COMMISSIONER OF INCOME TAX vs. SMT.ROSY JACOB, TRICHUR

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE P.R.RAMACHANDRA MENON & THE HONOURABLE MRS. JUSTICE SHIRCY V. WEDNESDAY, THE 9TH DAY OF AUGUST 2017/18TH SRAVANA, 1939 ITA.No. 289 of 2009 ( ) ------------------------ AGAINST THE ORDER IN ITA 103/COCH/2002 of I.T.A.TRIBUNAL,COCHIN BENCH DATED 10-05-2003 APPELLANT/APPELLANT: ------------ THE COMMISSIONER OF INCOME TAX, TRICHUR.

BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT/RESPONDENT: -------------- SMT. ROSY JACOB, KOLLANNUR BHAVAN, TRICHUR.

BY ADV. SRI.ANIL D. NAIR BY ADV. SRI.P.BENNY THOMAS BY ADV. SRI.E.K.NANDAKUMAR THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 09-08-2017 ALONG WITH I.T. APPEAL No.312 OF 2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

P.R. RAMACHANDRA MENON & SHIRCY V, JJ. .............................................................................. I.T.Appeal Nos.289 & 312 OF 2009 ......................................................................... Dated this the 9th August , 2017 J U D G M E N T P.R. Ramachandra Menon, J. Correctness and sustainability of the order passed by the Tribunal, whereby the case projected by the Revenue came to be turned down, answering the position in favour of the assessee in respect of different assessment years , i.e. 1990-91 and 1991-92 with regard to passing assessment orders stated as made by way of rectification, invoking the power under Section 154 of the Income Tax Act, forms the subject matter of challenge in these appeals. 2. Heard the learned Standing Counsel for the appellants as well as the learned counsel appearing on behalf of the assessee. 3. The respondent-assessee had declared his income before the assessing authority, by filing returns for the assessment years 1990-91 and 1991-92. In fact, the assessee happens to be one of the co-owners of the building from which, income is

I.T.Appeal Nos.289 & 312 OF 2009 2 generated. During the course of the proceedings, a petition was filed by the assessee in terms of Section 144A of the Act before the competent authority for giving appropriate directions to the assessing authority to assess the income as 'income from other sources'. Based on the prayer in the said petition, a direction was given by the Deputy Commissioner(competent authority), directing the assessing authority to assess the income as ' income from other sources'. Pursuant to the said direction, the assessment was completed by the assessing authority. 4. After completing the above process, it came to the notice of the Deputy Commissioner that, while passing the order in the petition filed by the assessee directing to assess the income as 'income from other sources', the Dy.Commissioner had virtually over-looked the verdict passed by this Court, as reported in 80

ITR 180

(Dr.P.A. Varghese vs. Commissioner of Income Tax, Kerala) as to the circumstances under which such a course was open. It was held by the Bench in the said case that, as there was no letting of machinery, plant or furniture, but for letting of a building with certain amenities,

I.T.Appeal Nos.289 & 312 OF 2009 3 Section 56(2)(iii) of the Income Tax Act would not be attracted and the income was to be assessed as income from 'house property' and not as 'income from other sources'. This made the Dy. Commissioner to pass an order directing the assessing authority to treat it as 'income from the house property'; pursuant to which, the assessment was re-done by the assessing authority, invoking the power under Section 154 of the Income Tax Act. 5. On being aggrieved of the course and proceedings, the assessee approached the appellate authority-Commissioner of Income-Tax (Appeals), when interference was declined and appeal was dismissed in respect of the year 1990-91; whereas in respect of the other case, the Commissioner of Income Tax (Appeals) found it appropriate to allow the appeal. This made the Revenue to approach the Tribunal by way of further appeal in respect of the year 1991-92; while in respect of the year 1990- 91, the assessee chose to approach the Tribunal on being aggrieved of the verdict passed by the Commissioner of Income Tax (Appeals). Both the appeals were considered together by the

I.T.Appeal Nos.289 & 312 OF 2009 4 Tribunal and after hearing, the appeal preferred by the assessee was allowed and the orders passed by the authorities were set aside in respect of the year 1990-91. In respect of the subsequent year, i.e., 1991-92, the appeal preferred by the revenue was dismissed, taking the same analogy. Challenging the above orders of the Tribunal, the Revenue has filed these appeals [ITA No.312 of 2009 is in respect of the year 1990-91 and ITA 289 of 2009 is in respect of the year 1991-92]. 6. During the course of hearing, it is brought to the notice of this Court by the learned counsel for the respondent that the respondent assessee is a co-owner, being one among the four sisters, who own the building. In respect of another co-owner, similar course was pursued by the revenue, by approaching this Court as per I.T.A.227/2009 raising similar contentions. The merit of the case was examined by the Bench and Annexure B verdict (produced along with I.A.No.1003 of 2010) was passed which is extracted below: “ When the appeals were taken up for hearing counsel for the respondent submits that the tax involved is much below the limit entitling the Department to file

I.T.Appeal Nos.289 & 312 OF 2009 5 appeal before the High Court based on the norms prescribed by the CBDT. Even though Standing Counsel submits that the cases fall under exception clause of notification, we do not think this contention is tenable because the original orders cancelled in appeal were rectification orders that are not binding on the Department for subsequent years and therefore, the issue has no application for subsequent years. Consequently, we dismiss the appeals as not maintainable.” Obviously, the factual position involved in the present appeals is also similar in terms and as such, we are of the view that dismissal of the similar matters by this Bench as per judgment dated 03.12.2009 in ITA Nos.168, 181 and 227 of 2009 will govern the issue involved in the present cases as well. Accordingly, we find no merit in these appeals and they are dismissed in terms of the judgment dated 03.12.2009 in ITA.Nos.168, 182 and 227 of 2009.

P.R. RAMACHANDRA MENON, JUDGE SHIRCY V, JUDGE lk