THE COMMISSIONER OF INCOME TAX vs. M/S. AL AHALYA MONEY EXCHANGE BUREAU

PDF · subscribers
ITA/224/2015HC KeralaKLHC01025625201518 September 2018Bench: HONOURABLE MR.JUSTICE K.VINOD CHANDRAN,HONOURABLE MR. JUSTICE ASHOK MENON4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the appeals were to be closed as infructuous. This decision was based on the agreement of both parties that the advance ruling, which formed the basis of the assessments, had been cancelled by the Delhi High Court in the case of U.A.E. Exchange Centre Ltd. v. Union of India & another. Although the Revenue had filed an SLP against the Delhi High Court's judgment, which was admitted by the Supreme Court, the High Court chose to dispose of the present appeals as infructuous. The Court granted liberty to the Revenue to file an application for reopening the appeals before the High Court in the event the Supreme Court allowed the SLP. The operative direction was to close the appeals, leaving it open for future arguments on merits if the Supreme Court's decision favored the Revenue. The principle established is that appeals based on a cancelled ruling, even with a pending higher court challenge, can be closed as infructuous with liberty to reopen.

What were the facts?

The appeals before the High Court of Kerala were filed by the Commissioner of Income Tax, Thrissur, against an order of the Income Tax Appellate Tribunal (ITAT), Cochin Bench, for the assessment year 2008-09. The respondent is M/s. Ahalya Money Exchange Bureau. The original assessments were based on an advance ruling by the Authority for Advance Ruling (AAR) which held that the respondent's operations in India were taxable. The dispute before the Tribunal was on the quantum of tax. However, both parties agreed that the AAR's ruling had been cancelled by a Delhi High Court judgment in U.A.E. Exchange Centre Ltd. v. Union of India & another. The Revenue had filed a Special Leave Petition (SLP) against the Delhi High Court's decision, which was admitted by the Supreme Court. Consequently, the appeals before the High Court were closed as infructuous.

What were the issues?

1. Whether the appeals before the High Court are to be decided on merits, or are they rendered infructuous due to the cancellation of the advance ruling by the Delhi High Court in U.A.E. Exchange Centre Ltd. v. Union of India & another, which was challenged before the Supreme Court. (Question of law and fact) Assessee's Contention: Not recorded. Revenue's Contention: The Revenue, through its learned Senior Standing Counsel, submitted that the advance ruling relied upon for the assessment had been cancelled by the Delhi High Court. However, since an SLP was admitted by the Supreme Court, the Revenue requested that the appeals be closed as infructuous, with liberty to move for reopening if the Supreme Court allowed the SLP.

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 TUESDAY ,THE 18TH DAY OF SEPTEMBER 2018 / 27TH BHADRA, 1940 ITA.No. 224 of 2015 AGAINST THE ORDER/JUDGMENT IN ITA 334/2014 of I.T.A.TRIBUNAL,COCHIN BENCH DATED 05-12-2014 ASSESSMENT YEAR 2008-09 APPELLANT: THE COMMISSIONER OF INCOME TAX THRISSUR. BY ADVS. SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH SC FOR INCOME TAX RESPONDENT: M/S. AHALYA MONEY EXCHANGE BUREAU VRINDAVAN, PUTHENVETTU VAZHI, CHEMBUKKAVU, THRISSUR 20. BY ADVS. DR.K.B.MOHAMED KUTTY SRI.K.M.FIROZ THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 18.09.2018, ALONG WITH ITA.192/2015, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

ITA Nos192/2015 & 224/2015 2 JUDGMENT Vinod Chandran, J Heard the learned Senior Counsel for the appellant and the learned Senior Counsel for the respondents. It is agreed by both sides that a batch of appeals involving similar issues filed by the appellant were disposed of by judgment dated 19.12.2011 in ITA No.352/2010 and connected cases. 2. In that judgment, the Division Bench has held thus : Assessments giving rise to these appeals filed by the Revenue were made based on advance ruling given by the Authority for Advance Ruling constituted under the Income Tax Act holding that respondent's operations in India attract tax under the Income Tax Act. Therefore, the limited dispute settled before the Tribunal is on the quantum, against which the Revenue is in appeals. However, when the appeals were taken up, both sides submitted that the advance ruling rendered by the authority stands cancelled by the Division Bench judgment of the Delhi High

ITA Nos192/2015 & 224/2015 3 Court in U.A.E.Exchange Centre Ltd. v. Union of India & another, reported in 313 ITR 94. Since the learned Senior Standing Counsel for the Revenue submitted that SLP is admitted by the Supreme Court, we close these Income Tax Appeals as infructuous leaving it open to the Revenue to moveapplication before this Court for reopening the appeals in the event the Supreme Court allows the SLP filed by the Revenue. In the event of re-opening of appeals, both sides are free to argue on merits of the appeals at that time. Since the issues involved in these appeals are also similar, these appeals are disposed of directing that the respondents herein will be entitled to the benefit of the directions of the judgment in ITA No. 352/2010 and connected cases referred to above. Sd/- K.VINOD CHANDRAN JUDGE Sd/- ASHOK MENON jma JUDGE

ITA Nos192/2015 & 224/2015 4 APPENDIX IN ITA NO.224/2015 PETITIONER'S/S EXHIBITS: ANNEXURE-A A TRUE COPY OF THE ASSESSMENT ORDER DATED 31/12/2010. ANNEXURE-B TRUE COPY OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) DATED 25/02/2014. ANNEXURE-C TRUE COPY OF THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL DATED 04/12/2014. ANNEXURE-D TRUE COPY OF THE ORDER OF THE HIGH COURT OF DELHI. //true copy//

Latest GST High Court judgments

Search GST case law →