KERALA STATE CO-OPERATIVE EMPLOYEE PENSION BOARD, vs. COMMISSIONER OF INCOME TAX (EXEMPTION),
What did the High Court hold?
The High Court disposed of the writ petition with specific directions. It directed the Central Board of Direct Taxes (CBDT), the 2nd respondent, to consider and pass orders on the application filed under Section 119(2)(b) (Ext.P9) expeditiously, preferably within two months from the date of the order, in accordance with the law. Furthermore, the 3rd respondent, the Commissioner of Income Tax (Appeals), was directed to consider and decide the pending appeals (Exts.P7, P10, and P11) expeditiously, as early as possible, in accordance with the law. The court did not decide on the merits of the exemption claim itself but focused on procedural directions to expedite the decision-making process at the administrative and appellate levels. The operative direction was to ensure timely consideration of the pending applications and appeals.
What were the facts?
The petitioner, Kerala State Co-operative Employee Pension Board, administers a pension scheme for co-operative employees, funded by interest from their contributions. The Board's income is exempted under Section 10(23AAA) of the Income Tax Act, 1961. For Assessment Year 2012-13, exemption was disallowed due to a delayed return, leading to a demand. The appeal to the Commissioner (Appeals) was allowed, but a refund of Rs. 12,15,204/- remains unissued. For AY 2013-14, a delayed return and application for condonation under Section 119(2)(b) to the Chief Commissioner were filed, but no decision was made, resulting in a demand of Rs. 56,04,860/-. Appeals for AYs 2014-15 to 2018-19 are pending due to similar issues with delayed returns and denied exemptions.
What were the issues?
1. Whether the petitioner is entitled to exemption under Section 10(23AAA) of the Income Tax Act, 1961, despite filing returns with a delay, and whether the revenue authorities are justified in disallowing the exemption on this technical ground. 2. Whether the pending application for condonation of delay under Section 119(2)(b) of the Income Tax Act, 1961, should be considered before proceeding with the assessment or appeal. Assessee's Contentions: The petitioner argues that the exemption under Section 10(23AAA) should not be denied on the technical ground of delayed filing. They have filed an application under Section 119(2)(b) before the Central Board of Direct Taxes (CBDT) for condonation of delay, but no decision has been taken. The delay in processing the refund and deciding the application is causing prejudice. Revenue's Contentions: The judgment does not record specific contentions from the revenue. However, the disallowance of exemption and issuance of demands indicate the revenue's stance that the conditions for exemption, including timely filing of returns, were not met.
Which sections of the Income-tax Act were involved?
Section 10(23AAA),Section 119(2)(b)
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
J U D G M E N T
The petitioner is the Kerala State Co-operative Employee Pension Board constituted by the Government of Kerala for administration of the Pension Scheme namely ‘Kerala Co- operative Societies Employees Financing Pension Scheme 1994’. This Pension Scheme was framed by the Government issuing a notification dated 14.03.1995 in the exercise of its powers conferred under Section 80A of the Kerala State Co- operative Societies Act 1969. 2. The petitioner’s income is exempted under Section 10(23AAA) of the Income Tax Act 1961. The first exemption was issued for three years and it has been renewed thereafter as per the norms. The only income of the petitioner is the interest from the deposits of pension contributions of the Co- operative Employees.
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1 The assessment for the Assessment Year 2012-13 was completed by the 4th respondent with a demand disallowing the exemption as the petitioner did not file its return on time. The petitioner filed an appeal before the 3rd respondent which was allowed by the Commissioner (Appeals). According to the petitioner, the petitioner is entitled to a refund of Rs.12,15,204/- which has not yet been issued. In respect of the Assessment Year 2013-14, the petitioner filed a return claiming exemption under Section 10(23AAA) online. The petitioner filed an application for condoning the delay in filing the return before the Chief Commissioner of Income Tax Thiruvananthapuram. However, the said application has not yet been decided. As the Assessing Officer did not consider the delayed return as a valid return, the Assessing Authority completed the assessment and a demand for Rs.56,04,860/- has been issued for the Assessment -5-
Year 2013-14 against which the petitioner has filed an appeal before the 1st respondent.
2 In respect of the Assessment Years 2014-15 to 2018- 19 the petitioner did not file returns on time and therefore the petitioner’s claim for exemption under Section 10(23AAA) has been denied and demand has been issued. The petitioner has filed appeals in Exts.P7, P10 and P11. 3. Learned Counsel for the petitioner submits that the petitioner has been denied exemption from payment of the Income Tax on interest income on the technical ground of filing the return with delay to which he has filed an application before the Central Board of Direct Taxes (CBDT) under Section 119(2)(b). However, no decision has been taken and in the absence of a decision by the CBDT, the refund has not been processed.
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Considering the said submissions the present writ petition is disposed of with a direction to the CBDT/2nd respondent to consider and pass orders on the Ext.P9 application expeditiously, preferably within a period of two months from today, in accordance with the law. The 3rd respondent is directed to consider and decide the appeals in Exts.P7, P10 and P11 expeditiously in accordance with the law, as early as possible. With the aforesaid directions, the present writ petition stands finally disposed of. DINESH KUMAR SINGH JUDGE
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Appendix — schedule of exhibits
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