INDIAN RED CROSS SOCIETY vs. DEPUTY COMMISSIONER OF INCOME TAX

WP(C)/31520/2022HC KeralaKLHC01066952202212 April 2023Author: HONOURABLE MR. JUSTICE T.R.RAVI5 pages
AI SummaryRemanded

What were the facts?

The petitioner, Indian Red Cross Society, a charitable society, sought the benefit of Section 12A of the Income Tax Act, 1961, for assessment year 2015-16. They obtained Section 12A registration in 2019, but their claim for deduction was rejected via an intimation under Section 143(1) on March 27, 2017. The petitioner applied for rectification of this order, which was rejected as per Ext.P4, stating that the return was filed as a Trust without Section 12A registration and processed by the CPC, making it impossible for the officer to change the status. The respondent also cited delay in the rectification application. The petitioner argued that the delay might be excused due to Covid-related extensions.

What did the High Court hold?

The High Court of Kerala, while not entertaining the writ petition directly after five years from the rejection of the deduction claim, found that the interest of justice would be served by permitting the petitioner to file an appeal. The Court noted that the petitioner had pursued the remedy of rectification after obtaining Section 12A registration. Therefore, the Court directed the petitioner to prefer an appeal against the rejection of the deduction claim. If such an appeal, along with a petition for condonation of delay, is filed within two weeks from the date of the order, it shall be considered by the competent authority, keeping in mind the fact situation. The Court did not decide on the merits of the claim itself but facilitated the appeal process.

What were the issues?

1. Whether the petitioner, having obtained Section 12A registration in 2019, can claim the benefit for assessment year 2015-16 when the initial return was filed without such registration. 2. Whether the delay in filing the rectification application is a valid ground for rejection, especially considering potential Covid-related extensions. Assessee's Contentions: The petitioner argued that the delay in the rectification application might not be applicable due to extensions granted during the Covid situation. They also pursued rectification after obtaining Section 12A registration. Revenue's Contentions: The respondent argued that the rectification application was delayed. Furthermore, once the return was processed by the CPC as a Trust without Section 12A registration, the status cannot be changed.

Which sections of the Income-tax Act were involved?

Section 12A,Section 143(1)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE T.R.RAVI WEDNE AY, THE 12TH DAY OF APRIL 2023 / 22ND CHAITHRA, 1945 WP(C) NO. 31520 OF 2022 PETITIONER: 1 INDIAN RED CROSS SOCIETY RED CROSS TOWER, NAGAMBADAM, PIN - 686002 KOTTAYAM, REP. BY SECRETARY JOBY THOMAS BY ADVS. P.RAGHUNATHAN RAMANARAYANAN G. RESPONDENTS: 1 DEPUTY COMMISSIONER OF INCOME TAX CENTRALISED PROCESSING CENTER, ELECTRONIC CITY POST OFFICE, BANGALORE, PIN - 560100 2 INCOME TAX OFFICER [EXEMPTIONS] PUBLIC LIBRARY BUILDING, SASTRI ROAD , KOTTAYAM, PIN - 686001 BY ADV CHRISTOPHER ABRAHAM THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 12.04.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WPC No.31520 of 2022 2 T.R. RAVI, J. ------------------------------------ W.P.(C.) No.31520 of 2022 ------------------------------------ Dated this the 12th day of April, 2023 JUDGMENT The petitioner, a Charitable Society, claims benefit of Section 12A of the Income Tax Act, 1961 with regard to the assessment year 2015-16. Admittedly, the registration under Section 12A was obtained only in the year 2019. The petitioner has produced the intimation under Section 143(1) of the Income Ta

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