RAM BAHADU THAKUR LTD. vs. THE COMMISSIONER OF INCOME TAX

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WP(C)/10210/2011HC KeralaKLHC01053054201104 November 2022Author: HONOURABLE MR. JUSTICE P.V.KUNHIKRISHNAN8 pages
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What did the High Court hold?

The High Court allowed the writ petition. While acknowledging the revenue's submission that paragraph 2 of Ext.P10 indicated that an opportunity was provided, the Court noted the petitioner's contention that the revisional authority had not considered Ext.P11, an order from the ITAT concerning similar assessment years. Without making any observations on the merits of the case, the Court found it appropriate to grant the petitioner one more opportunity to raise all its contentions before the revisional authority. Consequently, Ext.P10 (the Commissioner's order) was set aside. The 1st respondent (Commissioner of Income Tax) was directed to reconsider the matter after providing a hearing to the petitioner. All contentions raised by the petitioner, including the applicability of Ext.P11, were left open to be raised before the revisional authority. The Court also directed that the status quo should continue until the revisional authority passed final orders.

What were the facts?

The petitioner, Ram Bahadur Thakur Ltd., a public limited company, faced difficulties in finalizing its accounts for assessment year 1997-98 due to internal management disputes. Consequently, it filed its income tax return based on provisional profit and loss and balance sheets. The Joint Commissioner of Income Tax treated this return as invalid. The Company Law Board (CLB) had also previously restrained the company from finalizing accounts from 1995-96 onwards. The petitioner obtained permission from the CLB to finalize its accounts. After finalizing, it filed a revision petition before the Commissioner of Income Tax against the Joint Commissioner's order. This revision was dismissed by the Commissioner. The petitioner then filed a writ petition challenging the Commissioner's order, seeking to quash it and directing the assessing officer to reconsider the return after taking on record the audited accounts.

What were the issues?

1. Whether the revisional authority (Commissioner of Income Tax) dismissed the revision petition without affording adequate opportunity to the petitioner to raise its contentions? (Question of mixed law and fact, concerning principles of natural justice and procedural fairness). Assessee's Contention: The petitioner argued that the revisional authority dismissed the revision without giving adequate opportunity to present its case. It relied on Ext.P11, an order from the Income Tax Appellate Tribunal in a similar situation for assessment years 1996-97 and 1998-99. Revenue's Contention: The revenue contended that sufficient opportunity was given to the petitioner, as evidenced by paragraph 2 of the impugned order (Ext.P10). It further argued that the revisional authority considered the matter in detail even in the petitioner's absence and that there was no reason to interfere with the order.

Which sections of the Income-tax Act were involved?

Section 139

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, in a

THEREIN DATED 11.04.2007. Exhibit P8OF AUDITED ACCOUNTS FOR 1997-98. Exhibit P9OF REVISION PETITION DATED NIL FILED BY THE PETITIONER. Exhibit P10OF APPELLATE ORDER DATED 3.4.2008 OF THE COMMISSIONER OF INCOME TAX, KOCHI FOR ASSESSMENT YEAR 1997-

98.

Exhibit P11OF ORDER DATED 6.5.2010 FOR ASSESSMENT YEAR 1996-97 AND ORDER DATED 24.10.2008 FOR ASSESSMENT YEAR 1998-99 OF THE INCOME TAX APPELLATE TRIBUNAL, COCHIN. Exhibit P12OF JUDGMENT DATED 6.2.2009 PASSED BY THIS HON'BLE COURT IN WPC NO.37524/2008. -8- W.P.(C). No. 10210 of 2011 Exhibit P13OF THE ORDER DATED 30.11.2011N SENT BY THE TAX RECOVERY OFFICER, ERNAKULAM TO M/S. BAL PHARMA LIMITED.OF THE ASSESSMENT ORDER DATED 30.09.2009 FOR THE ASSESSMENT YEAR 1998-99 ISSUED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 1 (1), RANGE-1, KOCHI TO THE PETITIONER. Exhibit P14OF THE TAX PRAYER'S COUNTERFOIL DATED 22.11.2008.OF NOTICE DATED 09.04.2015 AND ATTACHMENT ORDER OF THE PETITIONER'S RESIDENT SAMUDRA MAHAL, MUMBAI DATED 13.03.2007 ISSUED BY THE TAX RECOVERY OFFICER, ERNAKULAM, KOCHI-18. Exhibit P15OF THE WRITTEN SUBMISSION DATED 13.08.2015 SUBMITTED BY THE PETITIONER TO THE COMMISSIONER OF INCOME TAX, ERNAKULAM, KOCHI-18. Exhibit P16OF THE JUDGMENT IN WPC NO.22583 OF 2011 DATED 23.08.2011 OF THE HON'BLE HIGH COURT OF KERALA, ERNAKULAM. Exhibit P17OF THE APPEAL FILED UNDER RULE 45 OF THE INCOME TAX RULES IN FORM NO.35 BY THE PETITIONER BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), ENAKULAM.

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