THE COMMISSIONER OF INCOME TAX vs. M/S. THE MATHRUBHUMI PRINTING AND

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON FRIDAY ,THE 12TH DAY OF OCTOBER 2018 / 20TH ASWINA, 1940 ITA.No. 1239 of 2009 AGAINST THE ORDER/JUDGMENT IN ITA 528/COCH/2006 of I.T.A.TRIBUNAL,COCHIN BENCH DATED 24-09-2007 APPELLANT/S:/RESPONDENT/REVENUE THE COMMISSIONER OF INCOME TAX KOZHIKODE. BY ADVS. SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH SC FOR INCOME TAX RESPONDENT/S:/APPELLANT/ASSESSEE : M/S. THE MATHRUBHUMI PRINTING AND PUBLISHING CO. LTD., KOZHIKODE. BY ADVS. SRI.E.K.NANDAKUMAR (SR.) SRI.K.JOHN MATHAI SRI.P.BENNY THOMAS THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 12.10.2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

ITA 1239/09 -2- J U D G M E N T Vinod Chandran, J. The short question arising in the appeal is as to whether the Income Tax Appellate Tribunal was correct in having interfered with the order of the Commissioner passed under Section 263(1) of the Income Tax Act, 1961 ('Act' for short). The brief facts to be noticed are that the assessment of the assessee for the year 1999- 2000 was completed under Section 143(1) on 20.4.2000 in which there was a refund ordered. Subsequently, on scrutiny taken up, the assessment was completed on 23.3.2005 under Section 143(3) read with Section 147 wherein the income was enhanced and there was a payment of tax necessitated far in excess of the refund ordered. The Assessing Officer (AO) levied interest under Section 234A and B, but did not levy that under Section 234D, which was introduced from 1.6.2003 onwards. The Commissioner suo motu revised the order of the AO under Section 263. 2. The Tribunal interfered with the same. The assessee argued that the Commissioner ought not to have

ITA 1239/09 -3- treated the order of the AO as erroneous, since the view taken by the Income Tax officer is one plausible view and permissible in law. When such a view has been taken by the AO, it was the contention that there could not be a different view taken by the Commissioner under Section 263, especially when the issue was debatable. 3. We do not, from the precedents available, find any support for the said propositions expounded by the assessee. Under Section 263, what is required is that the order should be an erroneous one, causing prejudice to the interest of the Revenue, as has been stated in (2000) 243 ITR 83 (SC) [Malabar Industrial Company Ltd. v. CIT]. The Tribunal, in fact, found that there was sufficient cause to invoke Section 263, but relying on the decision of the very same Tribunal set aside the order passed under Section 263. The Tribunal ought to have noticed that the provision has been introduced with effect from 1.6.2003. 4. In this context, we have to notice (2010) 323 ITR 584 (Ker) [Commissioner of Income Tax v. Kerala Chemicals and Proteins Ltd.], which upheld Section 234D and found its effect to be only from 1.6.2003. The

ITA 1239/09 -4- issue is no longer debatable, going by the aforesaid decision and in such circumstances, we set aside the order of the appellate Tribunal and clarify that the order of the Commissioner is only to the extent of directing the AO to levy interest from 1.6.2003. The Appeal is disposed of as above. No order as to costs. Sd/- K.VINOD CHANDRAN JUDGE Sd/- ASHOK MENON JUDGE APPENDIX PETITIONER'S/S EXHIBITS: ANNEXURE A COPY OF ASSESSMENT ORDER ANNEXURE B COPY OF CIT'S ORDER U/S 263 ANNEXURE C CERTIFIED COPY OF ITAT'S ORDER //TRUE COPY// jg