COMMISSIONER OF INCOME TAX vs. M/S.AMALGAM FOODS LIMITED

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ITA/326/2010HC KeralaKLHC01027018201031 January 2011Bench: HONOURABLE MR.JUSTICE B.P.RAY,HONOURABLE MR.JUSTICE C.N.RAMACHANDRAN NAIR4 pages
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the appeal by vacating the order of the Tribunal. The Court directed the Assessing Officer to reconsider the case on merits, in light of the judgment rendered by the High Court in the case of M/s. Accelerated Freeze Drying Co. Ltd. (Annexure G). This direction was issued because the disallowance involved in the present case was the same as in the case that led to the Annexure G judgment. The Court emphasized that the Assessing Officer should consider the facts and decide the case on merits as directed by the Commissioner under Section 263 of the Income Tax Act. The assessee was to be given sufficient opportunity to raise their contentions and prove them. The issue decided was the appropriate course of action for the present appeal, given the High Court's prior decision on a similar matter.

What were the facts?

The appeal was filed by the Commissioner of Income Tax, Kottayam, against an order of the Income Tax Appellate Tribunal (ITAT), Cochin Bench. The respondent is M/s. Amalgam Foods Limited. The dispute concerns an assessment year not explicitly stated. The order under challenge before the Tribunal was an order passed by the Commissioner under Section 263 of the Income Tax Act, 1961. The Tribunal had allowed the appeal in favour of the assessee. The procedural history indicates that the Tribunal's order was based on a previous order in ITA No. 971/Coch/2008. This previous order was appealed before the High Court, which set aside the Tribunal's order and remanded the matter to the Assessing Officer.

What were the issues?

1. Whether the High Court should direct the Assessing Officer to reconsider the present case in light of a specific judgment rendered by the High Court in the case of M/s. Accelerated Freeze Drying Co. Ltd. (Annexure G), given that the disallowance in the present case is the same as in the case that led to the aforementioned judgment. Assessee's Contention: Not recorded. Revenue's Contention: The revenue, represented by the Commissioner of Income Tax, argued that the order of the Tribunal allowing the appeal in favour of the respondent was erroneous. They relied on the fact that a similar order by the Tribunal in ITA No. 971/Coch/2008 was set aside by this Court and remanded to the Assessing Officer. The revenue sought reconsideration of the present case by the Assessing Officer in light of the High Court's judgment.

Which sections of the Income-tax Act were involved?

Section 263

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 B.P.RAY MONDAY, THE 31ST JANUARY 2011 / 11TH MAGHA 1932 ITA.No. 326 of 2010() --------------------- ITA.150/COCH/2009 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT/APPELLANT. ---------------------------------------- COMMISSIONER OF INCOME TAX, KOTTAYAM. BY ADV. SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT(S): RESPONDENT. -------------------------- M/S.AMALGAM FOODS LIMITED, AMALGAM HOUSE, WILLINGTON ISLAND, BRISTO ROAD, COCHIN-682 003. ADV. SRI.P.BALAKRISHNAN (E) FOR R1 THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 31/01/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

C .N. RAMACHANDRAN NAIR, & BHABANI PRASAD RAY, JJ. -------------------------------------------- I. T. A. No. 326 of 2010 -------------------------------------------- Dated this the 31st day of January, 2011 JUDGMENT Ramachandran Nair, J. When the appeal was taken up for hearing, both sides submitted that the order relied on by the Tribunal for allowing the appeal in favour of the respondent, that is the order in I.T.A. No. 971/Coch/2008, was appealed against before this Court, and this Court set aside the order of the Tribunal and remanded the matter to the Assessing Officer for reconsideration in the light of the findings and observations contained therein. Since disallownce involved in this case is the very same, we feel the assessing officer should be directed to consider this case also in the light of Annexure G judgment rendered by this Court in the case of M/s. Accelerated Freeze Drying Co. Ltd. This appeal is allowed by vacating the order of the Tribunal with direction to the assessing officer to consider the facts and decide the case on merits as directed by the Commissioner under Section 263 of the I.T. Act. The assessee should be given sufficient opportunity to raise their

2 contentions and prove the same. In this case the order that was challenged before the Tribunal was the one issued by the Commissioner under Section 263 of the Act, which was the subject matter of Annexure G judgment.

(C.N.RAMACHANDRAN NAIR) Judge. (BHABANI PRASAD RAY) Judge.

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