IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE V.K.MOHANAN MONDAY, THE 16TH NOVEMBER 2009 / 25TH KARTHIKA 1931 ITA.No. 939 of 2009() --------------------- ITA.318/COCH/2002 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT: -------------------- THE COMMISSIONER OF INCOME TAX, THRISSUR. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT(S): --------------- M/S.VANAJA TEXTILES LTD, KURICHIKKARA P.O, THRISSUR DISTRICT. ADV. SRI.P.BALAKRISHNAN (E) FOR R THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 16/11/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C .N. RAMACHANDRAN NAIR & V.K. MOHANAN, JJ. -------------------------------------------- I. T. A. No. 939 OF 2009 -------------------------------------------- Dated this the 16th day of November, 2009 JUDGMENT Ramachandran Nair, J. The question raised in the appeal filed by the revenue is whether the Tribunal was justified in cancelling the assessment made under Section 143(1)(a) for the reason that disallowances made do not fall within the description "prima facie inadmissible items". After hearing both sides and after going through the proceedings issued under Section 143(1)(a) and the order of the Tribunal, we are unable to uphold the order of the Tribunal for more than one reason. In the first place, against proceedings under Section 143(1)(a) the assessee itself filed rectification application under Section 154 which goes to prove that the assessee was satisfied that the proceedings issued under Section 143(1)(a) with additions contained only mistakes. In our view, the assessee cannot later turn round and say that mistakes are of arguable issue and could not have been corrected in proceedings under Section 143. Further, as is revealed from the proceedings under Section 143, it is clear that assessee made belated claim of investment allowance relating to assessment years 1984-85 and 1985-86 in the 2 returns filed for 1994-95. The reason for disallowance is based on the disallowance under Section 32A(3)(ii) of the Act. We are of the view that claim is prima facie inadmissible because it is obviously beyond the period of limitation provided under the Act. Further, the next item of disallowance is prior period expenses and the assessee has not shown in the return and annexures as to the provision under which claim of deduction is made. In our view, the added items are prima facie not admissible under the Act, but still deducted by the assessee in the computation of taxable income. We are therefore of the view that the Tribunal was not justified in cancelling the proceedings under Section 143 which stood modified in one round of rectification on assessee's own application and again by the Commissioner of Income Tax in revision. We therefore allow the appeal by reversing the order of the Tribunal and remanding the matter to the Tribunal for deciding the issues on merits. (C.N.RAMACHANDRAN NAIR) Judge. (V.K. MOHANAN) Judge. kk 3