Ita/939/2009 Of The Commissioner Of Income v. M/S.vanaja Taxtiles Ltd

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE V.K.MOHANAN MONDAY, THE 16TH NOVEMBER 2009 / 25TH KARTHIKA 1931 ITA.No. 939 of 2009() --------------------- ITA.318/COCH/2002 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT: -------------------- THE COMMISSIONER OF INCOME TAX, THRISSUR. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT(S): --------------- M/S.VANAJA TEXTILES LTD, KURICHIKKARA P.O, THRISSUR DISTRICT. ADV. SRI.P.BALAKRISHNAN (E) FOR R THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 16/11/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: -------------------------------------------- -------------------------------------------- Dated this the 16th day of November, 2009 JUDGMENT Ramachandran Nair, J. The question raised in the appeal filed by the revenue is whetherthe Tribunal was justified in cancelling the assessment made underSection 143(1)(a) for the reason that disallowances made do not fallwithin the description "prima facie inadmissible items". After hearingboth sides and after going through the proceedings issued underSection 143(1)(a) and the order of the Tribunal, we are unable touphold the order of the Tribunal for more than one reason. In the firstplace, against proceedings under Section 143(1)(a) the assessee itselffiled rectification application under Section 154 which goes to provethat the assessee was satisfied that the proceedings issued underSection 143(1)(a) with additions contained only mistakes. In our view,the assessee cannot later turn round and say that mistakes are ofarguable issue and could not have been corrected in proceedings underSection 143. Further, as is revealed from the proceedings underSection 143, it is clear that assessee made belated claim of investmentallowance relating to assessment years 1984-85 and 1985-86 in the returns filed for 1994-95. The reason for disallowance is based on thedisallowance under Section 32A(3)(ii) of the Act. We are of the viewthat claim is prima facie inadmissible because it is obviously beyondthe period of limitation provided under the Act. Further, the next itemof disallowance is prior period expenses and the assessee has notshown in the return and annexures as to the provision under whichclaim of deduction is made. In our view, the added items are primafacie not admissible under the Act, but still deducted by the assessee inthe computation of taxable income. We are therefore of the view thatthe Tribunal was not justified in cancelling the proceedings underSection 143 which stood modified in one round of rectification onassessee's own application and again by the Commissioner of IncomeTax in revision. We therefore allow the appeal by reversing the orderof the Tribunal and remanding the matter to the Tribunal for decidingthe issues on merits. (C.N.RAMACHANDRAN NAIR) Judge. (V.K. MOHANAN) Judge.