Ita 1239/09 v. In This Context, We Have To Notice (2010) 323Itr 584 (Ker) [Commissioner Of Income Tax V. Keralachemicals And Proteins Ltd.], Which Upheld Section 234Dand Found

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON FRIDAY ,THE 12TH DAY OF OCTOBER 2018 / 20TH ASWINA, 1940 ITA.No. 1239 of 2009 AGAINST THE ORDER/JUDGMENT IN ITA 528/COCH/2006 ofI.T.A.TRIBUNAL,COCHIN BENCH DATED 24-09-2007 APPELLANT/S:/RESPONDENT/REVENUE THE COMMISSIONER OF INCOME TAXKOZHIKODE. BY ADVS.SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES)SRI.JOSE JOSEPH SC FOR INCOME TAX RESPONDENT/S:/APPELLANT/ASSESSEE : M/S. THE MATHRUBHUMI PRINTING ANDPUBLISHING CO. LTD., KOZHIKODE. BY ADVS.SRI.E.K.NANDAKUMAR (SR.)SRI.K.JOHN MATHAISRI.P.BENNY THOMAS THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 12.10.2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: J U D G M E N T Vinod Chandran, J. The short question arising in the appeal is as towhether the Income Tax Appellate Tribunal was correctin having interfered with the order of the Commissionerpassed under Section 263(1) of the Income Tax Act, 1961('Act' for short). The brief facts to be noticed arethat the assessment of the assessee for the year 1999-2000 was completed under Section 143(1) on 20.4.2000 inwhich there was a refund ordered. Subsequently, onscrutiny taken up, the assessment was completed on23.3.2005 under Section 143(3) read with Section 147wherein the income was enhanced and there was a paymentof tax necessitated far in excess of the refundordered. The Assessing Officer (AO) levied interestunder Section 234A and B, but did not levy that underSection 234D, which was introduced from 1.6.2003onwards. The Commissioner suo motu revised the orderof the AO under Section 263. 2.The Tribunal interfered with the same. Theassessee argued that the Commissioner ought not to have treated the order of the AO as erroneous, since theview taken by the Income Tax officer is one plausibleview and permissible in law. When such a view has beentaken by the AO, it was the contention that there couldnot be a different view taken by the Commissioner underSection 263, especially when the issue was debatable. 3.We do not, from the precedents available, findany support for the said propositions expounded by theassessee. Under Section 263, what is required is thatthe order should be an erroneous one, causing prejudiceto the interest of the Revenue, as has been stated in(2000) 243 ITR 83 (SC) [Malabar Industrial CompanyLtd. v. CIT]. The Tribunal, in fact, found that therewas sufficient cause to invoke Section 263, but relyingon the decision of the very same Tribunal set aside theorder passed under Section 263. The Tribunal ought tohave noticed that the provision has been introducedwith effect from 1.6.2003. 4.In this context, we have to notice (2010) 323ITR 584 (Ker) [Commissioner of Income Tax v. KeralaChemicals and Proteins Ltd.], which upheld Section 234Dand found its effect to be only from 1.6.2003. The issue is no longer debatable, going by the aforesaiddecision and in such circumstances, we set aside theorder of the appellate Tribunal and clarify that theorder of the Commissioner is only to the extent ofdirecting the AO to levy interest from 1.6.2003. The Appeal is disposed of as above. No order asto costs. Sd/-K.VINOD CHANDRANJUDGE Sd/-ASHOK MENONJUDGE APPENDIX PETITIONER'S/S EXHIBITS:ANNEXURE ACOPY OF ASSESSMENT ORDERANNEXURE BCOPY OF CIT'S ORDER U/S 263ANNEXURE CCERTIFIED COPY OF ITAT'S ORDER//TRUE COPY// jg