Ita/1516/2009 Of The Commissioner Of Income Tax, Cochin v. Shri. K.a.joseph, Kurikayil(H),Vyttila

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE V.K.MOHANAN WEDNESDAY, THE 16TH SEPTEMBER 2009 / 25TH BHADRA 1931 ITA.No. 1516 of 2009() ---------------------- ITA.334/COCH/2007 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): --------------- SRI.K.A.JOSEPH, KURIKAYIL HOUSE, VYTTILA, KOCHI-19. THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ALONG WITH ITA NO.919/2009 & CONN. CASES ON 16/09/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR &V.K.MOHANAN, JJ. .................................................................... I.T. Appeal Nos.1516,919,740,880,882,913,1068,1154,1274,814,878,912,1000,1010,1027,1051,1114,1146,1160,1253,1467,1480,1485,1527,1557,976,1086,1306,1473 and 1481 of 2009 .................................................................... Dated this the 16th day of September, 2009. JUDGMENT Ramachandran Nair, J. Connected appeals are filed by the Revenue challenging theorders of the Tribunal wherein Tribunal confirmed the orders of theC.I.T.(Appeal) declaring the reassessments made under Section 147read with Section 150(1) of the Income Tax Act as time barred. Wehave heard Standing Counsel appearing for the appellants. 2. On going through the orders of the Income Tax authoritiesincluding the Tribunal, we find that the agricultural lands of therespondents were acquired in 1990 for construction of a LPG bottling plant for Indian Oil Corporation. Compensation awarded andincreased by courts enjoy exemption as no capital gain is payable forthe compensation received on acquisition of agricultural land outsidethe Municipal limits. However, department is entitled to levy tax on interest on the compensation amount which according to settledposition based on judgment of the Supreme Court is assessable on anyear to year basis, on accrual basis. Reassessments initiated underSection 147 were time barred under Section 149 because by the timethe High Court pronounced judgment granting enhanced compensationand interest thereon, time for reopening assessments provided underSection 149 was over. However, the Assessing Officer reopened theassessments by invoking the exception clause on limitation containedunder Section 150(1) of the Income Tax Act. Even thoughreassessments are based on Section 150(1) of the Act, the first appellateauthority as well as the Tribunal held that reassessments were still timebarred because according to them, time barred assessments cannot bereopened under Section 150(1) of the Act. Standing Counselcontended that scope of Section 150(1) is to exclude application ofSection 149 for cases falling under Section 150(1) of the Act and somuch so, the finding of the lower authorities are unsustainable. Eventhough we find force in this contention, we are of the view that we neednot consider the issue in these appeals where the tax involved in individual cases is fairly low. In fact, under the CBDT norms appealseven to the Tribunal is provided only when the tax effect is above Rs.2lakhs. In most of these cases we find the tax on interest payable foreach year is much below the limit of Rs.2 lakhs and the additionaldemands are attributable to interest demanded under Section 234A and234B of the Act which will in any case be waived, even if the taxdemand is sustained. Since the assessments are for periods 10 to 18years back and in view of the low amount of tax involved and since allthe respondents-assessees are individuals deprived of their smallextents of agricultural lands in acquisition proceedings, we dismissthese appeals without going into the merits of the case, but by statingthat the findings of the Tribunal or the first appellate authority need notbe treated as binding on the department in any other matter. C.N.RAMACHANDRAN NAIRJudge V.K.MOHANANJudge