P.J.BESSY vs. INCOME TAX APPELLATE TRIBUNAL

WA/951/2014HC KeralaKLHC01044557201420 August 2014Author: HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU,HONOURABLE MR.JUSTICE ANTONY DOMINIC5 pages
AI SummaryRemanded

What were the facts?

The appellant, P.J. Bessy, was a partner in M/s. Mamata Motels, which sold its land and building. The appellant did not report any capital gains. An assessment order (Ext.P1) was passed, which was upheld by the Commissioner of Income Tax(Appeals) (Ext.P2). The appellant then filed an appeal before the Income Tax Appellate Tribunal (ITAT) with a delay of 6 years, 8 months, and 3 days. The ITAT rejected this appeal due to the delay (Ext.P7). The appellant filed a writ petition before the High Court of Kerala, arguing that other partners of the firm had their appeals allowed by the ITAT (Ext.P8) and therefore, her assessment should be revised or her appeal heard on merits. The learned Single Judge dismissed the writ petition, holding that the assessment order had become final. This judgment is under challenge in the present writ appeal.

What did the High Court hold?

The High Court held that while an assessment order, if not varied according to law, remains binding, the facts of the case warranted a different approach. The Court noted that other partners of the firm had their assessment orders nullified by the ITAT's order (Ext.P8), and the Department did not contend that the appellant's case was different. Therefore, the Court found no reason why the appellant should be burdened with a tax liability that could not have been fastened on her, solely on the ground of a belated appeal. The Court concluded that justice demanded the appellant be given the benefit of the Ext.P8 order. Consequently, the Court set aside the Single Judge's judgment and directed the Income Tax Officer to revise the assessment order (Ext.P1) in light of the ITAT's order (Ext.P8) in favour of the other partners. The revision was to be completed expeditiously, within two months. The appellant was also held entitled to consequential benefits, but without any interest on any refund due.

What were the issues?

1. Whether the High Court was justified in dismissing the writ petition, upholding the finality of the assessment order despite the ITAT allowing appeals of other partners of the same firm? Assessee's contentions: The appellant argued that since the ITAT had allowed the appeals of ten other partners of the firm (vide Ext.P8), her assessment order should be revised in light of this precedent, or alternatively, the Tribunal should hear her appeal on merits. She contended that she should not be penalized for the delay when the substantive issue regarding capital gains was decided in favour of other similarly situated partners. Revenue's contentions: The revenue contended that the assessment order had become final as the appellant's appeal before the ITAT was rejected due to a significant delay. The judgment does not explicitly record the revenue's specific arguments beyond this implicit reliance on the finality of the assessment order.

Which sections of the Income-tax Act were involved?

Section 68

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Heard together (2 matters)

WA.No. 951 of 2014
WP(C).28795/2013

Read from the judgment's own cause title. This page is filed under one of them.

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE ANTONY DOMINIC & THE HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU WEDNE AY, THE 20TH DAY OF AUGUST 2014/29TH SRAVANA, 1936 WA.No. 951 of 2014 () IN WP(C).28795/2013 ------------------------------------------- (AGAINST THE ORDER/JUDGMENT IN WP(C) 28795/2013 of HIGH COURT OF KERALA DATED 17-06-2014) APPELLANT(S)/PETITIONER:-: -------------------------- P.J.BESSY, (PAN NO.ACAPB7771M), NEDUMPARAMBIL HOUSE, GLORY BHAVAN, THRISSUR DISTRICT, KERALA STATE. BY ADVS.SRI.M.UNNIKRISHNA MENON SRI.C.CHANDRASEKHARAN RESPONDENT(S)/RESPONDENTS:-: ----------------------------- 1. INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, COCHIN,

REPRESENTED BY ASST. REGISTRAR INCOME - TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN - 682 016. 2. THE INCOME - TAX OFFICER, WARD-2(1), CIRCLE 1, THRISSUR - 678 001. R BY SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 20-08- 2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

ANTONY DOMINIC & DAMA SESHADRI NAIDU, JJ. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

The order continues below.

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