ALEX.C.JOSEPH, CHEKKATTU HOUSE, vs. THE INCOME TAX OFFICER, WARD-1,THIRUVALL

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ITA/92/2008HC KeralaKLHC01026997200811 November 2009Bench: HONOURABLE MR.JUSTICE V.K.MOHANAN,HONOURABLE MR.JUSTICE C.N.RAMACHANDRAN NAIR4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court declined to consider the issue of the assessment being time-barred under Section 147, stating that such a contention was not raised before the Tribunal. The Court held that an appeal to the High Court is maintainable only on a substantial question of law arising from the Tribunal's order, and since this issue did not arise from the Tribunal's orders, it would not be considered. Regarding the refixation of income, the High Court found no question of law arising from the Tribunal's order that reduced the estimated income to Rs. 50,000/-. Consequently, the appeal was dismissed. However, the appellant was granted freedom to move the Tribunal if they had a case that the assessment was time-barred.

What were the facts?

The assessee, Alex C. Joseph, is the appellant and the Income Tax Officer, Ward-1, Thiruvalla is the respondent. The assessment year in question is 1992-93. The appeal is against the order of the Income Tax Appellate Tribunal (ITAT), Cochin Bench. The assessee, who was the Managing Partner of two firms, did not file a return. A search under Section 132 of the Income Tax Act revealed that business transactions of these firms were conducted through the assessee's bank account. The firms dealt in imported cars. The Assessing Officer estimated the net profit from business at Rs. 75,000/- due to unacceptable books of accounts. The ITAT reduced this estimated income to Rs. 50,000/-. The High Court notes that a contention regarding the assessment being time-barred under Section 147 was not raised before the Tribunal.

What were the issues?

1. Whether the assessment completed under Section 147 of the Income Tax Act, 1961, is time-barred? (Question of law). The assessee's counsel contended that the income escaping assessment completed under Section 147 is time-barred. The revenue did not record any specific argument on this point in the judgment. 2. Whether the refixation of income by the Tribunal is legally sustainable? (Question of mixed law and fact). The assessee's counsel argued that the assessment is time-barred. The Tribunal reduced the estimated income from Rs. 75,000/- to Rs. 50,000/-. The High Court considered whether a substantial question of law arose from the Tribunal's order regarding the refixation of income.

Which sections of the Income-tax Act were involved?

Section 132,Section 147

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE V.K.MOHANAN WEDNESDAY, THE 11TH NOVEMBER 2009 / 20TH KARTHIKA 1931 ITA.No. 92 of 2008() -------------------- ITA.707/COCH/2005 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT/APPELLANT IN ITA ---------------------------------------------- ALEX.C.JOSEPH, CHEKKATTU HOUSE, THADIYOOR.P.O, THIRUVALLA. BY ADV. SRI.M.A.SHAFIK RESPONDENT(S): RESPONDENT IN ITA -------------------------------- THE INCOME TAX OFFICER, WARD-1, THIRUVALLA.

BY ADV. SRI. JOSE JOSEPH, SC FOR IT DEPT. THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 11/11/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

C .N. RAMACHANDRAN NAIR & V.K. MOHANAN, JJ. -------------------------------------------- I. T. A. No. 92 OF 2008 -------------------------------------------- Dated this the 11th day of November, 2009 JUDGMENT Ramachandran Nair, J. Heard counsel for the appellant. The appeal is filed against the order of the Tribunal disposing of assessment appeal by the assessee for the year 1992-93. The assessee who was the Managing Partner of two firms during the previous year did not file any return. A search was carried out in the premises under Section 132 of the I.T. Act when it was found that business transactions of the two firms of which the assessee was Managing Partner, were transacted through the bank account of the assessee. Both the firms had converted their business to purchase and sale of imported cars. After collecting information from the books of accounts, the assessing officer issued notice to one person by name K.A. Mathew to whom payment of Rs. 25,000/- was recorded in the books of accounts of the assessee's firm towards consideration for using his passport for import of Mercedes car in June, 1991. However, the said K.A. Mathew appeared before the assessing officer

2 and gave a statement denying any commission having been received by him. Since books of accounts were found to be unacceptable, the assessing officer estimated that the net profit from business is Rs. 75,000/-. On appeal, the Tribunal reduced this income estimated to Rs. 50,000/-. Even though assessee's counsel contended that income escaping assessment completed under Section 147 is time barred, we do not find any such contention raised before the Tribunal while deciding the issue. An appeal is maintainable before this Court only on substantial question of law arising from the order of the Tribunal. Since the issue does not arise from the orders of the Tribunal, we decline to consider the same. So far as refixation of income is concerned, we do not find any question of law arising from the Tribunal's order. Consequently appeal is dismissed leaving freedom to the appellant to move the Tribunal in accordance with law if he has a case that the assessment is time barred. (C.N.RAMACHANDRAN NAIR) Judge. (V.K. MOHANAN) Judge. kk

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