P.V.THOMAS V. THE COMMISSIONER OF INCOME TAX (APPEALS),

WA/2049/2019

AI Insights

The case involves P.V. Thomas, the appellant, who contested the addition of Rs. 11,59,000 to his total income for the assessment year 2015-16, as per the order under section 40A(3) of the Income Tax Act, 1961. This addition was initially conceded by his authorized representative during the assessment proceedings but was later disputed. The appellant's challenge to the assessment order was dismissed by the first appellate authority, leading to the filing of a writ petition, which was also dismissed. The High Court's dismissal was based on the grounds that the matter involved disputed questions of fact, which are not typically resolved in writ proceedings, and that the appellant had an alternative statutory remedy before the Income Tax Appellate Tribunal.

• Counselvise Citation: [2019] 140 COUNSELVISE.COM (IT) 695857 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 04-11-2019
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH
• Assessee Lawyers: M NAMBIAR; K MATHAI; JOSON MANAVALAN; KURYAN THOMAS; PAULOSE ABRAHAM
• Keywords: Appeal; Assessment; Disputed Question of Fact; Income Tax; Rectification
• Section: 154; 40A(3); 253

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE C.K.ABDUL REHIM & THE HONOURABLE MRS. JUSTICE ANU SIVARAMAN MONDAY, THE 04TH DAY OF NOVEMBER 2019 / 13TH KARTHIKA, 1941 WA.No.2049 OF 2019 AGAINST THE JUDGMENT IN WP(C) 39333/2018(N) OF HIGH COURT OF KERALA DATED 26.02.2019 APPELLANT: P.V.THOMAS, POOTHARAYIL HOUSE, AYMANAM.P.O., KOTTAYAM - 686 015. BY ADVS. SRI.M.GOPIKRISHNAN NAMBIAR SRI.K.JOHN MATHAI SRI.JOSON MANAVALAN SRI.KURYAN THOMAS SRI.PAULOSE C. ABRAHAM RESPONDENTS: 1 THE COMMISSIONER OF INCOME TAX (APPEALS), OFFICE OF THE COMMISSIONER OF INCOME TAX (APPEALS), PUBLIC LIBRARY BUILDING, SASTRI ROAD, KOTTAYAM - 686 001. 2 THE INCOME TAX OFFICER, WARD-5, KOTTAYAM, PUBLIC LIBRARY BUILDING, SASTRI ROAD, KOTTAYAM - 686 001. BY SRI.JOSE JOSEPH, SC, GOI, TAXES THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 04.11.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WA.No.2049 OF 2019 2 C.K. ABDUL REHIM & ANU SIVARAMAN, JJ. ``````````````````````````` W.A. No. 2049 OF 2019 ````````````````````````````` JUDGMENT Dated this the 4th day of November, 2019 C.K. Abdul Rehim, J. 1. Petitioner in W.P.(C) No. 39333/2018 is in appeal against judgment of the Single Judge dated 26th February, 2019 dismissing the writ petition, by leaving open the remedy available to approach the appellate tribunal against Ext. P2 order impugned in the writ Petition. The respondents herein are the respondents in the writ Petition. 2. While finalizing assessment against the appellant with respect to the year 2015 - '16, the assessing authority disallowed an amount of Rs.11,59,000/- and added back the said amount to the total income, u/s 40A (3) of the Income Tax Act, 1961. This was done on the basis of a concession made by the authorized WA.No.2049 OF 2019 3 representative of the appellant, who appeared before the assessing authority. The finding in Ext. P1 order of assessment in this regard is as follows : “7............Therefore, at the time of scrutiny assessment, the assessee's authorized representative offered to add back this amount to the total income returned.” 3. The authorised representative, thereafter, caused a letter to the assessing authority intimating that he has not made any such concession, and at the time of hearing of the matter he put his signature on the hearing sheet only as a token of his appearance; and that he had not written any word of such offer and acceptance. The authorized representative requested the assessing authority to delete the above quoted words from the assessment order, on the basis that he had not conceded the same. Ext.P3 is the copy of the above said letter dated 04.07.2017. It contains an endorsement purportedly made by the assessing authority as follows : WA.No.2049 OF 2019 4 “Received the letter. Contents not accepted. Sd/-20.07.2017.” 4. The appellant thereupon challenged the order of assessment in a statutory appeal before the first appellate authority, the Commissioner of Income Tax [Appeals], Kottayam. The appeal was dismissed by the appellate authority. Contention before the appellate authority was that, the authorized representative of the appellant had not agreed to the addition, but he only signed to mark his appearance. The appellate authority, on verification of the records, noticed the endorsement in the 'order sheet' of the proceedings, which contained the endorsement as below; “6/6/17 Shri. Rajesh C.A. Appeared for hearing. He has agreed for addition of Rs.11,59,000/- u/s 40A(3) of the Act.” 5. The appellate authority found that, the 'notings in the order sheet' would clearly show that the authorized representative of the appellant had agreed for making the addition and therefore WA.No.2049 OF 2019 5 the appellant is not entitled to agitate the said issue in the appeal. On finding that there is no merit in the appeal, the same was dismissed. 6. Against the order of the first appellate authority, the appellant approached this court in a Writ Petition, which was opposed by the Revenue by contending that, whether the addition was conceded by the authorized representative or not is a pure question of fact, which cannot be decided in a writ petition. It was pointed out that, the appellant ought to have sought further appellate remedy provided under Section 253. The learned Single Judge found that, the appellant had travelled the statutory path half way by exhausting one appellate remedy. But thereafter he felt shy of proceeding further. Then he turned around and approached this Court by resorting to remedy under Article 226. Since the contention involves a disputed question of fact, it was observed that, this court cannot interfere with the matter. The learned Single Judge observed that, whatever relief the appellant had sought for before the writ court, can as well be granted by the Income Tax Appellate Tribunal, before whom the WA.No.2049 OF 2019 6 appellant had got an efficacious remedy. Therefore the writ petition was dismissed without adverting to the merits, by leaving open liberty to the appellant to approach the Tribunal. Further the Tribunal was directed, if approached, to exclude the period which the petitioner had spent before this court, for enabling the appellant to exhaust the appellate remedy. The learned Judge had shown further indulgence by deferring the coercive steps of recovery for a period of 30 days from the date of the judgment. The appellant is assailing the said judgment. 7. The first contention raised is that, the assessing authority ought to have treated Ext. P3 letter as a request for rectification, coming within the purview of Section 154 of the Income Tax Act. We need not dwell upon the said issue, because the endorsement contained in Ext. P3 itself would indicate that the assessing authority had rejected the contents thereon. But it is pertinent to note that, against the non acceptance of Ext. P3 or against its rejection, the appellant has not taken any further steps. Instead he approached the appellate authority challenging the assessment itself. Before the first appellate authority also, no WA.No.2049 OF 2019 7 specific contention was seen raised with respect to non consideration of the request made as per Ext. P3. Therefore we are of the opinion that the question regarding non consideration of Ext. P3, as a rectification petition, cannot be agitated successfully. 8. Secondly, it is contended that the appellate authority ought to have made a probe into correctness of the statement made by the authorized representative, to the extent of conceding the additions made. But as pointed out by learned counsel for the respondent, no effort was seen taken before the first appellate authority to adduce evidence to prove that the concession was not actually made. On the contrary, based on the records available, the appellate authority had specifically found that the authorized representative had made a clear endorsement in the order sheet agreeing for such an addition. Neither the appellant nor the authorized representative has taken any effort before the first appellate authority to substantiate their contention that the authorized representative had put his signature in the order sheet only to mark his appearance and not to concede the WA.No.2049 OF 2019 8 addition made. Therefore, we are compelled to arrive at a finding that, the appellant had failed, before the first appellate authority, to prove that the endorsement contained in the assessment records with respect to the concession made by the authorized representative is not true and correct. 9. Learned counsel for the appellant submitted that the learned single Judge ought to have dealt with the matter by exercising powers vested under Article 226, because availability of the alternate statutory remedy is not an absolute bar. It is argued that; this Court ought to have appreciated the fact that as a constitutional court urgent redresssal need to have been made in the writ petition. We are unable to accept such contentions, because there exists no exceptional circumstances for the writ court to bypass the statutory remedy, especially on the wake of the contention of the revenue that what has to be decided is a disputed question of fact. 10. Based on the above discussions, we are not persuaded to interfere with the judgment impugned, as it does not suffer from WA.No.2049 OF 2019 9 any illegality, error or impropriety. However, we make it clear that if the appellant chooses to avail the statutory remedy of second appeal, the Tribunal shall deal with the matter independently, untrammelled by any observations contained in the impugned judgment or any observations contained hereinabove. Consequently, the above writ appeal is hereby dismissed. Sd/- C.K.ABDUL REHIM JUDGE Sd/- ANU SIVARAMAN JUDGE kmd //TRUE COPY// P.A. TO JUDGE "