PARAGON BIOMEDICAL INDIA (P) LTD V. THE PRINCIPAL COMMISSIONER OF INCOME TAX

RP/351/2022

AI Insights

The case involves M/s. Paragon Biomedical India (P) Ltd, the review petitioner, who sought a review of a judgment that allowed the Revenue's appeal regarding income tax deductions under Sections 10A and 10B of the Income Tax Act, 1961. The original judgment had confirmed the assessee's eligibility for a deduction under Section 10A, which was not claimed in the return but was allowed by the Commissioner of Income Tax (Appeals) and upheld by the Tribunal. The Revenue challenged this in I.T.A. No.25/2018, leading to the judgment under review. The assessee's review petition argued that a relevant judgment supporting their position was not considered, but the court found that the review exceeded the permissible scope by attempting to reassess the principles and judgments cited.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 749676 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 03-02-2023
• Assessment Year: misc
• Other Referred Cases: CIT v. Flytxt Technology P. Ltd, Goetze (India) Ltd. v. Commissioner of Income Tax, CIT v. Ramakrishna Deo
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: CHRISTOPHER ABRAHAM
• Assessee Lawyers: ABRAHAM MARKOS; JOSEPH MARKOSE; ISAAC JOSEPH MARKOS; SHARAD KODANTHARA
• Keywords: Assessment; Deduction; Income Tax; Review petition
• Section: 10B; 10A

Judgement Text

" IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR.JUSTICE VIJU ABRAHAM FRIDAY, THE 3RD DAY OF FEBRUARY 2023 / 14TH MAGHA, 1944 RP NO. 351 OF 2022 REVIEW PETITIONER/S: M/S.PARAGON BIOMEDICAL INDIA (P) LTD, B-16, ‘GAYATHRI’, TECHNOPARK CAMPUS, KARIAVATTOM, TRIVANDRUM-695 581, NOW KNOWN AS M/S.CLINIFACE CLINICAL RESEARCH (P) LTD. BY ADVS. JOSEPH MARKOSE (SR.); ABRAHAM JOSEPH MARKOS V.ABRAHAM MARKOS; ISAAC THOMAS ALEXANDER JOSEPH MARKOS; SHARAD JOSEPH KODANTHARA RESPONDENT/S: THE PRINCIPAL COMMISSIONER OF INCOME TAX THIRUVANANTHAPURAM-695 003, PIN - 695003 OTHER PRESENT: SC CHRISTOPHER ABRAHAM THIS REVIEW PETITION HAVING COME UP FOR ADMISSION ON 03.02.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: R.P. No.351/2022 in ITA 25/2018 -2- O R D E R S.V. Bhatti, J. We have heard Adv. Abraham Joseph Markos and Adv. Christopher Abraham for the parties. 2. M/s. Paragon Biomedical India (P) Ltd/Assessee is the review petitioner and the sole respondent in I.T.A. No.25/2018. The Principal Commissioner of Income Tax, Thiruvananthapuram/Revenue, is the respondent in the review petition and the appellant in I.T.A.No.25/2018. Before we advert to the grounds of review of the judgment dated 06.09.2021 in I.T.A.No.25/2018, the following circumstances are noted: 2.1 The Assessing Officer, through the assessment order dated 29.03.2014, while rejecting the deduction under Section R.P. No.351/2022 in ITA 25/2018 -3- 10B of the Income Tax Act, 1961 (for short, the Act), determined the income of the assessee at Rs1,33,64,510/- The Commissioner of Income Tax (Appeals), on the appeal filed by the assessee, without there being a revised return, allowed a deduction under Section 10A of the Act for the Assessment Year 2010-11. The Tribunal confirmed the view of the Commissioner. Hence, the Revenue filed I.T.A. No.25/2018 with the following substantial questions of law: “i) Has not the tribunal erred in holding that the respondent- Assessee is eligible for deduction u/s 10A of the Act in spite of the fact that the assessee had made the claim for such deduction before the CIT(A) and had not made any such claim in its Return of Income? ii) Is not the decision of the tribunal upholding the order of the CIT(A) allowing the respondent's alternate claim for deduction u/s. 10A in the circumstances of the case, contrary to the principles laid down by the Apex Court in 284 ITR 323 (SC)? iii) Is not the observation of the Tribunal: \"When the deduction u/s. 10B was denied the AO ought to have examined whether R.P. No.351/2022 in ITA 25/2018 -4- the assessee is eligible for deduction/s 10A of the Act\" frivolous and opposed to the law, facts and circumstances of the case and also in the light of the decision of the Hon'ble Supreme Court in the case of CIT v. Ramakrishna Deo {[1959] 35 ITR 312(SC)}?\" 3. On 19.07.2018, this Court ordered a notice to the assessee, and admittedly, the assessee received the notice on 25.10.2018. The assessee did not engage a lawyer, and finally, by the judgment under review, the appeal filed by the Revenue was allowed. The assessee, on 22.03.2022, made an application for a certified copy of the judgment dated 06.09.2021 and, on 30.03.2022, filed the instant review petition. 4. The assessee does not dispute the receipt of notice from this Court. The assessee avers that yet another appeal filed by the Revenue by referring to the ceiling on the monetary limit was dismissed, and the assessee was of the view that I.T.A. No.25/2018 would also end up in dismissal. Further, the R.P. No.351/2022 in ITA 25/2018 -5- approval of the head office resulted in some delay, and later, due to the inadvertence, the assessee did not take steps to engage a lawyer. The crux of the matter is that despite notice, the assessee preferred to wait and watch till this Court's judgment dated 06.09.2021 was delivered. The error pointed out in the judgment under review is that by this Court’s judgment reported in CIT v. Flytxt Technology P. Ltd, the assessee is entitled to raise an alternate claim for deduction under Section 10A before the Appellate Authority. The said decision was not brought to the notice of this Court. Therefore, a ground for review is available, and he prays for reviewing the judgment dated 06.09.2021. 5. Mr Christopher Abraham argues that the appeal filed by the Revenue was allowed by relying on the judgment of the R.P. No.351/2022 in ITA 25/2018 -6- Apex Court in Goetze (India) Ltd. v. Commissioner of Income Tax1. The judgment under review has followed the binding precedent of the Supreme Court, and the error now pointed out by the assessee engages this Court to evaluate the judgment of the Supreme Court and a judgment not cited before this Court. Such an exercise is not within the scope and the jurisdiction of this Court in a review petition. He further argues that the Department was correct in pursuing the remedy of appeal, for, according to him, the ceiling on monetary limit is not attracted in the case on hand. 6. We have taken note of the circumstances. Despite the service of notice, the assessee did not appear by engaging a lawyer. The reasons now stated need not be examined on merits, for those reasons were not stated to treat the judgment dated 06.09.2021 as an ex parte judgment and set aside the 1 (2006) 284 ITR 323 (SC) R.P. No.351/2022 in ITA 25/2018 -7- same. The grounds of review refer to the non-consideration of the judgment of this Court in Flytxt Technology P. Ltd case. The judgment under review went by the dictum laid down in Goetze (India) Ltd. case. Now, the effort in the review petition is to compare the relative principles and, for the said purpose, recall the judgment dated 06.09.2021. We prefer not to elaborate on the scope of review in the present order. However, we are of the view that the review on the ground stated would undoubtedly go beyond the scope of the review. Therefore, the review petition fails and is dismissed. Sd/- S.V.BHATTI JUDGE Sd/- VIJU ABRAHAM JUDGE jjj "