Kerala High Court
Coconut Palm Beach Garden vs Commissioner Of Income Tax on 26 August, 2009
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HON'BLE THE CHIEF JUSTICE DR. MANJULA CHELLUR
&
THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE
WEDNESDAY, THE 18TH DAY OF DECEMBER 2013/27TH AGRAHAYANA, 1935
ITA.No. 56 of 2010
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AGAINST THE ORDER IN ITA 636/COCH/2008 of I.T.A.TRIBUNAL,
COCHIN BENCH DATED 26.08.2009
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APPELLANT/APPELLANT :
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COCONUT PALM BEACH GARDEN,
NEROTH HOUSE, ALAPPUZHA.
BY ADVS.SRI.ANIL D. NAIR
SMT.NIVEDITA A.KAMATH
RESPONDENT/RESPONDENT :
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COMMISSIONER OF INCOME TAX,
ALAPPUZHA.
BY SRI.JOSE JOSEPH, SC, FOR INCOME TAX
THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON
18-12-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
Manjula Chellur, C.J. & A.M. Shaffique, J.
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I.T.A. No. 56 OF 2010
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Dated this the 18th day of December, 2013
JUDGMENT
Shaffique, J.
The assessee has filed this appeal challenging the order passed by the Income Tax Appellate Tribunal, Cochin Bench in ITA No.636/Coch/08 with reference to the assessment year 2001-02. The facts of the case would disclose that the assessee filed return of income on 31.07.2001 by way of short-term capital gains on sale of certain buildings sold to M/s.Surya Samudra Holiday Resorts Pvt. Ltd. The assessee did not disclose any amount by way of capital gains on sale of the land to the same person. Hence the assessing officer was of the opinion that there is escapement of income chargeable to tax. It was contended by the assessee that he has filed return of income on 06.05.2005. The assessing officer did not accept the explanation offered by assessee and computed capital gain on the entire transaction.
2. Though an appeal was filed before the Commissioner of Income Tax (Appeals), the findings of the assessing officer was confirmed. The assessee preferred an ITANo. 56 of 2010 -:2:- appeal before the Tribunal. After considering the rival contentions raised in the matter, Tribunal concurred with the view expressed by Commissioner of Income Tax (Appeals).
3. Learned counsel for the appellant had raised the following substantial questions of law:
"i) In the facts and circumstances of the case, ought not the Tribunal had held that the reopening is bad in law for want of statutory notice under Section 143(2) of the Act ?
ii) In the facts and circumstances of the case ought not the Tribunal had held that the demand of interest under Section 234-B of the Act is liable to be set aside ?"
4. During the course of argument learned counsel for the appellant contended that the very issuance of notice under Section 143(2) and the time provided under Section 143(2)(ii) was over. Section 143(2)(ii) reads as under:
"143. xx xx xx (2) (ii) 'Provided that no notice under clause (ii) shall be served on the assessee after the expiry of twelve months from the end of the month in which the return is furnished.'"
5. It is not in dispute that even as per the Revenue notice had been served under Section 143(2) to the assessee on 03.11.2006. Though there was some dispute regarding service of ITANo. 56 of 2010 -:3:- notice, it is submitted that for the purpose of this appeal there was service of notice under Section 142(1) of the Act which according to the assessee is bad in law. On going through the provisions of Section 143(2) (ii) of the Act, the notice is beyond the time specified under the said provision. Hence further proceedings cannot be taken against the assessee.
6. The learned counsel for the appellant would submit that though specific ground had been raised in the memorandum of appeal before the Commissioner of Income Tax(Appeals) as well as before the Tribunal, there was no consideration of the aforesaid factual situation.
7. Heard learned Standing Counsel appearing for the revenue as well.
8. As far as the merits of the appeal is concerned, after perusing the order passed by the Tribunal, we do not think that there is any question of law involved in the case as the finding of the authorities are based on factual materials. However, if the question of limitation is decided in favour of the appellant, the entire proceedings will be vitiated. We are of the ITANo. 56 of 2010 -:4:- opinion, the question of limitation is a matter to be considered by the Tribunal. If the notice under Section 143(2)(ii) is beyond the time specified and if so it is not in dispute that further proceedings will be vitiated. The Writ Appeal is allowed as follows:
The impugned order is set aside and we direct the Tribunal to consider the matter afresh in the light of the observations made above.
Manjula Chellur, Chief Justice.
A.M. Shaffique, Judge.
ttb/19/12