A.YOUNUS KUNJU, YOUNOUS CASHEW INDUSTRIE V. THE COMMISSIONER OF INCOME TAX, TVPM

ITA/302/2010

AI Insights

The case involves A. Younus Kunju of Younous Cashew Industries, who appealed against the order of the Income Tax Appellate Tribunal, Cochin Bench, which dismissed his appeal without considering the merits. The original assessment for the year 1985-86 was completed under Section 143(3) of the Income Tax Act, and subsequent proceedings were influenced by an order from the Settlement Commission in Chennai. The assessing officer, following the Settlement Commission's order, issued a rectification order under Section 154, which included the levy of interest under Section 220(2) and withdrawal of interest under Section 244(1A). The Commissioner of Income Tax (Appeals) upheld this rectification, leading to the appeal before the Tribunal, which was dismissed on procedural grounds rather than substantive ones. The High Court's decision emphasized the Tribunal's obligation to address the appeal on its merits, given the prior substantive ruling by the Commissioner of Income Tax (Appeals).

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 767694 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 03-12-2013
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH
• Assessee Lawyers: S RAJ; C T SUJA; P DANIEL
• Keywords: Assessment Year 1985-86; Income tax appeal; Interest Levy; Rectification Order; Settlement commission
• Section: 143(3); 154; 220(2); 245C; 246A(1)(c); 244(1)(a)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HON'BLE THE CHIEF JUSTICE DR. MANJULA CHELLUR & THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE TUESDAY, THE 3RD DAY OF DECEMBER 2013/12TH AGRAHAYANA, 1935 ITA.No. 302 of 2010 ( ) ------------------------------- AGAINST THE ORDER IN ITA 215/ COCH/2007 of INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, DATED 26-02-2009 ------------ APPELLANT(S)/APPELLANT/ASSESSEE: --------------------------------------------------------- A.YOUNUS KUNJU, YOUNOUS CASHEEW INDUSTRIES, VADAKKEVILA, KOLLAM. BY ADVS.SRI.S.ARUN RAJ SMT.C.T.SUJA SRI.P.DANIEL RESPONDENT(S)/RESPONDENT/REVENUE: ------------------------------------------------------------- COMMISSIONER OF INCOME TAX, THIRUVANANTHAPURAM. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 03-12-2013, ALONG WITH ITA. 303/2010, ITA. 310/2010, ITA. 311/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: PJ ITA.No. 302 of 2010 ( ) ------------------------------- APPENDIX PETITIONERS' ANNEXURES ---------------------------------------- ANNEXURE A: COPY OF THE SETTLEMENT COMMISSIONS ORDER DATED 29/6/93 PASSED UNDER SECTION 245D (4) OF THE ACT. ANNEXURE B: COPY OF THE ORDER UNDER SECTION 154 OF THE ACT DATED 18/7/2006 ISSUED BY THE ASSESSING OFFICER ANNEXURE C: COPY OF THE ORDER DATED 8/12/2006 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-III, TRIVANDRUM. ANNEXURE D: CERTIFIED COPY OF THE ORDER DATED 26/2/2009 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH COCHIN FOR THE ASSESSMENT YEAR 1985-86. RESPONDENTS' ANNEXURE ----------------------------------------- NIL. / TRUE COPY / P.S. TO JUDGE PJ Manjula Chellur, C.J. & A.M. Shaffique, J. - - - - - - - - - - - - - - - - - - - - - - - - - - - - I.T.A. No. 302 OF 2010 - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 3rd day of December, 2013 JUDGMENT Manjula Chellur, C.J. The relevant assessment year involved in the above appeal is 1985-86. The issue revolves around the completion of assessment subsequent to disposal of an application filed by the appellant assessee under Section 245C by the Settlement Commission at Chennai. Original assessment came to be completed under Section 143(3) of the Income Tax Act on 28.03.1988 so far as this particular assessment year. Meanwhile, Settlement Commission after admitting the application filed by the assessee settled the matter as per order dated 29.06.1993. 2. In pursuance of the order of the Settlement Commission, Chennai, the assessing officer completed the assessment proceedings and passed an order dated 26.06.1994. A notice came to be issued by the assessing officer under Section 154 and proceeded to levy interest apart ITA No. 302 of 2010 -:2:- from indicating the correct share of income from a partnership firm in which assessee was a partner and opined that no objection statement came to be filed by the appellant assessee. This order of the assessing officer, i.e. the rectification order after levying interest under Section 220(2) further withdrawing the interest earlier granted under Section 244(1)A came to be challenged before the Commissioner of Income Tax(Appeals). 3. The Commissioner of Income Tax(Appeals) dismissed the appeal considering the grievance of the appellant assessee with regard to levying interest under Section 220(2) in a detailed discussion at paragraph 5 of the order of Commissioner of Income Tax(Appeals). This order came to be challenged before the Appellate Tribunal raising several grounds. However, without touching the merits of the orders passed by the Commissioner of Income Tax(Appeals), Tribunal opined that the proceedings initiated by the assessing officer were the consequence of orders by Settlement Commission and Tribunal cannot examine any of the issues involving the matter subjected ITA No. 302 of 2010 -:3:- to the assessment. This order of the Tribunal is under challenge before us. 4. The relevant provision that has to be considered is Section 246A(1)(c) which reads as under: “246A. Appealable orders before Commissioner(Appeals).- (1) Any assessee aggrieved by any of the following orders (whether made before or after the appointed day) may appeal to the Commissioner(Appeals) against- xx xx xx xx (c) an order made under Section 154 or Section 155 having the effect of enhancing the assessment or reducing a refund or an order refusing to allow the claim made by the assessee under either of the said sections;” 5. It is very clear from reading of the above provision that the assessee, aggrieved by an order made under Section 154, can file appeal only before Commissioner of Income Tax (Appeals) which the appellant assessee has adopted in the above case and the Commissioner of Income Tax(Appeals) has also considered the appeal on merits and disposed of the same as ITA No. 302 of 2010 -:4:- indicated above. Hence, we are of the opinion, there was no justification on the part of the Tribunal to opine that the appeal before the Tribunal was not maintainable. As indicated above, the appeal filed before the Commissioner of Income Tax(Appeals) was under Section 154 of the Act and the Commissioner of Income Tax(Appeals) correctly disposed of the matter having jurisdiction, therefore, the Tribunal ought to have decided the appeal on merits after entertaining the same. With these observations, the order of the Tribunal dated 26.02.2009 is set aside remitting back the matter to Tribunal for consideration on merits. Manjula Chellur, Chief Justice. A.M. Shaffique, Judge. ttb/03/12 ITA No. 302 of 2010 -:5:- "