Ita/113/2013 Of The Commissioner Of Income Tax v. M/S. Cochin International Airport Ltd

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HON'BLE THE CHIEF JUSTICE DR. MANJULA CHELLUR & THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE THURSDAY, THE 7TH DAY OF NOVEMBER 2013/16TH KARTHIKA, 1935 ITA.No. 113 of 2013 () ----------------------- AGAINST THE ORDER IN ITA 341/COCH/2011 of I.T.A.TRIBUNAL,COCHIN BENCHDATED 07-09-2012 APPELLANT:------------ THE COMMISSIONER OF INCOME TAX-I, COCHIN. BY ADVS.SRI.P.K.RAVINDRANATHA MENON(SR.) SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT------------- M/S. COCHIN INTERNATIONAL AIRPORT LTD,35, 4TH FLOOR, GCDA COMMERCIAL COMPLEX,MARINE DRIVE, COCHIN-31. THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 07-11-2013,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: MANJULA CHELLUR,C.J. & A.M.SHAFFIQUE, J. = = = = = = = = = = = = = = = = I.T.A. No.113 of 2013 = = = = = = = = = = = = = = = = = = = = = Dated this the 7th day of November, 2013 JUDGMENT Manjula Chellur,CJ The respondent-assessee filed the return of income for theassessment year 2005-06 on 30.10.2012 declaring the Nettaxable income as nil and book profit computed under Section115TB amounting to `17,66,14,319/-. The returns came to beprocessed under Section 143(1) of the Income Tax Act(hereinafter referred to as the Act) on 10.08.2006. Thereafter, arevised return of income came to be filed on 23.03.2007declaring gross total income under the normal provisions of theAct and claimed the deductions as well. As per this normalcomputation of tax under regular provisions it was also nil. Thecase was selected for scrutiny and a notice was issued on27.10.2006. The assessment under Section 143(3) of the Act wascompleted only on 28.12.2007 arriving at a total income of`288,475,850/-. I.T.A. No.113 of 2013 2. It is also not in dispute that at the time of completing theassessment, disallowances/additions on various issues came tobe made by the Assessing Officer. The assessee filed appealbefore the Commissioner of Income Tax (Appeals-II), Kochi,wherein the First Appellate authority partly allowed the appealin favour of the assessee. The Assessing Officer completed theproceedings in pursuance of the orders of the First Appellateauthority only on 16.06.2008 arriving at a gross total income of`27,28,51,217/- and accordingly the total income under thenormal provisions of the Act, after set off and other deductionswas arrived at as nil. 3. Thereafter, invoking suo motu jurisdiction under Section263 of the Act, Commissioner of Income Tax, Cochin issued anorder dated 18.03.2011 holding that order of the AssessingOfficer giving effect to the order of the CIT(Appeals-II) iserroneous and it is prejudicial to the interest of the Revenue.This initiation of proceedings was in respect of unabsorbeddepreciation of `1336.37 lakhs so far as computing book profit under Section 155JB being not available to the assessee as theentire unabsorbed depreciation was adjusted against the profitsfor the assessment year 2004-05 (previous year). 4. Aggrieved by the same, assessee filed appeal beforethe Tribunal and the Tribunal allowed the appeal in favour ofthe assessee quashing the orders dated 18.03.2011 of theCommissioner on the ground that the said order was barredby limitation as the original assessment was as early as28.12.2007 accepting the book profit computed by theassessee. Aggrieved by the said order of the Tribunal thepresent appeal is filed by the Revenue contending thatinitiation of proceedings under Section 263 of the Act dated18.03.2001 is in respect of the orders of the CIT(Appeals) andtherefore, question of limitation would not arise in the case onhand. 5. It is pertinent to note that the assessee went beforethe First Appellate authority against the initial assessmentorder not with regard to the nature of computation that is 5. It is pertinent to note that the assessee went beforethe First Appellate authority against the initial assessmentorder not with regard to the nature of computation that is book profit or the normal procedure so far as unobserveddepreciation. According to the Tribunal the subject matterconsidered by the First Appellate authority was not withrespect with method of computation but altogether a differentsubject matter therefore the original assessment orderaccepting the book profit computed by the assessee on28.12.2007 would be the criterion so far as limitation issuedand not the subsequent order of the assessing authorityconsequent to the order of the First Appellate Authority. 6. This observation of the Tribunal is justified havingregard to the circumstances under which the assessingauthority had to proceed with the matter subsequent to thedisposal of the appeal. In order to exercise suo motu powersunder Section 263 finding fault with the book profitcomputation accepted by the assessing authority, it ought tobe from 28.12.2007 and not with reference to First AppellateAuthority’s order which was nothing to do with acceptance ofbook profit computation adopted by the assessee. 7. For the above said reasons, we are of the opinion, theTribunal was justified in opining that the AdministrativeCommissioner was not justified so far as initiatingproceedings under Section 263 of the Act, as, suchproceedings was from the end of the financial year withreference to the assessment order dated 28.12.2007.Accordingly the appeal is dismissed. MANJULA CHELLUR, CHIEF JUSTICE A.M.SHAFFIQUE, JUDGE. sj8/11