M/S.MOIDUS MEDICARE PRIVATE LTD., vs. THE DEPUTY COMMISSIONER OF INCOME TAX,

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WP(C)/29322/2019HC KeralaKLHC01074861201930 September 2020Bench: HONOURABLE MR. JUSTICE AMIT RAWAL7 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that a plain reading of Section 260A of the Income Tax Act indicates that an appeal to the High Court can be filed within 120 days. The Court noted that the ITAT had rejected the petitioner's application for additional charges on the sole ground that no additional evidence or material was placed. The Court also observed that an attempt was made to invoke Section 254(2) for an error apparent on record. However, the High Court stated that it cannot assume the role of an appellate court under Article 226 of the Constitution, especially when the matter is amenable to appeal under the provisions of the Act. Therefore, the writ petition was dismissed as bereft of merits. The operative direction was the dismissal of the writ petition.

What were the facts?

The petitioner, M/s. Moidus Medicare Private Ltd. (National Hospital), filed a writ petition challenging an order dated September 20, 2019, passed by the Income Tax Appellate Tribunal (ITAT). The petitioner's assessments for assessment years 2006-07 to 2011-12 were conducted under Section 153A read with Section 153C of the Income Tax Act, 1961. Appeals against these assessment orders were dismissed by the ITAT. Subsequently, the petitioner filed miscellaneous applications before the ITAT for rectification of alleged mistakes in one of the dismissal orders. These miscellaneous applications were also dismissed by the ITAT through the impugned common order. The petitioner contended that there is no remedy of appeal under Section 260A of the Income Tax Act and that training charges were not mentioned in any search papers. The revenue stated that the assessee had not filed returns and notices under Section 153C were issued due to seizure of payment details from a medical college during a search.

What were the issues?

1. Whether the petitioner has a remedy of appeal to the High Court under Section 260A of the Income Tax Act, 1961, against the order of the ITAT dismissing their miscellaneous applications for rectification. 2. Whether the ITAT erred in dismissing the petitioner's miscellaneous applications for rectification of alleged mistakes apparent from the record. Assessee's contentions: - There is no remedy of appeal available to the petitioner under Section 260A of the Income Tax Act. - There was no mention of training charges in any of the search papers, including the Panchanama, search inventories, or sworn statements. Revenue's contentions: - The assessee had not filed a return of income. - Notices under Section 153C were issued because details of payments received by the assessee were seized from a medical college during proceedings under Section 132. - The reasons provided by the ITAT in dismissing the miscellaneous applications were justifiable and in accordance with law.

Which sections of the Income-tax Act were involved?

Section 153A,Section 153C,Section 260A,Section 254(2)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE AMIT RAWAL WEDNESDAY, THE 30TH DAY OF SEPTEMBER 2020 / 8TH ASWINA, 1942 WP(C).No.29322 OF 2019(M) PETITIONER/S: M/S.MOIDUS MEDICARE PRIVATE LTD., (NATIONAL HOSPITAL), MAVOOR ROAD, KOZHIKODE, REPRESENTED BY ITS MANAGING DIRECTOR DR.K.MOIDU. BY ADVS. SRI.SANTHOSH P.ABRAHAM SMT.S.K.DEVI RESPONDENT/S: 1 THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, AAYAKAR BHAVAN, NORTH BLOCK, KOZHIKODE, PIN- 673001. 2 THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, KENDRIYA SADAN, KAKKANAD, ERNAKULAM, PIN- 682030. R1-2 BY SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 30.09.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C).No.29322 OF 2019(M) 2 JUDGMENT Dated this the 30th day of September 2020 This writ petition is filed by the petitioner a company incorporated under the Companies Act by challenging Exts.P5 dated 20.9.2019 passed by the 2nd respondent – the Income Tax Appellate Tribunal. The facts for disposal of the writ petition are as follows: 2. The petitioner is running a Hospital by name National Hospital at Mavoor Road, Kozhikode. The assessment for the six assessments year 2006-07 to 2011-12 were done under Section 153A r/w Section 153 C of the Income Tax Act, 1961, produced as Exts.P1 to P1 (f). Against the assessment order petitioner preferred Exts.P2 to P2 (e) appeals before the 2nd respondent. However, the same were dismissed. Against the dismissal order petitioner filed miscellaneous applications before the 2nd respondent – Tribunal, for rectification of alleged mistakes apparent in Ext.P3 order, as per Exts.P4 to P4 (e). The miscellaneous petitions were also dismissed through the common order dated 20.9.2019. Challenging Ext.P5, this writ petition is filed. 3. Learned Counsel appearing for the petitioner submitted that there is no remedy of appeal as enshrined under the provisions of Section 260 A of the Income Tax Act. It is also submitted that, there is

WP(C).No.29322 OF 2019(M) 3 no mention about training charges in any of the search papers such as Panchanama, search inventories, sworn statement etc. 4. A statement is filed on behalf of the respondents and it is stated therein that the assessee had not filed return of income and since details of payment received by the assessee was seized from the Medical College where proceedings u/s 132 took place, notice u/s 153C was issued. It is also stated that the reasons given by the Tribunal in reply to the submissions of the learned authorised representative of the assessee are justifiable and in accordance with law, thus, urged this Court for dismissal of the writ petition. 2. I have heard learned Counsel for the parties and appraised the paper books. Section 260A reads thus: 260A. (1) An appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal before the date of establishment of the National Tax Tribunal, if the High Court is satisfied that the case involves a substantial question of law. (2) The Principal Chief Commissioner or Chief Commissioner or the Principal Commissioner or Commissioner or an assessee aggrieved by any order passed by the Appellate Tribunal may file an appeal to the High Court and such appeal under this sub-section shall be— (a) filed within one hundred and twenty days from the date on which the order appealed against is received by the assessee or the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner; (b) [***] (c) in the form of a memorandum of appeal precisely stating therein the substantial question of law involved. (2A) The High Court may admit an appeal after the expiry of the period of one hundred and twenty days referred to in clause (a) of sub-section (2), if it

WP(C).No.29322 OF 2019(M) 4 is satisfied that there was sufficient cause for not filing the same within that period. (3) Where the High Court is satisfied that a substantial question of law is involved in any case, it shall formulate that question. (4) The appeal shall be heard only on the question so formulated, and the respondents shall, at the hearing of the appeal, be allowed to argue that the case does not involve such question : Provided that nothing in this sub-section shall be deemed to take away or abridge the power of the court to hear, for reasons to be recorded, the appeal on any other substantial question of law not formulated by it, if it is satisfied that the case involves such question. (5) The High Court shall decide the question of law so formulated and deliver such judgment thereon containing the grounds on which such decision is founded and may award such cost as it deems fit. (6) The High Court may determine any issue which— (a) has not been determined by the Appellate Tribunal; or (b) has been wrongly determined by the Appellate Tribunal, by reason of a decision on such question of law as is referred to in sub-section (1). (7) Save as otherwise provided in this Act, the provisions of the Code of Civil Procedure, 1908 (5 of 1908), relating to appeals to the High Court shall, as far as may be, apply in the case of appeals under this section. 3. The plain and simple reading of Section 260A of the Income Tax Act reveals that appeal to the High Court can be filed within a period of 120 days. The Tribunal while examining the application for taking out additional charges rejected the same on the sole ground that no additional evidence or material was placed. Even attempt was made to make out a case of an error apparent on record by invoking the provisions of section 254(2). Be that as it may. This Court by invoking the provisions under Article 226 of the Constitution of India cannot assume the role of an appellate court in deciding the matter, particularly when the matter is amenable to appeal under the

WP(C).No.29322 OF 2019(M) 5 provisions of the Act referred (supra). The writ petition is bereft of merits and it is accordingly dismissed. Sd/ AMIT RAWAL JUDGE Jm/

WP(C).No.29322 OF 2019(M) 6 APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER FOR THE YEAR 2006-2007. EXHIBIT P1 A TRUE COPY OF THE ASSESSMENT ORDER FOR THE YEAR 2007-2008. EXHIBIT P1 B TRUE COPY OF THE ASSESSMENT ORDER FOR THE YEAR 2008-2009. EXHIBIT P1 C TRUE COPY OF THE ASSESSMENT ORDER FOR THE YEAR 2009-2010. EXHIBIT P1 D TRUE COPY OF THE ASSESSMENT ORDER FOR THE YEAR 2010-2011. EXHIBIT P1 E TRUE COPY OF THE ASSESSMENT ORDER FOR THE YEAR 2011-2012. EXHIBIT P1 F TRUE COPY OF THE ASSESSMENT ORDER FOR THE YEAR 2012-2013. EXHIBIT P2 TRUE COPY OF THE ADDITIONAL GROUNDS FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE YEAR 2006-2007. EXHIBIT P2 A TRUE COPY OF THE ADDITIONAL GROUNDS FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE YEAR 2007-2008. EXHIBIT P2 B TRUE COPY OF THE ADDITIONAL GROUNDS FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE YEAR 2008-2009. EXHIBIT P2 C TRUE COPY OF THE ADDITIONAL GROUNDS FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE YEAR 2009-2010. EXHIBIT P2 D TRUE COPY OF THE ADDITIONAL GROUNDS FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE YEAR 2010-2011. EXHIBIT P2 E TRUE COPY OF THE ADDITIONAL GROUNDS FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE YEAR 2011-2012. EXHIBIT P3 TRUE COPY OF THE COMMON ORDER DATED

WP(C).No.29322 OF 2019(M) 7 10.04.2019 OF THE 2ND RESPONDENT, DISMISSING THE APPEALS. EXHIBIT P4 TRUE COPY OF THE MISCELLANEOUS APPLICATION FOR THE ASSESSMENT YEAR 2006-2007. EXHIBIT P4 A TRUE COPY OF THE MISCELLANEOUS APPLICATION FOR THE ASSESSMENT YEAR 2007-2008. EXHIBIT P4 B TRUE COPY OF THE MISCELLANEOUS APPLICATION FOR THE ASSESSMENT YEAR 2008-2009. EXHIBIT P4 C TRUE COPY OF THE MISCELLANEOUS APPLICATION FOR THE ASSESSMENT YEAR 2009-2010. EXHIBIT P4 D TRUE COPY OF THE MISCELLANEOUS APPLICATION FOR THE ASSESSMENT YEAR 2010-2011. EXHIBIT P4 E TRUE COPY OF THE MISCELLANEOUS APPLICATION FOR THE ASSESSMENT YEAR 2011-2012. EXHIBIT P4 F TRUE COPY OF THE MISCELLANEOUS APPLICATION FOR THE ASSESSMENT YEAR 2012-2013. EXHIBIT P5 TRUE COPY OF THE COMMON ORDER DATED 20.09.2019 OF THE 2ND RESPONDENT TRIBUNAL.

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