High Court of KeralaDivision BenchDismissed inlimine
RP.No.155 of 2020 in ITA 1222/2009 & connected cases (Commissioner of Income Tax, Kochi-1 v The Federal Bank Ltd)
Case / Petition Number:RP.No.155 of 2020 in ITA 1222/2009 & connected cases
Case Details & Bench
- Court
- High Court of Kerala
- Hon'ble Judges
- K. Vinod Chandran
- Ashok Menon
- Judgment Date
- 2020-03-18
- Court Decision / Holding
- The batch of review petitions is dismissed inlimine. The Kerala High Court holds that Section 14A disallowance must be computed using Rule 8D, and that Rule 8D is prospective, applicable from AY 2006-07 onward, consistent with Essar Teleholdings and the 2006 amendments. Godrej & Boyce is distinguished. The decision emphasizes that there is no retroactive operation of Rule 8D, and affirms the existing framework that the charging section and computation provisions form an integrated scheme.
- Final Disposition
- Dismissed inlimine
Parties to the Case
Appellants / Petitioners
- The Commissioner of Income Tax, Kochi-1
- The Principal Commissioner of Income Tax, Kochi-1
- The Principal Commissioner of Income Tax, Thrissur
- The Commissioner of Income Tax, Thrissur
- The Principal Commissioner of Income Tax, Thiruvananthapuram
- The Commissioner of Income Tax, Thiruvananthapuram
Respondents
- The Federal Bank Ltd
- M/S. Harrisons Malayalam Ltd
- M/S. South Indian Bank Ltd
- M/S. Dhanalakshmi Bank Ltd
- Popular Vehicles and Services Ltd
- Fertilizers and Chemicals Travancore Ltd
- Kerala State Industrial Development Corporation Ltd
- The Fertilizers and Chemicals Travancore Ltd
- Harrisons Malayalam Ltd (Willingdon Island)
- Kerala State Industrial Development Corporation Ltd (Thiruvananthapuram)
- The Federal Bank Ltd (Aluva)
- Popular Vehicles and Services Ltd (Ernakulam)
- KEL (Kerala) etc.
Legal Representation & Advocates
Counsels for Petitioners
- • Sri.P.K.R.MENON, Senior Counsel, GOI(TAXES)
- • Sri.Jose JOSEPH, SC
Counsels for Respondents
- • Sri.V.ABRAHAM MARKOS
- • Sri.M.GOPIKRISHNAN NAMBIAR
- • Sri Balakrishnan
- • Sri Mohan Pulikkal
- • Sri.P.Balakrishnan
- • Sri George Varghese
- • Sri.Jose Josephy (SC)
Case Synopsis & Summary
This is a batch of review petitions filed by various Commissioners of Income Tax challenging the orders deleting disallowances under Section 14A of the Income Tax Act, 1961, as read with Rule 8D, by the Kerala High Court. The petitions target the manner in which disallowance under Section 14A is computed, especially after the Machinery Provisions (Rule 8D) were introduced by Finance Act, 2006 and the accompanying notes. The Court, presided over by a Division Bench of Justice K. Vinod Chandran and Justice Ashok Menon, notes the binding Supreme Court precedent in Essar Teleholdings Ltd. v. CIT (2018) 401 ITR 445 (SC) that Rule 8D is the operative mechanism for computing expenditure for purposes of Section 14A from assessment year 2006-07 onwards, with retrospective operation not being accepted. The judgments cited contemplate that charging provisions and computation provisions form an integrated framework, and rely on BC Srinivasa Setty to emphasize this integration. Godrej & Boyce Mfg. Co. Ltd. v. CIT is distinguished, as the Kerala High Court prefers Essar Teleholdings’ reasoning and rejects retroactive application of Rule 8D. Ultimately, the Court dismisses the review petitions inlimine, reiterating that Section 14A disallowances are to be computed only with Rule 8D prospectively from AY 2006-07 onward, and not by retroactive machinery.
Provisions of Law Cited
Section 14A of the Income Tax Act, 1961Rule 8D of the Income Tax RulesFinance Act, 2006 (machinery provisions)Section 14A(2) and Section 14A(3)Proviso to Section 14A (Finance Act, 2002)Section 147 of the Income Tax ActSection 154 of the Income Tax Act
Legal Doctrines & Maxims
- Charging section and the computation provisions constitute an integrated provision
- Rule 8D is prospective in nature
- Prospective operation of machinery provisions (Rule 8D)
- Integrated framework of charging and computation provisions under the Act
Submissions & Arguments
Contentions of Appellants / Petitioners
The Revenue contends that Section 14A is workable with Rule 8D; the reasoning in Essar Teleholdings is binding to permit disallowance from AY 2006-07 onwards, given the statutory machinery and amendments, explanatory notes, and the prospective nature of Rule 8D. The practical computation should rely on the machinery provisions; the law requires a consistent method to compute expenditure under 14A.
Contentions of Respondents
The assessees argue that the computation mechanism (Rule 8D) is a retrofitted machinery post-Act; reliance on 2006 amendments and clarifications must not be read to override older principles; they urge the court to treat 8D as prospective and not apply to earlier years or to permit broader interpretation beyond the machinery; the respondents stress the need to respect prior jurisprudence that a charging section and computation provisions are integrated, but prefer a non-retroactive application.
Cited Precedents (3)
| Case Name | Citation | Treatment | Explanation |
|---|---|---|---|
| Essar Teleholdings Ltd v. CIT | [2018] 401 ITR 445 (SC) | Positive | Court relies on Essar Teleholdings to affirm that Section 14A disallowance via Rule 8D is applicable from AY 2006-07 and that the system operates prospectively. |
| Godrej & Boyce Mfg. Co. Ltd. v. CIT | (SC) 2017 7 SCC 421 | Distinguished | Court explicitly states it cannot place reliance on Godrej for retrospectivity and distinguishes it from Essar Teleholdings. |
| CIT, Bangalore v. BC Srinivasa Setty | 128 ITR 294 (SC) | Positive | Cited to support the proposition that the charging section and the computation provisions form an integrated framework. |
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Extracted Judgment Text
Exact text extracted from official judgment records.
# **IN THE HIGH COURT OF KERALA AT ERNAKULAM**
## **PRESENT**
**THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN**
## **&**
**THE HONOURABLE MR. JUSTICE ASHOK MENON**
**WEDNESDAY, THE 18TH DAY OF MARCH 2020 / 28TH PHALGUNA, 1941**
**RP.No.155 OF 2020 IN ITA. 1222/2009**
**AGAINST THE JUDGMENT IN ITA 1222/2009 OF HIGH COURT OF KERALA**
## **REVIEW PETITIONER/APPELLANT IN ITA:**
**THE COMMISSIONER OF INCOME TAX, KOCHI-682 018**
**BY ADVS. SRI.P.K.R.MENON,SENIOR COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX**
## **RESPONDENT/RESPONDENT IN ITA:**
**THE FEDERAL BANK LTD FEDERAL TOWERS, ALUVA**
## **SRI.V.ABRAHAM MARKOS**
**THIS REVIEW PETITION HAVING BEEN FINALLY HEARD ON 18.03.2020, ALONG WITH RP.985/2019 AND CONNECTED CASES, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:**
RP.No.155 OF 2020 IN ITA. 1222/2009&CONN.CASES 2
**IN THE HIGH COURT OF KERALA AT ERNAKULAM**
## **PRESENT**
**THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN**
## **&**
**THE HONOURABLE MR. JUSTICE ASHOK MENON**
**WEDNESDAY, THE 18TH DAY OF MARCH 2020 / 28TH PHALGUNA, 1941**
**RP.No.1061 OF 2019 IN ITA. 1195/2009**
**AGAINST THE JUDGMENT IN ITA 1195/2009 OF HIGH COURT OF KERALA**
## **REVIEW PETITIONER/RESPONDENT IN ITA:**
**THE PRINCIPAL COMMISSIONER OF INCOME TAX, KOCHI - 1, KOCHI.**
**BY ADVS. SRI.P.K.RAVINDRANATHA MENON (SR.) SRI.JOSE JOSEPH, SC, FOR INCOME TAX**
## **RESPONDENT/APPELLANT IN ITA:**
**M/S. THE FEDERAL BANK LTD., FEDERAL TOWERS, ALUVA- 683 101**
## **BY SRI.V.ABRAHAM MARKOS**
**THIS REVIEW PETITION HAVING BEEN FINALLY HEARD ON 18.03.2020, ALONG WITH RP.155/2020 AND CONNECTED CASES, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:**
RP.No.155 OF 2020 IN ITA. 1222/2009&CONN.CASES 3
**IN THE HIGH COURT OF KERALA AT ERNAKULAM**
## **PRESENT**
**THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN**
## **&**
**THE HONOURABLE MR. JUSTICE ASHOK MENON**
**WEDNESDAY, THE 18TH DAY OF MARCH 2020 / 28TH PHALGUNA, 1941**
**RP.No.1123 OF 2019 IN ITA. 533/2009**
**AGAINST THE JUDGMENT IN ITA 533/2009 OF HIGH COURT OF KERALA**
## **REVIEW PETITIONER/APPELLANT IN ITA:**
**THE COMMISSIONER OF INCOME TAX KOCHI-1, KOCHI**
**BY ADVS. SRI.P.K.RAVINDRANATHA MENON (SR.) SRI.JOSE JOSEPH, SC, FOR INCOME TAX**
## **RESPONDENT/RESPONDENT IN ITA:**
**M/S.THE FEDERAL BANK LTD FEDERAL TOWERS, ALUVA.**
## **BY SRI.V.ABRAHAM MARKOS**
**THIS REVIEW PETITION HAVING BEEN FINALLY HEARD ON 18.03.2020, ALONG WITH RP.155/2020 AND CONNECTED CASES, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:**
RP.No.155 OF 2020 IN ITA. 1222/2009&CONN.CASES 4
**IN THE HIGH COURT OF KERALA AT ERNAKULAM**
## **PRESENT**
**THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN**
**&**
**THE HONOURABLE MR. JUSTICE ASHOK MENON**
**WEDNESDAY, THE 18TH DAY OF MARCH 2020 / 28TH PHALGUNA, 1941**
**RP.No.287 OF 2020 IN ITA. 1116/2009**
**AGAINST THE JUDGMENT IN ITA 1116/2009 OF HIGH COURT OF KERALA**
**REVIEW PETITIONER/APPELLANT IN ITA:**
**THE PRL. COMMISSIONER OF INCOME TAX, THRISSUR**
**BY ADVS. SRI.P.K.R.MENON,SENIOR COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX**
## **RESPONDENT/RESPONDENT IN ITA:**
**M/S. SOUTH INDIAN BANK LTD. MISSION QUARTERS, THRISSUR.**
**BY SRI.V.ABRAHAM MARKOS**
**THIS REVIEW PETITION HAVING BEEN FINALLY HEARD ON 18.03.2020, ALONG WITH RP.155/2020 AND CONNECTED CASES, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:**
RP.No.155 OF 2020 IN ITA. 1222/2009&CONN.CASES 5
**IN THE HIGH COURT OF KERALA AT ERNAKULAM**
## **PRESENT**
**THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN**
**&**
**THE HONOURABLE MR. JUSTICE ASHOK MENON**
**WEDNESDAY, THE 18TH DAY OF MARCH 2020 / 28TH PHALGUNA, 1941**
**RP.No.991 OF 2019 IN ITA. 570/2009**
**AGAINST THE JUDGMENT IN ITA 570/2009 OF HIGH COURT OF KERALA**
## **REVIEW PETITIONER/APPELLANT IN ITA:**
**THE PR.COMMISSIONER OF INCOME TAX, THRISSUR.**
**BY ADVS. SRI.P.K.RAVINDRANATHA MENON (SR.) SRI.JOSE JOSEPH, SC, FOR INCOME TAX**
## **RESPONDENT/RESPONDENT IN ITA:**
**M/S.SOUTH INDIAN BANK LTD., MISSION QUARTERS, THRISSUR - 680 001**
## **SRI.V.ABRAHAM MARKOS**
**THIS REVIEW PETITION HAVING BEEN FINALLY HEARD ON 18.03.2020, ALONG WITH RP.155/2020 AND CONNECTED CASES, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:**
RP.No.155 OF 2020 IN ITA. 1222/2009&CONN.CASES 6
**IN THE HIGH COURT OF KERALA AT ERNAKULAM**
## **PRESENT**
**THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN**
**&**
**THE HONOURABLE MR. JUSTICE ASHOK MENON**
**WEDNESDAY, THE 18TH DAY OF MARCH 2020 / 28TH PHALGUNA, 1941 RP.No.985 OF 2019 IN ITA. 1092/2009**
**AGAINST THE JUDGMENT IN ITA 1092/2009 OF HIGH COURT OF KERALA**
## **REVIEW PETITIONER/APPELLANT IN ITA:**
**THE PRINCIPAL COMMISSIONER OF INCOME TAX THRISSUR**
**BY ADVS. SRI.P.K.R.MENON,SENIOR COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX**
## **RESPONDENT/RESPONDENT IN ITA:**
**DHANALAKSHMI BANK LTD. NAIKKANAL, THRISSUR - 680 001**
**SRI.P.BALAKRISHNAN**
**THIS REVIEW PETITION HAVING BEEN FINALLY HEARD ON 18.03.2020, ALONG WITH RP.155/2020 AND CONNECTED CASES, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:**
RP.No.155 OF 2020 IN ITA. 1222/2009&CONN.CASES 7
**IN THE HIGH COURT OF KERALA AT ERNAKULAM**
**PRESENT**
**THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN**
**&**
**THE HONOURABLE MR. JUSTICE ASHOK MENON**
**WEDNESDAY, THE 18TH DAY OF MARCH 2020 / 28TH PHALGUNA, 1941**
**RP.No.1034 OF 2019 IN ITA. 98/2012**
**AGAINST THE JUDGMENT IN ITA 98/2012 OF HIGH COURT OF KERALA**
## **REVIEW PETITIONER/PETITIONER IN ITA:**
**THE PRINCIPAL COMMISSIONER OF INCOME TAX THRISSUR.**
**BY ADV. SRI.P.K.R.MENON,SENIOR COUNSEL, GOI(TAXES) SRI. JOSE JOSEPH, SC FOR INCOME TAX**
## **RESPONDENT/APPELLANT IN ITA:**
**M/S. DHANALEKSHMI BANK LTD. NAIKKANAL, THRISSUR.**
**SRI.MOHAN PULIKKAL**
**THIS REVIEW PETITION HAVING BEEN FINALLY HEARD ON 18.03.2020, ALONG WITH RP.155/2020 AND CONNECTED CASES, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:**
RP.No.155 OF 2020 IN ITA. 1222/2009&CONN.CASES 8
**IN THE HIGH COURT OF KERALA AT ERNAKULAM**
## **PRESENT**
**THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN**
**&**
**THE HONOURABLE MR. JUSTICE ASHOK MENON**
**WEDNESDAY, THE 18TH DAY OF MARCH 2020 / 28TH PHALGUNA, 1941**
**RP.No.285 OF 2020 IN ITA. 116/2012**
**AGAINST THE JUDGMENT IN ITA 116/2012 OF HIGH COURT OF KERALA**
## **REVIEW PETITIONER/RESPONDENT IN ITA:**
**THE COMMISSIONER OF INCOME TAX, THRISSUR.**
**BY ADVS. SRI.P.K.RAVINDRANATHA MENON (SR.) SRI.JOSE JOSEPH, SC, FOR INCOME TAX**
**RESPONDENT/APPELLANT IN ITA:**
**M/S.DHANALAKSHMI BANK LTD., NAIKKANAL, THRISSUR.**
**SRI.P.BALAKRISHNAN**
**THIS REVIEW PETITION HAVING BEEN FINALLY HEARD ON 18.03.2020, ALONG WITH RP.155/2020 AND CONNECTED CASES, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:**
RP.No.155 OF 2020 IN ITA. 1222/2009&CONN.CASES 9
**IN THE HIGH COURT OF KERALA AT ERNAKULAM**
## **PRESENT**
**THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN**
**&**
**THE HONOURABLE MR. JUSTICE ASHOK MENON**
**WEDNESDAY, THE 18TH DAY OF MARCH 2020 / 28TH PHALGUNA, 1941**
**RP.No.1277 OF 2019 IN ITA. 873/2009**
**AGAINST THE JUDGMENT IN ITA 873/2009 OF HIGH COURT OF KERALA**
## **REVIEW PETITIONER/APPELLANT IN ITA:**
**THE PRINCIPAL COMMISSIONER OF INCOME TAX, KOCHI-1, KOCHI.**
**BY ADVS. SRI.P.K.R.MENON,SENIOR COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX**
## **RESPONDENT/RESPONDENT IN ITA:**
**M/S.HARRISONS MALAYALAM LTD., WILLINGDON ISLAND, KOCHI- 682 003**
## **SRI.M.GOPIKRISHNAN NAMBIAR**
**THIS REVIEW PETITION HAVING BEEN FINALLY HEARD ON 18.03.2020, ALONG WITH RP.155/2020 AND CONNECTED CASES, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:**
RP.No.155 OF 2020 IN ITA. 1222/2009&CONN.CASES 10
**IN THE HIGH COURT OF KERALA AT ERNAKULAM**
## **PRESENT**
**THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN**
**&**
**THE HONOURABLE MR. JUSTICE ASHOK MENON**
**WEDNESDAY, THE 18TH DAY OF MARCH 2020 / 28TH PHALGUNA, 1941**
**RP.No.1124 OF 2019 IN ITA. 88/2013**
**AGAINST THE JUDGMENT IN ITA 88/2013 OF HIGH COURT OF KERALA**
## **REVIEW PETITIONER/APPELLANT IN ITA:**
**THE COMMISSIONER OF INCOME TAX KOCHI-1, KOCHI -682 018.**
**BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX**
## **RESPONDENT/RESPONDENT IN ITA:**
**M/S. HARRISONS MALAYALAM LTD. WILLINGDON ISLAND, KOCHI.**
## **SRI.M.GOPIKRISHNAN NAMBIAR**
**THIS REVIEW PETITION HAVING BEEN FINALLY HEARD ON 18.03.2020, ALONG WITH RP.155/2020 AND CONNECTED CASES, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:**
RP.No.155 OF 2020 IN ITA. 1222/2009&CONN.CASES 11
**IN THE HIGH COURT OF KERALA AT ERNAKULAM**
## **PRESENT**
**THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN**
## **&**
**THE HONOURABLE MR. JUSTICE ASHOK MENON**
**WEDNESDAY, THE 18TH DAY OF MARCH 2020 / 28TH PHALGUNA, 1941**
**RP.No.1058 OF 2019 IN ITA. 703/2009**
**AGAINST THE JUDGMENT IN ITA 703/2009 OF HIGH COURT OF KERALA**
## **REVIEW PETITIONER/APPELLANT IN ITA:**
**THE COMMISSIONER OF INCOME TAX, KOCHI. X**
**BY ADVS. SRI.P.K.RAVINDRANATHA MENON (SR.) SRI.JOSE JOSEPH, SC, FOR INCOME TAX**
## **RESPONDENT/RESPONDENT IN ITA:**
**M/S.HARRISONS MALAYALAM LTD. WILLINGDON ISLAND, KOCHI**
## **SRI.M.GOPIKRISHNAN NAMBIAR**
**THIS REVIEW PETITION HAVING BEEN FINALLY HEARD ON 18.03.2020, ALONG WITH RP.155/2020 AND CONNECTED CASES, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:**
RP.No.155 OF 2020 IN ITA. 1222/2009&CONN.CASES 12
**IN THE HIGH COURT OF KERALA AT ERNAKULAM**
## **PRESENT**
**THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN**
**&**
**THE HONOURABLE MR. JUSTICE ASHOK MENON**
**WEDNESDAY, THE 18TH DAY OF MARCH 2020 / 28TH PHALGUNA, 1941**
**RP.No.1066 OF 2019 IN ITA. 1084/2009**
**AGAINST THE JUDGMENT IN ITA 1084/2009 OF HIGH COURT OF KERALA**
## **REVIEW PETITIONER/APPELLANT IN ITA:**
**THE PRINCIPAL COMMISSIONER OF INCOME TAX KOCHI-1, KOCHI**
**BY ADVS. SRI.P.K.RAVINDRANATHA MENON (SR.) SRI.JOSE JOSEPH, SC, FOR INCOME TAX**
## **RESPONDENT/RESPONDENT IN ITA:**
**M/S.HARRISONS MALAYALAM LTD WILLINGDON ISLAND, KOCHI**
## **SRI.M.GOPIKRISHNAN NAMBIAR**
**THIS REVIEW PETITION HAVING BEEN FINALLY HEARD ON 18.03.2020, ALONG WITH RP.155/2020 AND CONNECTED CASES, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:**
RP.No.155 OF 2020 IN ITA. 1222/2009&CONN.CASES 13
**IN THE HIGH COURT OF KERALA AT ERNAKULAM**
**PRESENT**
**THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN**
**&**
**THE HONOURABLE MR. JUSTICE ASHOK MENON**
**WEDNESDAY, THE 18TH DAY OF MARCH 2020 / 28TH PHALGUNA, 1941**
**RP.No.1118 OF 2019 IN ITA. 922/2009**
**AGAINST THE JUDGMENT IN ITA 922/2009 OF HIGH COURT OF KERALA**
## **REVIEW PETITIONER/APPELLANT IN ITA:**
**THE PRINCIPAL COMMISSIONER OF INCOME TAX , KOCHI - 1, KOCHI.**
**BY ADVS. SRI.P.K.RAVINDRANATHA MENON (SR.) SRI.JOSE JOSEPH, SC, FOR INCOME TAX**
## **RESPONDENT/RESPONDENT IN ITA:**
**M/S. HARRISONS MALAYALAM LTD., WILLINGDON ISLAND, KOCHI .**
## **SRI.M.GOPIKRISHNAN NAMBIAR**
**THIS REVIEW PETITION HAVING BEEN FINALLY HEARD ON 18.03.2020, ALONG WITH RP.155/2020 AND CONNECTED CASES, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:**
RP.No.155 OF 2020 IN ITA. 1222/2009&CONN.CASES 14
**IN THE HIGH COURT OF KERALA AT ERNAKULAM**
## **PRESENT**
**THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN**
**&**
**THE HONOURABLE MR. JUSTICE ASHOK MENON**
**WEDNESDAY, THE 18TH DAY OF MARCH 2020 / 28TH PHALGUNA, 1941**
**RP.No.1031 OF 2019 IN ITA. 1060/2009**
**AGAINST THE JUDGMENT IN ITA 1060/2009 OF HIGH COURT OF KERALA**
## **REVIEW PETITIONER/RESPONDENT IN ITA:**
**THE PRINCIPAL COMMISSIONER OF INCOME TAX, KOCHI - 1, KOCHI.**
**BY ADVS. SRI.P.K.RAVINDRANATHA MENON (SR.) SRI.JOSE JOSEPH, SC, FOR INCOME TAX**
**RESPONDENT/APPELLANT IN ITA:**
**M/S.HARRISONS MALAYALAM LIMITED, WILLINGTON ISLAND, KOCHI - 682 003**
## **SRI.M.GOPIKRISHNAN NAMBIAR**
**THIS REVIEW PETITION HAVING BEEN FINALLY HEARD ON 18.03.2020, ALONG WITH RP.155/2020 AND CONNECTED CASES, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:**
RP.No.155 OF 2020 IN ITA. 1222/2009&CONN.CASES 15
# **IN THE HIGH COURT OF KERALA AT ERNAKULAM**
## **PRESENT**
**THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN**
**&**
**THE HONOURABLE MR. JUSTICE ASHOK MENON**
**WEDNESDAY, THE 18TH DAY OF MARCH 2020 / 28TH PHALGUNA, 1941**
**RP.No.1103 OF 2019 IN ITA. 879/2009**
**AGAINST THE JUDGMENT IN ITA 879/2009 OF HIGH COURT OF KERALA**
## **REVIEW PETITIONER/APPELLANT IN ITA:**
**THE PRINCIPAL COMMISSIONER OF INCOME TAX, KOCHI-1, KOCHI**
**BY ADVS. SRI.P.K.R.MENON,SENIOR COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX**
## **RESPONDENT/RESPONDENT IN ITA:**
**M/S.HARRISONS MALAYAM LTD., WILLINGDON ISLAND, KOCHI- 682 003**
## **SRI.M.GOPIKRISHNAN NAMBIAR**
**THIS REVIEW PETITION HAVING BEEN FINALLY HEARD ON 18.03.2020, ALONG WITH RP.155/2020 AND CONNECTED CASES, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:**
RP.No.155 OF 2020 IN ITA. 1222/2009&CONN.CASES 16
## **IN THE HIGH COURT OF KERALA AT ERNAKULAM**
## **PRESENT**
**THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN**
**&**
**THE HONOURABLE MR. JUSTICE ASHOK MENON**
**WEDNESDAY, THE 18TH DAY OF MARCH 2020 / 28TH PHALGUNA, 1941**
**RP.No.1106 OF 2019 IN ITA. 121/2010**
**AGAINST THE JUDGMENT IN ITA 121/2010 OF HIGH COURT OF KERALA**
## **REVIEW PETITIONER/RESPONDENT IN ITA:**
**THE PRINCIPAL COMMISSIONER OF INCOME TAX KOCHI-1, KOCHI.**
**BY ADVS. SRI.P.K.R.MENON,SENIOR COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX**
**RESPONDENT/APPELLANT IN ITA:**
**THE FERTILIZERS AND CHEMICALS TRAVANCORE LTD., UDYOGAMANDAL, ELOOR, KOCHI - 683 501**
## **SRI.M.GOPIKRISHNAN NAMBIAR**
**THIS REVIEW PETITION HAVING BEEN FINALLY HEARD ON 18.03.2020, ALONG WITH RP.155/2020 AND CONNECTED CASES, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:**
RP.No.155 OF 2020 IN ITA. 1222/2009&CONN.CASES 17
## **IN THE HIGH COURT OF KERALA AT ERNAKULAM**
## **PRESENT**
**THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN**
**&**
**THE HONOURABLE MR. JUSTICE ASHOK MENON**
**WEDNESDAY, THE 18TH DAY OF MARCH 2020 / 28TH PHALGUNA, 1941 RP.No.1273 OF 2019 IN ITA. 872/2009**
**AGAINST THE JUDGMENT IN ITA 872/2009 OF HIGH COURT OF KERALA**
## **REVIEW PETITIONER/APPELLANT IN ITA:**
**THE PRINCIPAL COMMISSIONER OF INCOME TAX, KOCHI-1, KOCHI.**
**BY ADVS. SRI.P.K.R.MENON,SENIOR COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX**
## **RESPONDENT/RESPONDENT IN ITA:**
**M/S. THE FEDERAL BANK LTD FEDERAL TOWERS, ALUVA-683 101**
## **SRI.M.GOPIKRISHNAN NAMBIAR**
**THIS REVIEW PETITION HAVING BEEN FINALLY HEARD ON 18.03.2020, ALONG WITH RP.155/2020 AND CONNECTED CASES, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:**
RP.No.155 OF 2020 IN ITA. 1222/2009&CONN.CASES 18
## **IN THE HIGH COURT OF KERALA AT ERNAKULAM**
## **PRESENT**
**THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN**
**&**
**THE HONOURABLE MR. JUSTICE ASHOK MENON**
**WEDNESDAY, THE 18TH DAY OF MARCH 2020 / 28TH PHALGUNA, 1941 RP.No.1115 OF 2019 IN ITA. 69/2012**
**AGAINST THE JUDGMENT IN ITA 69/2012 OF HIGH COURT OF KERALA**
## **REVIEW PETITIONER/APPELLANT IN ITA:**
**THE PRINCIPAL COMMISSIONER OF INCOME TAX THIRUVANANTHAPURAM.**
**BY ADVS. SRI.P.K.RAVINDRANATHA MENON (SR.) SRI.JOSE JOSEPH, SC, FOR INCOME TAX**
## **RESPONDENT/RESPONDENT IN ITA:**
**M/S.KERALA STATE INDUSTRIAL DEVELOPMENT CORPORATION LTD.,KESTON ROAD, KOWDIAR.P.O., THIRUVANANTHAPURAM-695003.**
## **SRI.M.GOPIKRISHNAN NAMBIAR**
**THIS REVIEW PETITION HAVING BEEN FINALLY HEARD ON 18.03.2020, ALONG WITH RP.155/2020 AND CONNECTED CASES, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:**
RP.No.155 OF 2020 IN ITA. 1222/2009&CONN.CASES 19
## **IN THE HIGH COURT OF KERALA AT ERNAKULAM**
## **PRESENT**
**THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN**
**&**
**THE HONOURABLE MR. JUSTICE ASHOK MENON**
**WEDNESDAY, THE 18TH DAY OF MARCH 2020 / 28TH PHALGUNA, 1941 RP.No.1072 OF 2019 IN ITA. 123/2012**
**AGAINST THE JUDGMENT IN ITA 123/2012 OF HIGH COURT OF KERALA**
## **REVIEW PETITIONER/APPELLANT IN ITA:**
**THE COMMISSIONER OF INCOME TAX THIRUVANANTHAPURAM.**
**BY ADVS. SRI.P.K.R.MENON,SENIOR COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX**
## **RESPONDENT/RESPONDENT IN ITA:**
**KERALA STATE INDUSTRIAL DEVELOPMENT CORPORATION LTD.,KESTON ROAD, KOWDIAR P.O., THIRUVANANTHAPURAM-695003.**
## **SRI.M.GOPIKRISHNAN NAMBIAR**
**THIS REVIEW PETITION HAVING BEEN FINALLY HEARD ON 18.03.2020, ALONG WITH RP.155/2020 AND CONNECTED CASES, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:**
RP.No.155 OF 2020 IN ITA. 1222/2009&CONN.CASES 20
**IN THE HIGH COURT OF KERALA AT ERNAKULAM**
## **PRESENT**
**THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN**
**&**
**THE HONOURABLE MR. JUSTICE ASHOK MENON**
**WEDNESDAY, THE 18TH DAY OF MARCH 2020 / 28TH PHALGUNA, 1941**
**RP.No.1158 OF 2019 IN ITA. 1662/2009**
**AGAINST THE JUDGMENT IN ITA 1662/2009 OF HIGH COURT OF KERALA**
**REVIEW PETITIONER/RESPONDENT IN ITA:**
**THE PR.COMMISSIONER OF INCOME TAX THRISSUR**
**BY ADVS.**
**SRI.P.K.R.MENON,SENIOR COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX**
**RESPONDENT/APPELLANT IN ITA:**
**M/S.SOUTH INDIAN BANK LTD MISSION QUARTERS, THRISSUR- 680 001**
**:**
## **SRI.GEORGE VARGHESE**
**THIS REVIEW PETITION HAVING BEEN FINALLY HEARD ON 18.03.2020, ALONG WITH RP.155/2020 AND CONNECTED CASES, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:**
RP.No.155 OF 2020 IN ITA. 1222/2009&CONN.CASES 21
**IN THE HIGH COURT OF KERALA AT ERNAKULAM**
## **PRESENT**
**THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN**
**&**
**THE HONOURABLE MR. JUSTICE ASHOK MENON**
**WEDNESDAY, THE 18TH DAY OF MARCH 2020 / 28TH PHALGUNA, 1941 RP.No.1161 OF 2019 IN ITA. 16/2013**
**AGAINST THE JUDGMENT IN ITA 16/2013 OF HIGH COURT OF KERALA**
## **REVIEW PETITIONER/RESPONDENT IN ITA:**
**THE PRINCIPAL COMMISSIONER OF INCOME TAX KOCHI -1, KOCHI.**
**BY ADVS. SRI.P.K.R.MENON,SENIOR COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX**
## **RESPONDENT/APPELLANT IN ITA:**
**M/S. HARRISONS MALAYALAM LTD. WILLINGTON ISLAND, KOCHI -682 003**
**SRI.M.GOPIKRISHNAN NAMBIAR**
**THIS REVIEW PETITION HAVING BEEN FINALLY HEARD ON 18.03.2020, ALONG WITH RP.155/2020 AND CONNECTED CASES, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:**
RP.No.155 OF 2020 IN ITA. 1222/2009&CONN.CASES 22
**IN THE HIGH COURT OF KERALA AT ERNAKULAM**
## **PRESENT**
**THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN**
**&**
**THE HONOURABLE MR. JUSTICE ASHOK MENON**
**WEDNESDAY, THE 18TH DAY OF MARCH 2020 / 28TH PHALGUNA, 1941 RP.No.328 OF 2020 IN ITA. 1151/2009**
**AGAINST THE JUDGMENT IN ITA 1151/2009 OF HIGH COURT OF KERALA**
## **REVIEW PETITIONER/APPELLANT IN ITA:**
**THE COMMISSIONER OF INCOME TAX KOCHI**
**BY ADVS. SRI.JOSE JOSEPH, SC, FOR INCOME TAX SRI.P.K.RAVINDRANATHA MENON (SR.)**
## **RESPONDENT/RESPONDENT IN ITA:**
**M/S.HARRISONS MALAYALAM LTD WILLINGDON ISLAND, KOCHI - 682 003**
## **SRI.M.GOPIKRISHNAN NAMBIAR**
**THIS REVIEW PETITION HAVING BEEN FINALLY HEARD ON 18.03.2020, ALONG WITH RP.155/2020 AND CONNECTED CASES, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:**
RP.No.155 OF 2020 IN ITA. 1222/2009&CONN.CASES 23
**IN THE HIGH COURT OF KERALA AT ERNAKULAM**
## **PRESENT**
**THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN**
**&**
**THE HONOURABLE MR. JUSTICE ASHOK MENON**
**WEDNESDAY, THE 18TH DAY OF MARCH 2020 / 28TH PHALGUNA, 1941**
**RP.No.329 OF 2020 IN ITA. 712/2009**
**AGAINST THE JUDGMENT IN ITA 712/2009 OF HIGH COURT OF KERALA**
## **REVIEW PETITIONER/RESPONDENT IN ITA:**
**THE COMMISSIONER OF INCOME TAX THRISSUR**
**BY ADVS. SRI.P.K.RAVINDRANATHA MENON (SR.) SRI.JOSE JOSEPH, SC, FOR INCOME TAX**
**RESPONDENT/APPELLANT IN ITA:**
**M/S.DHANALAKSHMI BANK LTD NAIKKANAL, THISSUR**
## **SRI.P.BALAKRISHNAN**
**THIS REVIEW PETITION HAVING BEEN FINALLY HEARD ON 18.03.2020, ALONG WITH RP.155/2020 AND CONNECTED CASES, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:**
RP.No.155 OF 2020 IN ITA. 1222/2009&CONN.CASES 24
**IN THE HIGH COURT OF KERALA AT ERNAKULAM**
## **PRESENT**
**THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN**
## **&**
**THE HONOURABLE MR. JUSTICE ASHOK MENON**
**WEDNESDAY, THE 18TH DAY OF MARCH 2020 / 28TH PHALGUNA, 1941**
**RP.No.327 OF 2020 IN ITA. 186/2014**
**AGAINST THE JUDGMENT IN ITA 186/2014 OF HIGH COURT OF KERALA**
**REVIEW PETITIONER/RESPONDENT IN ITA:**
**THE COMMISSIONER OF INCOME TAX KOCHI**
**BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX**
**RESPONDENT/APPELLANT IN ITA:**
**POPULAR VEHICLES AND SERVICES LTD. MAMANGALAM, ERNAKULAM**
## **SRI.M.GOPIKRISHNAN NAMBIAR**
**THIS REVIEW PETITION HAVING BEEN FINALLY HEARD ON 18.03.2020, ALONG WITH RP.155/2020 AND CONNECTED CASES, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:**
RP.No.155 OF 2020 IN ITA. 1222/2009&CONN.CASES 25
**IN THE HIGH COURT OF KERALA AT ERNAKULAM**
## **PRESENT**
**THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN**
**&**
**THE HONOURABLE MR. JUSTICE ASHOK MENON**
**WEDNESDAY, THE 18TH DAY OF MARCH 2020 / 28TH PHALGUNA, 1941 RP.No.326 OF 2020 IN ITA. 815/2009**
**AGAINST THE JUDGMENT IN ITA 815/2009 OF HIGH COURT OF KERALA**
## **REVIEW PETITIONER/RESPONDENT IN ITA:**
**THE COMMISSIONER OF INCOME TAX KOCHI, KOCHI**
**BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX**
**RESPONDENT/APPELLANT IN ITA:**
**M/S.THE FEDERAL BANK LTD. FEDERAL TOWERS, ALUVA**
**SRI. V.ABRAHAM MARKOS**
**THIS REVIEW PETITION HAVING BEEN FINALLY HEARD ON 18.03.2020, ALONG WITH RP.155/2020 AND CONNECTED CASES, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:**
RP.No.155 OF 2020 IN ITA. 1222/2009&CONN.CASES 26
## **ORDER**
[ RP.155/2020, RP.1061/2019, RP.1123/2019, RP.287/2020, RP.991/2019, RP.985/2019, RP.1034/2019, RP.285/2020, RP.1277/2019, RP.1124/2019, RP.1058/2019, RP.1066/2019, RP.1118/2019, RP.1031/2019, RP.1103/2019, RP.1106/2019, RP.1273/2019, RP.1115/2019, RP.1072/2019, RP.1158/2019, RP.1161/2019, RP.328/2020, RP.329/2020, RP.327/2020, RP.326/2020
## K. Vinod Chandran, J.
The batch of review Petitions have been filed against the deletion of disallowance made under Section 14A of the Income Tax Act, 1961 (For brevity, 'the Act of 1961). This Court, in the appeals, filed by both the Revenue and the assessee, found that, as per the binding precedent of the Hon'ble Supreme Court in _Commissioner of Income Tax V. Essar Teleholdings Ltd. [(2018) 401 ITR 445 (SC),_ such disallowance could be made only from the assessment year 2007-2008. This was held to be so for reason of the incorporation of the machinery provisions under Rule 8D of the Income Tax Rules in the year 2006, the Explanatory Notes in the Finance Bill 2006, clarification in the Circular dated 28.12.2006 and the methodology having been changed in the year 2016, which was expressly stated to be prospective.
RP.No.155 OF 2020 IN ITA. 1222/2009&CONN.CASES 27
2. Learned Standing Counsel appearing for the Revenue submitted that the decision in _Essar Teleholdings (supra)_ itself finds that Section 14A of the Act is fully workable without there being any mechanism provided for computing the expenditure as noticed in para 36.
3. We have to immediately notice that it is not the dictum of the decision and their Lordships expressed otherwise in paragraphs 36, 37 & 40, all of which we extract hereunder:
_-_ _**36.** It is to be noted that Section 14 A was inserted by the Finance Act, 2001 and the provisions were fully workable without their being any mechanism provided for computing the expenditure. Although Section 14-A was made effective from 1-41962 but proviso was immediately inserted by the Finance Act, 2002, providing that Section 14-A shall not empower the assessing officer either to reassess under Section 147 or pass an order enhancing the assessment or reducing a refund already made or otherwise increasing the liability of the assessees under Section 154, for any assessment year beginning on or before 1-4-2001. Thus, all concluded transactions prior to 1-4-2001 were made final and not allowed to be reopened._
_37. The memorandum of explanation explaining the provisions of the Finance Act, 2006 has - clearly mentioned that Section 14 sub section (2) and_
RP.No.155 OF 2020 IN ITA. 1222/2009&CONN.CASES 28
_- sub section (3) shall be effective with effect from - Assessment Year 2006 2007 alone which is another indicator that provision was intended to operate prospectively._
XXX XXX XXX
_**40.** In the present case, methodology as provided under Rule 8-D was neither a well-known nor wellsettled mode of computation. The new mode of computation was brought in place by Rule 8-D. No assessing officer, even in his imagination could have applied the methodology, which was brought in place - - by Rule 8 B. Thus, retrospective operation of Rule 8 B cannot be accepted on the strength of law laid down by this Court in the above case._
## _Underlining by us for emphasis_
It cannot hence be said that there could have been a computation applied even without the machinery provision.
4. The learned Standing Counsel placed reliance on the decision of the Hon'ble Supreme Court in _Godrej & Boyce - Manufacturing Co. Ltd V. Deputy Commissioner of Income Tax and Another [(2017) 394 ITR 449 (SC)_ to contend that even before _Essar Teleholdings'_ case, Honourable Supreme Court had accepted that dis-allowance under Section 14A of the Act, was valid and possible especially looking at the
RP.No.155 OF 2020 IN ITA. 1222/2009&CONN.CASES 29
## legislative intend of the provision. We need only extract para of _Essar Teleholdings_ to reject the above contention:
_50. It is relevant to note that the impugned judgment in this appeal relies on the earlier judgment of the Bombay High Court in Godrej & Boyce Mfg. Co. Ltd. v. CIT, where the Division Bench of the Bombay High Court after elaborately considering the principles to determine the prospectivity or retrospectivity of the amendment has concluded that Rule 8-D is prospective in nature. Against the aforesaid judgment of the Bombay High Court dated 12-8-2010 an appeal was filed in this Court which has been decided vide its judgment in_ _**Godrej &**_
_**Boyce Mfg. Co. Ltd. v. CIT[(2017) 7 SCC 421 ]** . This Court, while deciding the above appeal, repelled the challenge raised by the assessee regarding vires of Section 14-A. In para 36 of the judgment, this Court noticed that with regard to retrospectivity of provisions Revenue had filed appeal, hence the said question was not gone into the aforesaid appeal. In the above case, this Court specifically left the question of retrospectivity to be decided in other appeals filed by the Revenue. We thus have proceeded to decide the question of - retrospectivity of Rule 8 D in these appeals._
## _Underlining by us for emphasis_
We need not hence place any reliance on Godrej & Boyce Mfg. Co. Ltd. (supra) to decide on the retrospectivity.
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5. We also rely on a three Judge Bench decision of _-_ the Hon'ble Supreme Court in _Commissioner of Income Tax, Bangalore v. B.C. Srinivasa Setty [(1981) 128 ITR 294]_ . There, the question was slightly different in so far as the computation provisions not being applicable, in which event it was held that the issue was not intended to fall within the charging section. We are concerned with the declaration that _''the Charging section and the computation provision together constitute an integrated provision''._ Hence, only when the machinery provisions for computation came into the Rules, there could have been a dis-allowance under Section 14A of the Act especially when sub-sections (2) & (3) of Section 14A came into the statute in 2006, just before Rule 8D.
6. We also notice that in another appeal, ITA No.830 of 2009 dated 06.12.2018, wherein the question raised was answered in favour of the assessee and against the Revenue, again relying on _Essar Teleholdings_ , the Revenue took it up before the Hon'ble Supreme Court and the SLP stood dismissed by an order dated 06.12.2018.
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For all the above reasons, we find no reason to review the judgments to the extent of the finding on applicability of Section 14A. The review petitions are accordingly dismissed _inlimine_ .
**Sd/K.VINOD CHANDRAN, JUDGE**
**Sd/-**
**ASHOK MENON, JUDGE**
ajt