned in the orders except for
the assessment year 2012-2013, wherein a few of the
addition was deleted in view of the substantial additions
being upheld in the case of one Sri. Cheriyan Abraham.
The assessee preferred appeal against the said order of
predecessor CIT(Appeals) passed under Section 250
before the ITAT. The appeal was dismissed on
14.07.2017. However, the ITAT held that its order dated
14.07.2017 would not have a bearing on the Section 154
petition filed by the Assessee before the CIT (Appeals).
5. The Director General of Income Tax (Investigation),
was of the opinion that CIT(A)-11 had passed an order
under Section 154 r/w Section 250(1) on 29.12.2017
based on the assessee's submissions without making any
analysis of the same and without giving his own findings
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AND 7 OTHERS
on the submissions, and granted complete relief to the
assessee for all the assessment years. The standard
reasoning given by the CIT(A)-11 was also extracted in
the show-cause notice.
6. It was also mentioned in the show-cause notice that
in the original order passed by the predecessor CIT
(Appeals) under Section 250 of the Income Tax Act, there
was no mistake apparent that was required to be rectified
and the order passed by the CIT(A)-11 under Section 154
r/w Section 251 of the Income Tax Act, amounted to
re-adjudication of the appeal. It was also noted that there
was a considerable difference between the date of orders
and the date of dispatch. The orders dated 29.12.2018
appeared to have been dispatched on 23.01.2018 and on
21.03.2018. In view of the aforesaid, the CIT(A)-11 was
directed to furnish an explanation on the circumstances
leading to passing of such alleged erroneous orders and
also the explanation was required to be furnished for the
delay in dispatch of the orders, within four days.
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AND 7 OTHERS
7. The Director General of Income Tax (Investigation)
was of the opinion that there were serious lapses
committed by the CIT(A)-11, while passing the appellate
orders, and there was no improvement in the quality of
the orders. Therefore, he directed the CIT(A)-11 not to
pass any further appellate orders until the explanation
sought for was given to the satisfaction of the Director
General of Income Tax (Investigation). CIT(A)-11 was also
directed to furnish a list of all appeals disposed of, in the
month of June 2018 till date, immediately.
8. On 16.07.2018 in exercise of the powers conferred
under sub-Section (2) and (3) of Section 120 of the IT Act
and other enabling provisions in this behalf, the powers
conferred on the Principal Chief Commissioner of Income
Tax, Karnataka and Goa Region by the Notification
No.66/2014/F.No.279/Misc./66/2014-SO(ITJ) dated
13.11.2014 read with Notification No.2238(E) vide
notification No.69/2015, F.No.187/30/2014(ITA.I) dated
17.08.2015 transferred all appeals pending from CIT(A)-
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AND 7 OTHERS
11, Bengaluru, to the CIT(A)-12, Bengaluru, in the interest
of Administrative convenience.
9. Admittedly, all orders passed in these appeals by the
CIT(A)-11 are after 18.06.2018 and before 16.07.2018.
However, the revenue has contented that in some cases,
the orders passed by the CIT(A)-11 were after
16.07.2018, but pre-dated inasmuch as these orders were
dispatched after 16.07.2018.
10. The Revenue had filed the appeals against the orders
passed by the CIT(A)-11 after 18.06.2018 and in some
cases the orders were passed before 18.06.2018. Those
appeals are not subject matter of challenge before us.
These appeals are confined only to the orders passed by
the CIT(A)-11 after 18.06.2018. The revenue also urged
two additional grounds in all these appeals including other
appeals before the ITAT. The two additional grounds
would read as under :-
"1. The order passed by the Commissioner of
Income Tax (Appeals)-11 dated 10.07.2018
being the order passed after the directions vide
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AND 7 OTHERS
letter dated 18.06.2018 by the DGIT, (Inv.),
Bengaluru, and notification u/s.120 dated
16.07.2018 issued by the PCCIT, Bengaluru, the
CIT(A) order is without jurisdiction and liable to
be set aside.
2. The order passed by the Commissioner of
Income Tax (Appeal)-11, dated 10.07.2018
being not entered in dispatch register which was
required to be entered, the order is presumed to
be passed after the transfer of jurisdiction."
11. The Tribunal after considering the facts and
circumstances of the case, has been of the opinion that
the orders passed by the CIT(A)-11 after 18.06.2018 were
without jurisdiction and therefore, set aside all the orders
passed after 18.06.2018 by the CIT(A)-11 and remitted
the matter back to the respective CIT(A) for decision
afresh in accordance with law, after giving opportunity of
hearing to all the parties.
12. The ITAT has also noticed that the CIT(A)-11 had
passed 50 orders involving different assesses and different
issues between 05.07.2018 to 13.07.2018 and that would
be an impossible task for any appellate authority.
- 18 -
AND 7 OTHERS
13. Heard Sri A. Shankar, learned Senior Counsel
assisted by Sri S. Parthasarathi, learned counsel for the
appellants. It is submitted that the orders passed after
18.06.2018 but before 16.07.2018 when the Principal
Chief Commissioner of Income Tax transferred the pending
appeals before the CIT(A)-11 to CIT(A)-12 cannot be said
to be without jurisdiction.
14. It is the Principal Chief Commissioner of the Income
Tax Karnataka and Goa Region, Bengaluru, who would
have the jurisdiction under Sub-Section (2) of Section 120
of the Income Tax Act, 1961 r/w Notification
No.66/2014/F.No.279/Misc/66/2014-SO(ITJ) dated
13.11.2014 and Notification No.69/2015,
F.No.187/30/2014(ITA.I) dated 17.08.2015 issued by the
CBDT, New Delhi, to transfer the appeals from one
Commissioner of Appeals to another Commissioner of
Appeals and the Principal Chief Commissioner exercising
such powers has transferred the appeals only on
16.07.2018 from CIT(A)-11 to CIT(A)-12 and only from
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AND 7 OTHERS
16.07.2018, the CIT (A)-11 would not have jurisdiction to
hear and decide the appeals pending before him.
However, before 16.07.2018 CIT(A)-11 was well within the
power to decide the appeals.
15. It has been further submitted that two additional
grounds urged by the Revenue could not have been
entertained and the appeals sought to have been decided
on merit by the ITAT instead of remanding the matter
back to the respective CIT(A) to the prejudice of the
assessees.
16. On the other hand, Mr. Y.V. Ravi Raj, learned
Standing Counsel for the Income Tax has submitted that
the Director General of Income Tax (Investigation)
Karnataka and Goa, Bengaluru was well within the power
to issue direction to the CIT(A)-11, not to pass orders on
pending appeals till he submits explanation to the show-
cause notice issued to him on 18.06.2018 to the
satisfaction of the Director General of Income Tax
(Investigation). The submission is that after 18.06.2018
- 20 -
AND 7 OTHERS
any order passed by the CIT(A)-11 would be without
jurisdiction and therefore, the ITAT has rightly set aside
those orders on this ground alone and remanded the
matter back to the CIT(A)-11 for fresh adjudication in
accordance with law. It is further submitted that the
assessees are in no manner prejudiced by the remand as
they would be heard and their contentions would be taken
note of, while passing a fresh order as directed by the
ITAT, while remanding the matters back to the CIT(A).
The learned counsel for the Revenue has further submitted
that when the Appellate Commissioner CIT(A)-11 conduct
was in cloud and he was facing the explanation sought for,
from him and in fact he was compulsorily thereafter
retired, the orders passed by him, cannot be said to be the
orders passed in accordance with law.
17. He has placed reliance on the Notification dated
15.11.2014 to submit that DGIT (Investigation),
Bengaluru, would have jurisdiction over CIT(A)-11,
Bengaluru in all matters, except the discretion of the
- 21 -
AND 7 OTHERS
Commissioner (Appeals) regarding the manner and
method of adjudication. Similar Notification has also been
issued on 09.11.2023, which would suggest that the DGIT
(Investigation), Bengaluru, would have the supervisory
jurisdiction over CIT(A)-11. He further submits that the
Principal Commissioner of Income Tax and DGIT
(Investigation) are the Officers of the same rank and same
status and therefore, when the DGIT (Investigation) came
to know about the erroneous orders being passed by the
CIT(A)-11, he asked for his explanation by the notice
dated 18.06.2018 and asked him not to pass any further
orders. He therefore, submits that the orders passed by
the CIT(A)-11 after 18.06.2018 were improper, illegal
without jurisdiction, and the Tribunal has rightly set aside
those orders and allowed the appeals and remanded the
matters back to CIT(A) of the respective jurisdiction.
18. We have considered the submissions of the learned
counsel for both the parties. The facts are not in dispute.
- 22 -
AND 7 OTHERS
The only question that arises for our consideration is
that :-
"Whether the orders passed after 18.06.2018
by the CIT(A)-11 are just, proper and legal
and whether the ITAT while setting aside the
orders passed by the CIT(A)-11, Bengaluru,
has committed any error of law or
jurisdiction ?"
19. As pointed out above, the DGIT (Investigation)
Karnataka and Goa Region, would have the supervisory
and administrative jurisdiction over the CIT(A)-11, which
is evident from the two notifications mentioned above.
When the DGIT asked explanation regarding the erroneous
orders being passed by the CIT (A)-11 and asked him not
to proceed further in passing the orders on pending
appeals, the CIT(A)-11 for the reasons best known to him,
went on to decide as many as 81 appeals between
05.07.2018 to 13.07.2018. He decided 50 appeals
involving different assessees and different issues, which
would be a very very difficult task for any authority.
- 23 -
AND 7 OTHERS
20. Therefore, in the facts and circumstances, we are of
the considered view, that the orders passed by the CIT
(A)-11 after 18.06.2018 are erroneous, illegal and without
jurisdiction and therefore, we affirm the orders passed by
the ITAT impugned in these appeals and dismiss all the
above appeals.
21. We also hold that the assessees are not in any
manner prejudiced by the remand of the appeals to the
respective CIT(A).
Accordingly, all the above appeals stand dismissed.
Sd/-
(D K SINGH)
JUDGE
Sd/-
(VENKATESH NAIK T)
JUDGE
NG
