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The State Of Kerala vs M/S. Orma Marble Palace (P) Ltd on 9 June, 2010

Kerala High Court
The State Of Kerala vs M/S. Orma Marble Palace (P) Ltd on 9 June, 2010
       

  

  

 
 
  IN THE HIGH COURT OF KERALA AT ERNAKULAM

ST.Rev..No. 12 of 2010()


1. THE STATE OF KERALA, REPRESENTED BY
                      ...  Petitioner

                        Vs



1. M/S. ORMA MARBLE PALACE (P) LTD.,
                       ...       Respondent

                For Petitioner  :GOVERNMENT PLEADER

                For Respondent  :SRI.ISSAC M.PERUMPILLIL

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

 Dated :09/06/2010

 O R D E R
                   C.N.RAMACHANDRAN NAIR &
                            P.S.GOPINATHAN, JJ.
              ....................................................................
                      S.T. Rev. Nos.12 & 19 of 2010
              ....................................................................
                  Dated this the 9th day of June, 2010.

                                     JUDGMENT

Ramachandran Nair, J.

Heard the Government Pleader for the common revision

petitioner and counsel appearing for the group companies, the

respondents in the connected case. After completion of the sales tax

assessments of the respondents for the assessment year 1999-2000, it

came to the notice of the Deputy Commissioner that respondents have

been subjected to search and block assessment was made for the

undisclosed business income under the Income Tax Act. Based on the

block assessments completed by the Income Tax Department, the

Deputy Commissioner directed revision of assessment under Section

35 against which respondents filed appeals before the Tribunal. By the

time the Tribunal took up the appeals, the block assessments completed

under Section 158BC of the Income Tax Act were interfered with by

the Commissioner of Income Tax (Appeals) and he cancelled the

addition of undisclosed income. Since the Income Tax assessments

S.T. Rev. 12&19/2010 2

formed the basis of the order of the Deputy Commissioner, the

Tribunal relying on C.I.T.(Appeal)’s order in appeals filed against

block assessments completed under the Income Tax Act, allowed the

appeals. In fact, Government Pleader has relied on Annexure-D

produced in S.T. Rev. No.12/2010 which is a three Member Order

issued by the very same Bench in another company’s case(of the same

group) remanding the matter to the Assessing Officer holding that the

matter has to be reconsidered after the Income Tax Appellate Tribunal

disposes of appeal filed against order of the C.I.T.(Appeals) relied on

by the Tribunal. Review Petition filed by the department before the

Tribunal was also turned down.

2. After hearing both sides and after going through the Tribunal’s

order, we find that the Tribunal has heavily relied on the order of the

C.I.T.(Appeals) cancelling the block assessment of the assessee

completed under Section 158BC of the Act. In our view, the Tribunal

was not justified in treating the order of the C.I.T.(Appeals) as final.

Since it is a fact finding authority, it is upto the Income Tax Appellate

Tribunal to consider whether the C.I.T.(Appeals)’s order deserves to be

S.T. Rev. 12&19/2010 3

modified or reversed. Therefore, we feel the right course that the Sales

Tax Appellate Tribunal should have adopted was to remand this matter

to the Assessing Officer to wait for finality to be achieved in the

Income Tax block assessment through orders of the Tribunal as was

done in the case of another company of the same group vide Annexure-

D order produced in S.T. Rev. No.12/2010. We, therefore, allow the

S.T. Revision cases by setting aside the orders of the Tribunal and with

direction to the Assessing Officer to take up the matter afresh based on

final orders of the Tribunal issued in the Income Tax appeals. We

make it clear that fresh orders of assessment if any should be made

considering findings of the Income Tax Tribunal also and after giving

sufficient opportunity to the assessee.

C.N.RAMACHANDRAN NAIR
Judge

P.S.GOPINATHAN
Judge
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