THE COMMISSIONER OF INCOME TAX vs. M/S. INDIA FOOD EXPORTS

PDF · subscribers
ITA/68/2010HC KeralaKLHC01026760201012 November 2018Bench: HONOURABLE MR.JUSTICE K.VINOD CHANDRAN,HONOURABLE MR. JUSTICE ASHOK MENON5 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the retrospective amendment to Section 80HHC of the Income Tax Act, 1961, by the Taxation Laws (Second Amendment) Act, 2005, was invalid. The Court's decision was directly influenced by the Honourable Supreme Court's ruling in (2015) 277 CTR Reports 460 [Commissioner of Income Tax & Anr. v. Avani Exports & Ors.], which had quashed the retrospective effect given to this amendment. Consequently, the question of law was answered against the Revenue and in favour of the assessee. The appeals filed by the Revenue were therefore rejected. No costs were awarded. The specific amount in dispute was not recorded in the judgment.

What were the facts?

These Income Tax Appeals (ITAs 68/2010 and 78/2010) were filed by the Commissioner of Income Tax (Central), Cochin, against the assessee, M/s. India Food Exports. The appeals arose from a common order of the Income Tax Appellate Tribunal (ITAT), Cochin Bench, dated July 9, 2009. The assessment years involved were 1998-99 and 2001-02. The core dispute concerned the validity of the retrospective amendment to Section 80HHC of the Income Tax Act, 1961, introduced by the Taxation Laws (Second Amendment) Act, 2005. The ITAT's order, which is under challenge, presumably ruled in favour of the assessee on this issue.

What were the issues?

1. Whether the retrospective amendment to Section 80HHC of the Income Tax Act, 1961, by the Taxation Laws (Second Amendment) Act, 2005, is valid? (Question of law) Assessee's Contention: The assessee would argue that the retrospective amendment is invalid, likely relying on judicial pronouncements that have struck down such retrospective amendments, particularly concerning Section 80HHC. They would contend that the benefit under Section 80HHC should be assessed based on the law prevailing at the time of filing the return or during the assessment year, not based on a subsequent retrospective amendment. Revenue's Contention: The Revenue would contend that the retrospective amendment to Section 80HHC is valid and applicable to the assessment years in question. They would likely argue that the amendment was necessary to clarify the legislative intent and plug loopholes, and that the retrospective nature was justified. They might cite the legislative power to make laws retrospectively.

Which sections of the Income-tax Act were involved?

Section 80HHC

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 MONDAY ,THE 12TH DAY OF NOVEMBER 2018 / 21ST KARTHIKA, 1940 ITA.No. 68 of 2010 AGAINST THE ORDER/JUDGMENT IN ITA 474/COCH/2008 of I.T.A.TRIBUNAL,COCHIN BENCH DATED 09-07-2009 APPELLANT/S:/RESPONDENT/REVENUE: THE COMMISSIONER OF INCOME TAX (CENTRAL), COCHIN. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX DEPT. RESPONDENT/S:/APPELLANT/ASSESSEE: M/S. INDIA FOOD EXPORTS PALMS DALE, MUNDAKKAL WEST, KOLLAM. BY ADVS. SMT.C.K.SHERIN SRI.T.M.SREEDHARAN (SR.) SRI.V.P.NARAYANAN THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 12.11.2018, ALONG WITH ITA.78/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

ITAs 68 & 78/10 -2- IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON MONDAY ,THE 12TH DAY OF NOVEMBER 2018 / 21ST KARTHIKA, 1940 ITA.No. 78 of 2010 AGAINST THE ORDER/JUDGMENT IN ITA 598/COCH/2008 of I.T.A.TRIBUNAL,COCHIN BENCH DATED 09-07-2009 APPELLANT/S:/RESPONDENT/REVENUE: THE COMMISSIONER OF INCOME TAX (CENTRAL), COCHIN. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT/S:/APPELLANT/ASSESSEE: M/S. INDIA FOOD EXPORTS PALMS DALE, MUNDAKKAL WEST, KOLLAM. BY ADVS. SMT.C.K.SHERIN SRI.T.M.SREEDHARAN (SR.) SRI.V.P.NARAYANAN THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 12.11.2018, ALONG WITH ITA.68/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

ITAs 68 & 78/10 -3- JUDGMENT ITA Nos.68/2010 & 78/2010 K.Vinod Chandran, J. These Income Tax Appeals arise from a common order of the Income Tax Appellate Tribunal for the assessment years 1998-99 and 2001-02. The issue was as to whether the retrospective amendment to Section 80HHC of the Income Tax Act, 1961, by Taxation Laws (Second Amendment) Act, 2005 was valid or not. The Honourable Supreme Court in (2015) 277 CTR Reports 460 [Commissioner of Income Tax & Anr. v. Avani Exports & Ors.] quashed the retrospective effect given. In such circumstances, the question of law has to be answered against the Revenue and in favour of the assessee. Hence, these Income Tax Appeals stand rejected. No costs. Sd/- K.VINOD CHANDRAN JUDGE Sd/- ASHOK MENON JUDGE jg

ITAs 68 & 78/10 -4- APPENDIX OF ITA 68/2010 PETITIONER'S/S EXHIBITS: ANNEXURE A TRUE COPY OF ASSESSMENT ORDER DATED 17.12.2003. ANNEXURE B TRUE COPY OF ASSESSEE'S LETTER DATED 16.10.2006. ANNEXURE C TRUE COPY OF ORDER U/S. 154 DATED 26.3.2007. ANNEXURE D CERTIFIED/TRUE COPY OF ORDER OF THE CIT(A) DATED 16.11.2007. ANNEXURE E CERTIFIED/TRUE COPY OF ORDER OF THE ITAT DATED 9.7.2009. [True Copy]

ITAs 68 & 78/10 -5- APPENDIX OF ITA 78/2010 PETITIONER'S/S EXHIBITS: ANNEXURE A TRUE COPY OF ASSESSMENT ORDER DATED 3.2.2004. ANNEXURE B(1) TRUE COPY OF PROCEEDINGS U/S. 154 DATED 25.2.04. ANNEXURE B(2) TRUE COPY OF PROCEEDINGS U/S. 154 DATED 8.7.04. ANNEXURE C TRUE COPY OF FORM NO.10CCAC SHOWING ASSESSEE'S WORKING OF DEDUCTION U/S. 80HHC. ANNEXURE D TRUE COPY OF ASSESSEE'S LETER DATED 16.10.2006. ANNEXURE E TRUE COPY OF ORDER U/S.154 DATED 25.5.2007. ANNEXURE F CERTIFIED/TRUE COPY OF ORDER OF THE CIT(A) DATED 13.12.2007. ANNEXURE G CERTIFIED/TRUE COPY OF ORDER OF THE ITAT DATED 9.7.2009. [True Copy] jg

More judgments on Section 80HHC

All 1,083 judgments and leading authorities on Section 80HHC →

Recent GST High Court judgments

Search GST case law →