M/S. TRAVANCORE DIAGNOSTICS (P) LTD. vs. THE ASSISTANT COMMISSIONER OF INCOME-TAX

ITA/221/2015HC KeralaKLHC01025622201519 October 2016Author: HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN,HONOURABLE MR.JUSTICE THOTTATHIL B.RADHAKRISHNAN47 pages
AI SummaryPartly Allowed

What did the High Court hold?

The High Court held that the assessment proceedings for AY 2009-10 were vitiated due to the non-issuance of a mandatory notice under Section 143(2) of the Income Tax Act, 1961. The Court emphasized that the issuance of a notice under Section 143(2) is a condition precedent for assuming jurisdiction under Section 143(3). While Section 292BB provides an estoppel against the assessee for non-receipt of notice if they participate in proceedings, it does not grant the Assessing Officer the privilege to dispense with the mandatory issuance of a Section 143(2) notice. The Court found it surprising that a notice under Section 143(2) was not issued for AY 2009-10, despite the Assessing Officer being aware of the need and having issued one for AY 2010-11. The reason recorded for non-issuance (inability to generate notice electronically) was found illogical. Therefore, the assessment order for AY 2009-10 was set aside. For AY 2010-11, the assessment was upheld as it was based on a validly issued Section 143(2) notice.

What were the facts?

The assessee, M/s. Travancore Diagnostics (P) Ltd., is engaged in the diagnostics business. The Revenue alleged suppression of receipts and non-deduction of TDS. A survey was conducted under Section 133A on September 24, 2009. The assessee filed returns for Assessment Year (AY) 2009-10 and 2010-11. Subsequently, the Revenue issued a notice under Section 148 on January 11, 2012, for AY 2009-10. The assessee's reply treated the earlier return as filed under Section 148. Proceedings continued with questionnaires and proposals. The Assessing Officer passed an assessment order under Section 143(3) read with Section 147 for AY 2009-10, assessing total income at Rs. 1,09,38,057/-. The High Court is considering appeals against the orders of the Income Tax Appellate Tribunal (ITAT) concerning these assessments.

What were the issues?

1. Whether the assessment proceedings for AY 2009-10, initiated under Section 147 and completed under Section 143(3), are vitiated by the non-issuance of a mandatory notice under Section 143(2) of the Income Tax Act, 1961. Assessee's contention: The assessment for AY 2009-10 is bad in law as no notice under Section 143(2) was issued, which is a mandatory prerequisite for assuming jurisdiction under Section 143(3). The participation in proceedings under Section 148 does not cure this defect. Reliance is placed on the principle that in taxation, nothing is to be read in or implied, and statutory provisions must be strictly followed. Revenue's contention: The Revenue argued that the assessee participated in the proceedings, and therefore, Section 292BB of the Act estops the assessee from claiming non-receipt of notice. It was also contended that the notice under Section 148 could be considered as substantial compliance with the requirement of notice for reassessment proceedings. The Revenue also pointed to the fact that a notice under Section 143(2) was issued for AY 2010-11.

Which sections of the Income-tax Act were involved?

Section 133A,Section 139(1),Section 143(1),Section 143(2),Section 143(3),Section 147,Section 148,Section 292BB

AI-generated summary — verify with the full judgment below

Cited by 50 judgments on BharatTax

See all citing judgments →

Counted from the text of the judgments hosted here. Most recent first.

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE THOTTATHIL B.RADHAKRISHNAN & THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN WEDNE AY, THE 19TH DAY OF OCTOBER 2016/27TH ASWINA, 1938 ITA.No. 221 of 2015 -------------------------------- ORDER IN ITA 289/2014 of I.T.A.TRIBUNAL,COCHIN BENCH ............... APPELLANT: M/S. TRAVANCORE DIAGNOSTICS (P) LTD., KAILAS ARCADE, DISTRICT HOSPITAL ROAD, KOLLAM, REPRESENTED BY ITS MANAGING DIRECTOR, I.C.CHERIAN.

BY ADVS.SRI.D.S.SREEKUMARAN SMT.T.S.MAYA (THIYADIL) RESPONDENT: THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-1, KOLLAM.

BY ADV. SRI.K.M.V.PANDALAI THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 06-10-2016 ALONG WITH ITA. 228/2015, THE COURT ON 19-10-2016 DELIVERED THE FOLLOWING:

APPENDIX IN ITA 221/2015 PETITIONER'S EXHIBITS: ANNEXURE-A1OF NOTICE DATED 5.10.2016 ISSUED BY RESPONDENT ANNEXURE-A2OF THE ORDER SHEET ANNEXURE-A3 ENGLISH TRANSLATION OF THE SWORN STATEMENT ANNEXURE-A4OF THE ASSESSMENT ORDER DATED 31.03.2016 PASSED BY THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-1, KOLLAM ANNEXURE

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 133A

All 5,893 judgments and leading authorities on Section 133A →

Recent GST High Court judgments

Search GST case law →