The High Court rejected the Commissioner of Income Tax's Income Tax Appeal as a fit case for rejection under the litigation policy due to significant delay, despite jurisdictional contentions that were not raised earlier in proceedings.
The Income Tax Appeal is rejected with no order as to costs.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN
&
THE HONOURABLE MR.JUSTICE ASHOK MENON
THURSDAY, THE 17TH DAY OF JANUARY 2019 / 27TH POUSHA, 1940
I.T.A.No.103 of 2012
AGAINST THE ORDER IN ITA.(SS) NO.214/COCH/2005 OF I.T.A.TRIBUNAL, COCHIN BENCH, COCHIN, DATED 06.01.2012. [BLOCK PERIOD 1990-91 TO 1999-2000 UPTO 27.03.2000]
APPELLANT/APPELLANT:
THE COMMISSIONER OF INCOME TAX-II, COCHIN.
BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX
RESPONDENT/RESPONDENT:
P.SREENIVASAN, FLAT NO. 421, ARIHANT MAGESTIC TOWER, KOYEMBEDU, CHENNAI-600 107.
OTHER PRESENT:
SRI P.K.R.MENON, SENIOR COUNSEL, GOI (TAXES)
THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 17.01.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
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ITA.No.103 of 2012
JUDGMENT
Vinod Chandran, J.
Yet another case which reveals the haphazard manner in which the revenue officials follow up proceedings before this Court and the Tribunal. The respondent herein is alleged to be the partner of a firm against which an assessment order was passed as per Annexure-A. The firm filed an appeal, the memorandum of which is produced at Annexure-B, against the assessment order. The appeal filed before the first appellate authority was dismissed by Annexure-C order dated 12.02.2004 for reason only of the assessee having not paid the admitted tax. No consideration on merits was made.
2. The respondent herein was made aware of the determination of income and demand raised, only when recovery steps were initiated. The respondent was also proceeded against for reason of he being a partner of the firm. The respondent asserted that he was not a partner and
to stall the recovery proceedings, the respondent approached this Court with W.P.(C) No.13544 of 2005 on 18.04.2005. Despite that contention, the respondent also filed an appeal from the assessment order, as seen from the memorandum produced at Annexure-D, on 28.05.2005. The writ
ITA.No.103 of 2012 - 3 -
petition was disposed of by Annexure-H order dated 23.08.2005, which directed the CIT (Appeals) to peruse the records, hear the writ petitioner and the concerned Assessing Officer [AO] and dispose of the appeal within six weeks from the date of receipt of a copy of the judgment. There was also a stay granted against the sale of attached properties until the appeal was disposed of. Later, by Annexure-E order dated 27.09.2005, the first appeal filed by the respondent was disposed of, making some quantum adjustments. The Revenue filed an appeal to the Tribunal [Annexure-I] and also approached this Court with a review petition in the writ petition, numbered as R.P.No.52 of 2006, which was disposed of by Annexure-L dated 05.04.2006.
3. The review of the Revenue raised a ground that
the appeal of the firm was rejected and there could not be any subsequent appeal filed by the Partner before the first appellate authority. The assessment stands confirmed by the first appellate authority, which order has acquired finality was the sole ground raised. Immediately we have to notice that the first appeal filed by the firm was dismissed only for reason of the admitted tax having not been paid and there was no consideration on merits.
4. The learned Senior Counsel, Government of India (Taxes) points out that the right given to a partner to
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file an appeal under Section 247 of the Income Tax Act, 1961 was omitted by Finance Act, 1992 with effect from 01.04.1993. However, such a ground was never raised before the learned Single Judge even in the review petition. In any event, the learned Single Judge noticed that the Revenue had already approached the Tribunal against the order of the first appellate authority in the appeal filed by the Partner and, hence, directed the Tribunal to consider whether the appeal was maintainable before the first appellate authority. The Tribunal considered the appeal filed by the Revenue, by Annexure-J order dated 06.01.2012.
5. As noticed from Annexure-J, the date of hearing
was 03.01.2012. We see from the order of the Tribunal that
though an objection was raised with respect to the maintainability of the appeal by the Revenue before the Tribunal, on the very same grounds as raised in the Review Petition, the Tribunal refused to consider the same since the High Court had already directed consideration on merits. It is unfortunate that the Revenue did not place the order of the learned Single Judge in the Review Petition passed six years prior, before the Tribunal. The learned Senior Counsel, Government of India (Taxes) would submit that since the CIT (Appeals) at the second instance
ITA.No.103 of 2012
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had acted without jurisdiction, the order is non est in law. However, we do not find any reason to hold so in an appeal since the Revenue has not raised such contentions before the first appellate authority or before the Tribunal nor even before this Court in the Review Petition.
6. We also notice that the original demand as is revealed from Annexure-C was only Rs.15,02,720/-, which is far lesser than that prescribed in the litigation policy. The appeal is one of the year 2012 and though the appeal stood admitted in 2012 itself, there was no appearance for the respondent since notice was not served. Paper publication was taken out only in 2018. We are of the opinion that this is a fit case to be rejected on the ground of litigation policy. We reject the appeal with no order as to costs.
Sd/K.VINOD CHANDRAN JUDGE
Sd/ASHOK MENON JUDGE
Vku/-
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ITA.No.103 of 2012
APPENDIX
APPELLANT'S ANNEXURES:
ANNEXURE-A COPY OF ASST. ORDER U/S. 158BC R.W.S. 143(3) DATED 25/03/2002 OF THE B.P.90-91 TO 99-00 UPTO 27/03/2000. ANNEXURE-B COPY OF APPEAL MEMORANDUM FILED BY FIRM. ANNEXURE-C COPY OF THE ORDER DATED 12/02/2004 OF THE COMMISSIONER OF INCOME TAX (APPEALS). ANNEXURE-D COPY OF APPEAL MEMORANDUM FILED BY SRI. SREENIVASAN, EX-PARTNER. ANNEXURE-E COPY OF THE ORDER DATED 27/09/2005 OF THE COMMISSIONER OF INCOME TAX (APPEALS). ANNEXURE-F COPY OF WRIT PETITION FILED BY SREENIVASAN. ANNEXURE-G COPY OF COUNTER AFFIDAVIT FILED BY REVENUE. ANNEXURE-H COPY OF JUDGMENT DATED 23/08/2005 OF HON'BLE COURT IN WPC NO.13544/2005 (K) ANNEXURE-I COPY OF APPEAL MEMORANDUM FILED BY REVENUE BEFORE ITAT. ANNEXURE-J COPY OF THE ORDER DATED 06/01/2012 OF THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH IT(SS)A NO.214/COCH/2005. ANNEXURE-K COPY OF REVIEW PETITION FILED BY REVENUE BEFORE THE HON'BLE HIGH COURT 22/12/2005. ANNEXURE-L COPY OF JUDGMENT RP NO.52/2006 DATED 05/04/2006 OF HON'BLE HIGH COURT AGAINST THE REVIEW PETITION BY THE REVENUE.
[true copy]
2 issues framed by the court
Whether the Income Tax Appeal was maintainable given the jurisdictional challenges raised by the Revenue regarding the Tribunal's order and the partner's right to appeal.
Whether the appeal should be rejected on the ground of litigation policy due to lapse of time and lack of appearance by the respondent.
2 provisions across 2 enactments
The Commissioner of Income Tax-II, Cochin
P.Sreenivasan
Vinod Chandran
Ashok Menon
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
