M/S.N.C JOHN & SONS P.LTD vs. THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-1

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ITA/65/2012HC KeralaKLHC01023987201203 July 2012Author: HONOURABLE MR.JUSTICE K.VINOD CHANDRAN,HONOURABLE MR.JUSTICE THOTTATHIL B.RADHAKRISHNAN5 pages

AI SummaryPartly Allowed

What did the High Court hold?

The High Court acknowledged the Revenue's contention that an order on a miscellaneous petition might not be challengeable under Section 260A. However, the Court deemed it unnecessary to definitively rule on this aspect, considering the nature of the order being passed. The Court also noted that the issue regarding the prosecution of matters with a tax effect less than Rs. 2 lakhs should be decided on a case-to-case basis, as recurring issues might still be entertained by the Tribunal even if the tax effect is below the threshold. The Court found that the assessee could not be aggrieved by the reconsideration of IT appeals on merits. The Court sustained the impugned order and directed that the IT appeals pending before the ITAT (specifically, appeals 563 & 733/COCH/2008) be decided after hearing the parties and without being influenced by any findings or observations in the order issued on MP.Nos.28 & 29/COCH/2010.

What were the facts?

The appeals were filed by M/s. N.C. John & Sons P. Ltd. against orders passed by the Income Tax Appellate Tribunal (ITAT) on miscellaneous petitions. These orders recalled earlier ITAT orders concerning appeals filed by the Revenue and directed the registry to list those appeals for normal hearing. The Revenue argued that an order on a miscellaneous petition cannot be challenged in an Income Tax Appeal before the High Court under Section 260A of the Income Tax Act, 1961. The assessee's grievance was that the impugned order contained findings and observations that might adversely affect the adjudication of the appeals on merits.

What were the issues?

1. Whether an order passed on a miscellaneous petition by the Income Tax Appellate Tribunal can be challenged in an Income Tax Appeal before the High Court under Section 260A of the Income Tax Act, 1961? (Question of law) 2. Whether the Revenue should prosecute matters with a tax effect less than Rs. 2 lakhs, considering CBDT circulars? (Question of mixed law and fact) Assessee's Contentions: The assessee contended that the impugned order contained findings and observations which could adversely affect the adjudication of the appeals on merits. The assessee did not explicitly argue on the maintainability of the appeal against an order on a miscellaneous petition. Revenue's Contentions: The Revenue argued that an order passed on a miscellaneous petition could not be challenged in an IT appeal before the High Court under Section 260A of the IT Act, 1961. The Revenue also argued on the effect of CBDT circulars regarding the prosecution of matters with a tax effect less than Rs. 2 lakhs.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE THOTTATHIL B.RADHAKRISHNAN & THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN TUESDAY, THE 3RD DAY OF JULY 2012/12TH ASHADHA 1934 ITA.No. 65 of 2012 ------------------- .NO./ IN MP.28/2010 of I.T.A.TRIBUNAL,COCHIN BENCH APPELLANT(S)/RESPONDENT: ----------------------- M/S.N.C JOHN & SONS P.LTD, VAZHINCHERRY, ALAPPUZHA. BY ADVS.SRI.ANIL D. NAIR SRI.J.R.PREM NAVAZ SMT.NIVEDITA A.KAMATH RESPONDENT(S)/APPELLANT: ------------------------ THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-1 ALAPPUZHA-688 001. BY SRI.JOSE JOSEPH, SC, FOR INCOME TAX BY SRI.P.K.R.MENON (SR.) THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 03-07-2012, ALONG WITH ITA. 71/2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: AS ITA.No. 65 of 2012 APPENDIX PETITIONER'S ANNEXURES: ANN.A: COPY OF THE ORDER OF ASSESSMENT FOR THE YEAR 2003-04 ISSUED TO THE APPELLANT. ANN.B: COPY OF THE ORDER OF THE COMMISSIONER OF INCOME TAX FOR THE YEAR 2003-04 ISSUED TO THE APPELLANT. ANN.C: COPY OF THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH DT.12/10/2009. ANN.D: COPY OF THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH DT.9/3/2012. RESPONDENT'S EXHIBITS: NIL /TRUE COPY/ P.A.TO JUDGE AS THOTTATHIL B.RADHAKRISHNAN & K.VINOD CHANDRAN, JJ. ----------------------------------- I.T.A.Nos.65 & 71 of 2012 ------------------------------------ Dated this the 3rd day of July, 2012

JUDGMENT

Thottathil B.Radhakrishnan,J. 1.These appeals are filed against orders passed on miscellaneous petitions. The Income Tax Appellate Tribunal, as per those orders, recalled the orders issued earlier on appeals by the department and directed the registry to post those appeals in the normal course. 2.While the learned counsel for the appellant and the learned senior counsel for the department argued on the effect of the circular of the Cental Board of Direct Taxes (CBDT) as to whether the Revenue should prosecute matters which has a tax effect less than Rs.2 lakhs, we are of the view that such issue has to be decided on a case to case basis since even when recurring issues arise, it will be open to the Tribunal to entertain such appeals though the tax effect is below Rs.2 lakhs. 3.We are fairly impressed by the view of the department that the order passed on a miscellaneous petition could not be challenged in an IT appeal before this Court under Section 260A of the IT Act, 1961. Be that as it may, we are inclined to think that having regard to the nature of the order that is being passed hereunder, it is not necessary for us to finally express on that aspect of the matter and thereby open up for the appellant other avenues of litigation. 4.The appellant cannot be aggrieved by the re-consideration of the IT appeals pending before the Appellate Tribunal on merits. The grievance is only to the effect that the impugned order contains certain findings and observations which may adversely affect the adjudication of the appeals on merits. We, accordingly, sustain the impugned order and direct that when IT appeals 563 & 733/COCH/2008 are taken up by the Income Tax Appellate Tribunal, they shall be decided after hearing the parties and untrammelled by any findings or observations contained in the order issued on MP.Nos.28 & 29/COCH/2010. The appeals ordered accordingly. THOTTATHIL B.RADHAKRISHNAN Judge. K.VINOD CHANDRAN Judge. kkb.6/7.

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