M/S.LFC HIRE PURCHASE CO. LTD. V. THE ASSISTANT COMMISSIONER OF INCOME TAX

WP(C)/26950/2006

AI Insights

The case involves M/S. LFC Hire Purchase Co. Ltd., which challenged an order by the Commissioner of Income Tax under the Interest Tax Act. The petitioner argued that hire purchase charges should not be taxed, citing a Supreme Court decision. However, the Commissioner rejected the petitioner's revision due to an unexplained delay in filing. The High Court of Kerala dismissed the writ petition, agreeing with the Commissioner on both the taxability of the charges and the inadequacy of the delay explanation.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 755806 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 03-02-2014
• Assessment Year: misc
• Other Referred Cases: Charanjit Singh Chadha v. Sudhir Mehra, Commissioner of Income Tax vs. Kerala State Financial Enterprises Ltd., N. Balakrishanan vs. M.Krishnamurthy
• Laws Referred To: Interest Tax Act, Article 141 of the Constitution of India
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH
• Assessee Lawyers: DALE KURIEN
• Keywords: Assessment Order; Delay condonation; Interest Tax; Revision petition; Supreme Court decision
• Section: 20

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE P.R.RAMACHANDRA MENON MONDAY, THE 3RD DAY OF FEBRUARY 2014/14TH MAGHA, 1935 WP(C).No. 26950 of 2006 (G) ---------------------------- PETITIONER: ---------- M/S. LFC HIRE PURCHASE CO. LTD., MANNATH BUILDING, MAIN ROAD, SHORNUR REPRESENTED BY ITS MANAGING DIRECTOR SHRI. K.P.ACHUTHAN NAIR. BY ADV. SRI.DALE P.KURIEN RESPONDENTS: ------------ 1. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-I, PALAKKAD. 2. THE COMMISSIONER OF INCOME TAX, THRISSUR. R BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 03-02-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 26950 of 2006 (G) APPENDIX PETITIONER'S EXHIBITS: P1: TRUE COPY OF THE ASSESSMENT ORDER DATED 12.3.2001. P2: TRUE COPY OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) DATED 27.4.2004. P3: TRUE COPY OF THE PETITION FOR REVISION DATED 24.1.2005. P4: TRUE COPY OF THE DELAY CONDONATION DATED 24.1.2005 SENT TO THE COMMISSIONER OF INCOME TAX, THRISSUR. P5: TRUE COPY OF THE ORDER DATED 23.3.2006. RESPONDENTS' EXHIBITS: NIL //TRUE COPY// PA TO JUDGE Scl. P.R. RAMACHANDRA MENON, J. .............................................................................. W.P.(C)No.26950 OF 2006 ......................................................................... Dated this the 3rd February, 2014 J U D G M E N T Ext.P5 order passed by the second respondent/Commissioner of Income Tax, under Section 20 of the Interest Tax Act is the subject matter of challenge in this writ petition. The case of the petitioner is that Ext.P1 assessment order was passed by the concerned statutory authority in respect of the assessment year. As a matter of fact, the assessing authority went wrong in mulcting liability upon the petitioner in so far as the Hire Purchase charges were not liable to be taxed under the Interest Act; more so in view of the decision rendered by the Apex Court in Charanjit Singh Chadha v. Sudhir Mehra [(2001)7 SCC 417]. (see paragraph 5). 2. The case of the petitioner is that the petitioner had already approached the appellate authority by filing necessary appeals in respect of the pre-assessment years 1995-96 to 1997-98 also citing the law declared by the Supreme Court , which is the law of the land by virtue of Article 141 of the W.P.(C)No.26950 OF 2006 2 Constitution of India. After considering the merits involved, the appellate authority allowed the appeal as discernible from Ext.P2. In respect of the subsequent assessment year 1999-2000, instead of filing the appeal the petitioner chose to approach the Commissioner/second respondent by filing Ext.P3 along with Ext.P4 petition for condoning the delay. 3. The second respondent/Commissioner of Income Tax however declined interference as per Ext.P5 observing that Revision Petitions were filed about two years or more after passing the assessment orders and that the reason stated for condoning the delay was not at all satisfactory. 4. Heard the learned Counsel for the petitioner and the learned counsel for the respondents. 5. The learned Counsel for the respondents submits that the issue stands answered in favour of the Department by virtue of the law declared by the Division Bench of this Court as per the decision in Commissioner of Income Tax vs. Kerala State Financial Enterprises Ltd. [(2008) 220 CTR 286]. 6. The learned Counsel for the petitioner however points W.P.(C)No.26950 OF 2006 3 out that the said decision rendered by the Division Bench has not referred to the verdict passed by the Supreme Court. The question to be considered is whether the merits should be examined by this Court in view of the specific observation made by the second respondent/Commissioner of Income Tax in Ext. P5, in so far as the explanation for the delay is concerned. Explanation offered, that the party came to know about the position of law only much later when the appellate order was received on 24.05.2004, has been considered and it has been found as illogical for the reason that the very same assessee had approached the appellate authority in respect of the previous years, citing the decision rendered by the Apex Court and it was accordingly, that favourable orders were obtained. Though the extent of delay is not the matter which is to be weighed, but the reason, as made clear by the Apex Court as per the decision rendered in N. Balakrishanan vs. M.Krishnamurthy (1998 (7) SCC 123) , the second respondent/the Commissioner of Income Tax has categorically found that the reason/explanation offered is not acceptable. As it stands so, this Court finds that W.P.(C)No.26950 OF 2006 4 the order passed by the second respondent/the Commissioner of Income Tax does not call for any interference invoking the discretionary jurisdiction of this Court. The writ petition is dismissed accordingly. P.R.RAMACHANDRA MENON JUDGE lk "