COMMISSIONER OF INCOME TAX, KOZHIKODE vs. HOTEL RELAX PARK, MANJERI.

PDF · subscribers
ITA/1641/2009HC KeralaKLHC01026402200923 December 2009Bench: HONOURABLE MR.JUSTICE V.K.MOHANAN,HONOURABLE MR.JUSTICE C.N.RAMACHANDRAN NAIR3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that there was no substantial question of law arising from the order of the Income Tax Appellate Tribunal. The Tribunal had found that the Assessing Officer had estimated the turnover and consequently worked out the net profit on an estimation basis. The Court agreed with the Tribunal's view that the Commissioner of Income Tax was not justified in interfering with the assessment proceedings initiated under Section 263 of the Income Tax Act. The reasoning was that the AO's approach of estimation was accepted by the Tribunal, and the CIT's intervention was deemed unnecessary. Therefore, the appeal filed by the Commissioner of Income Tax was dismissed. No specific issue was left undecided.

What were the facts?

The assessee, Hotel Relax Park, Manjeri, returned a loss of Rs. 5 lakhs. The Assessing Officer (AO) computed a net income of Rs. 3,95,310 and raised a demand of over Rs. 2 lakhs. The AO also proposed penalties under Sections 271(1)(c) and 271B of the Income Tax Act. The Commissioner of Income Tax (CIT) issued an order under Section 263 of the Act. The Income Tax Appellate Tribunal (ITAT), Cochin Bench, in its order dated March 6, 2009 (ITA No. 166/Coch/2007), reviewed the AO's assessment and the CIT's intervention. The present appeal is filed by the Commissioner of Income Tax, Kozhikode, challenging the ITAT's order.

What were the issues?

1. Whether there is a substantial question of law arising from the order of the Tribunal, considering the Tribunal's finding that the Assessing Officer estimated the turnover and worked out the net profit on an estimation basis. Assessee's Contention: The Tribunal rightly held that there was no justification for the Commissioner to interfere with the assessment in proceedings initiated under Section 263 of the Act. The AO's estimation of turnover and net profit was appropriate. Revenue's Contention: The revenue, represented by the Commissioner of Income Tax, argued that the ITAT's order was erroneous, implying that the Commissioner's intervention under Section 263 was justified. However, specific arguments or reliance on authorities by the revenue are not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 263,Section 271(1)(c),Section 271B

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 P.Q.BARKATH ALI WEDNESDAY, THE 23RD DECEMBER 2009 / 2ND POUSHA 1931 ITA.No. 1641 of 2009() ---------------------- AGAINST THE ORDER DATED 06/03/2009 IN COCH IN ITA.166/COCH/2007 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT/RESPONDENT: ----------------------------- THE COMMISSIONER OF INCOME TAX, KOZHIKODE BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT(S): --------------- HOTEL RELAX PARK, MANJERI., ADV. SRI.T.A.SHAJI THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 23/12/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

C.N.RAMACHANDRAN NAIR & P.Q.BARKATH ALI, JJ. .................................................................... I.T. Appeal No.1641 of 2009 .................................................................... Dated this the 23rd day of December, 2009. JUDGMENT Ramachandran Nair, J. Heard Standing Counsel appearing for the appellant and Adv. Sri.T.A.Shaji, appearing for the respondent-assessee. After hearing both sides and after going through the order of the Commissioner issued under Section 263 of the Income Tax Act and the order of the Tribunal, we do not find any substantial question of law arising from the order of the Tribunal because the Tribunal found that the Assessing Officer estimated the turnover and therefrom worked out the net profit on an estimation basis. It is seen from the assessment order that as against a loss of Rs.5 lakhs and odd returned by the assessee, the Assessing Officer has computed net income at Rs.3,95,310/- and has raised a total demand of above Rs.2 lakhs. It is seen that the officer has also proposed penalty under Section 271(1C) and 271B of the Act. We are of the view that the Tribunal rightly held that there was no justification for the Commissioner to interfere with the assessment in

2 proceedings initiated under Section 263 of the Act. Consequently we dismiss the appeal. C.N.RAMACHANDRAN NAIR Judge P.Q.BARKATH ALI Judge pms

More judgments on Section 263

All 13,616 judgments and leading authorities on Section 263 →

Latest GST High Court judgments

Search GST case law →