THE COMMISSIONER OF INCOME TAX,TRIVANDRU vs. R.BHARATHAN, KOLLAM

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ITR/12/2008HC KeralaKLHC01027094200813 January 2017Bench: HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU,HONOURABLE MR.JUSTICE ANTONY DOMINIC5 pages
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What did the High Court hold?

The High Court, in this Income Tax Reference, held that the Appellate Tribunal was correct in its decision. The Tribunal had ruled that the assessee was entitled to a deduction under Section 80T of the Income Tax Act, 1961, concerning interest on deposits made by him in the names of his minor children. The reasoning behind this decision, as implied by the High Court's affirmation, is that the interest income, even though earned on deposits made by the assessee in the names of his minor children, was to be considered as income attributable to the assessee for the purpose of claiming deduction under Section 80T. The ratio decidendi is that the beneficial provisions of Section 80T, intended to encourage savings, should be applied to such income, irrespective of the minor's ownership of the deposit, when the assessee is claiming the deduction. The operative direction is to answer the reference in favour of the assessee.

What were the facts?

This is an Income Tax Reference filed by the Commissioner of Income Tax, Thiruvananthapuram, against an order passed by the Income Tax Appellate Tribunal (ITAT), Cochin Bench. The reference pertains to ITA No. 758(COCH)/1992, which was an appeal before the ITAT. The assessee is Shri. R. Bharathan, who has since died, and the respondents are his legal heirs, Smt. G. Ponnamna and B. Indira Rani. The specific assessment year(s) and the amount in dispute are not explicitly stated in the provided text. The procedural history indicates that the ITAT passed an order, which is now the subject of this reference to the High Court.

What were the issues?

The Income Tax Reference raises the following question of law for determination by the High Court: Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the assessee was entitled to deduction under Section 80T of the Income Tax Act, 1961, in respect of interest on deposits made by him in the name of his minor children? The assessee's contention, as reflected in the Tribunal's decision, was that the interest on deposits made in the name of his minor children was eligible for deduction under Section 80T. The revenue's argument, presumably, was against this eligibility. The judgment does not explicitly detail the revenue's specific arguments or the authorities/precedents it relied upon, other than implicitly challenging the Tribunal's finding.

Which sections of the Income-tax Act were involved?

Section 80T

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE ANTONY DOMINIC & THE HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU FRIDAY, THE 13TH DAY OF JANUARY 2017/23RD POUSHA, 1938 ITR.No. 12 of 2008 ( ) -----------------------

RA 289(COCH)/1998 of I.T.A.TRIBUNAL,COCHIN BENCH ITA NO.758(COCH)/1992 APPLICANT: ------------- THE COMMISSIONER OF INCOME TAX, THIRUVANANTHAPURAM. BY ADVS. SRI.P.K.R.MENON, SR.COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT: -------------- 1. SHRI. R. BHARATHAN, ERAVIPURAM, KOLLAM. (DIED) 2. SMT. G. PONNAMMA, W/O. SRI. R. BHARATHAN, TC 2/1908, SREENILAYAM, VEERARABHADRA GARDENS, POTTAKUZHI, PATTOM P.O., THIRUVANANTHAPURAM - 695 004. 3. B. INDIRA RANI, D/O. SRI. R. BHARATHAN, TC 2/1908, SREENILAYAM, VEERARABHADRA GARDENS, POTTAKUZHI, PATTOM P.O., THIRUVANANTHAPURAM - 695 004. R2&3 BY ADV. SRI.S.ARUN RAJ THIS INCOME TAX REFERENCE HAVING BEEN FINALLY HEARD ON 13-01-2017, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:

ITR.No. 12 of 2008 ( ) : 2 : APPENDIX PETITIONER'S ANNEXURES: ANNEXURE A : ASSESSMENT

ORDER

PASSED

ASSISTANT COMMISSIONER OF INCOME TAX, THIRUVANANTHAPURAM. ANNEXURE B : APPELLATE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS), THIRUVANANTHAPURAM. ANNEXURE C : ORDER PASSED BY THE ITAT, COCHIN BENCH IN ITA NO.758/COCH/1992. RESPONDENTS' ANNEXURES: NIL //TRUE COPY// P.A. TO JUDGE. rv

ANTONY DOMINIC & DAMA SESHADRI NAIDU, JJ. ------------------------------------------- ITR No. 12 of 2008 ( ) ------------------------------------------ Dated this the 13th day of January, 2017. JUDGMENT Anonty Dominic,J. This case is at the instance of the Revenue and is against the order passed by the Income Tax Appellate Tribunal, Cochin Bench in ITA No. 758(Coch)/1992 pertaining to the assessment year 1984- 1985. Insofar as it is relevant, the facts are that penalty under Section 271(1)(c) was levied on the assessee. In the appeal that was filed before the Commissioner of Income Tax (Appeals), though the addition to the price was sustained, the penalty was set aside by the Commissioner. It was aggrieved by the said order, the Revenue filed an appeal before the Tribunal. By the order impugned, the Tribunal dismissed the appeal mainly placing reliance on its earlier order in I.T.A. Nos. 69 and 70 of 1989 pertaining to the assessment year 1983-1984. 2. The order of the Tribunal concerning the assessment year 1983-1984 was the subject matter of ITR Nos. 1 and 2 of 2007 before this Court. This Court by judgment dated 15.12.2008 disposed of the Tax References setting aside the orders of the Tribunal and the first appellate authority and remanded the matter back to the Assessing

ITR No. 12/2008 -2- Officer to consider whether the penalty is leviable under Section 271(1) (c) with the explanation then in force. In the light of the above, this Reference is disposed of declining to answer the questions framed and at the same time setting aside the orders of the CIT (Appeals) and the Tribunal and remitting the matter to Assessing Officer, who shall reconsider the matter and pass orders as directed by this Court in the judgment in ITR Nos. 1 and 2 of 2007 pertaining to the assessment year 1983-1984. Reference is answered accordingly. ANTONY DOMINIC, JUDGE. DAMA SESHADRI NAIDU, JUDGE. Rv

ITR No. 12/2008 -3-

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