Ita/1353/2009 Of Mr.nilofer Hameed v. Income Tax Officer

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON FRIDAY, THE 18TH DAY OF JANUARY 2019 / 28TH POUSHA, 1940 ITA. No.1349 of 2009 AGAINST THE ORDER IN ITA NO.1310/2004 OF THE INCOME TAX APPELLATETRIBUNAL, COCHIN BENCH DATED 30.10.2006 APPELLANT/RESPONDENT: MRS.NAHID SHAFFI, NO.15, SARASWATHY, IST FLOOR,, DENA BANK COLONY, GANGA NAGAR, BANGALORE-560 032. BY ADVS.SMT.PREETHA S.NAIRSRI.ANIL D. NAIRSRI.E.K.NANDAKUMAR (SR.) RESPONDENTS/APPELLANT: 1INCOME TAX OFFICER KOCHI.WARD-1(3), RNAGE-2, KOCHI.WARD-1(3), RNAGE-2, KOCHI. 2COMMISSIONER OF INCOME-TAXKOCHI.KOCHI. BY ADVS.SRI.P.K.RAVINDRANATHA MENON (SR.)SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 18.01.2019,ALONG WITH ITA.1350/2009, ITA.1351/2009, ITA.1353/2009, THE COURTON THE SAME DAY DELIVERED THE FOLLOWING: IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON FRIDAY, THE 18TH DAY OF JANUARY 2019 / 28TH POUSHA, 1940 ITA. No.1350 of 2009 AGAINST THE ORDER IN ITA NO.1311/2004 OF THE INCOME TAXAPPELLATE TRIBUNAL, COCHIN BENCH DATED 30.10.2006 APPELLANT/RESPONDENT: MRS.NAHID SHAFFI, NO.15, SARASWATHY, IST FLOOR,, DENA BANK COLONY, GANGA NAGAR, BANGALORE-560 032. BY ADVS.SRI.E.K.NANDAKUMARSMT.PREETHA S.NAIR RESPONDENTS/APPELLANT: 1INCOME TAX OFFICER KOCHI. WARD-1(3), RNAGE-2, KOCHI. 2COMMISSIONER OF INCOME-TAXKOCHI. BY ADVS.SRI.P.K.RAVINDRANATHA MENON (SR.)SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 18.01.2019,ALONG WITH ITA.1349/2009, ITA.1351/2009 & ITA.1353/2009, THECOURT ON THE SAME DAY DELIVERED THE FOLLOWING: IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON FRIDAY, THE 18TH DAY OF JANUARY 2019 / 28TH POUSHA, 1940 ITA. No.1351 of 2009 AGAINST THE ORDER IN ITA NO.154/2005 OF THE INCOME TAX APPELLATETRIBUNAL, COCHIN BENCH DATED 30.10.2006 APPELLANT/RESPONDENT: MRS. NILOFER HAMEED S-4, MONARCH RESIDENCE, ST.JOHN'S CHURCH ROAD, BANGALORE. BY ADVS.SMT.PREETHA S.NAIRSRI.ANIL D. NAIRSRI.E.K.NANDAKUMAR (SR.)SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENTS/APPELLANT: 1INCOME TAX KOCHIWARD-2(3), RANGE-2, KOCHI. 2COMMISSIONER OF INCOME-TAXKOCHI. BY ADV. SRI.P.K.RAVINDRANATHA MENON (SR.) THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 18.01.2019,ALONG WITH ITA.1349/2009, ITA.1350/2009 & ITA.1353/2009, THECOURT ON THE SAME DAY DELIVERED THE FOLLOWING: IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON FRIDAY, THE 18TH DAY OF JANUARY 2019 / 28TH POUSHA, 1940 ITA. No.1353 of 2009 AGAINST THE ORDER IN ITA NO.153/2005 OF THE INCOME TAX APPELLATETRIBUNAL, COCHIN BENCH DATED 30.10.2006 APPELLANT/APPELLANT: MRS. NILOFER HAMEED S-4, MONARCH RESIDENCE, ST.JOHN'S CHURCH ROAD, BANGALORE. BY ADVS.SMT.PREETHA S.NAIRSRI.ANIL D. NAIRSRI.E.K.NANDAKUMAR (SR.) RESPONDENTS/RESPONDENTS: 1INCOME TAX OFFICER WARD-2(3), RANGE-2, KOCHI. 2COMMISSIONER OF INCOME-TAXKOCHI. BY ADVS.SRI.P.K.RAVINDRANATHA MENON (SR.)SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 18.01.2019,ALONG WITH ITA.1349/2009, ITA.1350/2009 & ITA.1351/2009, THECOURT ON THE SAME DAY DELIVERED THE FOLLOWING: JUDGMENT K. Vinod Chandran, J. FRIDAY, THE 18TH DAY OF JANUARY 2019 / 28TH POUSHA, 1940 ITA. No.1353 of 2009 AGAINST THE ORDER IN ITA NO.153/2005 OF THE INCOME TAX APPELLATETRIBUNAL, COCHIN BENCH DATED 30.10.2006 APPELLANT/APPELLANT: MRS. NILOFER HAMEED S-4, MONARCH RESIDENCE, ST.JOHN'S CHURCH ROAD, BANGALORE. BY ADVS.SMT.PREETHA S.NAIRSRI.ANIL D. NAIRSRI.E.K.NANDAKUMAR (SR.) RESPONDENTS/RESPONDENTS: 1INCOME TAX OFFICER WARD-2(3), RANGE-2, KOCHI. 2COMMISSIONER OF INCOME-TAXKOCHI. BY ADVS.SRI.P.K.RAVINDRANATHA MENON (SR.)SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 18.01.2019,ALONG WITH ITA.1349/2009, ITA.1350/2009 & ITA.1351/2009, THECOURT ON THE SAME DAY DELIVERED THE FOLLOWING: JUDGMENT K. Vinod Chandran, J. Two assessees, who are partners of a firm,are before us in the above two appeals arisingfrom the assessment years 1986-1987 and 1988-1999. The short facts required for considerationof the appeals are that the firm, in which theappellants were partners, was before theSettlement Commission, who had passed an orderunder Section 245D of the Income Tax Act, 1961[for brevity, 'the Act']. The order passed bytheSettlementCommissionresultedinenhancement of the income of the partners. Thepartners did not file any return pursuant to theorder passed by the Settlement Commission. Insuch circumstances, the Assessing Officer issuednotice to the partners under Section 148 of theAct, with sanction obtained under Section 151and assessment completed under Section 144. 2. The proceedings were completed afteraffording the assessee with an opportunity, which was not availed of. We find from theassessment order that the assessee's hadappeared before the Assessing Officer and soughtadjournment, but then did not subsequentlyappear. The Assessing Officer took the income ofthe assessee as found by the SettlementCommission and completed the assessment. Theground raised in first appeal was that therewere two notices issued under Section 148 andthe assessment was barred by limitation.However, before the First Appellate Authority,this was not urged and an additional ground wasraised. The ground so raised was that theAssessing Officer ought to have proceeded underSection 155(1)(C) of the Act and not underSection 148. The First Appellate Authority foundin favour of the assessee relying on a decisionof the Hon'ble Supreme Court in Commissioner ofIncome Tax v. Dalmia Manganese Corporation [236ITR 46 (SC)]. 3. The Tribunal found that the subject matter in Dalmia Manganese Corporation[supra]was relating to the withdrawal of developmentrebate allowed by the Assessing Officer in theregularassessmentorder.Subsequently,proceedings were taken under Section 154 of theAct for rectification of the assessment. TheHon'ble Supreme Court found that when there is aspecific provision in so far as re-opening ofassessment, there could be no resort made to ageneral provision for rectification. 4. The Tribunal found that the dictum doesnot apply in the present case, when there was noregular assessment made. Resort could only behad to Section 148, since Section 155 appliesonly in the case of a completed assessment of apartner and the share of the income of the firmas found in an order passed under Section245D(4)[clause (c) of Section 155(1)] is notincluded in the partners completed assessment.We do not think any interference can be made tothe order of the Tribunal, since the question has been answered perfectly in tune with thelaw. We hence answer the questions of law raisedhere against the assessee and in favour of theRevenue and reject the appeals. However, we makeit clear that the remand order in so far as thelimitation is concerned, would be left open forconsideration by the First Appellate Authority. Sd/- K. VINOD CHANDRAN JUDGE Sd/- ASHOK MENON JUDGE sp/22/01/19 has been answered perfectly in tune with thelaw. We hence answer the questions of law raisedhere against the assessee and in favour of theRevenue and reject the appeals. However, we makeit clear that the remand order in so far as thelimitation is concerned, would be left open forconsideration by the First Appellate Authority. Sd/- K. VINOD CHANDRAN JUDGE Sd/- ASHOK MENON JUDGE sp/22/01/19 APPENDIX OF ITA 1349/2009 PETITIONER'S EXHIBITS: ANNEXURE A-A ANNEXURE B-A ANNEXURE C-A TRUE COPY OF THE ASSESSMENT ORDER DATED 07.10.1997. TRUE COPY OF THE ORDER OF THE CIT (APPEALS). DATED 21.09.2004. TRUE COPY OF THE COMMON ORDER OF THE INCOMETAX APPELLATE TRIBUNAL DATED 30.10.2006. APPENDIX OF ITA 1350/2009 PETITIONER'S EXHIBITS: ANNEXURE A A TRUE COPY OF THE ASSESSMENT ORDERDATED 07.10.1997. ANNEXURE B A TRUE COPY OF THE ORDER OF THE CIT (APPEALS) DATED 21.09.2004. ANNEXURE C A TRUE COPY OF THE COMMON ORDER OF THE INCOME TAX APPELLATE TRIBUNAL DATED30.10.2006. APPENDIX OF ITA 1351/2009 PETITIONER'S EXHIBITS: ANNEXURE-AA TRUE COPY OF THE ASSESSMENT ORDER.ANNEXURE-BA TRUE COPY OF ORDER OF THE CIT (APPEALS) DATED 15/10/2004. ANNEXURE-C TRUE COPY OF THE COMMON ORDER OF INCOME TAXAPPELLATE TRIBUNAL DATED 30/10/2006 APPENDIX OF ITA 1353/2009 PETITIONER'S EXHIBITS: ANNEXURE A A TRUE COPY OF THE ASSESSMENT ORDER DATED 07.10.1997. ANNEXURE B A TRUE COPY OF THE ORDER OF THE CIT (APPEALS) DATED 15.10.2004. ANNEXURE C A TRUE COPY OF THE COMMON ORDER OF THE INCOME TAX APPELLATE TRIBUNAL DATED 30.10.06