THE COMMISSIONER OF INCOME TAX vs. M/S. COCHIN INTERNATIONAL AIRPORT LTD

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HON'BLE THE CHIEF JUSTICE DR. MANJULA CHELLUR & THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE THURSDAY, THE 7TH DAY OF NOVEMBER 2013/16TH KARTHIKA, 1935 ITA.No. 113 of 2013 () ----------------------- AGAINST THE ORDER IN ITA 341/COCH/2011 of I.T.A.TRIBUNAL,COCHIN BENCH DATED 07-09-2012 APPELLANT: ------------ THE COMMISSIONER OF INCOME TAX-I, COCHIN.

BY ADVS.SRI.P.K.RAVINDRANATHA MENON(SR.) SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT ------------- M/S. COCHIN INTERNATIONAL AIRPORT LTD, 35, 4TH FLOOR, GCDA COMMERCIAL COMPLEX, MARINE DRIVE, COCHIN-31.

THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 07-11-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

MANJULA CHELLUR,C.J. & A.M.SHAFFIQUE, J. = = = = = = = = = = = = = = = = I.T.A. No.113 of 2013 = = = = = = = = = = = = = = = = = = = = = Dated this the 7 th day of November, 2013 JUDGMENT Manjula Chellur,CJ The respondent-assessee filed the return of income for the assessment year 2005-06 on 30.10.2012 declaring the Net taxable income as nil and book profit computed under Section 115TB amounting to `17,66,14,319/-. The returns came to be processed under Section 143(1) of the Income Tax Act (hereinafter referred to as the Act) on 10.08.2006. Thereafter, a revised return of income came to be filed on 23.03.2007 declaring gross total income under the normal provisions of the Act and claimed the deductions as well. As per this normal computation of tax under regular provisions it was also nil. The case was selected for scrutiny and a notice was issued on 27.10.2006. The assessment under Section 143(3) of the Act was completed only on 28.12.2007 arriving at a total income of `288,475,850/-.

I.T.A. No.113 of 2013 2 2. It is also not in dispute that at the time of completing the assessment, disallowances/additions on various issues came to be made by the Assessing Officer. The assessee filed appeal before the Commissioner of Income Tax (Appeals-II), Kochi, wherein the First Appellate authority partly allowed the appeal in favour of the assessee. The Assessing Officer completed the proceedings in pursuance of the orders of the First Appellate authority only on 16.06.2008 arriving at a gross total income of `27,28,51,217/- and accordingly the total income under the normal provisions of the Act, after set off and other deductions was arrived at as nil. 3. Thereafter, invoking suo motu jurisdiction under Section 263 of the Act, Commissioner of Income Tax, Cochin issued an order dated 18.03.2011 holding that order of the Assessing Officer giving effect to the order of the CIT(Appeals-II) is erroneous and it is prejudicial to the interest of the Revenue. This initiation of proceedings was in respect of unabsorbed depreciation of `1336.37 lakhs so far as computing book profit

I.T.A. No.113 of 2013 3 under Section 155JB being not available to the assessee as the entire unabsorbed depreciation was adjusted against the profits for the assessment year 2004-05 (previous year). 4. Aggrieved by the same, assessee filed appeal before the Tribunal and the Tribunal allowed the appeal in favour of the assessee quashing the orders dated 18.03.2011 of the Commissioner on the ground that the said order was barred by limitation as the original assessment was as early as 28.12.2007 accepting the book profit computed by the assessee. Aggrieved by the said order of the Tribunal the present appeal is filed by the Revenue contending that initiation of proceedings under Section 263 of the Act dated 18.03.2001 is in respect of the orders of the CIT(Appeals) and therefore, question of limitation would not arise in the case on hand. 5. It is pertinent to note that the assessee went before the First Appellate authority against the initial assessment order not with regard to the nature of computation that is

I.T.A. No.113 of 2013 4 book profit or the normal procedure so far as unobserved depreciation. According to the Tribunal the subject matter considered by the First Appellate authority was not with respect with method of computation but altogether a different subject matter therefore the original assessment order accepting the book profit computed by the assessee on 28.12.2007 would be the criterion so far as limitation issued and not the subsequent order of the assessing authority consequent to the order of the First Appellate Authority. 6. This observation of the Tribunal is justified having regard to the circumstances under which the assessing authority had to proceed with the matter subsequent to the disposal of the appeal. In order to exercise suo motu powers under Section 263 finding fault with the book profit computation accepted by the assessing authority, it ought to be from 28.12.2007 and not with reference to First Appellate Authority’s order which was nothing to do with acceptance of book profit computation adopted by the assessee.

I.T.A. No.113 of 2013 5 7. For the above said reasons, we are of the opinion, the Tribunal was justified in opining that the Administrative Commissioner was not justified so far as initiating proceedings under Section 263 of the Act, as, such proceedings was from the end of the financial year with reference to the assessment order dated 28.12.2007. Accordingly the appeal is dismissed. MANJULA CHELLUR, CHIEF JUSTICE A.M.SHAFFIQUE, JUDGE.

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