K.k.denesan v. Ramkumar, Jj

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE K.SURENDRA MOHAN THURSDAY, THE 26TH MARCH 2009 / 5TH CHAITHRA 1931 ITA.No. 29 of 2004 ------------------------ IT(SS)A.29/COCH/2002 of I.T.A.TRIBUNAL,COCHIN BENCH ................................ APPELLANT: ------------------ M/S. SWISS TIME & ELECTRONICS, XL/1831, WAKF BUILDING, BROAD WAY, ERNAKULAM. BY ADV. SRI.B.S.KRISHNAN, SENIOR ADVOCATE SRI. V.RAMACHANDRAN, SENIOR COUNSEL SRI.K.ANAND (A.201) SMT.LATHA KRISHNAN RESPONDENT(S): ------------------------- THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1, ERNAKULAM. ADV. SRI. P.K.R MENON, SENIOR COUNSEL ADV. SRI.GEORGE K. GEORGE, SC FOR IT THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 26/03/2009 ALONG WITH ITA NO. 30 OF 2008 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & K.SURENDRA MOHAN, JJ. ------------------------------------------------------------------------------------ I.T.Appeal Nos: 29/2004 & 30/2008 ----------------------------------------------------------------------------------- Dated this the 26[th] March, 2009. JUDGMENT RAMACHANDRAN NAIR, J. The connected appeals arise from the order of the Tribunaldismissing an appeal and cross appeal pertaining to theassessment of the very same assessee. Assessment was onecompleted under Section 158BC of the Income Tax Act after searchconducted in the residential premises of the partner of the assesseefirm and after conducting survey in the business premises of theassessee on the same day. In first appeal assessee contested thevalidity of the assessment under Section 158BC and the additionson merit. CIT (Appeal) allowed the appeal by holding thatassessment should have been made under Section 158BD as thesearch was not pursuant to warrant issued in the name of theassessee firm. When department filed appeal against this orderbefore the Tribunal assessee filed cross appeal to contest thematter on merits. The Tribunal upheld the order of the CIT (Appeal)and consequently did not consider the assessee's cross appeal onmerits. The department and the assessee are in appeal before us ITA Nos: 29/04 & 30/08 against the common order issued by the Tribunal. 2. During hearing of the appeal before us the senior counselappearing for the department brought to our notice order of theTribunal issued in I.T(S&S)A No:27(Coch)/2003 dated 11.3.2004which is an appeal filed by the Managing Partner of the assesseefirm wherein an exactly opposite finding is rendered by the Tribunalfor allowing that appeal. In fact the specific finding of the Tribunalis that warrant was issued for search in the name of the firmMessrs. Swiss Time and Electronics, Ernakulam which is theassessee, the assessment of which is involved in these two appeals.The finding of the Tribunal impugned in these two appeals is thatwarrant was issued in the name of the partner and so much soassessment cannot be made under Section 158BC against the firm.This order of the Tribunal is patently wrong and unsustainablebecause the very same Bench in the subsequent order issued in thename of the Partner held that warrant was in the name of the firmand not against the partner. We are told that partners' assessmentcancelled by the Tribunal's order above referred stands confirmedand is accepted by both sides. In the circumstances we allow theappeals by cancelling the orders of the Tribunal and that of the firstappellate authority and remand the case back to the first appellate ITA Nos: 29/04 & 30/08 authority to consider the assessment on merits that is pertainin to the amounts assessed and not on the jurisdictional questionwhich stands concluded by this judgment. C.N. RAMACHANDRAN NAIRJudge K. SURENDRA MOHANJudge jj K.K.DENESAN & V. RAMKUMAR, JJ. ITA Nos: 29/04 & 30/08 authority to consider the assessment on merits that is pertainin to the amounts assessed and not on the jurisdictional questionwhich stands concluded by this judgment. C.N. RAMACHANDRAN NAIRJudge K. SURENDRA MOHANJudge jj K.K.DENESAN & V. RAMKUMAR, JJ. ---------------------------------------------------- M.F.A.NO: ----------------------------------------------------- JUDGMENT Dated: