THE COMMISSIONER OF INCOME TAX,COCHIN vs. ORCHID CONSTRUCTION AND PROPERTIES PVT.L

ITA/545/2009HC KeralaKLHC01025306200907 April 2016Bench: HONOURABLE MR.JUSTICE THOTTATHIL B.RADHAKRISHNAN3 pages

AI SummaryDismissed

What did the High Court hold?

The High Court held that the appeal filed by the Commissioner of Income Tax does not merit interference with the Tribunal's decision. The reasoning was based on the ITAT's observation that the tax amount involved was less than Rs. 2 lakhs. The High Court referred to CBDT circulars, including one dated October 24, 2005, which stipulate that no appeal should be filed unless a repetitive matter or a question of law is involved. The Court also noted subsequent circulars that suggest such appeals need not be prosecuted except in cases involving questions relating to the validity of any notification or the vires of any provision. Consequently, the High Court found no reason to interfere with the ITAT's order and dismissed the appeal. The operative direction was the dismissal of the appeal.

What were the facts?

This is an appeal filed by the Commissioner of Income Tax, Cochin, against an order of the Income Tax Appellate Tribunal (ITAT), Cochin Bench, dated November 25, 2005. The appeal was filed in the High Court of Kerala. The notice issued in the appeal was returned with the endorsement "no such addressee". The High Court examined the impugned order of the ITAT. The ITAT had noted that the tax amount involved in the appeal before it was less than Rs. 2 lakhs. The High Court observed that in terms of CBDT circulars, appeals involving such amounts, unless repetitive or involving a question of law, or relating to the validity of notifications or vires of provisions, need not be filed or prosecuted.

What were the issues?

1. Whether the appeal filed by the Revenue merits interference, considering the tax amount involved and the relevant CBDT circulars. The Revenue's contention, as inferred from the High Court's reasoning, is that the appeal should be entertained. The Revenue likely argued that the appeal involves a substantial question of law or a repetitive matter, warranting its consideration by the High Court. The High Court, however, considered the ITAT's observation regarding the low tax amount and the prevailing CBDT circulars which discourage appeals below a certain threshold unless specific conditions are met. The High Court's decision suggests that the Revenue did not sufficiently demonstrate the necessity of pursuing the appeal under these circumstances.

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE THOTTATHIL B.RADHAKRISHNAN & THE HONOURABLE MRS. JUSTICE ANU SIVARAMAN THURSDAY, THE 7TH DAY OF APRIL 2016/18TH CHAITHRA, 1938 ITA.No. 545 of 2009 -------------------- AGAINST THE ORDER IN ITA 688/COCH/2005 of I.T.A.TRIBUNAL,COCHIN BENCH DATED 25-11-2005 APPELLANT: ------------ THE COMMMISSIONER OF INCOME TAX, COCHIN.

BY ADVS.SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENTS: ---------------- ORCHID CONSTRUCTION AND PROPERTIES PVT LTD., XLI/821, PULLEPADY, CROSS ROAD, KALOOR, KOCHI 682 017.

THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 07-04-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

THOTTATHIL B.RADHAKRISHNAN & ANU SIVARAMAN, JJ. = = = = = = = = = = = = = = = = = = I.T.A. No.545 of 2009 = = = = = = = = = = = = = = = = = = Dated this the 7th day of April, 2016 JUDGMENT Thottathil B.Radhakrishnan, J. Notice was issued in this appeal without the court formulating any question of law. The notice taken out has been returned with the endorsement “no such addressee”. We have examined the impugned order of the Income Tax Appellate Tribunal. The Tribunal noted that the tax amount involved in that appeal was less than Rs.2 lakhs and in terms of CBDT circular dated 24.10.2005, no appeal was required to be filed unless a repetitive matter is involved or any question of law is involved. With the passage of time, different other circulars have been issued, including to the effect that such appeals need not be prosecuted except in cases where they involve questions relating to the validity of any notification or the vires of any provision. We, therefore, are of the view that

I.T.A. No.545/09 2 this appeal does not merit interference with the Tribunal's decision and it is accordingly dismissed. sd/- Thottathil B.Radhakrishnan, Judge sd/- Anu Sivaraman, Judge

sj /True Copy/ P.A. to Judge

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