THE COMMISSIONER OF INCOME TAX vs. M/S P.T.CHACKO AND CO.

ITA/263/2009HC KeralaKLHC01025024200905 November 2009Author: HONOURABLE MR.JUSTICE V.K.MOHANAN,HONOURABLE MR.JUSTICE C.N.RAMACHANDRAN NAIR4 pages
AI SummaryDismissed

What were the facts?

The appeal was filed by the Commissioner of Income Tax, Thiruvananthapuram, against an order of the Income Tax Appellate Tribunal (ITAT), Cochin Bench. The assessee is M/s. P.T. Chacko and Co. The dispute pertains to an assessment year not explicitly stated but related to reassessment under Section 147 and penalty under Section 271(1)(a) of the Income Tax Act, 1961. The revenue's appeal was challenged by the assessee on grounds of maintainability, citing the CBDT's monetary limit for filing appeals. The revenue contended that the circular regarding the monetary limit was not applicable to appeals filed before its effective date.

What did the High Court hold?

The High Court held that the appeal filed by the revenue is not maintainable. The Court found force in the assessee's contention that the CBDT circular regarding the monetary limit for filing appeals applies. Clause (11) of CBDT Instruction 5/08 clarifies that appeals filed before 15.5.2008 are governed by the instructions in force at the time of filing. The Court noted that the department itself had issued Annexure D (CBDT circular dated 27.10.2005) which stipulated a threshold limit of Rs. 4 lakhs for appeals to the High Court. While exceptions were provided, the present case, concerning penalty under Section 271(1)(a) based on reassessment under Section 147 beyond the original assessment's limitation period, did not fall under any of these exceptions. Therefore, the appeal was dismissed on the grounds of not being maintainable.

What were the issues?

1. Whether the appeal filed by the revenue is maintainable before the High Court, considering the monetary limit prescribed by the CBDT for filing appeals under Section 260A of the Income Tax Act, 1961. Assessee's Contention: The appeal is not maintainable as the tax effect is below the Rs. 4 lakhs limit prescribed by the CBDT for filing appeals by the department. Reliance was placed on CBDT Instruction 5/08 dated 15.5.2008. Revenue's Contention: The said circular does not apply to appeals filed prior to 15.5.2008. The appeal was governed by instructions operative at the time of filing. The issue involves penalty under Section 271(1)(a) based on reassessment under Section 147 beyond the period of limitation for the original assessment.

Which sections of the Income-tax Act were involved?

Section 260A,Section 271(1)(a),Section 147

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE V.K.MOHANAN THUR AY, THE 5TH NOVEMBER 2009 / 14TH KARTHIKA 1931 ITA.No. 263 of 2009() --------------------- ITA.458/COCH/2005 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT/RESPONDENT ---------------------------------------- THE COMMISSIONER OF INCOME TAX, THIRUVANANTHAPURAM. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT(S): APPELLANT ------------------------ M/S.P.T.CHACKO AND CO., SANTHA BHAWAN, KALANJOOR P.O., PATHANAPURAM. ADV. SRI.P.BALAKRISHNAN (E) FOR R THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 05/11/2009

The order continues below.

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