Kerala High Court
Cool Minds Technologies Private ... vs Assistant Commissioner Of Income Tax on 16 June, 2025
Author: A.K.Jayasankaran Nambiar
Bench: A.K.Jayasankaran Nambiar
2025:KER:42605
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR
&
THE HONOURABLE MR. JUSTICE P.M.MANOJ
MONDAY, THE 16TH DAY OF JUNE 2025/26TH JYAISHTA, 1947
I.T.A.NO.31 OF 2025
AGAINST THE ORDER DATED 18.03.2025 OF THE INCOME TAX APPELLATE
TRIBUNAL, COCHIN BENCH, COCHIN
APPELLANT(S):
COOL MINDS TECHNOLOGIES PRIVATE LIMITED
A-5, 2ND FLOOR, TAPASYA, INFOPARK, KAKKANAD,
KOCHI A-5, 2ND FLOOR, TAPASYA, INFOPARK, KAKKANAD,
KOCHI A-5, 2ND FLOOR, TAPASYA, INFOPARK, KAKKANAD,
KOCHI PAN - AABCD6457G, (FORMERLY COOL MINDS
TECHNOLOGIES PVT. LTD., 6TH FLOOR, CHERUPUSHPAM
BUILDING, SHANMUGHAM ROAD, KOCHI 682301), PIN - 682030
BY ADV.SRI.ABRAHAM JOSEPH MARKOS
BY ADV.SRI.V.ABRAHAM MARKOS
BY ADV.SRI.ISAAC THOMAS
BY ADV.SRI.P.G.CHANDAPILLAI ABRAHAM
BY ADV.SRI.ALEXANDER JOSEPH MARKOS
BY ADV.SRI.JOHN VITHAYATHIL
RESPONDENT(S):
1 ASSISTANT COMMISSIONER OF INCOME TAX
CIRCLE-1(1), AAYAKAR BHAWAN, I.S.PRESS ROAD,
KOCHI, PIN - 682018
2 PRINCIPAL COMMISSIONER OF INCOME TAX
CIRCLE-1(1), AAYAKAR BHAWAN, I.S.PRESS ROAD,
KOCHI, PIN - 682018
BY SRI.SRI.JOSE JOSEPH, STANDING COUNSEL
THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON
16.06.2025, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
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JUDGMENT
Dr. A.K. Jayasankaran Nambiar, J.
This I.T. Appeal impugns the order dated 18.03.2025 of the
Income Tax Appellate Tribunal, Cochin Bench in
I.T.A.No.375/COCH/2016 relevant to the assessment year 2007-08.
2. The brief facts necessary for disposal of this I.T. Appeal are as
follows:
The appellant is engaged in software development and export of
IT enabled services, for which, it had claimed deduction under Section
10B of the Income Tax Act [hereinafter referred to as the "I.T. Act"] as
a 100% EOU. For the assessment years 2007-08 and 2008-09, the
claim for deduction was denied. In the first appeal, the appellant
raised an alternate contention for deduction under Section 10A of the
I.T. Act, in the event, the claim under Section 10B was not allowed.
This alternate ground was allowed by the First Appellate Authority for
the assessment year 2008-09, but was rejected by the same authority
for the assessment year 2007-08.
3. Against the rejection by the First Appellate Authority, the
appellant preferred an appeal before the Income Tax Appellate
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Tribunal. The said appeal however came to be dismissed for
non-prosecution. It is the case of the appellant that he received
neither the notice of hearing before the Appellate Tribunal nor the
dismissal order of the Appellate Tribunal. When he eventually got a
copy of the said dismissal order of the Appellate Tribunal, he preferred
an application for restoration of the appeal, but the said application
was also dismissed as belated.
4. Aggrieved by the orders dismissing his appeal and the
restoration application, the appellant approached this Court through
W.P.(C).No.9100 of 2020, which was dismissed by a learned Single
Judge. The learned Single Judge, although noticed the provisions of
Section 254 of the I.T. Act, read with Rule 24 of the Income Tax
(Appellate Tribunal) Rules, 1963, to find that the Appellant Tribunal
was statutorily obliged to consider the appeal on merits, and did not
have the power to dismiss the appeal filed before it for
non-prosecution, nevertheless proceeded to dismiss the writ petition
on the ground that the miscellaneous application preferred by the
appellant for restoration of the appeal, was itself belated.
5. In the Writ Appeal preferred by the appellant before this
Court, a Division Bench of this Court, of which one of us is a party
[Dr. Justice A.K.Jayasankaran Nambiar], found that in view of the
earlier Division Bench judgment of this Court in Uzhuva Service
Co-operative Bank Ltd. v. Income Tax Officer and others - [2020
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(5) KHC 615], the Appellate Tribunal was statutorily obliged to
consider all appeals on merits, and the dismissal for non-prosecution,
without considering the merits of the appeal, was legally
unsustainable. The Writ Appeal was therefore allowed by setting aside
the impugned judgment of the learned Single Judge as also the orders
of the Income Tax Appellate Tribunal that were impugned in the writ
petition and a direction was issued to the Appellate Tribunal to restore
the appeal [I.T.A.No.375/COCH/2016] on its file, and pass orders on
merits after hearing the appellant, within an outer time limit of six
months from the date of receipt of a copy of the judgment. We are
informed that against the said judgment of the Division Bench, no
further proceedings were initiated by the Revenue, and hence, the said
judgment has become final and binding on the Appellate Tribunal.
6. It would appear that pursuant to a remand by this Court with
a specific direction to consider and dispose the appeal on merits, the
Appellate Tribunal has now, in gross disregard of the said direction,
once again dismissed the appeal preferred by the appellant by
purportedly considering a delay condonation application in the said
appeal and dismissing the same as devoid of merit. The appeal was
thus dismissed, yet again, without considering the merits of the matter.
It is the said order passed by the Appellate Tribunal, dismissing the
appeal after dismissing the delay condonation application, that is
impugned before us in this proceedings by raising the following
substantial questions of law:
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(a) Whether on the facts and in the circumstances of the case and in the
light of Annexure A judgment the Appellate Tribunal is right in
dismissing the Appeal on the ground of delay ?
(b) Whether, on the facts and circumstances and in the light of the
affidavit filed for condonation of delay there is any material or
evidence on record to justify the finding of the Appellate Tribunal
that the delay in filing the appeal cannot be condoned ?
(c) Whether on the facts and in the circumstances of the case, the
Appellant's unit licensed by the Software Technology Park of India
as a 100% EOU is entitled to deduction under Section 10B or
alternatively under Section 10A for Assessment Year 2007-08 ?
7. At the very outset we must observe that we are quite
surprised, not to mention moderately irked, by the blatant disregard of
our directions by the Income Tax Appellate Tribunal. We find the
action of the Income Tax Appellate Tribunal [Cochin Bench comprising
of Shri. Inturi Rama Rao (Administrative Member) & Shri. Keshav
Dubey (Judicial Member)] to be in breach of the judicial discipline that
must inform its actions in a hierarchical system of adjudication. Its
action of considering a delay condonation application that was never
restored before it for consideration, and a non-consideration on merits
of the appeal that was, smacks of impertinence and tantamounts to a
blatant disregard of the directions issued from this Court. The
Appellate Tribunal would do well to avoid such indiscretions in the
future, and adhere to a standard of conduct befitting a quasi-judicial
authority under our legal system.
8. We therefore set aside the impugned order of the Income Tax
Appellate Tribunal, and direct the Tribunal to pass orders on merits of
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I.T.A.No.375/COCH/2016 that shall stand restored forthwith for their
consideration. The Tribunal shall also pass final orders in the appeal
within two months from the date of receipt of a copy of this judgment,
after hearing the appellant. The I.T.A. is therefore allowed, by
answering question nos.(a) and (b) in favour of the appellant/assessee
and against the Revenue and without answering question no.(c), which
pertains to the merits of the appeal before the Appellate Tribunal.
The Registrar of this Court shall cause a copy of this judgment to
be sent to the President of the Income Tax Appellate Tribunal with a
request to the said authority to take such measures as would avoid
such unpleasant situations in future.
Sd/-
DR. A.K.JAYASANKARAN NAMBIAR
JUDGE
Sd/-
P.M.MANOJ
JUDGE
prp/17/6/25
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APPENDIX OF I.T.A.NO.31/2025
PETITIONER'S ANNEXURES:
ANNEXURE A TRUE COPY UDGMENT DATED 04.06.2024 IN WA NO.
717/2024 BY A DIVISION BENCH OF THIS
HONOURABLE COURT
ANNEXURE B TRUE COPY OF THE ORDER DATED 24.10.2016 OF
THE APPELLATE TRIBUNAL IN ITA NO.375/
COCH/2016 FOR THE ASSESSMENT YEAR 2007-08
ANNEXURE C TRUE COPY OF THE ORDER DATED 23.08.2019
DISMISSING MISCELLANEOUS PETITION NO.
64/COCH/2019 DATED 09.04.2019 FILED BY
APPELLANT FOR RESTORING THE APPEAL
ANNEXURE D TRUE COPY OF THE ASSESSMENT ORDER DATED
22.02.2013 ISSUED TO THE PETITIONER
ANNEXURE E TRUE COPY OF THE ORDER OF THE COMMISSIONER
(APPEALS) DATED 23.09.2014
ANNEXURE F TRUE COPY OF THE APPEAL DATED 01.09.2016
FILED BY THE APPELLANT BEFORE THE INCOME TAX
APPELLATE TRIBUNAL
ANNEXURE G TRUE COPY OF APPLICATION FOR CONDONATION OF
DELAY OF 580 DAYS DATED 01.09.2016 FILED BY
THE APPELLANT
ANNEXURE H TRUE COPY OF ADDITIONAL PAPER BOOK DATED
15-11-2024 FILED BY THE APPELLANT
ANNEXURE I TRUE COPY OF THE ADDITIONAL AFFIDAVIT BEFORE
THE INCOME TAX APPELLATE TRIBUNAL DATED
14.12.2024 TO SUPPORT THE PETITION FOR
CONDONATION OF DELAY
ANNEXURE J TRUE COPY OF THE IMPUGNED ORDER DATED
18-03-2025 OF THE INCOME TAX APPELLATE
TRIBUNAL
RESPONDENT'S ANNEXURES: NIL.
//TRUE COPY//
P.S. TO JUDGE
