THE COMMISSIONER OF WEALTH TAX (CENTRAL) vs. LAKSHMIKANTHAN, BHIMA & BROS.

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WTA/43/2009HC KeralaKLHC01080062200907 December 2009Bench: HONOURABLE MR.JUSTICE V.K.MOHANAN,HONOURABLE MR.JUSTICE C.N.RAMACHANDRAN NAIR4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the constitution of the ITAT Bench, comprising two Accountant Members, was impermissible under Section 255(2) of the Income Tax Act. Consequently, the Bench was deemed incompetent to hear the appeals. The High Court vacated the impugned orders passed by the ITAT and restored the appeals to the file of the Tribunal. The Tribunal was directed to dispose of the appeals afresh after considering the decision in WTA No. 1 of 2009 and issuing notice to the parties. The appeals were to be disposed of within three months from the production of the High Court's judgment. No specific finding was made on the merits of the original wealth tax appeals.

What were the facts?

The appeals before the High Court of Kerala concerned orders passed by the Income Tax Appellate Tribunal (ITAT), Cochin Bench. The Commissioner of Wealth Tax (Central), Cochin, was the appellant, and Shri. Lakshmikanthan, Bhima & Bros, Alleppey, was the respondent. The core issue revolved around the constitution of the ITAT Bench that passed the impugned orders. The High Court noted that the Bench comprised two Accountant Members, which it found impermissible under Section 255(2) of the Income Tax Act. Consequently, the High Court deemed the Bench incompetent to hear the appeals.

What were the issues?

1. Whether the constitution of the ITAT Bench, consisting of two Accountant Members, was permissible under Section 255(2) of the Income Tax Act, and if not, whether the orders passed by such a Bench were valid. Assessee's Contention: The judgment does not record any specific arguments made by the assessee (Shri. Lakshmikanthan). The assessee is the respondent in the High Court appeal, and the judgment focuses on the revenue's submission regarding the Bench constitution. Revenue's Contention: The revenue, through its standing counsel, argued that the ITAT Bench was improperly constituted as it consisted of two Accountant Members, which is not permissible under Section 255(2) of the Income Tax Act. The revenue relied on a Division Bench decision of the High Court in WTA No. 1 of 2009, which it contended was on the same issue.

Which sections of the Income-tax Act were involved?

Section 255(2)

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 MONDAY, THE 7TH DECEMBER 2009 / 16TH AGRAHAYANA 1931 WTA.No. 43 of 2009() -------------------- WTA.102/COCH/2005 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT/RESPONDENT ---------------------------------------- THE COMMISSIONER OF WEALTH TAX(CENTRAL) COCHIN. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT(S): APPELLANT ------------------------ SHRI.LAKSHMIKANTHAN, BHIMA & BROS, ALLEPPEY. ADV. SRI.P.BALAKRISHNAN (E) THIS WEALTH TAX APPEAL HAVING BEEN FINALLY HEARD ON 07/12/2009, ALONG WITH WTA NO. 46 OF 2009 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

C .N. RAMACHANDRAN NAIR & V.K. MOHANAN, JJ. -------------------------------------------- W.T.A. Nos. 43,46 to 48,76,79 96, 134, 156 & 161 OF 2009 -------------------------------------------- Dated this the 7th day of December, 2009 JUDGMENT Ramachandran Nair, J. We notice that the Tribunal Bench consisting of two Accountant members have passed impugned orders in the appeals. Constitution of Bench in this manner is not permissible under Section 255(2) of the Income Tax Act. The Bench constituted against the provisions of the Act is not competent to hear appeals and therefore we vacate the impugned orders issued by them and restore the appeals to file of the Tribunal. Standing counsel for the revenue brought to our notice decision of a Division Bench of this Court in WTA No. 1 of 2009 which, according to him, is on the issue raised in the appeals filed before the Tribunal. The Tribunal is therefore directed to go through the judgment above referred, issue notice to parties and dispose of the appeals afresh within a period of three months from the date of

2 production of a copy of this judgment. WT Appeals are disposed of as above. (C.N.RAMACHANDRAN NAIR) Judge. (V.K. MOHANAN) Judge. kk

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