THE COMMISSIONER OF INCOME TAX, COCHIN vs. SHRI.EUROPINI GLOVANT
What did the High Court hold?
The High Court held that no question of law arose from the Tribunal's order dismissing the appeals due to delay. The Court noted that while the Supreme Court in CIT v. West Bengal Infrastructure Development Finance Corporation Ltd. had directed consideration on merits despite delay due to huge stakes, in the present case, the protective assessment against FACT remained, allowing the Revenue to satisfy the demand from the company. Therefore, the Court found no significant stakes involved in the appeals before the Tribunal concerning the cancellation of substantive assessments on the foreign technicians. Consequently, the appeals were rejected. The operative direction was the rejection of the appeals filed by the Revenue.
What were the facts?
The appeals concerned foreign technicians employed by FACT Ltd. who received salaries taxed as income. After reassessment based on a High Court judgment, significant refunds were issued. The Revenue made substantive assessments on the technicians and protective assessments on FACT for interest income on these refunds. The Commissioner (Appeals) upheld the protective assessment on FACT but set aside the substantive assessments on the technicians. The Revenue appealed the upholding of protective assessments and the setting aside of substantive assessments. The Tribunal directed the Revenue to approach the Committee on Disputes (COD) regarding protective assessments. Later, the Revenue dropped proceedings before the COD and did not revive appeals before the Tribunal. The Supreme Court later nullified the COD. The Revenue appealed the cancellation of substantive assessments in 2008, but the Tribunal dismissed these appeals in 2012 due to unexplained delay.
What were the issues?
1. Whether the Tribunal erred in refusing to condone the delay in filing the appeals against the cancellation of substantive assessments, thereby preventing a decision on merits, when significant stakes were involved, as per the principle in Commissioner of Income Tax v. West Bengal Infrastructure Development Finance Corporation Ltd. (2011)? (Question of law and fact, turning on the interpretation of the Tribunal's discretion and the application of Supreme Court precedent). Assessee's Contention (Implicitly, as the appeals were dismissed by the Tribunal): The assessee would likely argue that the delay was sufficiently explained or that the Tribunal's refusal to condone was arbitrary, especially given the stakes. However, the judgment does not record specific arguments from the assessee regarding the delay. Revenue's Contention: The Revenue argued that the Supreme Court in CIT v. West Bengal Infrastructure Development Finance Corporation Ltd. had directed High Courts to consider issues on merits despite delay when huge stakes were involved. They sought to apply this principle to the present case.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN THE HONOURABLE MR. JUSTICE ASHOK MENON THURSDAY, THE 26TH DAY OF JULY 2018 / 4TH SRAVANA, 1940 ITA.No. 14 of 2013 AGAINST THE ORDER IN ITA 988/2008 of INCOME TAX APPELLATE TRIBUNAL,COCHIN BENCH DATED 17-04-2012 APPELLANT(S)/APPELLANT:
THE COMMISSIONER OF INCOME TAX, COCHIN.
BY SRI.JOSE JOSEPH, SC RESPONDENT(S)/RESPONDENT:
SHRI EUROPINI GIOVANI,
FOREIGN TECHNICIAN, REP. BY FACT LTD., UDYOGAMANDAL,
KOCHI-683 501. R1 BY ADVS. SRI.M.GOPIKRISHNAN NAMBIAR
SRI.P.GOPINATH
SRI.P.BENNY THOMAS
SRI.K.JOHN MATHAI
SRI.JOSON MANAVALAN
SRI.KURYAN THOMAS
THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 26-07-2018, ALONG WITH I.T.A. NO.24/2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: RVS.
ITA.No. 14 of 2013 APPENDIX PETITIONER(S)' ANNEXURES: ANNEXURE A: A TRUE COPY OF THE ASSESSMENT ORDER DATED 28/03/1996 FOR THE ASST. YEAR 1993-94. ANNEXURE B: TRUE COPY OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) DATED 06/03/2006. ANNEXURE C: TRUE COPY OF THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL IN ITA NOS. 1141&1142/COCH/2005 DATED 31/12/2007. ANNEXURE D: TRUE COPY OF THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL IN ITA NOS.987&988/COCH/2008 DATED 17/04/2012. ANNEXURE E: TRUE COPY OF THE JUDGMENT OF THE SUPREME COURT REPORT IN (2011) 196 TAXMAN 321.
RESPONDENT(S)' ANNEXURES:
NIL. /TRUE COPY/ P.S. TO JUDGE RVS. 10/08/2018
K. VINOD CHANDRAN & ASHOK MENON, JJ. --------------------------------------- I.T.A. Nos.14 & 24 of 2013 --------------------------------------- Dated this the 26th day of July, 2018 JUDGMENT K. Vinod Chandran, J. The appeals are against the Tribunal order refusing to condone the delay in filing the appeal. The facts arising are slightly peculiar in nature and the same are relevant. The respondents herein were foreign technicians, who were in the employment of Fertilizers and Chemicals Travancore Limited [FACT], a public sector undertaking. The salary paid to them by the FACT was taxed as income at the hands of the foreign technicians. Statutory appeals were resorted to by the assessees and eventually this Court found that the same can only
I.T.A. Nos.14 & 24 of 2013 2 be treated as income from other sources. On the basis of the judgment of this Court, the assessment was redone, which necessitated a huge refund. The refund was of more than Rs.50,00,000/- in the case of one assessee and more than Rs.1,66,00,000/- in the case of the other. Refunds were made to FACT since the tax liability was satisfied by FACT. 2. On the interest income obtained on such refund being made by the Department, a substantive assessment was made on the foreign technicians and a protective assessment on FACT. In first appeal, the protective assessment against FACT was sustained, but the substantive assessment made against the foreign technicians were set aside. The revenue, very strangely filed an appeal from the protective assessments being sustained. No appeal was filed from the order cancelling the substantive
I.T.A. Nos.14 & 24 of 2013 3 assessments. 3. With respect to the protective assessment, the Tribunal directed the Department to approach the Committee on Disputes [for brevity, the COD] and then, if necessary approach the Tribunal. The appeals were closed with such direction, reserving liberty to revive the same if required on the orders of the COD. Though initially the Commissioner had directed the proceedings to be initiated before the COD, later the same was directed to be dropped. The appeals before the Tribunal were also not sought to be revived and that remedy was abandoned. Pertinent also is the fact that COD itself was set at naught, finding the same to be not an effective measure by the Hon'ble Supreme Court in Electronics Corporation of India Ltd. v. Union of India [2011 (265) E.L.T. 11 (SC)].
I.T.A. Nos.14 & 24 of 2013 4 4. An appeal was filed from the cancellation of substantive assessment in the year 2008 against the two respondents herein. The appeals filed against the cancellation of substantive assessments were dismissed by the Tribunal on 17.04.2012, finding no reason for the delay and the explanation to be unsatisfactory. The learned Standing Counsel for Government of India [Taxes] placed before us an order of the Hon'ble Supreme Court in Commissioner of Income Tax v. West Bengal Infrastructure Development Finance Corporation Ltd. [(2011) 334 ITR 269 (SC)], in which the Hon'ble Supreme Court had requested the High Court to consider the issue on merits, despite a delay, when there are huge stakes involved. What is to be noticed in the present case is that the protective assessment as against the FACT survives even now and the demand
I.T.A. Nos.14 & 24 of 2013 5 could be made against the said assessee. In such circumstances, there could be found no stakes involved in the appeal before the Tribunal, since the revenue could have as well satisfied the demand from the assessee Company. In such circumstances, we do not think any question of law arises from the order of the Tribunal and hence we reject the appeals. Sd/- K. VINOD CHANDRAN, JUDGE. Sd/- ASHOK MENON, JUDGE. //True Copy// P.A. To Judge sp/27/07/18
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