COMM. OF INCOME TAX, TRIVANDRUM vs. S. SANDEEP KUMAR,PACHAYIL IND., KADAKKAL

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ITA/36/2008HC KeralaKLHC01026941200804 March 2009Author: HONOURABLE MR.JUSTICE K.SURENDRA MOHAN,HONOURABLE MR.JUSTICE C.N.RAMACHANDRAN NAIR3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal filed by the Revenue. The Court found no substantial question of law involved in the appeal, particularly considering the tax effect of approximately Rs. 65,000/-. The Court noted that even if the ITAT had entertained the appeal, it would have likely been remanded for fresh adjudication. Therefore, the Revenue's appeal was dismissed. However, the Court clarified that this dismissal should not be interpreted as an endorsement of the Commissioner (Appeals)'s view that the failure to issue a notice under Section 143(2) is fatal to income escaping assessment under Section 147 of the Income Tax Act. The specific finding on the Section 143(2) issue was left undecided by the High Court.

What were the facts?

The Revenue (Commissioner of Income Tax, Trivandrum) filed an appeal before the High Court of Kerala against an order of the Income Tax Appellate Tribunal (ITAT), Cochin Bench. The ITAT had rejected the Revenue's appeal on the grounds that the tax effect was below the prescribed limit for filing an appeal. The assessee is Shri S. Sandeep Kumar, Pachayil Industries, Kadakkal. The assessment year(s) are not explicitly stated in the provided text, but the appeal concerns an order passed by the ITAT. The amount in dispute is approximately Rs. 65,000/-. The procedural history involves the Revenue filing an appeal to the ITAT, which was rejected, and then the Revenue filing the present appeal to the High Court.

What were the issues?

1. Whether a substantial question of law is involved in the appeal filed by the Revenue, justifying its entertainment despite the tax effect being below the prescribed limit. Assessee's contentions: Not recorded in the judgment. Revenue's contentions: The Revenue argued that a substantial question of law was involved, which should exempt their appeal from the tax effect limit. They contended that the case falls under an exemption clause. The Revenue's appeal to the ITAT was against an order that, if entertained by the ITAT, would have required remand for fresh adjudication.

Which sections of the Income-tax Act were involved?

Section 143(2),Section 147

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 C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE K.SURENDRA MOHAN WEDNESDAY, THE 4TH MARCH 2009 / 13TH PHALGUNA 1930 ITA.No. 36 of 2008() -------------------- ITA.474/COCH/2006 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT/APPELLANT: ------------------------------ THE COMMISSIONER OF INCOME TAX, TRIVANDRUM. BY ADV. SRI.JOSE JOSEPH, SC FOR IT RESPONDENT(S): RESPONDENT: -------------------------- SHRI.S.SANDEEP KUMAR, PACHAYIL INDUSTRIES, KADAKKAL. ADV. SRI.O.RAMACHANDRAN NAMBIAR FOR R SRI.GEEN T.MATHEW FOR R THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 04/03/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & K.SURENDRA MOHAN, JJ. .................................................................... I.T. Appeal No.36 of 2008 .................................................................... Dated this the 4th day of March, 2009.

JUDGMENT Ramachandran Nair, J. Heard Standing Counsel for the appellant and counsel appearing for the respondent-assessee. Appeal is filed by the Revenue against the order of the Tribunal rejecting their appeal for the reason that tax effect is below the limit that entitles the department to file an appeal before the Tribunal. Even though Standing Counsel submitted that substantial question of law is involved in this case and so much so, it falls under exemption clause, on going through the assessment order itself we find that if at all appeal was entertained by the Tribunal, it has to be again remanded for fresh adjudication in a case where the tax effect is around Rs.65,000/- only. We, therefore, do not find any substantial question of law involved in the appeal filed by the Revenue. Consequently we dismiss the appeal. However, dismissal of appeal should not be treated as our endorsement to the view taken by the Commissioner (Appeals) that failure to issue notice under Section 143

2 (2) is fatal to the income escaping assessment under Section 147 of the Income Tax Act. C.N.RAMACHANDRAN NAIR Judge K.SURENDRA MOHAN Judge pms

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