Ita/15/2013 Of The Commissioner Of Income-Tax v. M/S. Anu Cahews

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN&THE HONOURABLE MR. JUSTICE ASHOK MENON WEDNESDAY, THE 13TH DAY OF JUNE 2018 / 23RD JYAISHTA, 1940 ITA.No. 15 of 2013 ----------------------AGAINST THE ORDER/JUDGMENT IN ITA 242/COCH/2009 of I.T.A.TRIBUNAL,COCHIN BENCH DATED 20-01-2012 APPELLANT(S)/APPELLANT:---------------------- THE COMMISSIONER OF INCOME-TAX THIRUVANANTHAPURAM. BY ADV.SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT(S)/RESPONDENT: ------------------------ M/S. ANU CAHEWS PARAMESHWAR NAGAR, KOLLAM - 691 001. R1 BY ADV. SRI.M.GOPIKRISHNAN NAMBIAR R1 BY ADV. SRI.P.GOPINATH R1 BY ADV. SRI.P.BENNY THOMAS R1 BY ADV. SRI.K.JOHN MATHAI R1 BY ADV. SMT.PREETHA S.NAIR THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 13-06-2018,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: APPENDIX APPELLANT(S)' ANNEXURES:----------------------- ANNEXURE A1 COPY OF THE RETURN ALONG WITH STATEMENT. ANNEXURE A2 COPY OF THE INTIMATION U/S 143(1) DATED 08-03-2004. ANNEXURE A3 COPY OF THE ORDER U/S 143(3) R/W S.147 DATED 30-08-2006. RESPONDENT(S)' ANNEXURES:------------------------ NIL /TRUE COPY/ PA TO JUDGE K.VINOD CHANDRAN & ASHOK MENON, JJ. ------------------------------------------- ------------------------------------------- Dated this the 13[th] day of June, 2018 J U D G M E N T Vinod Chandran, J. The appellant is the Commissioner of Income Tax, who isaggrieved with the order of the Tribunal, which set aside the re-assessment under Section 147 read with Section 148 of the IncomeTax Act, 1961, on the ground of there being no suppression ofmaterial facts. The re-assessment proceedings were admittedlytaken for the four year period as provided under Section 147. Suchre-assessment could have been done only if the income chargeableto tax had escaped assessment for reason, inter alia, of failure todisclose fully and truly all material facts necessary for thatassessment year; which sole ground the revenue relies on in thepresent case. 2.The assessee filed a return produced as Annexure A1which was processed under Section 143(1). By Annexure A2 withinthe four year period, the assessment was re-opened for escapementof income under Section 147 read with Section 148 concluding ITA 15/2013 eventually with Annexure A3 order. Again, further re-assessmentwas proposed on 13-03-2008 after the four year period stipulatedin Section 147. The assessee filed a return in response to the noticeunder Section 148 on 15-04-2008 and a further notice underSection 143(2) on 24-02-2008 was issued. The reasons recordedfor re-opening of assessment was communicated to the assesseeand an order was passed as Annexure A; reducing considerably thededuction granted under Section 80HHC. Aggrieved by such order,the assessee was before the first appellate authority which stoodrejected as per Annexure B. A further appeal to the Tribunal went infavour of the assessee on the ground that there could be noproceedings initiated under Section 147 after four years since thereis discernible no absence of disclosure of true and completematerial facts. 3.The Revenue is in appeal on the following questions oflaw:law: “1. Whether, on the facts and in the circumstances of thecase and in the light of the decision of this Hon'bleCourt in the connected appeal filed against the orderin C.O.24/Coch/2009 in ITA.242/Coch/2009 dated20-01-2012 should not the Tribunal decide theappeal of the Revenue on merits ?case and in the light of the decision of this Hon'bleCourt in the connected appeal filed against the orderin C.O.24/Coch/2009 in ITA.242/Coch/2009 dated20-01-2012 should not the Tribunal decide theappeal of the Revenue on merits ? 3.The Revenue is in appeal on the following questions oflaw:law: “1. Whether, on the facts and in the circumstances of thecase and in the light of the decision of this Hon'bleCourt in the connected appeal filed against the orderin C.O.24/Coch/2009 in ITA.242/Coch/2009 dated20-01-2012 should not the Tribunal decide theappeal of the Revenue on merits ?case and in the light of the decision of this Hon'bleCourt in the connected appeal filed against the orderin C.O.24/Coch/2009 in ITA.242/Coch/2009 dated20-01-2012 should not the Tribunal decide theappeal of the Revenue on merits ? 2.Whether, on the facts and in the circumstances of thecase and the pronouncement of the judgment by theHon'ble Supreme Court in Ravindranathan Nair's casebeing declaration of the law from the very inceptionand always retrospective:case and the pronouncement of the judgment by theHon'ble Supreme Court in Ravindranathan Nair's casebeing declaration of the law from the very inceptionand always retrospective: i.Is not the return originally filed by the assesseeinconsistent with the declaration of the law by theSupreme Court ?inconsistent with the declaration of the law by theSupreme Court ? ii.The original return being inconsistent with thedecision of the Supreme Court from the inceptionof filing the return, is not the return filed not fullyand truly disclosing material facts ?decision of the Supreme Court from the inceptionof filing the return, is not the return filed not fullyand truly disclosing material facts ? iii. Is not the original return, understood in the lightof the principle laid down in Ravindranathan Nairnot one filed under section 139 of the Income TaxAct as laid down by the Hon'ble High Court in ITR30 of 1977 (unreported) ?”of the principle laid down in Ravindranathan Nairnot one filed under section 139 of the Income TaxAct as laid down by the Hon'ble High Court in ITR30 of 1977 (unreported) ?” 4. The assessing authority had reduced 90% of the gross processing charges and added the processing charges to thetotal turnover. The first appellate authority directed reduction of90% of only net processing charges. The Department was inappeal and the assessee filed a cross-objection. The appeal filedby the Department was rejected against which the present appealis filed. The cross-objection was allowed granting the relief bysetting aside the orders of the lower authorities finding thatre-assessment could not be taken up under Section 147. Henceas of now there is no appeal from the order which interfered with assessment and the first appellate order, on grounds of invalidityof a re-assessment under Section 147. 5.We also notice that the returns originally filed was inaccordance with the declaration of law of this Court in CIT v.K.Rajendranathan Nair, [2004] 265 ITR 35. The said decisionwas reversed by the Honourable Supreme Court in CIT v.K.Ravindranathan Nair, [2007] 295 ITR 228 (SC). There couldhence be no suppression found as held by the HonourableSupreme Court in Deputy Commissioner of Income Tax v.Simplex Concrete Piles (India) Ltd., (2013) 11 SCC 373. In such circumstances, we refuse to answer the questions oflaw, especially on the ground that there is no appeal filed from theorder which allowed the cross-objection of the assessee. Theinstant Appeal would thus stand dismissed. Sd/-K. VINOD CHANDRANJudge Sd/-ASHOK MENONJudge