M/S.COOL MIND TECHNOLOGIES PRIVATE LIMITED vs. ASSISTANT COMMISSIONER OF INCOME TAX

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WP(C)/9100/2020HC KeralaKLHC01023187202008 February 2024Author: HONOURABLE MR. JUSTICE D. K. SINGH6 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the writ petition, finding it not maintainable. While acknowledging that Rule 24 of the ITAT Rules, 1963, requires the Tribunal to decide appeals on merits even if a party is absent, the Court considered the petitioner's gross delay and latches. The petitioner filed the appeal before the ITAT, which was dismissed for non-prosecution on 24.10.2016. A miscellaneous petition to recall this order was filed after approximately three years, on 09.04.2019. This application was rejected by the ITAT on 23.08.2019, citing the lack of power to condone the delay in filing the miscellaneous application, as it was filed with a delay of over three years against a six-month limitation period. The Court found that the petitioner's subsequent approach to the High Court via writ petition after such significant delays rendered the writ petition itself not maintainable. No specific finding was made on the merits of the original appeal concerning Sections 10A or 10B.

What were the facts?

The petitioner, M/s. Cool Mind Technologies Private Limited, an assessee under the Income Tax Act, 1961, filed its return for assessment year 2007-08 claiming exemption under Section 10B. The assessment was initially completed, but later re-opened under Section 148. The petitioner filed a revised return claiming deduction under Section 10A. The Assessing Officer disallowed the deduction of Rs. 45,43,302/-. The Commissioner of Income Tax (Appeals) dismissed the petitioner's appeal. Subsequently, the petitioner filed an appeal before the Income Tax Appellate Tribunal (ITAT). The ITAT dismissed the appeal for non-prosecution on 24.10.2016. After nearly three years, the petitioner filed a miscellaneous petition to recall the order, which was rejected by the ITAT on 23.08.2019 due to significant delay and lack of power to condone it. The petitioner then filed this writ petition before the High Court.

What were the issues?

1. Whether the Income Tax Appellate Tribunal was justified in dismissing the appeal for non-prosecution, despite Rule 24 of the Income Tax (Appellate) Tribunal Rules, 1963, which mandates deciding appeals on merits even in the absence of a party? (Question of law and fact, concerning Section 10A and 10B of the Income Tax Act, 1961 and Rule 24 of the ITAT Rules, 1963). Assessee's Contention: The petitioner argued that the Tribunal should have decided the appeal on merits as per Rule 24, even in their absence. They also sought to recall the dismissal order. Revenue's Contention: The revenue, through the Assistant Commissioner and Principal Commissioner of Income Tax, implicitly supported the ITAT's decision by not opposing the dismissal for non-prosecution and the rejection of the miscellaneous application. The judgment does not record specific arguments from the revenue regarding the merits of the original appeal or the application of Rule 24.

Which sections of the Income-tax Act were involved?

Section 10A,Section 10B,Section 143(3),Section 148

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 DINESH KUMAR SINGH THURSDAY, THE 8TH DAY OF FEBRUARY 2024 / 19TH MAGHA, 1945 WP(C) NO. 9100 OF 2020 PETITIONER/S: M/S.COOL MIND TECHNOLOGIES PRIVATE LIMITED A-5, 2ND FLOOR, TAPASYA, INFOPARK, KAKKANAD, KOCHI-682030, REPRESENTED BY ITS MANAGING DIRECTOR ABRAHAM JACOB. BY ADVS. S.ARUN RAJ C.T.SUJA RESPONDENT/S: 1 ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-1(1), AAYAKAR BHAWAN, IS PRESS ROAD, KOCHI- 682031. 2 PRINCIPAL COMMISSIONER OF INCOME TAX, AAYAKAR BHAWAN, IS PRESS ROAD, KOCHI-682031. 3 INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, KENDRIYA BHAVAN, KAKKANAD, COCHIN- 682037. OTHER PRESENT: SRI.CYRIAC TOM-SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08.02.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 9100 OF 2020 2

J U D G M E N T The present writ petition has been filed impugning Ext.P4 order passed by the Income Tax Appellate Tribunal ('Tribunal', for short), Cochin Bench (SMC), Kochi dismissing the Income Tax Appeal, ITA No.375/Coch/2016, filed by the petitioner for non-prosecution.

2.

The petitioner, a private limited company, is sought to be engaged in the business of software development and exports. The petitioner-Company is an assessee under the provisions of the Income Tax Act, 1961 ('Act', for short).

3.

The petitioner had filed its return of income for the assessment year 2007-08 on 26.10.2007 disclosing 'nil' income, after claiming exemption under Section 10B of the Act. Originally, the assessment was completed under Section 143(3) of the Act on 13.11.2009. However, it was re-opened for the reason that the petitioner-Company

claimed

deduction

of WP(C) NO. 9100 OF 2020 3 Rs.45,43,302/- under Section 10B of the Act on the basis of approval under the Software Technology Park (STP) Scheme. In pursuance to the notice issued under Section 148 of the Act, the petitioner filed revised return on 20.4.2012 showing 'nil' return, after claiming deduction under Section 10A of the Act for an amount of Rs.45,43,302/-. The petitioner was issued notice under Section 143(2) of the Act and the petitioner filed detailed reply explaining the reason for the claim under Section 10A of the Act in the return filed pursuant to Section 148 notice. In the assessment order in Ext.P1, the assessing authority disallowed the claim of the petitioner for deduction for Rs.45,43,302/-.

4.

Aggrieved by the said order, the petitioner filed appeal before the first appellate authority. The Commissioner of Income Tax (Appeals) II, Kochi dismissed the appeal on 23.9.2014 vide Ext.P2. Against the said order passed by the Commissioner of Income Tax (Appeals), the WP(C) NO. 9100 OF 2020 4 petitioner filed appeal before the Tribunal. Despite several opportunities granted to the petitioner, the petitioner did not appear to prosecute the appeal and therefore, the Tribunal vide impugned order dated 24.10.2016, Ext.P4, dismissed the appeal for non-prosecution.

5.

The said appeal was dismissed way back on 24.10.2016 by the Tribunal. The petitioner after three years from the date of dismissal of the appeal for non-prosecution filed miscellaneous petition on 9.4.2019 before the Tribunal praying for recalling of order dated 24.10.2016 and requesting the Tribunal to decide the appeal on merits. However, the said application came to be rejected, vide order dated 23.8.2019 in Ext.P6, on the ground that the Tribunal does not have the power to condone the delay in filing the miscellaneous application, inasmuch as the limitation period for filing miscellaneous application was six months and the application was filed with a delay of more than three years. The WP(C) NO. 9100 OF 2020 5 petitioner thereafter has approached this Court by filing this writ petition on 19.3.2020. 6. Though it is true that under Rule 24 of the Income Tax (Appellate) Tribunal Rules, 1963, the Tribunal is required to decide the appeal on merits even when the party is not appearing or is not representing. But, considering the facts as narrated above, that the petitioner had committed gross delay and latches in filing the miscellaneous application and thereafter approaching this Court by filing this writ petition, I do not find that the writ petition is maintainable and the same is dismissed. Pending interlocutory application, if any, in the present writ petition stands dismissed. DINESH KUMAR SINGH

JUDGE jg

WP(C) NO. 9100 OF 2020 6

Appendix — schedule of exhibits
APPENDIX OF WP(C) 9100/2020 PETITIONER EXHIBITS EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 22.02.2013 PASSED BY THE 1ST RESPONDENT FOR THE AY 2007-08. EXHIBIT P2 TRUE COPY OF THE ORDER DATED 23.09.2014 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-II, KOCHI FOR THE AY 2007-08. EXHIBIT P3 TRUE COPY OF THE APPEAL MEMORANDUM FILED BY THE PETITIONER FOR AY 2007-08 BEFORE THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, COCHIN. EXHIBIT P4 TRUE COPY OF THE ORDER DATED 24.10.2016 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, COCHIN IN ITA NO.375/COCH/2016 FOR THE AY 2007-08. EXHIBIT P5 TRUE COPY OF THE MISCELLANEOUS PETITION NO.64/COCH/2019 DATED 09.04.2019 FILED BY THE PETITIONER BEFORE THE ITAT, COCHIN BENCH, COCHIN AGAINST THE ORDER DATED 24.10.2016 IN ITA NO.375/COCH/2016. EXHIBIT P6 TRUE COPY OF THE ORDER DATED 23.08.2019 PASSED IN M.A.NO.64/COCH/2019 BY THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, COCHIN. EXHIBIT P7 TRUE COPY OF THE JUDGMENT DATED 16.04.2018 PASSED IN WP.NO.8126 OF 2018 BY THE DIVISION BENCH OF THE HIGH COURT OF MADRAS. EXHIBIT P8 TRUE COPY OF THE JUDGMENT DATED 04.07.2019 PASSED BY THE HIGH COURT OF KARNATAKA AT BENGALURU IN WRIT PETITION NO.25597/2019 IN THE CASE OF M/S KARUTURI GLOBAL LTD VS DEPUTY COMMISSIONER OF INCOME TAX, BANGALORE.

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