LAWS(KER)-2018-7-195

INNOVATIVE FOODS LIMITED Vs. UNION OF INDIA

Decided On July 06, 2018
Innovative Foods Limited Appellant
V/S
UNION OF INDIA Respondents

JUDGEMENT

(1.) The appellant is before this Court aggrieved by the judgment of the learned Single Judge refusing to interfere with the reassessment proceedings under Section 147 of the Income Tax Act, 1961 [for brevity, "IT Act"]. The reassessment proceedings were issued specifically on four grounds:

(2.) The learned Counsel for the assessee, concerned for the assessment year 2007-08, submits that the assessment itself was completed under Section 143(3) on 31.12009 by Ext.P Later, the assessee had filed an application for rectification under Section 154, in which an order was passed on 09.04.2010, produced at Ext.P3. The assessee, aggrieved with Ext.P3 order, filed an appeal, which was allowed as per Ext.P4. The assessee, hence, contends that there is no scope for a reassessment under Section 147 especially since there was a rectification application filed by the appellant, which stood allowed in toto. It is also contended that at the time when the assessment was completed under Section 143(3), these issues were considered and, in fact, the issues were placed before the Assessing Officer (AO), after discussion by way of written objections as seen from Ext.P1. Hence, there is a clear disclosure of relevant materials and the AO has also come to a definite conclusion after looking at the materials produced by the assessee as also the objections filed as per Ext.P1. Various decisions were also relied on, which have been cited by the learned Single Judge also, to contend that in the present case there is only a mere change of opinion and there could be no reassessment proceedings taken. The learned counsel for the appellant relies on the Full Bench decision of the Delhi High Court reported in [Commissioner of Income Tax v. Kelvinator of India Ltd, (2002) 256 ITR 1], which was followed in [Commissioner of Income Tax v. Usha International Ltd, (2012) 348 ITR 485]. The decision in Kelvinator of India Ltd. Was upheld by the Full Bench of the Honourable Supreme Court in [Commissioner of Income Tax v. Kelvinator of India Ltd, (2010) 320 ITR 561].

(3.) The learned Senior Counsel for Government of India (Taxes) seeks to sustain the order and argues that merely because certain dis-allowances, which ought to have been made, were allowed, it cannot be said that there was a clear conclusion arrived at by the Assessing Officer. The thrust of the arguments of the Revenue was that merely because the assessee had pointed out certain issues or that it was discussed would not necessarily lead to a conclusion that in allowing the deduction, the Assessing Officer (AO) had come to a conclusion as to the sustainability of the claim of deduction. Even a mistake committed by the AO, which is apparent from the face of the record, could be rectified and in such circumstances, there could also be re-assessment under Section 147 for reason of escapement of income. The learned Senior Counsel would rely on the decision of the Division Bench of the Madras High Court reported in (Salem Provident Fund Society Ltd. v. Commissioner of Income Tax, Madras, (1961) 42 ITR 547), which was followed by a Division Bench of this Court in [United Mercantile Co. Ltd. v. Commissioner of Income Tax, Kerala, (1967) 64 ITR 218]. Both these decisions were noticed with approval by a Constitution Bench of the Honourable Supreme Court in [Anandji Haridas and Co. (P) Ltd. v. S.P.Kasture and others, (1968) AIR SC 565].