Swiss Time & Electronics V. The Assistant Commissioner of Income-Tax, Central Circle-1, Ernakulam

ITA/29/2004

AI Insights

The case involves M/s. Swiss Time & Electronics, the appellant, and the Assistant Commissioner of Income-Tax, Central Circle-1, Ernakulam, the respondent. The dispute arose from an assessment completed under Section 158BC of the Income Tax Act following a search and survey conducted on the same day at the premises of the assessee and a partner of the assessee firm. The first appellate authority reclassified the assessment under Section 158BD, leading to appeals by both the department and the assessee. The Tribunal's decision, which did not consider the assessee's cross appeal on merits, was challenged in the High Court. The High Court found inconsistencies in the Tribunal's previous rulings and remanded the case for a merit-based assessment.

• Counselvise Citation: [2009] 140 COUNSELVISE.COM (IT) 804467 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 26-03-2009
• Assessment Year: misc
• Other Referred Cases: I.T(S&S)A No:27(Coch)/2003
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: P K R MENON; GEORGE K GEORGE
• Assessee Lawyers: B S KRISHNAN; V RAMACHANDRAN; K ANAND; LATHA KRISHNAN
• Keywords: Assessment; Income tax appeal; Search and survey; Section 158BC; Section 158BD
• Section: 158BC; 158BD

Judgement Text

" IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE K.SURENDRA MOHAN THURSDAY, THE 26TH MARCH 2009 / 5TH CHAITHRA 1931 ITA.No. 29 of 2004 ------------------------ IT(SS)A.29/COCH/2002 of I.T.A.TRIBUNAL,COCHIN BENCH ................................ APPELLANT: ------------------ M/S. SWISS TIME & ELECTRONICS, XL/1831, WAKF BUILDING, BROAD WAY, ERNAKULAM. BY ADV. SRI.B.S.KRISHNAN, SENIOR ADVOCATE SRI. V.RAMACHANDRAN, SENIOR COUNSEL SRI.K.ANAND (A.201) SMT.LATHA KRISHNAN RESPONDENT(S): ------------------------- THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1, ERNAKULAM. ADV. SRI. P.K.R MENON, SENIOR COUNSEL ADV. SRI.GEORGE K. GEORGE, SC FOR IT THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 26/03/2009 ALONG WITH ITA NO. 30 OF 2008 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & K.SURENDRA MOHAN, JJ. ------------------------------------------------------------------------------------ I.T.Appeal Nos: 29/2004 & 30/2008 ----------------------------------------------------------------------------------- Dated this the 26th March, 2009. JUDGMENT RAMACHANDRAN NAIR, J. The connected appeals arise from the order of the Tribunal dismissing an appeal and cross appeal pertaining to the assessment of the very same assessee. Assessment was one completed under Section 158BC of the Income Tax Act after search conducted in the residential premises of the partner of the assessee firm and after conducting survey in the business premises of the assessee on the same day. In first appeal assessee contested the validity of the assessment under Section 158BC and the additions on merit. CIT (Appeal) allowed the appeal by holding that assessment should have been made under Section 158BD as the search was not pursuant to warrant issued in the name of the assessee firm. When department filed appeal against this order before the Tribunal assessee filed cross appeal to contest the matter on merits. The Tribunal upheld the order of the CIT (Appeal) and consequently did not consider the assessee's cross appeal on merits. The department and the assessee are in appeal before us ITA Nos: 29/04 & 30/08 2 against the common order issued by the Tribunal. 2. During hearing of the appeal before us the senior counsel appearing for the department brought to our notice order of the Tribunal issued in I.T(S&S)A No:27(Coch)/2003 dated 11.3.2004 which is an appeal filed by the Managing Partner of the assessee firm wherein an exactly opposite finding is rendered by the Tribunal for allowing that appeal. In fact the specific finding of the Tribunal is that warrant was issued for search in the name of the firm Messrs. Swiss Time and Electronics, Ernakulam which is the assessee, the assessment of which is involved in these two appeals. The finding of the Tribunal impugned in these two appeals is that warrant was issued in the name of the partner and so much so assessment cannot be made under Section 158BC against the firm. This order of the Tribunal is patently wrong and unsustainable because the very same Bench in the subsequent order issued in the name of the Partner held that warrant was in the name of the firm and not against the partner. We are told that partners' assessment cancelled by the Tribunal's order above referred stands confirmed and is accepted by both sides. In the circumstances we allow the appeals by cancelling the orders of the Tribunal and that of the first appellate authority and remand the case back to the first appellate ITA Nos: 29/04 & 30/08 3 authority to consider the assessment on merits that is pertainin to the amounts assessed and not on the jurisdictional question which stands concluded by this judgment. C.N. RAMACHANDRAN NAIR Judge K. SURENDRA MOHAN Judge jj K.K.DENESAN & V. RAMKUMAR, JJ. ---------------------------------------------------- M.F.A.NO: ----------------------------------------------------- JUDGMENT Dated: "