THE COMMISSIONER OF INCOME TAX vs. PRATAP CASHEW COMPANY (P) LTD.

ITA/65/2011HC KeralaKLHC01026413201114 September 2018Author: HONOURABLE MR.JUSTICE K.VINOD CHANDRAN,HONOURABLE MR. JUSTICE ASHOK MENON4 pages
AI SummaryDismissed

What were the facts?

The appeal concerns the assessment year 1998-99. The Income Tax Officer completed the assessment on February 23, 2001. Subsequently, rectification proceedings were initiated on January 17, 2007, based on an amendment by the Taxation Laws (Amendment) Act, 2005, which had retrospective effect from April 1, 1998. The Income Tax Appellate Tribunal (ITAT) held that rectification was not permissible as it amounted to a change of opinion. The Commissioner of Income Tax (appellant) has appealed this order of the ITAT. The respondent is Pratap Cashew Company (P) Ltd.

What did the High Court hold?

The High Court noted that the amendment itself, which formed the basis for the rectification, had been considered by various High Courts and the Supreme Court. The Supreme Court had withdrawn cases from High Courts and directed the Gujarat High Court to decide the issue. The Gujarat High Court struck down the amendment, a decision that was upheld by the Supreme Court in Commissioner of Income Tax v. Avani Exports, (2015) 277 CTR 460. Since the amendment itself was set aside, the High Court found no scope for the rectification proceedings to stand. Therefore, the High Court dismissed the appeal, leaving the substantive question of whether rectification was permissible on merits open.

What were the issues?

1. Whether the rectification of the assessment order for the assessment year 1998-99 was permissible in law, considering the amendment brought about by the Taxation Laws (Amendment) Act, 2005, with retrospective effect from April 1, 1998. This is a question of law. Assessee's contention: The ITAT found that rectification was not permissible as it constituted a change of opinion. Revenue's contention: The revenue argued that rectification was permissible based on the retrospective amendment.

Which sections of the Income-tax Act were involved?

Section 68

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 FRIDAY ,THE 14TH DAY OF SEPTEMBER 2018 / 23RD BHADRA, 1940 ITA.No. 65 of 2011 AGAINST THE ORDER/JUDGMENT IN ITA 791/2008 of I.T.A.TRIBUNAL,COCHIN BENCH APPELLANT/S: THE COMMISSIONER OF INCOME TAX THIRUVANANTHAPURAM. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT/S: PRATAP CASHEW COMPANY (P) LTD. KOLLAM P.O., KOCHUPILAMOODU - 691 001. BY ADVS. SRI.E.K.NANDAKUMAR (SR.) SMT.PREETHA S.NAIR SRI.K.JOHN MATHAI SRI.M.GOPIKRISHNAN NAMBIAR SRI.P.BENNY THOMAS SRI.P.GOPINATH THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 14.09.2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ITA 65/2011 2

JUDGMENT Vinod Chandran, J.

The appeal arises from the order of the Tribunal, which found that on facts rectification was not permissible, since there is a change of opinion. The assessment of the year 1998-99, which was completed on 23.02.2001, was subjected to rectification proceedings dated 17.01.2007 in view of the amendment by the Taxation Laws (Amendment) Act, 2005 with retrospective effect from 01.04.1998. The question of law raised is as to whe

The order continues below.

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