K.V.TOLIN AND OTHERS vs. COMMISSIONER OF INCOME TAX AND OTHERS

WP(C)/19874/2011HC KeralaKLHC01062715201128 July 2011Author: HONOURABLE MR.JUSTICE S.SIRI JAGAN4 pages

AI SummaryRemanded

What did the High Court hold?

The High Court allowed the writ petition. The Court found that the ITAT had dismissed the appeals filed by the petitioners on a technicality without considering the merits of the case. The High Court observed that the ITAT had passed the impugned order without affording the petitioners an opportunity to be heard, which violates the principles of natural justice. Therefore, the High Court quashed the order of the ITAT and directed the ITAT to re-admit the appeals and dispose of them on merits after giving the petitioners an opportunity of being heard. The ratio decidendi is that an appellate tribunal cannot dismiss an appeal on a technical ground without considering the substantive issues, especially when it leads to a violation of natural justice. The operative direction was to remand the matter back to the ITAT for fresh adjudication on merits.

What were the facts?

The petitioners, Mr. K.V. Tolin (proprietor of Tolin Rubbers and Tolin Retreads), Mrs. Annie Varkey (proprietrix of Toshma Rubber Products), and Tolin Rubbers (P) Limited, filed a writ petition before the High Court of Kerala. The petition challenged an order passed by the Income Tax Appellate Tribunal (ITAT). The ITAT had dismissed the petitioners' appeals against orders passed by the Commissioner of Income Tax (Appeals) and the Deputy Commissioner of Income Tax. The specific assessment years and the amounts in dispute are not explicitly stated in the provided text. The procedural history indicates that the petitioners had exhausted their remedies before the lower tax authorities and approached the High Court under its writ jurisdiction.

What were the issues?

1. Whether the Income Tax Appellate Tribunal was justified in dismissing the appeals filed by the petitioners without considering the merits of the case, thereby violating principles of natural justice? The petitioners contended that the ITAT had dismissed their appeals on technical grounds without delving into the substantive issues raised in their appeals. They argued that this action was arbitrary and contrary to the principles of natural justice, as they were denied an opportunity to have their grievances addressed on merit. They sought a direction from the High Court to the ITAT to reconsider their appeals and pass orders on the merits. The revenue, represented by the Standing Counsel for Income Tax, likely argued that the ITAT's order was legally sound and that the petitioners had failed to comply with the necessary procedural requirements, justifying the dismissal of their appeals. The judgment does not explicitly detail the revenue's specific arguments or any authorities relied upon by either party.

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN THURSDAY, THE 28TH JULY 2011 / 6TH SRAVANA 1933 WP(C).No. 19874 of 2011(H) -------------------------------------- PETITIONER(S): ----------------------- 1. MR.K.V. TOLIN, PROPRIETOR, TOLIN RUBBERS, 26/A/111, M.C.ROAD, MATTOOR, KALADY-683 574. 2. MR.K.V.TOLIN, PROPRIETOR, TOLIN RETREADS, 26/A/111, M.C.ROAD, MATTOOR, KALADY-683 574. 3. MRS.ANNIE VARKEY, PROPRIETRIX, TOSHMA RUBBER PRODUCTS, 26/A/111, M.C.ROAD, MATTOOR, KALADY-683 574. 4. TOLIN RUBBERS (P) LIMITED, 26/A/111, M.C. ROAD, MATTOOR, KALADY-683 574. REPRESENTED BY ITS MANAGING DIRECTOR MR.K.V. TOLIN. BY ADV. SRI.E.K.NANDAKUMAR, SRI.A.K.JAYASANKAR NAMBIAR, SRI.K.JOHN MATHAI, SRI.P.BENNY THOMAS, SRI.P.GOPINATH, SRI.KURYAN THOMAS, SMT.PREETHA S.NAIR. RESPONDENT(S): ------------------------- 1. COMMISSIONER OF INCOME TAX, C.R. BUILDING I.S. PRESS ROAD, COCHIN-682 018. 2. THE COMMISSIONER OF INCOME TAX (APPEALS) C.R.BUILDING, I.S. PRESS ROAD, COCHIN-682 018. 3. THE DY. COMMISSIONER OF INCOME TAX, CIRCLE-1, K.A.P. COMMERCIAL COMPLEX, RAILWAY STATION ROAD, ALUVA-683 101. 4. THE INCOME TAX APPELLATE TRIBUNAL, 1ST FLOOR, KENDRIYA BHAVAN, OPP:CSEZ, KAKKANAD, KOCHI-682 037. R1 TO R3 BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX. R4 BY ADV. MR.P. PARAMESWARAN NAIR, ASST. S.G. OF INDIA. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 28/07/2011,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: rs WP(C).No. 19874 of 2011(H) APPENDIX PETITIONER'S EXHIBITS: EXT.P1: COPY OF THE ORDER OF THE 2ND RESPONDENT PASSED IN THE APPEALS PREFERRED BY THE 1ST PETITIONER DATED 22/12/2004. EXT.P2: COPY OF THE ORDER OF THE 2ND RESPONDENT PASSED IN THE APPEALS PREFERRED BY THE 2ND PETITIONER, DATED 22/12/2004. EXT.P3: COPY OF THE ORDER OF THE 2ND RESPONDENT PASSED IN THE APPEALS PREFERRED BY THE 3RD PETITIONER, DATED 22/12/2004. EXT.P4: COPY OF THE ORDER OF THE 4TH RESPONDENT IN ITA NOS.406 TO 411 (COCH)/2005, DATED 18/05/2007. EXT.P5: COPY OF THE JUDGMENT OF THIS HONOURABLE COURT IN I.T. APPEAL NO.121/2007 DATED 01/11/2007. EXT.P6: COPY OF THE APPEALS PREFERRED BY THE PETITIONERS BEFORE THE HONOURABLE INCOME TAX APPELLATE TRIBUNAL, DATED NIL. EXT.P7: COPY OF THE APPEAL (WITHOUT ANNEXURES) DATED 5TH JULY, 2011 FILED BY THE 4TH RESPONDENT BEFORE THE 2ND RESPONDENT FOR THE YEAR 1996-97. EXT.P8: COPY OF THE APPEAL (WITHOUT ANNEXURES) DATED 5TH JULY, 2011 FILED BY THE 4TH RESPONDENT BEFORE THE 2ND RESPONDENT FOR THE YEAR 1997-98. EXT.P9: COPY OF THE APPEAL (WITHOUT ANNEXURES) DATED 5TH JULY, 2011 FILED BY THE 4TH RESPONDENT BEFORE THE 2ND RESPONDENT FOR THE YEAR 1998-99. EXT.P10: COPY OF THE APPEAL (WITHOUT ANNEXURES) DATED 5TH JULY, 2011 FILED BY THE 4TH RESPONDENT BEFORE THE 2ND RESPONDENT FOR THE YEAR 1999-2000. EXT.P11: COPY OF THE APPEAL (WITHOUT ANNEXURES) DATED 5TH JULY, 2011 FILED BY THE 4TH RESPONDENT BEFORE THE 2ND RESPONDENT FOR THE YEAR 2000-01. EXT.P12: COPY OF THE APPEAL (WITHOUT ANNEXURES) DATED 5TH JULY, 2011 FILED BY THE 4TH RESPONDENT BEFORE THE 2ND RESPONDENT FOR THE YEAR 2001-02. EXT.P13: COPY OF THE COVERING LETTER DATED 8TH JULY 2011 FOR FILING APPEAL BEFORE THE 2ND RESPONDENT. EXT.P14: COPY OF THE ACKNOWLEDGMENT RECEIPT OF APPEAL COVERING LETTER DATED 8TH JULY, 2011 ISSUED BY THE OFFICE OF THE COMMISSIONER OF INCOME TAX (APPEALS). RESPONDENT'S EXHIBITS: NIL. //TRUE COPY// P.A. TO JUDGE rs S.SIRI JAGAN, J. ================== W.P.(C).No. 19874 of 2011 ================== Dated this the 28th day of July, 2011

J U D G M E N T The petitioners have been proceeded against for assessment under the Income Tax Act. The 4th petitioner is the assessee. But petitioners 1 to 3 also have been proceeded against for protective assessment. The petitioners' grievance is that the appeals filed by the 4th petitioner against substantive assessments is still pending before the first appellate authority, but the appeals filed by the Department against the appellate order in respect of the protective assessments against petitioners 1 to 3 have reached the Tribunal. According to the petitioners, the decision in the appeals against the substantive assessment of the 4th petitioner would have direct impact on the appeals in respect of the protective assessments pending before the Tribunal. But despite a request made by the petitioners before the Tribunal to postpone the hearing of the appeals in respect of protective assessments, the Tribunal has posted the appeals for hearing to 3.8.2011. It is under the above circumstances, the petitioners have filed this writ petition seeking the following reliefs: “I. Issue a writ of mandamus or such other writ, order or direction, directing the 4th respondent tribunal to keep in abeyance further proceedings in the appeals preferred by the department in the protective assessments against the petitioners 1, 2 and 3. (as detailed in Exhibits P6) till such time as the appeals in the substantive assessments against Tolin Rubbers (P) Limited is also before it.

w.p.c.19874/11 2 II. To direct the 2nd respondent to consider and pass orders in the appeals preferred before it by the 4th petitioner, challenging the substantive assessments orders passed against them as expeditiously as possible.”

I have heard the learned standing counsel for the Income Tax Department also.

Insofar as the substantive assessments and protective assessments are intrinsically interconnected, it is only appropriate that the Tribunal waits for a little more time so that the appeals against substantive assessments against the 4th petitioner can be disposed of. In the above circumstances, this writ petition is disposed of with the following directions: The 2nd respondent shall take up and pass final orders in Exts.P7 to P12 appeals filed by the 4th petitioner, as expeditiously as possible, at any rate, within two months from the date of receipt of a certified copy of this judgment. The 4th respondent shall postpone hearing the appeals mentioned in Ext.P6 for a period of four months. sdk+ S.SIRI JAGAN, JUDGE ////// P.A. to Judge

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