K.Sreekantan Pillai vs The Income Tax Officer on 2 February, 2010

       

  

  

 
 
  IN THE HIGH COURT OF KERALA AT ERNAKULAM

ITA.No. 1775 of 2009()


1. K.SREEKANTAN PILLAI,S/O.KRISHNA PILLAI,
                      ...  Petitioner

                        Vs



1. THE INCOME TAX OFFICER, WARD - 3,
                       ...       Respondent

                For Petitioner  :SRI.V.M.KURIAN

                For Respondent  :SRI.JOSE JOSEPH, SC, FOR INCOME TAX

The Hon'ble MR. Justice C.N.RAMACHANDRAN NAIR
The Hon'ble MR. Justice P.S.GOPINATHAN

 Dated :02/02/2010

 O R D E R
                    C.N.RAMACHANDRAN NAIR &
                             P.S.GOPINATHAN, JJ.
               ....................................................................
                 I.T. Appeal Nos.1775 & 1781 of 2009
               ....................................................................
                Dated this the 2nd day of February, 2010.

                                      JUDGMENT

Ramachandran Nair, J.

Heard counsel for the appellant and Senior Standing Counsel for

the respondent. The question raised is whether the Tribunal was

justified in cancelling the first appellate order and restoring the income

escaping assessment completed under Section 147 of the Income Tax

Act.

2. Counsel for the appellant contended that the only reason for

reopening is low gross profit which according to him, is not a ground

for reopening the assessment. However, we notice that besides the low

gross profit, the Assessing Officer has pointed out some other grounds

as well. Further, percentage of gross profit returned in the same

business by the assessee was substantially higher for earlier years. It is

seen that the Tribunal has sustained the income escaping assessment

following decision of the Supreme Court in COMMISSIONER OF

INCOME-TAX VS. RAJESH JHAVERI STOCK BROKERS PVT.

2

LTD. reported in 291 ITR 500. Therefore, we do not find any

justification to interfere with the orders of the Tribunal sustaining the

income escaping assessments. However, we notice from the Tribunal’s

order that besides considering validity of reopening, the Tribunal has

not gone into the merits of the case i.e. with regard to estimation of net

income, addition sustained etc. We, therefore, dispose of the appeals

by upholding the findings of the Tribunal with regard to validity of

reopening, but by remanding the matter back to the Tribunal for

considering appeals on merits i.e. on estimation of gross profit,

addition sustained etc., after giving opportunity to both sides.

C.N.RAMACHANDRAN NAIR
Judge

P.S.GOPINATHAN
Judge
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