Ita/41/2002 Of The Commissioner Of Income Tax v. M/S.cochin Refineries Ltd., Cochin

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON TUESDAY ,THE 11TH DAY OF DECEMBER 2018 / 20TH AGRAHAYANA, 1940 ITA.No. 41 of 2002 AGAINST THE ORDER/JUDGMENT IN ITA 638(COCH)/1996 ofI.T.A.TRIBUNAL,COCHIN BENCH DATED 17-07-2001 APPELLANT/S:/APPELLANT/REVENUE: THE COMMISSIONER OF INCOME TAX,COCHIN.BY ADVS.SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES)SRI.JOSE JOSEPH, SC FOR IT DEPT. RESPONDENT/S:/RESPONDENT/ASSESSEE: M/S.COCHIN REFINERIES LTD., AMBALAMUGAL. BY ADVS.SRI.P.BENNY THOMASSRI.ANIL D. NAIRSRI.JOSON MANAVALANSRI.K.JOHN MATHAISRI.KURYAN THOMASSRI.M.GOPIKRISHNAN NAMBIARSRI.P.GOPINATHSRI.RAJA KANNAN THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 11.12.2018, ALONG WITH ITA.16/2002 AND ITA.49/2002, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ITAs16, 41 & 49/2002 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON TUESDAY ,THE 11TH DAY OF DECEMBER 2018 / 20TH AGRAHAYANA, 1940 ITA.No. 16 of 2002 AGAINST THE ORDER/JUDGMENT IN ITA 637(COCH)/1996 ofI.T.A.TRIBUNAL,COCHIN BENCH DATED 17.7.2001 APPELLANT/S:/APPELLANT/REVENUE: THE COMMISSIONER OF INCOME TAX, COCHIN. BY ADVS.SRI.P.K.R.MENON,SENIOR COUNSEL, GOI(TAXES)SRI.JOSE JOSEPH, SC FOR INCOME TAX DEPARTMENT RESPONDENT/S:/RESPONDENT/ASSESSEE: M/S.COCHIN REFINERIES LTD, AMBALAMUGAL. BY ADVS.SRI.P.BENNY THOMASSRI.JOSON MANAVALANSRI.K.JOHN MATHAISRI.KURYAN THOMASSRI.M.GOPIKRISHNAN NAMBIARSRI.P.GOPINATHSRI.RAJA KANNAN THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 11.12.2018, ALONG WITH ITA.49/2002 AND ITA.41/2002, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ITAs16, 41 & 49/2002 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON TUESDAY ,THE 11TH DAY OF DECEMBER 2018 / 20TH AGRAHAYANA, 1940 ITA.No. 49 of 2002 AGAINST THE ORDER/JUDGMENT IN ITA 639(COCH)/1996 ofI.T.A.TRIBUNAL,COCHIN BENCH DATED 17-07-2001 APPELLANT/S:/APPELLANT/ASSESSEE: THE COMMISSIONER OF INCOME TAX, COCHIN. BY ADVS.SRI.P.K.R.MENON,SENIOR COUNSEL, GOI(TAXES)SRI.JOSE JOSEPH, SC FOR INCOME TAX DEPARTMENT. RESPONDENT/S: M/S.COCHIN REFINERIES LTD., AMBALAMUGAL. BY ADVS.SRI.P.BENNY THOMASSRI.ANIL D. NAIRSRI.JOSON MANAVALANSRI.K.JOHN MATHAISRI.KURYAN THOMASSRI.M.GOPIKRISHNAN NAMBIARSRI.P.GOPINATHSRI.RAJA KANNAN THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 11.12.2018, ALONG WITH ITA.41/2002 AND ITA.16/2002, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: K.VINOD CHANDRAN & ASHOK MENON, JJ. -------------------------------------------ITA Nos.16, 41 and 49 of 2002------------------------------------------- Dated this the 11[th] day of December, 2018 J U D G M E N T Vinod Chandran, J. The Department is in appeal from an order of theIncome Tax Appellate Tribunal raising certain questions oflaw regarding the sustainability of the Tribunal's ordersetting aside the rectification under Section 154 of theIncome Tax Act, 1961 ('Act', for short) merely on theground of change of opinion. The assessment years are1987-88, 1989-90 and 1990-91. The Tribunal, in fact, alsotook note of the earlier proceedings for the assessmentyear 1985-86, the loss in which year was the subject matterof rectification. 2.On facts, it is to be noticed that theassessee had filed a return under Section 139(1) for theassessment year 1985-86 beyond the due date in September.The assessment was completed under Section 143(3), ascrutiny assessment, and the assessee was allowed carryforward of the loss of the said year. In fact, such carry ITAs16, 41 & 49/2002 2.On facts, it is to be noticed that theassessee had filed a return under Section 139(1) for theassessment year 1985-86 beyond the due date in September.The assessment was completed under Section 143(3), ascrutiny assessment, and the assessee was allowed carryforward of the loss of the said year. In fact, such carry ITAs16, 41 & 49/2002 forward could not have been allowed, since the assessee hadfiled the return beyond the due date under Section 139(1).Section 80 under Chapter-VI prohibited such carry forwardand set off of loss of years in which the assessee hadfailed to file the return within the time provided underSection 139(1). 3.The subject assessment years in which therectification was carried out, purportedly to refuse setoff of the loss carried forward, of the year 1985-86, arethe years 1987-88, 1989-90 and 1990-91. The carry forwardof loss as permitted in the assessment year 1985-86 by anassessment completed under Section 143(3) remains as such.Without rectifying the order of the said year, there can beno refusal to permit set off for the subsequent years.Admittedly, the assessment of 1985-86 as completed underSection 143(3) remains as such and carry forward is hencepermitted. There can be no rectification made for the saidassessment year for the limitation having expired. Further, even in the subject assessment years, thelimitation under Section 154 has expired. The notice asseen from the appeals and the rectification order was firstissued on 04.12.1995. The four year period from the end of ITAs16, 41 & 49/2002 the assessment years of 1987-88, 1989-90 and 1990-91 standsexpired respectively on 31.03.1992, 31.03.1994 and31.03.1995. All the proceedings were initiated beyond thefour year period. In such circumstances, we refuse toanswer the question regarding the change of opinion. Wealso uphold the order of the Tribunal setting aside therectification under Section 154 for the subject assessmentyears. The I.T.Appeals are rejected. No costs. Sd/- K.VINOD CHANDRAN JUDGE Sd/-ASHOK MENONJUDGE ITAs16, 41 & 49/2002 -7- APPENDIX OF ITA 41/2002 APPELLANT'S EXHIBITS: ANNEXURE-ACOPY OF THE ORDER OF THE ASSESSING OFFICER DATED 27/02/89. ANNEXURE-BCOPY OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) DATED 06/09/1996.ANNEXURE-CCOPY OF THE ORDER OF THE TRIBUNAL DATED 17/07/2001. jg [True Copy] ITAs16, 41 & 49/2002 APPENDIX OF ITA 16/2002 PETITIONER'S/S EXHIBITS: ANNEXURE-ATRUE COPY OF THE ORDER OF THE ASSESSING OFFICER DATED 27/02/1996. ANNEXURE-BCOPY OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) DATED 06/09/96.ANNEXURE-CTRUE COPY OF THE ORDER OF THE TRIBUNAL DATED 17/07/2001. ANNEXURE-D COPY OF THE ASSESSMENT ORDER FOR THE ASSISTANT YEAR 1985-86 DATED 19/02/1988. jg [True Copy] ITAs16, 41 & 49/2002 -9- APPENDIX OF ITA 49/2002 PETITIONER'S/S EXHIBITS: ANNEXURE-ATRUE COPY OF THE ORDER OF THE ASSESSING OFFICER DATED 27/02/1996.ANNEXURE-BCOPY OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) DATED 06/09/96.ANNEXURE-CTRUE COPY OF THE ORDER OF THE TRIBUNAL DATED 17/07/2001. jg [True Copy]