M/S.KERALA STATE CIVIL SUPPLIES CORPN LTD,COCHIN V. THE ACIT, COCHIN

SA 19/COCH/2017

AI Insights

The case involves Kerala State Civil Supplies Corporation Ltd. appealing against the order of the CIT(A)-1, Cochin, which pertained to the reopening of their income tax assessment for the year 2010-11 under sections 143(3) read with section 147 of the Income Tax Act, 1961. The primary legal contention raised by the assessee was the challenge to the validity of the reopening of the assessment, which the Tribunal found to be not sustainable in law based on the principles laid down in various precedents. The Tribunal noted that the reasons provided for reopening were vague and did not specify how the income had escaped assessment nor did they quantify the escaped income, leading to the conclusion that the reopening was invalid.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 23476 (ITAT-COCHIN)
• Duration Of Justice: 7 year(s) 7 month(s) 16 day(s)
• Appeal Type: Others
• Pronouncement Date: 07-11-2024
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 12-01-2021
• Assessment Year: 2010-2011
• Appeal Filed On: 21-03-2017
• Other Referred Cases: NTPC Ltd. vs. CIT [1998] 229 ITR 383 (SC), All Cargo Global Logistics Ltd. vs. ACIT [2012] 137 ITD 287 (Mum.) (SB), Hindustan Lever Ltd. vs. RB Wadkar [2004] 268 ITR 332 (Bom.), Ramna Pinto vs. DCIT [2024] 464 ITR 305 (Bom.), Revolution Forever Marketing (P.) Ltd. vs. ITO [2019] 413 ITR 400 (Del.), CIT vs. Kelvinator India Ltd. [2010] 310 ITR 561 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S. PANDIAN
• Assessee Lawyers: SATYANARAYANAN; C.A
• Keywords: Application of stay
• Section: 148

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN Before SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ITA No.95/Coch/2017 ALONG WITH Stay Application No.19/Coch./2017 Assessment Year – 2010-2011 M/s.Kerala State Civil Supplies Corpn. Ltd., Kochi. PAN AAACK6767F C/o.Varma & Varma, C.As COCHIN – 19. KERALA vs., The Assistant Commissioner of Income Tax, Circle-1(2) KOCHI, KERALA. (Appellant) (Respondent) For Assessee : Shri Satyanarayanan, C.A For Revenue: Dr.S.Pandian, CIT-DR Date of Hearing: 23.08.2024 Date of Pronouncement 07.11.2024 O R D E R PER BENCH : This assessee's appeal ITA.No.95/Coch/2017 along with stay application SA.No.19/Coch./2017, arise against the order of the learned CIT(A)-1, Cochin, Cochin's order in Appeal No.ITA.292/R-4/E/CIT(A)-1/2016-17, dated 31st January, 2017, for the assessment year 2010-11, in ITA No.95 & SA No.19/Coch/2017 . Kerala State Civil Supplies Corpn. Ltd. 2 proceedings u/sec.143(3) r.w.s.147 of the Income Tax Act, 1961 (in short \"the Act\"). Heard both the parties. Case file perused. 2. We advert to the assessee's first and foremost legal ground challenging validity of the impugned reopening as not sustainable in law. 3. The Revenue raises it's vehement technical objection at this stage that such a recourse of an additional ground is not permissible. We find that the assessee has already placed on record the reopening reasons and therefore, we quote NTPC Ltd., vs. CIT [1998] 229 ITR 383 (SC) and All Cargo Global Logistics Ltd., vs. ACIT [2012] 137 ITD 287 (Mum.) (SB) holding that the tribunal could very well entertain such an additional ground going to root of the matter provided all the facts form part of the record, to reject the Revenue's foregoing objection in very terms. 4. We next note that the Assessing Officer had recorded the following reasons to believe that the assessee's ITA No.95 & SA No.19/Coch/2017 . Kerala State Civil Supplies Corpn. Ltd. 3 taxable income liable to be assessed had escaped assessment on 23.09.2014 :- \"During the course of scrutiny proceedings for A.Y. 2011-12, it was found that for A.Y. 2010-11 the assessee had offered write-off of loans and interest from Kerala state Government below the line. Therefore, I have reasons to believe that income has escaped assessment. Issue notice u/sec. 148.\" 5. We had directed the learned CIT-DR to verify the said reopening reasons from the field authority(ies). He submits very fairly that these are the only sec. 148 reopening reasons recorded by the learned assessing authority. That being the clinching case, we are of the considered view that the impugned reopening itself is not sustainable in law. We first of all quote [2004] 268 ITR 332 (Bom.) Hindustan Lever Ltd., vs. RB Wadkar that such reasons \"all required to be read as they recorded by the Assessing Officer. No substitute or deletion is permissible. No addition can be ITA No.95 & SA No.19/Coch/2017 . Kerala State Civil Supplies Corpn. Ltd. 4 made to those reasons. No inference can be allowed to be drawn based on reason not recorded.\" 5.1. We keep in mind these settled principles and note that the learned Assessing Officer nowhere recorded as to how and in what manner the assessee's taxable income liable to be assessed had escaped assessment. There is also no whisper about quantification of such an escaped income as well in the above extracted reasons. Case law [2024] 464 ITR 305 (Bom.) Ramna Pinto vs. DCIT; [2019] 413 ITR 400 (Del.) Revolution Forver Marketing (P.) Ltd.,vs., ITO; [2010] 310 ITR 561 (SC) CIT vs. Kelvinator India Ltd., have settled the issue that a reopening based on such vague reasons, without even indicating the corresponding quantification of the income sought to be re-assessed, is invalid in law. We accordingly, quash the impugned reopening itself in these clinching facts and circumstances which render all other pleadings as infructuous. Ordered accordingly. ITA No.95 & SA No.19/Coch/2017 . Kerala State Civil Supplies Corpn. Ltd. 5 6. This assessee's appeal ITA.No.95/Coch/2017 is allowed in above terms and it's stay application SA.No.19/Coch./2017 has become infructuous. A copy of this common order be placed in the respective case files. Order pronounced in the open court on 7th November, 2024 Sd/- (AMARJIT SINGH) Sd/- (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Cochin ; Dated : 7th November, 2024. VBP/- Copy to : 1. The Appellant. 2. The Respondent. 3. The Pr.CIT Concerned. 4. The Sr.DR, ITAT, Cochin. 5. Guard File. Assistant Registrar ITAT, Cochin "