Op/1166/1998 Of M/S.valley Estates v. Addl.agrl.incometax Officer

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMAN THURSDAY, THE 22ND NOVEMBER 2007 / 1ST AGRAHAYANA 1929 OP.No. 1166 OF 1998(L) ---------------------- PETITIONER: ------------------- M/S. VALLEY ESTATES, THEKKETHATTIL, KEEZHIKUNNU, KOTTAYAM, REPRESENTED BY ITS MANAGING DIRECTOR- MRS. SANTHAMMA ABRAHAM. BY ADV. SRI.M.PATHROSE MATHAI SRI.RAMESH JOHN RESPONDENTS: ----------------------- 1.ADDITIONAL AGRICULTURAL INCOME TAX OFFICER,SULTHANBATHERY.SULTHANBATHERY. 2.DEPUTY COMMISSIONER OF AGRICULTURAL INCOME TAX AND SALES TAX, KOZHIKODE.AND SALES TAX, KOZHIKODE. 3.COMMISSIONER OF AGRICULTURAL INCOME TAX,BOARD OF REVENUE (TAXES), THIRUVANANTHAPURAM.BOARD OF REVENUE (TAXES), THIRUVANANTHAPURAM. BY GOVERNMENT PLEADER SRI. TEK CHAND THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 22/11/2007, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: // DISMISSED //22.11.2007.SD/-, P.R. RAMAN, (JUDGE) P.R. RAMAN, J.= = = = = = = = = = O.P. NO. 1166 OF 1998= = = = = = = = = = = = = = DATED THIS, THE 22ND DAY OF NOVEMBER, 2007.J U D G M E N T Petitioner is a registered Partnership firm engaged in the business ofplantation, having its Office at Kottayam, who is an assessee on the files ofthe Additional Agricultural Income Tax and Sales Tax Officer, SulthanBathery - the first respondent herein. The assessment pertains to 1987-88to 1989-90. The assessment in respect of these years were completed asevidenced by Exts.P1 to P3 orders of assessment produced in this originalpetition. Aggrieved thereby, petitioner preferred an appeal before theAppellate Assistant Commissioner, who, by Ext.P4 common order, set asidethe order of assessment and allowed various claims of the petitioner.Before the first appellate authority, various grounds were raised year-wiseand detailed consideration was made by that authority and substantial reliefswere granted. In order to give effect to the appellate order and to passmodified orders of assessment, the matter was remanded. The Statechallenged Ext.P4 order before the Tribunal. However, the Tribunaldismissed the appeal and confirmed the order Ext.P4 as per its order Ext.P5. O.P. 1166/1998 Thereafter, the assessing officer gave effect to the appellate order Ext.P4and passed modified orders of assessment as per Ext.P6. The DeputyCommissioner, Agricultural Income tax and Sales Tax, Kozhikode, who isthe second respondent herein, suo motu revised Ext.P6 order by Ext.P11which was confirmed by the Board of Revenue as per its order Ext.P12.Aggrieved thereby, petitioner has come up with this original petition. 2. Before the revisional order was passed, notice of proposal asmandated by the provisions of law was issued as evidenced by Ext.P10.The first and foremost contention of the learned counsel for the petitioner isthat Ext.P11 order has gone beyond the proposal made in Ext.P10. He tookme in detail to the proposal contained in Ext.P10 and Ext. P11 order in thisregard. 3. It can be seen that one of the issue was regarding the share incomeof certain individuals to be clubbed and assessed with the share income ofhis/her husband/father, as the case may be. The second issue was as towhether there is any error in the matter of adopting the income for the year1989-90 as against the conceded income of higher amount and the thirdissue was whether there is any change of the previous year relevant to theassessment year 1990-91 is correct. O.P. 1166/1998 3. It can be seen that one of the issue was regarding the share incomeof certain individuals to be clubbed and assessed with the share income ofhis/her husband/father, as the case may be. The second issue was as towhether there is any error in the matter of adopting the income for the year1989-90 as against the conceded income of higher amount and the thirdissue was whether there is any change of the previous year relevant to theassessment year 1990-91 is correct. O.P. 1166/1998 4. The assessee objected to the proposal by filing a written objection.The main contention was that since the earlier order of assessment wassubject matter of an appeal and a second appeal, there is a merger of theassessment with the order of the higher authority and as such, it is not opento invoke the power under Section 75 and revise such consequential ordersby suo motu revision. It is true that power of suo motu revision underSection 75 could not be invoked on the very same ground which was subjectmatter of any appeal or revision before the higher authorities. But as rightlyheld by the Authority, nothing is produced to show that the same groundon which the suo motu power is exercised is dealt with in any appellate orrevisional order as the case may be. If so the bar under Section 75 will notapply. However, paragraphs C and D of Ext.P11 order refers to theassessment year 1987-88 and 1988-89. The specific contention raised in theoriginal petition is that no proposal as such was made in Ext.P10 regardingthese assessment years. In the counter affidavit filed no reference is madeto this contention raised in the original petition. The fact remains that forthe assessment years 1987-88 and 1988-89 there was no proposal for re-opening of the case invoking the power under Section 75 of the Act. If so,the order Ext.P11 to the extent it has even directed the assessing authority tore-open the case relating to the assessment year 1987-88 and 1988-89 is O.P. 1166/1998 totally without jurisdiction. Accordingly, the order Ext.P11 and thedirections contained in paragraphs C and D to the extent it relates to theassessment years 1987-88 and 1988-89 are quashed. 5. It was then contended that "clubbing of the income" is an aspectwhich the appellate authority had earlier dealt with to attract the bar underSection 75. In this regard, it was contended that there was an observationthat the mode of computation in the case of individual assessee is found tobe correct. Learned counsel wants to draw an inference therefrom that themode of computation including clubbing of income therefore is thus amatter dealt with in the appellate order. Learned Government Pleadercontends that no such inference could be drawn in this case. On the otherhand, the specific point raised by the assessee has been dealt with in Ext.P4appellate order and in no way the question regarding clubbing of incomewas specifically dealt with. If so, there is no warrant for making anyinference as contended by the learned counsel appearing on behalf of thepetitioner. On a perusal of Ext.P4 it cannot be said that the issue regardingclubbing of income of the individual partners regarding their share from thefirm with that of the husband or father, as the case may be, was everconsidered. Hence the order Ext.P11 could not be held to be withoutjurisdiction as respect this issue. O.P. 1166/1998 6. It is then contended that merely because the process of passingconsequential order of assessment to give effect to the appellate order bywhich the income assessed was less than the income conceded is no reasonfor suo motu revision. But this is not a point urged by the petitioner beforeany of the authorities below. In the result, the original petition is allowed in part. Ext.P11 to theextent it directs the assessing officer to re-open the assessment relating tothe year 1988-89 as dealt with in paragraph C and D are quashed. P.R. RAMAN,(JUDGE) knc/- O.P. 1166/1998 O.P. 1166/1998 6. It is then contended that merely because the process of passingconsequential order of assessment to give effect to the appellate order bywhich the income assessed was less than the income conceded is no reasonfor suo motu revision. But this is not a point urged by the petitioner beforeany of the authorities below. In the result, the original petition is allowed in part. Ext.P11 to theextent it directs the assessing officer to re-open the assessment relating tothe year 1988-89 as dealt with in paragraph C and D are quashed. P.R. RAMAN,(JUDGE) knc/- O.P. 1166/1998 P.R. RAMAN, J.= = = = = = = = =O.P. 1166/1998= = = = = = = = J U D G M E N T 22ND NOVEMBER, 2007.