Wp(C)/2504/2007 Of K.m.chakrapani, Vatakara v. The Income Tax Officer, Ward-2(2),Kzd

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN MONDAY, THE 14TH NOVEMBER 2011 / 23RD KARTHIKA 1933 WP(C).No. 2504 of 2007(W) ---------------------------------------- PETITIONER(S): ------------------------- K.M. CHAKRAPANI, PROPRIETOR, COIR INDIA, CEMENT DEALER, PALOLI PALAM, VATAKARA. BY ADVS. SRI.P.RAGHUNATH, SRI.PREMJIT NAGENDRAN. RESPONDENT(S): --------------------------- 1. INCOME TAX OFFICER, WARD 2 (2) KOZHIKODE. 2. COMMISSIONER OF INCOME TAX, KOZHIKODE. R1 & R2 BY ADV. JOSE JOSEPH, SC,IT BY SRI.P.K.R.MENON,SR.COUNSEL,GOI(TAXES) SRI.GEORGE K. GEORGE, SC, IT THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 14/11/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WPC.NO.2504/2007 W APPENDIX PETITIONER'S EXHIBITS: P1:COPY OF ORDER U/S. 143 (1)(A) DTD. 29/03/04 FOR 2003-04. P2:COPY OF ASSESSMENT U/S. 143 (3) DTD. 27/01/2005 FOR 2002-03. P3:COPY OF ORDER DTD. 20/07/06 PASSED BY THE SECOND RESPONDENT ON APPLICATION U/S. 264 OF THE ACT. RESPONDENT'S EXHIBITS:N I L /TRUE COPY/ P.A.TO JUDGE S. SIRI JAGAN, J. - - - - - - - - - - - - - - - - - - - - - - - W.P.(C)No.2504 of 2007 - - - - - - - - - - - - - - - - - - - - - - -Dated this the 14[th] day of November, 2011 J U D G M E N T The petitioner is a dealer in cement and has dealings with M/s. Madras Cements Limited, a manufacturer ofcements. In the course of business dealings between thetwo, the Madras Cements Ltd. issues credit notes whichwere accounted for by the petitioner as and when receivedfrom the company. For the year ended 31.3.2002, thepetitioner returned a net income of Rs.2,92,430/- for thepurpose of Income Tax Act. The assessing officer found thatthe petitioner had accounted for discounts/adjustmentspertaining to the period December 2001 to March 2002amounting to Rs.15,46,342/- during the year ended31.3.2003, which according to him was to be taxed duringthe year ended 31.3.2002, since the petitioner is followingthe 'mercantile system of accounting'. Consequently thesaid amount of Rs.15,46,342/- was added to the income forthe assessment year 2002-03. The petitioner did not W.P.(C)No.2504 of 2007 -2- dispute the assessment and paid tax accordingly.Thereafter the petitioner sought exclusion of the saidincome from the assessment for the year ended 31.3.2003.The petitioner's revision in this regard was rejected byExt.P3 order on the ground that the mistake was committedby the assessee and not by the department. The petitionersubmits that whether the mistake is of the assessee or ofthe department, the same income cannot be subjected totax twice. The petitioner therefore seeks the followingreliefs: “call for the records leading to the issue of Ext.P3 order andExt.P1 order, peruse the same, hear arguments andExt.P1 order, peruse the same, hear arguments and A.issue a writ of certiorari quashing the original of Ext.P3order passed by the 2[nd] respondent.order passed by the 2[nd] respondent. B.issue a writ of certiorari quashing Ext.P1 order u/s 143(1) (a) of the Act in so far as it assesses the income ofRs.1546,342/- for the year 2003-04 since the same hasalready been assessed for 2002-03.”(1) (a) of the Act in so far as it assesses the income ofRs.1546,342/- for the year 2003-04 since the same hasalready been assessed for 2002-03.” 2.No counter affidavit has been filed in this writ petition. But the Standing Counsel for the Income TaxDepartment justifies the order on the ground that aftercompleting the assessment, the assessing authority cannot W.P.(C)No.2504 of 2007 reopen the assessment for deletion of the amount which has been added to another assessment year. Insofar as themistake is that of the assessee the respondents cannot beblamed for the same and the petitioner is bound to sufferfor his own mistake, is the contention raised. 2.No counter affidavit has been filed in this writ petition. But the Standing Counsel for the Income TaxDepartment justifies the order on the ground that aftercompleting the assessment, the assessing authority cannot W.P.(C)No.2504 of 2007 reopen the assessment for deletion of the amount which has been added to another assessment year. Insofar as themistake is that of the assessee the respondents cannot beblamed for the same and the petitioner is bound to sufferfor his own mistake, is the contention raised. 3.I have considered the rival contentions in detail.4.I am of opinion that whether it is because of amistake committed by the assessee or the department, thesame income cannot be taxed twice. It is not as if thedepartment will never commit any mistakes. Bonafidemistakes can be committed by anybody. The stand thatbecause the mistake is that of the assessee and not of thedepartment, the assessee should suffer notwithstanding thefact that the same income has been assessed twice is to saythe least, a Shylockian attitude which is unbecoming of aGovernment department. In the above circumstances, I amof opinion that, appropriate deletion shall be made inrespect of the income which has been added to anotherassessment year from the assessment year in question. W.P.(C)No.2504 of 2007 Accordingly Ext.P3 order is quashed. The 1[st] respondentassessing officer is directed to revise the assessment bydeleting the income of Rs.15,46,342/- from the assessmentof the petitioner for the year ended 31.3.2003corresponding to assessment year 2003-04. Orders in thisregard shall be passed and the excess tax paid by thepetitioner refunded to the petitioner, as expeditiously aspossible, at any rate, within a period of three months fromthe date of receipt of a copy of this judgment. Sd/- S. SIRI JAGAN JUDGE//True copy// P.A. TO JUDGE shg/