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2022 Supreme(Mad) 44
IN THE HIGH COURT OF JUDICATURE AT MADRAS
R. MAHADEVAN, MOHAMMED SHAFFIQ, JJ.
The Lakshmi Mills Co. Ltd., Coimbatore - Appellant
Versus
The Assistant Commissioner of Income Tax, Company Circle-IV(1), Coimbatore - Respondent
T.C.A. No. 746 of 2009
Decided On : 19-01-2022
For the Appellant :M/s. Philip George, Advocate.
For the Respondent: M. Swaminathan, K.G. Usharani Adv.
Headnote:
Income Tax Act, 1961 - Sections 143(1) and 260A – Taxation - Manufacture and sale of cotton – Assessment order - Appellant is engaged in business of manufacture and sale of cotton yarn, cotton fabrics and staple fibre yarn - For assessment year 2001-02, they had filed its return admitting a total income of Rs.3,98,17,147/-, which was processed u/s 143(1) of Act, 1961 - Subsequently, appellant filed a revised return admitting net adjusted income which was processed under section 143(1) - After scrutiny of same, the assessment under section 143(3) was completed determining total income at Rs.4,69,55,518 - Held, After analysing the entire materials and legal position, the Tribunal affirmed the order of the First Appellate Authority, after having held that the exercise of jurisdiction under section 154 was valid and justifiable - Importantly, it is to be noted that said decision in IPCA Laboratories Ltd. (supra) was delivered much prior to order of assessment - Thus, court view that the submission of learned counsel for appellant that issue was debatable, when assessing officer invoked section 154, lacks merit - It is trite law that an order contrary to law declared by Hon’ble Supreme Court, would constitute an error apparent on face of record - Appeal dismissed.
JUDGMENT :
Mohammed Shaffiq, J.
Prayer: Appeal under Section 260A of the Income Tax Act, 1961 against the order dated 13.02.2009 made in ITA.No.2036(Mds)/2007 on the file of the Income Tax Appellate Tribunal, Chennai ‘A’ Bench for the assessment year 2001-02.
1. This is an assessee’s appeal. The challenge made herein is to the order dated 13.02.2009 passed by the Income Tax Appellate Tribunal, Chennai ‘A’ Bench, in ITA No.2036(Mds)/2007, pertaining to the assessment year 2001-02.
2. On 14.09.2009, the aforesaid appeal was admitted on the following substantial questions of law:
A. Whether on the facts and in the circumstances of the case the Income Tax Appellate Tribunal was right in law in upholding the jurisdiction of the assessing officer u/s 154 to adjust the unabsorbed depreciation loss of earlier assessment years against the current year’s business income, while computing deduction u/s 80HHC?.
B. Whether on the facts and in the circumstances of the case the Income Tax Appellate Tribunal was right in not holding that the issue of setting off brought forward unabsorbed depreciation of earlier years against the current year’s business income was a debatable issue and therefore there was no apparent mistake for the assessing officer to exercise the jurisdiction u/s 154 of Income Tax Act, 1961?
3. The appellant is engaged in the business of manufacture and sale of cotton yarn, cotton fabrics and staple fibre yarn. For the assessment year 2001-02, they had filed its return admitting a total income of Rs.3,98,17,147/-, which was processed u/s 143(1) of the Income Tax Act, 1961 on 29.10.2001. Subsequently, the appellant filed a revised return admitting net adjusted income of Rs,3,82,35,240/- on 24.06.2002, which was processed under section 143(1) on 29.10.2002. After scrutiny of the same, the assessment under section 143(3) was completed on 30.03.2004, determining the total income at Rs.4,69,55,518/-. The said assessment was reopened according to the Appellate Authority’s order, at the instance of the assessee and the reassessment order was passed on 28.03.2006 under section 143(3) r/w section 147 of the Income Tax Act, 1961, determining the business income at Rs.4,42,39,895/-, after adjusting unabsorbed depreciation of the Assessment Years 1999-2000 and 2000-01 totalling to Rs.1,57,77,978/-.
4. While so, pointing out that while calculating 80 HHC deduction, the adjusted business profits was taken at Rs.6,00,17,873/- instead of Rs.4,42,39,895/- by mistake and 80HHC deduction was allowed excessively, notice under section 154 was issued, as the mistake being apparent on the face of record. The appellant filed its objection on 11.12.2006. Rejecting the said objection, the assessing officer held that the order dated 28.03.2006 suffers from error apparent on the face of record inasmuch as it was contrary to the decision of the Hon’ble Supreme Court in IPCA Laboratories Ltd. v. Deputy Commissioner of Income Tax, 266 ITR 521, in which, it was held that “section 80AB would override all other provisions in Chapter VI A”and accordingly, revised the assessment.
5. Aggrieved by the rectification of assessment on 15.12.2006, the appellant preferred an appeal before the Commissioner of Income Tax (Appeals)-1, Coimbatore, who referring to the decision of the Hon’ble Supreme Court in IPCA Laboratories Ltd (supra), found that the overriding effect of section 80AB in the computation of total income over all other sections in Chapter VIA, was a settled issue and thus, held that the revision order under section 154 was legal and justified.
6. Being dissatisfied with the order passed by the Appellate Authority, the appellant carried the matter by way of an appeal before the Income Tax Appellate Tribunal. After analysing the entire materials and legal position, the Tribunal affirmed the order of the First Appellate Authority, after having held that the exercise of jurisdiction under section 154 was valid and justifiable. The findings of the Tribunal may be rel
