Case Law Details
Joseph Madathiparambil Michael Vs DCIT (Kerala High Court)
The Kerala High Court recently addressed an important issue regarding the time limit for passing consequential orders following a remand in income tax assessments. The case, Joseph Madathiparambil Michael Vs DCIT, centered around whether the one-year limit prescribed by Section 153(2A) of the Income Tax Act, 1961, applies when an appellate or revisional authority remands a case to the assessing authority on a specific issue.
The petitioner, an assessee under the Income Tax Act, challenged an order (Ext.P8) passed by the Assessing Authority, which purportedly gave effect to an order of the Income Tax Appellate Tribunal (ITAT). The petitioner contended that Ext.P8 was issued beyond the time limit specified under Section 153(2A) of the Act, prior to the amendments effective from June 1, 2016. The matter was referred to a Division Bench of the Kerala High Court for consideration.
The Court examined the relevant provisions of the Income Tax Act, specifically Section 153(2A), which mandates a time-bound completion of assessments in cases of remand by appellate or revisional authorities. The statutory intent was to ensure finality and certainty in taxation matters for the assessee. The Court noted that if an assessing authority is required to re-adjudicate an issue afresh, the consequential order must be passed within one year from the end of the financial year in which the appellate or revisional order was issued.
In this case, the Tribunal had directed the Assessing Authority to re-adjudicate the petitioner’s claim under Section 54F of the Income Tax Act. Despite the clear direction and the need for reassessment, the Assessing Authority failed to pass the consequential order within the stipulated time frame. The Court emphasized that the one-year limit applies even when only one issue is remanded for fresh consideration.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
