Ita/1037/2009 Of The Commissioner Of Income Tax, Cochin v. Shri. Jacob J.thaliath, Ocean Bounty

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE B.P.RAY TUESDAY, THE 16TH NOVEMBER 2010 / 25TH KARTHIKA 1932 ITA.No. 1037 of 2009() ---------------------- AGAINST THE ORDER IN ITA.335/COCH/2006 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT/ APPELLANT ----------------------------- THE COMMISSIONER OF INCOME TAX, COCHIN. BY ADV. SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT(S): / RESPONDENT --------------- MRS.JACOB J.THALIATH, PROP. OCEAN BOUNTY, 26/1994, NEAR ST.JOSEPH CHURCH, K.P.VALLON ROAD, KOCHI-682 020. ADV. SRI.P.BALAKRISHNAN (E) FOR R1 SRI.V.SREEKUMAR FOR R1 SRI.MOHAN PULIKKAL FOR R1 THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 16/11/2010, ALONG WITH ITA NO.1197/2009 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & BHABANI PRASAD RAY, JJ. ---------------------------------- ITA Nos.1037 & 1197 of 2009 ---------------------------------Dated, this the 16[th] day of November, 2010J U D G M E N T Ramachandran Nair, J. In these two appeals, the only question raised is whether the Tribunal was justified in cancelling the suo motu revisionalorder issued by the Commissioner of Income Tax underSection 263 of the Income Tax Act for the reason that theorder sought to be revised was the revised assessment issuedunder Section 147, which was rectified under Section 154 formodification of interest levied under Section 234D. 2.The Tribunal cancelled the order issued by theCommissioner on the ground that original assessment onlycould be revised under Section 263. Admittedly, for theassessment year 1995-96, the Tribunal followed a decision ofthe Bhopal Bench of the Tribunal, which though was confirmedby the High Court, was later reversed by the Supreme Court.We feel the Tribunal has committed a patent error in cancelling The Tribunal cancelled the order issued by the ITA Nos.1037 & 1197 of 2009 -2- a Section 263 order on the ground that original order gotmerged in revised assessment, which cannot be revised underSection 263. There is no bar in Section 263 restricting thepower of the Commissioner by limiting his jurisdiction torevise only original orders issued by the Assessing Officer. Infact, any proceedings issued by the Assessing Officer, whetherit be original assessment or revised assessment issued underSection 147 or even a rectification order issued under Section154, could be revised in exercise of powers under Section 263,if the order is erroneous or is prejudicial to the interest of theRevenue. We, therefore, allow ITA No.1037/2009 by reversingthe order of the Tribunal and by restoring the order issued bythe Commissioner under Section 263. 3.In so far as ITA No.1197/2009 is concerned, theTribunal interfered with Section 263 order issued for the year1992-93 for the reason that the revised assessment issuedunder Section 147, that was the subject matter of revisionunder Section 263, itself is an invalid order. We do not thinkthat the Tribunal has any such power to consider the validity ITA Nos.1037 & 1197 of 2009 of any such order, while considering the appeal filed againstthe order issued by the Commissioner under Section 263. Theassessee having not challenged the revised assessment,cannot also contest validity of that proceedings before theTribunal in an appeal filed against the order issued underSection 263. The Tribunal, being the 2[nd] appellate authority,cannot consider validity of an assessment or reassessmentorder while considering the appeal filed against an orderissued under Section 263. So much so, the order of theTribunal is liable to be vacated. Therefore, we allow ITA No.1197/2009 by vacating theorder of the Tribunal and by restoring the order issued by theCommissioner under Section 263. These appeals are allowed as above. (C.N.RAMACHANDRAN NAIR, JUDGE) (BHABANI PRASAD RAY, JUDGE)