DR. G.PUSHPANGATHAN V. INCOME TAX OFFICER

WA/726/2007

AI Insights

The case involves a group of lecturers from various colleges in Kollam, who received arrears of salary that were partially credited to their Provident Fund (PF) accounts. They claimed benefits under section 89(1) of the Income Tax Act for spreading the arrears over previous years, which included a deduction for the amount deposited in their PF accounts. The Income Tax Officer disallowed this claim, leading to an appeal that was decided in favor of the lecturers by the CIT (Appeals). However, following a High Court decision in another case, the assessments were reopened under section 147 of the Income Tax Act, which the lecturers challenged through writ petitions. The High Court found that reopening the assessments was not permissible as the issues had been conclusively decided in the earlier appeals.

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 758896 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 08-06-2012
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: P K R MENON; JOSE JOSEPH
• Assessee Lawyers: S HANEEFF
• Keywords: Arrears of Salary; Income Tax; PF Account; Section 143(1)(a); Section 147; Section 89(1)
• Section: 147; 143(1)(a); 89(1)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR.JUSTICE C.K.ABDUL REHIM FRIDAY, THE 8TH DAY OF JUNE 2012/18TH JYAISHTA 1934 WA.No. 726 of 2007 ( ) IN WPC/34173/2006 ----------------------------------------- AGAINST THE ORDER/JUDGMENT IN WPC.34173/2006 DATED 20-02-2007 APPELLANT(S)/PETITIONERS IN THE WPC: ----------------------------------- 1. DR. G.PUSHPANGATHAN, LECTURER, SELECTION GRADE, S.N.COLLEGE KOLLAM, RESIDING AT 'SAKTHYEM', CHERIKSHETRA NAGAR KILIKOLLUR. 2. SMT.V.SUNANTHAKUMARI, LECTURER, SELECTION GRADE, DEPARTMENT OF PHILOSOPHY, S.N.COLLEGE, KOLLAM RESIDING AT 'ASWATHI', VIDHYA NAGAR, HOUSE NO.18, PATHATHANAM, KOLLAM. 3. K.SHAJI, LECTURER, SELECTION GRADE, S.G.COLLEGE KOTTARAKKARA, RESIDING AT 'KUZHIYATHU VEEDU' KARAVALLOOR P.O., PUNALUR P.O., KOLLAM. 4. DR. N.JAYADEVAN, LECTURER, SELECTION GRADE, S.N.COLLEGE KOLLAM, RESIDING AT 'HARSHM', PATHATHANAM KOLLAM. 5. B.SURESH KUMAR, LECTURER, SELECTION GRADE, S.N.COLLEGE KOLLAM, RESIDING AT 'THARAYIVEEDU', ASRAHAMAM P.O. KOLLAM. 6. DR. MARY TRESA P. MIRANDA, LECTURER, SELECTION GRADE, FMN COLLEGE KOLLAM, RESIDING AT 'GALAPAGOS', AMMAN NAGAR PATTATHANAM, KOLLAM. 7. N.UNNIKRISHNAN, LECTURER, SELECTION GRADE, S.N.COLLEGE CHERTHALA, RESIDING AT 'CHEMPAKASSERI' JAWAHAR NAGAR, PATTATHANAM P.O. BY ADV. SRI.S.MUHAMMED HANEEFF WA.No. 726 of 2007 ( ) -2- RESPONDENT(S)/RESPONDENTS IN WPC: --------------------------------- 1. INCOME TAX OFFICER, WARD NO.2, OFFICE OF THE ADDL. COMMISSIONER OF INCOME TAX, KOLLAM RANGE. 2. COMMISSIONER OF INCOME TAX (APPEALS), AYAKAR BHAVAN, KAVADIAR, THIRUVANANTHAPURAM. BY ADV. SRI.P.K.R.MENON,SR.COUNSEL,GOI(TAXES) BY ADV. SRI.JOSE JOSEPH, SC FOR IT THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 08-06-2012, ALONG WITH WPC.33616/2006, WPC.6881/2008, WPC.8926/2008, WPC.9347/2008, WPC.13820/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: sou. C.N. RAMACHANDRAN NAIR & C.K. ABDUL REHIM, JJ --------------------------------------------------------------------------- W.A. No.726 of 2007, W.P(C).No.33616 of 2006, W.P(C).No.6881 of 2008, W.P(C).No.8926 of 2008, W.P(C).No.9347 of 2008, W.P(C).No.13820 of 2008, ------------------------------------------------------------------------------ Dated 8th June, 2012 J U D G M E N T Ramachandran Nair, J The question raised in the writ appeal and in the connected WP(c)s is one and the same. We, therefore heard all the cases together and proceed to dispose of the same by common judgment. 2. We have heard counsel for respondent/petitioners and also Standing Counsel for Income Tax Department. The dispute arose when the assessees in these cases got arrears of salary during the previous assessment year 2004-2005. Full amount was not paid in cash to the assessees but substantial portion of the arrears were credited in the PF account on which the assessees had no choice. In the returns filed, assssees claimed sec.89 (1) -benefit that spreading over of arrears to back years. However, in that process assessees claimed deduction of the W.A. No.726/07 & connections 2 entire amount deposited in PF account as deduction. The assessing Officer treated the claim as inadmissible and issued proceedings under section 143(1)(a) of the Act disallowing the claim. This was challenged in appeal. The CIT (appeals) held that deduction cannot be made by way of prima facie adjustment under section 143(1)(a) of the Act. Further he proceeded to consider the claim on merit and held in favour of the assessees. The Department did not challenge the orders of the CIT (appeals), which means that those orders have become final. However, when High Court decided another case, holding disentitlement of the employees, the assessments were reopened under section 147 of the Act, which was challenged in writ petitions. 3. After hearing both sides, we find that writ appeal and the WP(c)s have to be allowed because there is no provision under section 147 of the IT Act to reopen the orders of CIT (appeals) on issues decided against the Department. In this case, the reopening proposed is to bring to tax same income in respect of which Commissioner decided the issue in appeal filed by assessees. So much so Revenue could have only file an appeal with a delay condonation petition if there was delay. However, no W.A. No.726/07 & connections 3 proceedings under section 147 is maintainable against orders of the CIT (Appeals). Hence we allow the writ appeal by vacating the judgment of the single Judge and allow all the W.P(c)s by vacating the impugned orders and by restoring the orders of CIT (appeals) which have become final. Sd.- C.N. RAMACHANDRAN NAIR, JUDGE Sd/- C.K. ABDUL REHIM, JUDGE. Sou. // True copy // P.A. to Judge. "