Wp(C)/28909/2013 Of Kerala State Electronics Development Corporation v. The Assistant Commissioner Of Income Tax

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MRS. JUSTICE ANU SIVARAMAN THURSDAY, THE 15 DAY OF JUNE 2023 / 25TH JYAISHTA, 1945 WP(C) NO. 28909 OF 2013 PETITIONER: KERALA STATE ELECTRONICS DEVELOPMENT CORPORATIONKELTRON HOUSE, VELLAYAMBALAM, THIRUVANANTHAPURAM, REPRESENTED BY ITS MANAGING DIRECTOR C.PRASANNA KUMAR. BY ADVS.SRI.JOSEPH MARKOSE (SR.)SRI.V.ABRAHAM MARKOSSRI.ABRAHAM JOSEPH MARKOSSRI.ABRAHAM VARGHESE THARAKANSRI.BINU MATHEWSRI.TOM THOMAS KAKKUZHIYIL RESPONDENTS: 1THE ASSISTANT COMMISSIONER OF INCOME TAXCIRCLE 1 (1), THIRUVANANTHAPURAM 695 001. 2THE COMMISSIONER OF INCOME TAXTHIRUVANANTHAPURAM 695 011. 3CENTRAL BOARD OF DIRECT TAXESNORTH BLOCK, NEW DELHI 110 001 REPRESENTED BY ITS CHAIRMAN. BY ADV SMT.M.A.ZOHRA, SC, KELTRON BY SRI.JOSE JOSEPH-SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON15.06.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ANU SIVARAMAN, J. ========================= W.P.(C) No.28909 of 2013 ========================= Dated this the 15[th] day of June, 2023 JUDGMENT This writ petition is filed seeking the following reliefs: “(i) call for the records relating to Exhibit P2 and P11 andto quash the same by the issue of a writ of certiorari orother appropriate writ, direction or order and direct theRespondents to complete the assessment for 1997-98 on(ii) direct the Respondents to accept on record the auditedaccounts for assessment year 1997-98 and consider thereturn filed for Assessment year 1997-98 as valid andcomplete the assessment on merits. (iii) direct the Respondents to permit the Petitioner tocarry forward loss claimed for assessment year 1997-98;” 2.Heard the learned counsel for the petitioner and thelearned counsel appearing for the respondents. 3. It is submitted by the learned counsel for the petitioner that the petitioner is a Government Companyengaged in the business of manufacturing and trading ofelectronic goods. It is an assessee under the Income Tax Acton the files of the 1[st] respondent. It is submitted that onaccount of huge losses, the petitioner is a sick company under the provisions of the Sick Industrial Companies (SpecialProvisions) Act, 1985 and a reference under Section 16 waspending with the BIFR, New Delhi as Case No.605 of 2002. Itis stated that a scheme has also been sanctioned in 2012 inrespect of the Company. It is contended that with respect tothe assessment year 1997-98, the petitioner had filed thereturn within the stipulated period. However, being aGovernment Company, its accounts are audited by theChartered Accountants appointed by the Comptroller andAuditor General and since there was a delay in theappointment of the Auditor, the return was accompanied byprovisional accounts and not by audited accounts. However,by Exhibit P2 intimation dated 19.02.1999, the 1[st] respondentinformed the petitioner that the return based on provisionalaccount is an invalid return, under Section 139(9) of theIncome Tax Act, 1961. It is submitted that after the accountswere duly audited, the petitioner filed the audited accounts on26.09.2002. It is stated that in Exhibit P3, the petitioner hadexplained the delay and had sought for rectification of thereturns and the reopening of the assessment. However, no orders were passed thereon. The petitioner filed an appealbefore the Commissioner of Income Tax (Appeals) on02.12.2002 and also filed a revision petition before the 2[nd]respondent under Section 264 of the Income Tax Act. It isstated that by Exhibit P4, the revision was dismissed on theground that an appeal is pending before the Commissioner ofIncome Tax (Appeals). Thereafter, the Commissioner ofIncome Tax (Appeals), by Exhibit P5 order, considered theappeal and dismissed the same. 2[nd] appeal preferred beforethe Income Tax Appellate Tribunal was rejected, since ExhibitP2 order treating return as invalid was found to be not anappealable order. 4.Thereafter, the petitioner preferred a further revisionas Exhibit P7 and also filed a petition before the Central Boardof Direct Taxes as Exhibit P8. It is submitted that thepetitioner had produced material before the RevisionalAuthority with regard to the delay in filing the auditedaccounts. However, by Exhibit P11 order dated 12.08.2013,the revision was also rejected on the ground that since theorder had already been subject matter of an appeal, the 2[nd] respondent could not consider the revision under Section 264.It is the contention of the petitioner that the rejection of theappeals and revision were on technicalities and that thecontentions on merits raised by the petitioner had not beenconsidered. 5.Learned counsel appearing for the respondentssubmits that the facts are evident from the materials placedon record. It is submitted that the BIFR proceedings had beeninitiated only in the year 2002 and the contentions raised bythe petitioner with regard to the delay in furnishing auditedaccounts in respect of the assessment year 1997-98 iscompletely untenable. It is further contended that since thereturn was defective as it was not accompanied by auditedaccounts as required under Section 44A, the matter wasimmediately informed to the petitioner by the AssessingOfficer by Deficiency Letter dated 10.08.1998. On 26.08.1998,the Managing Director of the petitioner had informed thataudit of its accounts is to be taken up in a month and a furthertime of three months was sought for curing the defects. Sincethe audited accounts were not produced and the defect in the Learned counsel appearing for the respondents return was not rectified, even within the three months assought for, another letter was issued by the Assessing Officeron 29.12.1998, informing the assessee that the return wouldbe treated as invalid under Section 139(9). Further threemonths time was sought for by the Managing Director byletter dated 15.01.1999. By Exhibit P2 letter dated19.02.1999, the petitioner was informed by the AssessingOfficer that the return of income filed in respect of theassessment year 1997-98, based on provisional accounts isinvalid under Section 139(9). It is submitted that it wasthereafter that a letter dated 26.02.2002 was filed before theAssessing Officer asking to rectify the proceedings, enclosing acopy of the audited accounts. It is stated that by Exhibt P3letter dated 26.09.2002, the petitioner had requested tocomplete the assessment and to issue refund as per the TDScertificates originally filed. It is stated that an appeal waspreferred to the Commissioner of Income Tax (Appeals) asagainst Exhibit P2 on 02.12.2002. While so, the petitioner hadalso approached the Revisional Authority with a revision,which was rejected on the ground that the appeal filed by the assessee before the Commissioner of Income Tax (Appeals)seeking the same relief is pending. It was also found inExhibit P4 that the last date for completing assessment on thebasis of the voluntary requirement for the assessment year1997-98 was 31.03.1999 and that it was only after Exhibit P2intimation had been issued that the defect was attempted tobe cured on 26.02.2002. It is, therefore, contended that nosteps could, thereafter, have been taken by the AssessingAuthority or the Appellate or Revisional Authorities in thematter. It is contended that after suffering Exhibits P5 and P6orders, the petitioner had again preferred a revision, whichhas been considered and rejected by Exhibit P11. It issubmitted that in the light of the admitted facts, the rejectionof the revision was perfectly legal and valid and no steps couldhave been taken since the return stood rejected on19.02.1999 and no rectification was attempted on or before31.03.1999 which was the last date in respect of theassessment year. 6.Having considered the contentions advanced, Inotice that the petitioner had been given ample opportunity to produce the audited accounts and to rectify the defect in thereturn submitted on 28.11.1997. Deficiency letters dated10.08.1998 and a letter intimating that return is liable to berejected as defective dated 29.12.1998 have been issued tothe petitioner which is not in dispute. It is also not in disputethat the audited accounts were produced only after Exhibit P2on 26.02.2002, long after the last date for filing the rectifiedreturns in respect of the year in question. In the above factual situation, i am of the opinionthat the contention raised by the petitioner cannot beaccepted. I do not find any patent illegality or irregularity inthe orders passed by the original, Appellate or RevisionalAuthorities. The writ petition fails and the same is accordinglydismissed. Sd/-ANU SIVARAMANJUDGE SSK/15/06 APPENDIX PETITIONER EXHIBITS P1 EXHIBIT P1. COPY OF THE SUMMARY RECORD OF THE PROCEEDINGS BEFORE THE BIFR HELD ON 2012.2012 AND THE SANCTIONED SCHEME. P2EXHIBIT P2. COPY OF THE INTIMATION DATED 19.2.99 OF THE IST RESPONDENT INFORMING THE PETITIONER THAT THE RETURN BASED ON PROVISIONAL ACCOUNT IS INVALID. P3EXHIBIT P3. COPY OF THE PETITIONERS LETTER DATED 26.9.02 FILING AUDITED ACCOUNTS AFTER CURING THE DEFECTS. P4EXHIBIT P4. COPY OF THE ORDER DATED 10.3.04 PASSED BY THE 2ND RESPONDENT. P5EXHIBIT P5. COPY OF THE ORDER DATED 04.01.11PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) 1, THIRUVANANTHAPURAM DISMISSING THE APPEAL FILED BY THE PETITIONER. P6EXHIBIT P6. COPY OF THE APPELLATE ORDER DATED 21.6.12 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, KOCHI BENCH. P7EXHIBIT P7. COPY OF THE REVISION PETITION DATED 25.7.12 FILED BY THE PETITIONER BEFORETHE 2ND RESPONDENT.DATED 25.7.12 FILED BY THE PETITIONER BEFORETHE 2ND RESPONDENT. P8EXHIBIT P8. COPY OF THE PETITION DATED 26.5.11 FILED BY THE PETITIONER BEFORE THE 3RD RESPONDENT. P9EXHIBIT P9. COPY OF THE PETITIONERS LETTER DATED 23.5.13 SUBMITTED BEFORE THE 2ND RESPONDENT. P10EXHIBIT P10. COPY OF THE CIRCULAR NO.367 DATED 26.5.1983 ISSUED BY THE 3RD RESPONDENT.DATED 26.5.1983 ISSUED BY THE 3RD RESPONDENT. P11EXHIBIT P11. COPY OF THE IMPUGNED ORDER DATED 12.8.13 PASSED BY THE 2ND RESPONDENT DISMISSING THE REVISION PETITION FILED BY THE PETITIONER.