MALANKARA PLANTATIONS LTD vs. THE ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX

WP(C)/11721/2021HC KeralaKLHC01032006202131 May 2023Author: HONOURABLE MRS. JUSTICE ANU SIVARAMAN4 pages

AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala, in its writ jurisdiction, allowed the writ petition. It set aside the impugned assessment order (Ext.P3) and penalty notice (Ext.P4) for the assessment year 2018-19. The Court remanded the matter back to the Assessing Authority for a fresh consideration. This reconsideration is to be conducted in accordance with the findings of the Full Bench of the Income Tax Appellate Tribunal in ITA No.23/2018, dated 01.08.2022, which held that the assessee is entitled to allowance in respect of the cost of replacement of dead and useless rubber trees under Rule 7A(2) of the Income Tax Rules, 1962. The ratio decidendi is that where a specific issue has been authoritatively decided by a higher judicial forum (like the ITAT Full Bench), subsequent assessments concerning the same issue should follow that precedent, and if not, the matter should be remanded for fresh adjudication based on the precedent.

What were the facts?

The petitioner, M/s. Malankara Plantations Ltd., filed a writ petition challenging an assessment order (Ext.P3) and a penalty notice (Ext.P4) for the assessment year 2018-19. The dispute concerns the disallowance of the petitioner's claim for re-plantation allowance under Rule 7A(2) of the Income Tax Rules, 1962. The petitioner had a similar claim disallowed for assessment year 2011-12, which was dismissed in first and second appeals. However, in a subsequent appeal (ITA No.23/2018), the issue was referred to a Full Bench of the Tribunal. The Full Bench, by an order dated 01.08.2022, held that the assessee is entitled to allowance for the cost of replacing dead and useless rubber trees under Rule 7A(2). Following the Full Bench's decision, the Division Bench remanded the matter to the primary authority for fresh consideration.

What were the issues?

1. Whether the petitioner is entitled to re-plantation allowance under Rule 7A(2) of the Income Tax Rules, 1962, for the assessment year 2018-19, in light of the Full Bench decision in ITA No.23/2018. Assessee's Contention: The petitioner argued that the issue in the present writ petition is identical to the one decided by the Full Bench in ITA No.23/2018. The Full Bench had ruled in favour of the assessee, holding that the cost of replacement of dead and useless rubber trees is eligible for allowance under Rule 7A(2). Therefore, the petitioner contended that the matter should be remitted back to the Assessment Authority for reconsideration based on the Full Bench's findings. Revenue's Contention: The judgment does not record any specific contentions from the revenue in this writ petition.

Which sections of the Income-tax Act were involved?

Rule 7A(2)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MRS. JUSTICE ANU SIVARAMAN WEDNESDAY, THE 31ST DAY OF MAY 2023 / 10TH JYAISHTA, 1945 WP(C) NO. 11721 OF 2021 PETITIONER: M/S.MALANKARA PLANTATIONS LTD MALANKARA BUILDINGS, KODIMATHA, KOTTAYAM - 686 039, REPRESENTED BY ITS MANAGING DIRECTOR, MR. J.K. THOMAS. BY ADVS. JOSEPH MARKOSE (SR.) V.ABRAHAM MARKOS ABRAHAM JOSEPH MARKOS ISAAC THOMAS ALEXANDER JOSEPH MARKOS SHARAD JOSEPH KODANTHARA RESPONDENTS: 1 THE ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX, INCOME TAX OFFICER, NATIONAL E-ASSESSMENT CENTRE, NEW DELHI - 110 001. 2 THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX NATIONAL E-ASSESSMENT CENTRE, NEW DELHI - 110 001. SRI.P.K.RAVINDRANATHA MENON (SR.) SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 31.05.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C) NO. 11721 OF 2021 2 JUDGMENT Dated this the 31st day of May, 2023 This writ petition is filed challenging Ext.P3 assessment order and Ext.P4 penalty notice in respect of the assessment year 2018-19. The learned senior counsel appearing for the petitioner submits that the issue in question is with regard to the claim of the petitioner for re- plantation allowance under Rule 7A(2) of the Income Tax Rules, 1962, which was disallowed. It is submitted that in respect of the income tax assessment year 2011-12, a similar claim for re-plantation allowance had been disallowed and the first appeal and second appeal filed by the petitioner were dismissed. Against the second appeal, the petitioner preferred ITA No.23/2018. The issue was referred to the Full Bench and the Full Bench, by its order dated 01.08.2022, considered the issue and found that the assessee is entitled to allowance in respect of the cost of replacement of dead and useless rubber trees under Rule 7A(2) of the 1962 Rules. The question was answered and the Registry was directed to post the ITA before the Division Bench. The Division

WP(C) NO. 11721 OF 2021 3 Bench considering the ITA in the light of the order of the Full Bench had remanded the matter to the primary authority to consider the issue afresh in the light of the order of the Full Bench with regard to the eligibility for re-plantation expenses.

It is submitted that the issue raised in this writ petition stands covered by the said order and judgment and therefore, this matter is also liable to be remitted back to the Assessment Authority to reconsider on the basis of the findings of the Full Bench.

In the above view of the matter, this writ petition is ordered setting aside Exts.P3 and P4 and remanding the matter for a fresh consideration to the Assessing Authority in accordance with the findings of the Full Bench in ITA No.23/2018 dated 01.08.2022. ANU SIVARAMAN JUDGE NP

WP(C) NO. 11721 OF 2021 4

Appendix — schedule of exhibits

APPENDIX OF WP(C) 11721/2021 PETITIONER’S EXHIBITS Exhibit P1 TRUE COPY OF THE INTERIM ORDER DATED 04.12.2019 IN W.P.(C) NO.32889/2019 OF THIS HONOURABLE COURT. Exhibit P2 TRUE COPY OF THE INCOME TAX COMPUTATION FOR AY 2018-19. Exhibit P3 TRUE COPY OF THE ASSESSMENT ORDER DATED 10.04.2021 ISSUED BY THE 1ST RESPONDENT FOR AY 2018-19. Exhibit P4 TRUE COPY OF THE NOTICE DATED 13.04.2021 ISSUED BY THE 1ST RESPONDENT FOR AY 2018-19. RESPONDENTS’ EXHIBITS: NIL

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