Ita/194/2019 Of The Principal Commissioner Of Income Tax v. Apollo Tyers Ltd

IN THE HIGH COURT OF KERALA AT ERNAKULAMPRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR.JUSTICE VIJU ABRAHAM THURSDAY, THE 23 DAY OF SEPTEMBER 2021 / 1ST ASWINA, 1943 ITA NO. 194 OF 2019 AGAINST THE ORDER IN ITA 108/2018 OF INCOME TAX APPELLATETRIBUNAL, COCHIN BENCH APPELLANT/S: THE PRINCIPAL COMMISSIONER OF INCOME TAXKOCHI -1 INCOME TAX OFFICE, CENTRAL REVENUE BUILDING, I.S PRESS ROAD, KOCHI 682 018. BY ADVS. SRI CHRISTOPHER ABRAHAMP.K.RAVINDRANATHA MENON (SR.)SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT/S: APOLLO TYERS LTD,3RD FLOOR AREEKAL MANSION, NEAR MANORAMA JUNCTION, PANAMPILLY NAGAR, KOCHI 682 036. BY ADVS. SRI.JOSEPH MARKOSE (SR.) SRI.V.ABRAHAM MARKOSSRI.ABRAHAM JOSEPH MARKOS SRI.ISAAC THOMASSRI.P.G.CHANDAPILLAI ABRAHAM SHRI.VIPIN ANTO H.M.SHRI.ALEXANDER JOSEPH MARKOS SHRI.SHARAD JOSEPH KODANTHARA OTHER PRESENT: SC CHRISTOPHER ABRAHAM THIS INCOME TAX APPEAL HAVING COME UP FOR HEARING ON 23.09.2021,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ITA No.194/2019 S.V.Bhatti, J. J U D G M E N T Heard learned Standing Counsel Mr. Christopher Abrahamand learned Senior Counsel Mr. Joseph Markos for parties. 2. The Principal Commissioner of Income Tax, Kochi-1/Revenue is the appellant. M/s.Apollo Tyres Ltd.,Kochi/Assessee is the respondent. The subject matter of theappeal deals with an order of Commissioner of Income Tax inpurported exercise of his power under Section 263 of theIncome Tax Act, 1961 (for short 'the Act'). The assessee on26.11.2012 filed returns for the Assessment Year 2012-13. TheAssessing Officer issued Annexure-B draft assessment orderunder Section 144C(1) of the Act. The assessee contested thedraft assessment order in Annexure-B, resulting in the issuesgoing before the Dispute Resolution Panel (DRP) -2, Bangalore. ITA No.194/2019 The DRP, through Annexure-C dated 15.12.2016, issueddirections to the Assessing Officer, which resulted in Annexure-D assessment order dated 25.01.2017. The Commissioner ofIncome Tax in purported exercise of his jurisdiction andauthority under Section 263 of the Act, interfered with the draftassessment order in Annexure-B and set aside the draftassessment order dated 31.03.2016, and directed the AssessingOfficer to de novo complete the assessment for the AssessmentYear 2012-13. The assessee questioned the order of theCommissioner dated 28.02.2018 in Annexure-E before theIncome Tax Appellate Tribunal, Cochin Bench in ITABI.108/Coch/2018. The Tribunal, through order in Annexure-Fdated 03.10.2018, allowed the appeal filed by the assessee.Hence the instant Tax Appeal at the instance of the Revenue. 3.The following substantial questions of law are raisedby the Revenue. ITA No.194/2019 “1.Whether, on the facts and in the circumstances of thecase, the Tribunal is right in law in holding that “theCommissioner is not justified in invoking his revisionaryjurisdiction under Section 263 of the IT Act as against the draftassessment orders which in this case already merged with thefinal assessment order? 2.Whether, on the facts and in the circumstances of thecase, and in the light of the Principal law, is the Hon'ble ITATright in holding that the order u/s 144C r/w 143(3) dated31.03.2016 did not cause any prejudice to the revenue? 3.Whether, on the facts and in the circumstances of thecase as well as in law, is the Hon'ble Tribunal right in quashingthe order u/s 263 dated 28.02.2018 passed by the PrincipalCommissioner of Income Tax, Kochi-1.” 4.In ITA No.36/2017, assessee's own case, this Court has considered similar substantial questions of law and held asfollows: “9.Our independent consideration of the circumstances;also the scheme of the Act and the view of the Tribunal aresimilar, namely that invocation of power under Section 263 ofthe Act to interdict a draft assessment order proposed by theAssessing Officer is unavailable to Principal Commissioner of 3.Whether, on the facts and in the circumstances of thecase as well as in law, is the Hon'ble Tribunal right in quashingthe order u/s 263 dated 28.02.2018 passed by the PrincipalCommissioner of Income Tax, Kochi-1.” 4.In ITA No.36/2017, assessee's own case, this Court has considered similar substantial questions of law and held asfollows: “9.Our independent consideration of the circumstances;also the scheme of the Act and the view of the Tribunal aresimilar, namely that invocation of power under Section 263 ofthe Act to interdict a draft assessment order proposed by theAssessing Officer is unavailable to Principal Commissioner of Income Tax. We hasten to add, for, at that stage, the conditionrequired for invoking Section 263, namely the order beingerroneous insofar as it is prejudicial to the interest of Revenue,does not arise. Hence the reasons are in accordance with thescheme of the Act envisaged on one hand by Section 144C andon another by Section 263 of the Act.” 5.The questions of law and the circumstances leadingto the subject questions of law, since are identical, by followingthe very same reasoning and discussion, the questions in thecase on hand are answered in favour of the assessee and againstthe Revenue. The Income Tax Appeal stands dismissed accordingly. Sd/-S.V.BHATTIJUDGE Sd/-VIJU ABRAHAMJUDGE ITA No.194/2019 PETITIONER ANNEXURE ANNEXURE A ANNEXURE B ANNEXURE C ANNEXURE D ANNEXURE E APPENDIX OF ITA 194/2019 COPY OF THE ORDER U/S. 92CA (30 DATED 29.1.2016 COPY OF DRAFT ASSESSMENT ORDER U/S 143 (3) R.W.S. 144 C (1) DATED 31.3.2016 COPY OF THE DRP ORDER DATED 15.12.2016 COPY OF ASSESSMENT ORDER U/S 143 (3) R.W.S. 144C DATED 25.1.2017 COPY OF 263 ORDER DATED 28./2.2018