The Commissioner Of Income Tax vs M/S.Vanaja Textiles Ltd on 16 November, 2009

       

  

  

 
 
  IN THE HIGH COURT OF KERALA AT ERNAKULAM

ITA.No. 939 of 2009()


1. THE COMMISSIONER OF INCOME TAX,
                      ...  Petitioner

                        Vs



1. M/S.VANAJA TEXTILES LTD,
                       ...       Respondent

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

                For Respondent  :SRI.P.BALAKRISHNAN (E)

The Hon'ble MR. Justice C.N.RAMACHANDRAN NAIR
The Hon'ble MR. Justice V.K.MOHANAN

 Dated :16/11/2009

 O R D E R
                  C .N. RAMACHANDRAN NAIR &
                          V.K. MOHANAN, JJ.
                  --------------------------------------------
                       I. T. A. No. 939 OF 2009
                  --------------------------------------------
               Dated this the 16th day of November, 2009

                               JUDGMENT

Ramachandran Nair, J.

The question raised in the appeal filed by the revenue is whether

the Tribunal was justified in cancelling the assessment made under

Section 143(1)(a) for the reason that disallowances made do not fall

within the description “prima facie inadmissible items”. After hearing

both sides and after going through the proceedings issued under

Section 143(1)(a) and the order of the Tribunal, we are unable to

uphold the order of the Tribunal for more than one reason. In the first

place, against proceedings under Section 143(1)(a) the assessee itself

filed rectification application under Section 154 which goes to prove

that the assessee was satisfied that the proceedings issued under

Section 143(1)(a) with additions contained only mistakes. In our view,

the assessee cannot later turn round and say that mistakes are of

arguable issue and could not have been corrected in proceedings under

Section 143. Further, as is revealed from the proceedings under

Section 143, it is clear that assessee made belated claim of investment

allowance relating to assessment years 1984-85 and 1985-86 in the

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returns filed for 1994-95. The reason for disallowance is based on the

disallowance under Section 32A(3)(ii) of the Act. We are of the view

that claim is prima facie inadmissible because it is obviously beyond

the period of limitation provided under the Act. Further, the next item

of disallowance is prior period expenses and the assessee has not

shown in the return and annexures as to the provision under which

claim of deduction is made. In our view, the added items are prima

facie not admissible under the Act, but still deducted by the assessee in

the computation of taxable income. We are therefore of the view that

the Tribunal was not justified in cancelling the proceedings under

Section 143 which stood modified in one round of rectification on

assessee’s own application and again by the Commissioner of Income

Tax in revision. We therefore allow the appeal by reversing the order

of the Tribunal and remanding the matter to the Tribunal for deciding

the issues on merits.

(C.N.RAMACHANDRAN NAIR)
Judge.

(V.K. MOHANAN)
Judge.

kk

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