Malabar Regional Co-Operative Milk Producers Union Limited Vs ACIT (Kerala High Court)
The Kerala High Court set aside the order of the Income Tax Appellate Tribunal (ITAT), Cochin Bench, and remanded the matter for fresh consideration after finding that the Tribunal proceeded on an erroneous assumption while deciding the assessee’s appeal. The dispute arose from an order passed by the Commissioner of Income Tax under Section 263 of the Income Tax Act concerning two disallowances. The assessee contended that the Commissioner had already decided one of the issues relating to ₹1,57,94,958 in its favour, while only the issue concerning performance allowance had been remitted to the Assessing Officer for reconsideration.
The assessee also argued that the Government had ratified the expenditure on 31.01.2019, making the expenditure neither illegal nor prohibited, and that this aspect had not been properly considered by the Tribunal. The Revenue acknowledged that one issue had indeed been decided in favour of the assessee by the Commissioner and that only the performance allowance issue had been remitted. The High Court observed that the ITAT wrongly assumed that the Assessing Officer had not examined either of the provisions and failed to consider the assessee’s specific contentions regarding the Government’s ratification.
