IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C).No. 17738 of 2010(N)
1. JOSE KURUVINAKUNNEL,
... Petitioner
Vs
1. THE INCOME TAX OFFICER,
... Respondent
2. THE INCOME TAX APPELLATE TRIBUNAL,
For Petitioner :SRI.RAMESH CHERIAN JOHN
For Respondent :SRI.JOSE JOSEPH, SC, FOR INCOME TAX
The Hon'ble MR. Justice P.R.RAMACHANDRA MENON
Dated :28/09/2010
O R D E R
P.R. RAMACHANDRA MENON, J.
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W.P.(C) No. 17738 OF 2010
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Dated this the 28th September, 2010
J U D G M E N T
The petitioner is challenging Exts.P9 order passed by the
second respondent Income Tax Appellate Tribunal, Ext P10
concurring order dated the same day, passed by the Accountant
Member and also Ext.P14 order dismissing Exts.P11 to P13
applications for ‘rectification of the errors’ filed under Section
254(2) of the Income Tax Act.
2. The sequence of events is as follows: The petitioner is
an assessee on the files of the first respondent . Assessment was
completed in respect of the assessment years 1996-97 to 2000-
01, which however was sought to be re-opened by the assessing
authority for the reasons recorded, stated as identical for all
the years as borne by Exts. P1 and P2 produced in respect of
the assessment years 1996-97 and 1998-99. The original
assessment for the year 1996-97 was a scrutiny assessment
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under Section 143(3) of the Act and for the subsequent years,
the assessment was completed by way of summary assessment
under Section 143(l) (a) of the Act. Re-opening of the
assessments in respect of the above different years was
subjected to challenge by filing appeals before the second
respondent, wherein Ext.P3 common order was passed by the
Tribunal on 08.12.2006 holding that there was absolutely no
reason for re-opening the assessment for the year 1996-97.
Accordingly, the assessment re-opened in respect of the said year
was set aside, observing that the assessing officer had
proceeded, taking shelter under Section 14 of the Act, for
making a rowing and fishing enquiry. In respect of the
assessment year 1997-98, the Tribunal observed in paragraph
No.15 of Ext.P3 order that the reasons stated by the assessing
officer were the same as given to the assessment year 1996-97.
It was further observed by the second respondent that formation
of the belief should be based on some definite, concrete and
reliable materials and thus came to the finding that in respect of
the assessment year 1997-98, it was only vague and hence
W.P.(C) No. 17738 OF 2010
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interference was made in respect of the said year as well .
3. However with regard to the remaining years, it was
observed by the Tribunal that the there was lack of materials to
decide the issue and accordingly, the matter was remanded to
the Commissioner of Income Tax (Appeals) with a specific
direction to consider the matters separately, as specifically
observed in paragraph 19. Pursuant to Ext.P3 order passed by
the Tribunal, the matter was re-considered by the Commissioner
of Income Tax who passed Ext. P4 order observing that the
reasons recorded by the assessing officer in respect of the
assessment year 1998-99 were the same as in respect of the
assessment years 1996-97 and 1997-98. After referring to the
facts and figures in respect of the different assessment years and
also taking note of the specific direction contained in the remand
order passed by the Tribunal vide Ext. P3, it was held by the
Commissioner that initiation of the proceedings under Section
148 for the assessment years 1998-99 to 2000-2001 was not
valid and accordingly, the appeals preferred by the petitioner
were allowed.
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4. Met with the situation, the Revenue preferred appeals
(Exts.P5 to P7) before the second respondent. After hearing the
matter, the Second respondent passed Ext. P9 order remanding
the matter to the Commissioner for considering the case on
merits, after arriving at a finding that there were valid reasons
for re-opening of the assessment by the assessing officer. The
Judicial Member relied on the law declared by the Apex Court in
ACIT vs. Rajesh Jhaveri Stock Brokers Pvt. Ltd [291 ITR
500 (SC), while the Accountant Member wrote a concurring
order as borne by Ext.P10, however observing in paragraph 2
that there was no direct application of the decision rendered in
291 ITR 500 (cited supra). But it was made clear that the
matter had to be considered by the appellate authority on
merits, as ordered by the Judicial Member, observing that the
reasons recorded by the Assessing officer for re-opening of the
assessment satisfied the conditions laid down under Section 147
of the Act. Contending that the said verdict passed by the
Tribunal was very much contrary to the verdict already passed
by the Tribunal as borne by Ext. P3 and that it was not correct
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or proper to have taken a different view, being a Co-ordinate
Bench, the assessee preferred Exts.P11 to P13 applications for
rectification, stating that there was error apparent on the face of
the records. The said petitions were considered by the second
respondent and they were dismissed as per Ext. P14 order,
holding that there was no mistake apparent on the face of the
records, so as to invoke the power under Section 254(2) of the
Income Tax Act, which in turn is under challenge in this Writ
Petition.
5. The respondents have filed a statement seeking to
sustain the course and procedure pursued by the Department
as well as the second respondent/Tribunal, contending that there
was no mistake to be rectified invoking the power under Section
254 (2) of the Income Tax Act and that no interference is
warranted in the Writ Petition . It is further stated that, as
observed by the Judicial Member of the Tribunal in Ext.P9, the
decision rendered by the Apex Court in 291 ITR 500 was not
available when Ext. P3 order was passed by the Tribunal earlier
or when Ext. P4 order was passed by the appellate authority
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pursuant to the remand and it was in the said circumstance, that
the matter was considered afresh in the appeals preferred by
the Revenue passing Exts.P9/P10 orders. It is also contended
in the statement that Ext.P3 order passed by the Tribunal in
respect of the assessment years 1996-97 and 1997-98 is not
correct or sustainable in view of the law declared by the Apex
Court in 291 ITR 500. It is also contended that ‘rectification
petitions’ by way of Exts. P11 to P13 filed by the petitioner
virtually amount to Review of Exts.P9/P10 orders passed by the
Tribunal; and that there is no such power of review for the
Tribunal, as made clear by the Apex Court in Assistant
Commissioner of Income-Tax vs. Saurashtra Kutch Stock
Exchange Ltd ( [2008] 305 ITR 227 (SC)).
6. The petitioner has filed a reply affidavit in response to
the statement filed by the Department, re-iterating the
contentions raised in the Writ Petition. The learned Counsel for
the petitioner submits that the Tribunal, having taken a view
already, vide Ext.P3, in respect of the assessment years 1996-97
and 1997-98 and further since the reasons stated for re-
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opening the assessment in respect of the subsequent years
having been declared as the same, on appreciation of the factual
position by the Commissioner, it was no more open for the
Tribunal to have taken a deviation and to have arrived at a
different finding as per Exts. P9/P10, than the one already
arrived at vide Ext.P3, which according to the petitioner is not in
conformity with the settled principles of law declared vide CIT
vs. Travancore Titanium Products Ltd.(Ker.)_(2003) 183
CTR (Ker.) 473. (at page 478).
7. Coming to the merits of the case, whether there is
mistake apparent on the face of the records, so as to have
invoked the power of rectification under Section 254(2) of the
IT Act, it remains a fact that the Tribunal considered the
matter/reasons for reopening the assessment and held in
respect of the assessment order for 1996-97 and 1997-98 that
the materials were not sufficient so as to have pursued such an
exercise and accordingly, the assessment was set aside and
relief was extended to the petitioner. But in respect of the
subsequent years, it was observed in para 19 of Ext. P3, that
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there was no material before the Tribunal to have analysed the
factual position in respect of the said assessment years ; more
so since the appellate authority had relied on the previous
assessment years, as the basis to have pursued similar action in
respect of the subsequent years and it was in the said
circumstance, that the Commissioner of Appeals was directed to
re-consider the matter with specific reference to the reasons in
respect of the said subsequent years as well and to pass
appropriate orders (thus explaining the scope of remand in
Ext.P3).
8. As mentioned above, pursuant to Ext. P3, the matter
was considered by the Commissioner of Appeals and observed
that the reasons were the same . The course pursued, as
ordered by the Tribunal in respect of the assessment years of
1996-97 and 1997-98, was hence ordered to be pursued in
respect of subsequent years as well. Accordingly, the appeals
preferred by the petitioner/assessee in respect of the years
1998-99 to 2000-01 were also allowed; which in turn were
subjected to challenge by the Revenue, by filing Exts.P5 to P7
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Appeals before the second respondent. It was during the
pendency of the proceedings before the Appellate Tribunal, that
the Apex Court passed the verdict as reported in 291 ITR 500,
based on which, Ext. P9 order was passed, upholding the reasons
stated by the assessing officer to reopen the assessment and
thus remanding the matter after allowing the appeals preferred
by the respondents for fresh consideration of merits by the
Commissioner of Appeals. In Ext.P10 order, though the
Accountant Member of the Tribunal has observed that the
decision rendered by the Apex Court in 291 ITR 500, as such, is
not applicable to the case in hand, a proper reasoning has been
given sustaining the reopening of the assessment, concurring
with the directions given in Ext. P9 and remanding the matter to
be considered on merits.
9. In short, when Ext.P3 order was passed by the
Tribunal, the remand in respect of the assessment years/orders
for 1998-99 to 2000-01 was for ‘want of necessary materials’,
but for which, the Tribunal would have passed similar orders
as in the assessment years 1996-97 and 1997-98. This being the
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position, it cannot be said that the Tribunal has taken a ‘U’ turn,
showing some or other inconsistency with regard to the earlier
order (Ext.P3), while passing Ext. P9/P10 or that the matter
ought to have been referred to a ‘larger Bench’ for consideration.
There is no mistake or error apparent on the face of the records
and as such, the prayer sought for vide Exts. P11 to P13 is quite
wrong and misconceived, which has been rightly declined in
Ext.P14. If at all the petitioner is aggrieved of the order passed
by the Tribunal vide Exts.P9/P10 in any manner, the remedy of
the petitioner can only be by way of further appeals to be
preferred before this Court, invoking the power under Section
260A of the Income Tax Act. This Court finds it difficult to accept
the preposition mooted by the petitioner. The Writ Petition fails
and the same is dismissed accordingly.
P.R. RAMACHANDRA MENON,
JUDGE.
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