THE COMMISSIONER OF INCOME TAX vs. M/S. INDIA FOOD EXPORTS

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ITA/78/2010HC KeralaKLHC01026770201012 November 2018Author: HONOURABLE MR.JUSTICE K.VINOD CHANDRAN,HONOURABLE MR. JUSTICE ASHOK MENON5 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the retrospective amendment to Section 80HHC of the Income Tax Act, 1961, by the Taxation Laws (Second Amendment) Act, 2005, was not valid. This decision was based on the Honourable Supreme Court's ruling in (2015) 277 CTR Reports 460 [Commissioner of Income Tax & Anr. v. Avani Exports & Ors.], which quashed the retrospective effect given to the amendment. Consequently, the question of law was answered against the Revenue and in favour of the assessee. The appeals filed by the Revenue were rejected. No costs were awarded. The operative direction was the rejection of the appeals.

What were the facts?

These Income Tax Appeals, ITA Nos. 68/2010 and 78/2010, were filed by the Commissioner of Income Tax (Central), Cochin, against the assessee, M/s. India Food Exports. The appeals challenge a common order of the Income Tax Appellate Tribunal, Cochin Bench, dated July 9, 2009. The assessment years under consideration are 1998-99 and 2001-02. The core dispute revolves around the validity of the retrospective amendment to Section 80HHC of the Income Tax Act, 1961, introduced by the Taxation Laws (Second Amendment) Act, 2005. The appeals were heard together by the High Court of Kerala.

What were the issues?

1. Whether the retrospective amendment to Section 80HHC of the Income Tax Act, 1961, by the Taxation Laws (Second Amendment) Act, 2005, is valid? (Question of law) Assessee's contention: The assessee implicitly supports the quashing of the retrospective amendment, as the High Court ruled in their favour. No specific arguments for the assessee are recorded in the judgment. Revenue's contention: The Revenue, as the appellant, is challenging the Tribunal's decision which presumably upheld the assessee's claim regarding the invalidity of the retrospective amendment. The judgment does not explicitly detail the Revenue's arguments but implies they sought to uphold the retrospective amendment.

Which sections of the Income-tax Act were involved?

Section 80HHC

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 K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON MONDAY ,THE 12TH DAY OF NOVEMBER 2018 / 21ST KARTHIKA, 1940 ITA.No. 68 of 2010 AGAINST THE ORDER/JUDGMENT IN ITA 474/COCH/2008 of I.T.A.TRIBUNAL,COCHIN BENCH DATED 09-07-2009 APPELLANT/S:/RESPONDENT/REVENUE: THE COMMISSIONER OF INCOME TAX (CENTRAL), COCHIN. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX DEPT. RESPONDENT/S:/APPELLANT/ASSESSEE: M/S. INDIA FOOD EXPORTS PALMS DALE, MUNDAKKAL WEST, KOLLAM. BY ADVS. SMT.C.K.SHERIN SRI.T.M.SREEDHARAN (SR.) SRI.V.P.NARAYANAN THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 12.11.2018, ALONG WITH ITA.78/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ITAs 68 & 78/10 -2- IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON MONDAY ,THE 12TH DAY OF NOVEMBER 2018 / 21ST KARTHIKA, 1940 ITA.No. 78 of 2010 AGAINST THE ORDER/JUDGMENT IN ITA 598/COCH/2008 of I.T.A.TRIBUNAL,COCHIN BENCH DATED 09-07-2009 APPELLANT/S:/RESPONDENT/REVENUE: THE COMMISSIONER OF INCOME TAX (CENTRAL), COCHIN. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT/S:/APPELLANT/ASSESSEE: M/S. INDIA FOOD EXPORTS PALMS DALE, MUNDAKKAL WEST, KOLLAM. BY ADVS. SMT.C.K.SHERIN SRI.T.M.SREEDHARAN (SR.) SRI.V.P.NARAYANAN THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 12.11.2018, ALONG WITH ITA.68/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ITAs 68 & 78/10 -3-

JUDGMENT ITA Nos.68/2010 & 78/2010 K.Vinod Chandran, J. These Income Tax Appeals arise from a common order of the Income Tax Appellate Tribunal for the assessment years 1998-99 and 2001-02. The issue was as to whether the retrospective amendment to Section 80HHC of the Income Tax Act, 1961, by Taxation Laws (Second Amendment) Act, 2005 was valid or not. The Honourable Supreme Court in (2015) 277 CTR Reports 460 [Commissioner of Income Tax & Anr. v. Avani Exports & Ors.] quashed the retrospective effect given. In such circumstances, the question of law has to be answered against the Revenue and in favour of the assessee. Hence, these Income Tax Appeals stand rejected. No costs. K.VINOD CHANDRAN JUDGE ASHOK MENON JUDGE jg -4- APPENDIX OF ITA 68/2010 PETITIONER'S/S EXHIBITS: ANNEXURE AOF ASSESSMENT ORDER DATED 17.12.2003. ANNEXURE BOF ASSESSEE'S LETTER DATED 16.10.2006. ANNEXURE COF ORDER U/S. 154 DATED 26.3.2007. ANNEXURE D CERTIFIED/OF ORDER OF THE CIT(A) DATED 16.11.2007. ANNEXURE E CERTIFIED/OF ORDER OF THE ITAT DATED 9.7.2009. []

-5- APPENDIX OF ITA 78/2010 PETITIONER'S/S EXHIBITS: ANNEXURE AOF ASSESSMENT ORDER DATED 3.2.2004. ANNEXURE B(1)OF PROCEEDINGS U/S. 154 DATED 25.2. 04. ANNEXURE B(2)OF PROCEEDINGS U/S. 154 DATED 8.7. 04. ANNEXURE COF FORM NO.10CCAC SHOWING ASSESSEE'S WORKING OF DEDUCTION U/S. 80HHC. ANNEXURE DOF ASSESSEE'S LETER DATED 16.10.2006. ANNEXURE EOF ORDER U/S.154 DATED 25.5.2007. ANNEXURE F CERTIFIED/OF ORDER OF THE CIT(A) DATED 13.12.2007. ANNEXURE G CERTIFIED/OF ORDER OF THE ITAT DATED 9.7.2009. [] jg

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