AYYAPPA ROLLER FLOUR MILLS LTD. V. INCOME TAX OFFICER

WP(C)/5784/2021

AI Insights

The case involves Ayyappa Roller Flour Mills Ltd., which contested the initiation of suo motu revision proceedings by the Principal Commissioner of Income Tax against an assessment order passed by the Income Tax Officer. The assessment related to the sale of properties by the petitioner in the assessment years 2011-2012 and 2012-2013. Initially, the assessment was modified on appeal, but the department challenged it, leading to a directive for a fresh decision based on a valuation report from the District Valuation Officer (DVO). The petitioner argued that the show-cause notice for revision was unjustified as the assessment had been conducted following the tribunal's directions. However, the court upheld the revisional authority's decision, emphasizing the legal provision for such revisions and the opportunity for the petitioner to present their case during the proceedings.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 753142 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 05-03-2021
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH
• Assessee Lawyers: P SATHISAN; DONA AUGUSTINE
• Keywords: Assessment Order; DVO; Show cause notice; Suo motu revision; Valuation report
• Section: 263

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE A.M.BADAR FRIDAY, THE 05TH DAY OF MARCH 2021 / 14TH PHALGUNA, 1942 WP(C).No.5784 OF 2021(W) PETITIONER: AYYAPPA ROLLER FLOUR MILLS LTD. DOOR NO.V/679-C, INDUSTRIAL DEVELOPMENT AREA, MUPPATHADAM P.O., EDAYAR, COCHIN-683 110, REPRESENTED BY THE PRINCIPAL OFFICER, S.K.GUPTA, MANAGING DIRECTOR, AGED 80 YEARS, S/O.B.D.GUPTA, RESIDING AT SAKET, JACOB VALLANAT ROAD, ERNAKULAM NORTH P.O., COCHIN, PIN-682 018. BY ADVS. SRI.P.SATHISAN SMT.DONA AUGUSTINE RESPONDENTS: 1 INCOME TAX OFFICER CORPORATE WARD-1(1), OFFICE OF THE JOINT COMMISSIONER OF INCOME TAX, CORPORATE RANGE I, KOCHI, 5TH FLOOR, C.R. BUILDING, IS PRESS ROAD, ERNAKULAM NORTH P.O., COCHIN-682 018. 2 THE PRINCIPAL COMMISSIONER OF INCOME TAX, OFFICE OF THE PRINCIPAL COMMISSIONER OF INCOME TAX, KOCHI-1, CENTRAL REVENUE BUILDING, I.S.PRESS ROAD, ERNAKULAM NORTH P.O., COCHIN-682 018. SC- SRI. JOSE JOSEPH THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 05.03.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.5784 OF 2021(W) 2 JUDGMENT Dated this the 5th day of March 2021 Heard the learned counsel for the petitioner. 2. Learned counsel for the petitioner submits that the petitioner has sold its properties as per registered sale deed during the assessment year 2012-2013. However, the registered sale agreement was stating that the possession was handed over in the previous year and therefore, the assessment was preponed to assessment year 2011-2012. The learned counsel for the petitioner submits that the assessment order was made by the assessing officer and feeling aggrieved by the same, the petitioner preferred an appeal before the Commissioner of Income Tax. The assessment order was modified in appeal. However, the department has filed their appeal before the Income Tax Appellate Commissioner and accordingly, the order at Ext.P1 came to be passed. The learned counsel for the petitioner submits that the learned Tribunal was pleased to direct the assessing officer to get the valuation report for the impugned property from the DVO and to decide the issue afresh. My attention was drawn to the order of the learned ITAT at Ext.P1. With this, it is argued that the order of the Income Tax Appellate Commissioner was duly complied and the assessment order at Ext.P2 was passed on 06/05/2020 by the WP(C).No.5784 OF 2021(W) 3 Income Tax Officer by considering the report of the DVO. The learned counsel for the petitioner submits that without there being any reason, the 2nd respondent-Principal Commissioner of Income Tax has decided to initiate suo motu revision by contending that the order of the Income Tax Officer is erroneous as it is prejudicial to the interest of the Revenue. The learned counsel for the petitioner drew my attention to the notice of suo motu revision proceedings issued by the 2nd respondent which is at Ext.P4. It is argued that the said notice is not in consonance with the powers of revision as stated in Section 263 of the Income Tax Act. The learned counsel for the petitioner argued that it is not a case of an order being passed without making an enquiry or verification which should have been made. The learned counsel argued that the assessment order is passed by the Income Tax Officer on the basis of the Appellate Order passed by the learned Income Tax Appellate Tribunal and the valuation report was called from the DVO. The same was considered and that is how, the assessment was done, vide order at Ext.P2. Therefore, in submission of the learned counsel for the petitioner, the 2nd respondent-Principal Commissioner of Income Tax is not justified in taking up suo motu revisional proceedings by a show cause notice at Ext.P4. 3. The learned standing counsel for the respondents opposed WP(C).No.5784 OF 2021(W) 4 the petition by contending that the matter is only at the show-cause notice and no final order is passed. 4. I have considered the submissions so advanced and also perused the impugned order at Ext.P4. The impugned order at Ext.P4 is merely a show-cause notice. It is averred in the show-cause notice that the valuation report of the DVO, Thiruvananthapuram is reportedly incorrect as communicated by the Asst. Engineer and the Chief Engineer vide letter dated 19.05.2020. 5. The learned counsel for the petitioner submits that the said report dated 19.05.2020 was not before the Assessment Officer who has passed the Assessment order on 06.05.2020, and as such it cannot be relied upon for exercising revisional powers. However, though the said report might not be before the assessing officer, the Principal Commissioner can certainly use such report for exercising suo moto revisional jurisdiction. The matter is at the stage of show-cause notice. The 2nd respondent has proposed to revise the assessment order at Ext.P2 and for that purpose, objections of the petitioner are invited. Opportunity of hearing is also to be granted to the petitioner vide show- cause notice at Ext.P4. Thus the petitioner shall have full opportunity to put up its case before the revisional authority. At this stage, it cannot be said that the 2nd respondent revisional authority is biased WP(C).No.5784 OF 2021(W) 5 and is bent upon to decide the matter adversly. Official acts are regularly done in wise principle of law and hence without there being any material on record, it cannot be said that issuance of show-cause notice reflects nothing but a biased attitude of the 2nd respondent. This Court hope and expect that the 2nd respondent shall determine the issue in accordance with the provision of law without being influenced by the fact that the petitioner had approached this Court by filing writ petition. Hence, I do not feel it proper to interfere in the show-cause notice issued by the revisional authority, which has the power to revise the assessment order suo motu. The petition therefore fails and the same is accordingly dismissed. Sd/- A.M.BADAR Nsd //true copy// PA to Judge JUDGE WP(C).No.5784 OF 2021(W) 6 APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE ORDER DATED 09.05.2019 IN ITA NO.458/COCH/2018 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, COCHIN. EXHIBIT P2 TRUE COPY OF ASSESSMENT ORDER NO.AACCA684OM/CORP WARD I(1) EKM/2019-20 DATED 06.05.2020 PASSED BY THE 1ST RESPONDENT. EXHIBIT P3 TRUE COPY OF THE RELEVANT EXTRACT OF ASSESSMENT ORDER DATED 27.03.2014. EXHIBIT P4 TRUE COPY OF THE NOTICE F NO.PCIT01/CHN/R/263/17/2020-21 DATED 08.02.2021 ISSUED BY THE 2ND RESPONDENT. "