JAGADEESAN CHELLAPPAN ACHARY vs. INCOME TAX OFFICER

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WP(C)/11496/2024HC KeralaKLHC01093646202426 March 2024Bench: HONOURABLE MR. JUSTICE D. K. SINGH5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court disposed of the writ petition with directions to the Faceless Appellate Centre to consider and dispose of the petitioner's appeal expeditiously, preferably within two months. The appellate authority was directed to take into account the modified Form 26AS, which indicated that the Rs. 75,73,122/- interest income was a mistake and no TDS was deposited by the bank. Until the appeal was decided, no coercive measures were to be taken against the petitioner to enforce the demand. The court acknowledged the bank's rectification and the petitioner's communication regarding it as significant factors to be considered during the appeal. The issue of whether the writ petition was maintainable in the presence of an appeal was implicitly addressed by directing the appeal to be heard and decided.

What were the facts?

The petitioner, Jagadeesan Chellappan Achary, a senior citizen and practicing advocate, was issued a notice under Section 148 of the Income Tax Act, 1961, by the Income Tax Officer for the assessment year 2013-14, alleging income escaped assessment. Subsequently, a notice under Section 142(1) was issued, stating his total interest income was Rs. 75,73,122/- and professional income was Rs. 4,000/- for the financial year 2012-13. The petitioner contended that the interest income figure was a mistake by the bank, which had subsequently rectified its records and issued a letter to this effect. Despite this communication and a modified Form 26AS, an assessment order was passed. The petitioner's rectification application was rejected as the appeal was pending. He then filed a writ petition before the High Court of Kerala.

What were the issues?

1. Whether the High Court should entertain a writ petition when an appeal against the assessment order is pending before the appellate authority, particularly when the petitioner claims a factual error in the assessment based on bank records. Assessee's Contention: The petitioner argued that the substantial interest income of Rs. 75,73,122/- was an error by the bank, which had since rectified its Form 26AS and communicated this fact. He relied on the bank's letter and the modified Form 26AS to demonstrate that no such interest income accrued to him and no TDS was deposited by the bank. Therefore, the assessment order was based on incorrect information. Revenue's Contention: The judgment does not record any specific contentions from the revenue regarding the maintainability of the writ petition or the merits of the alleged bank error. The revenue's role was primarily in issuing the notices and passing the assessment order.

Which sections of the Income-tax Act were involved?

Section 148,Section 142(1)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH TUESDAY, THE 26TH DAY OF MARCH 2024 / 6TH CHAITHRA, 1946 WP(C) NO. 11496 OF 2024 PETITIONER: JAGADEESAN CHELLAPPAN ACHARY AGED 68 YEARS, S/O. CHELLAPPAN ACHARY, RESIDING AT 'GOURI KRIPA', T. C. 52/1118-6, ANUGRAHA NAGAR, POOZHIKUNNU, ESTATE P. O., THIRUVANANTHAPURAM, PIN – 695019.

BY ADVS. SRI. SREEHARI INDUKALADHARAN SRI. SETHU NANDAKUMAR SMT. D. SMITHA SRI. JAYASANKAR K. RESPONDENTS: 1 INCOME TAX OFFICERM OFFICE OF THE INCOME TAX , AAYAKAR BHAVAN, 1ST FLOOR, KOWDIAR P. O., THIRUVANANTHAPURAM, PIN – 695003. 2 THE ASSISTANT COMMISSIONER OF INCOME TAX, OFFICE OF THE INCOME TAX DEPARTMENT, NATIONAL FACELESS ASSESSMENT CENTRE, DELHI, PIN – 110001. 3 ASSISTANT DIRECTOR OF INCOME TAX, OFFICE OF THE INCOME TAX DEPARTMENT, CENTRAL PROCESSING CENTRE, BENGALURU, PIN – 560500. 4 FEDERAL BANK LTD., REPRESENTED BY ITS MANAGING DIRECTOR CUM CEO, HEAD OFFICE, ALUVA BANK JUNCTION, METRO HEIGHTS, BYPASS JUNCTION, ALUVA, ERNAKULAM, PIN – 683101. BY ADVS. SRI. P. G. JAYASHANKAR - SC SRI. KEERTHIVAS GIRI - SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 26.03.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C) NO. 11496 OF 2024 2 DINESH KUMAR SINGH, J. -------------------------- W.P.(C) No. 11496 of 2024 ------------------------- Dated this the 26th day of March, 2024 JUDGMENT 1. The petitioner, a senior citizen is an assessee under the provisions of the Income Tax Act, 1961. Petitioner was served with a notice dated 30.03.2021 by the 1st respondent under Section 148 of the said Act requiring him to file tax return for the assessment year 2013-14 as the 1st respondent has been of the opinion that the petitioner’s income had escaped assessment. 2. Petitioner is a practicing Advocate. The petitioner was issued another notice under Sub-section (1) of Section 142 of the Act stating that total interest from income of the petitioner was Rs. 75,73,122/- and total professional income of the petitioner was Rs. 4,000/- during the financial year 2012-13. The petitioner was directed to produce books of accounts, details of source of income, bank account statements and income tax returns for the assessment year 2013-14 corresponding to the financial year 2012-13. 3. The learned Counsel for the petitioner submits that the amount of Rs. 75,73,122/- as interest income of the petitioner was a mistake on the part of the Bank and the Bank had issued a letter and the 26 AS Form has been rectified by the Bank. The Bank has issued a letter and the 26 AS

WP(C) NO. 11496 OF 2024 3 Form has been rectified by the Bank. The fact was also communicated vide the letter dated 18.04.2022 in Exhibit P-9. Despite the aforesaid communication, the assessment order was completed in Exhibit P-2, against which the petitioner has filed the appeal. The petitioner’s rectification application has been rejected on the ground that since the petitioner has filed the appeal, the rectification application is not maintainable. Considering the fact that the Bank has already modified Form 26 AS and letter has been issued in Exhibit P-9 which would suggest that no TDS was deposited by the Bank and no interest income of Rs. 75,73,122/- accrued to the petitioner, it would be appropriate to dispose of this writ petition with direction to the Faceless Appellate Centre to consider and dispose of Exhibit P-11 appeal of the petitioner expeditiously, preferably within period of two months. While considering the appeal, the appellate authority should take into account the modified Form 26 AS in Exhibit P-10. Till the disposal of the appeal, it is provided that no coercive measures to be taken against the petitioner for enforcing the demand of tax made. With the aforesaid directions, the present writ petition is hereby disposed of. Sd/- DINESH KUMAR SINGH JUDGE Svn

WP(C) NO. 11496 OF 2024 4 APPENDIX OF WP(C) 11496/2024 PETITIONER EXHIBITS EXHIBIT P1 A TRUE COPY OF THE NOTICE ISSUED UNDER SECTION 148 OF INCOME TAX ACT TO THE PETITIONER DATED 30/03/2021 EXHIBIT P2 A TRUE COPY OF THE NOTICE NO.ITBA/AST/F/142(1) 2021-22/1036857929 (1) ISSUED TO THE PETITIONER DATED 12/11/2021 EXHIBIT P3 A TRUE COPY OF THE REPRESENTATION SEND BY THE PETITION TO THE 1ST RESPONDENT THROUGH EMAIL COMMUNICATION DATED 09/12/2021 EXHIBIT P4 A TRUE COPY OF THE SHOW CAUSE NOTICE UNDER SECTION 144 DATED 25/03/2022 EXHIBIT P5 A TRUE COPY OF THE DEMAND NOTICE DATED 30/03/2022 EXHIBIT P6 TRUE COPY OF THE PENALTY DROPPING ORDER ISSUED BY THE 1ST RESPONDENT DATED 05.09.2022 EXHIBIT P6(A) TRUE COPY OF THE 2ND PENALTY DROPPING ORDER ISSUED BY THE 1ST RESPONDENT DATED 05.09.2022 EXHIBIT P7 A TRUE COPY OF THE DOWNLOADED FORM 26 AS TDS TRACES ISSUED BY THE I T DEPARTMENT EXHIBIT P8 A TRUE COPY OF THE COMPLAINT FILED BY THE PETITIONER BEFORE THE 3RD RESPONDENT DATED 04/04/2022 EXHIBIT P8(A) A TRUE COPY OF THE COMPLAINT DATED 06/04/2022 EXHIBIT P9 A TRUE COPY OF EMAIL COMMUNICATION DATED 18/04/2022 EXHIBIT P10 A TRUE COPY OF THE UPDATED 26AS TDS IN RESPECT OF THE PETITIONER, DOWNLOADED FROM THE SITE OF THE IT DEPARTMENT SHOWING ZERO BALANCES EXHIBIT P11 A TRUE COPY OF THE APPEAL MEMORANDUM FILED BY THE PETITIONER DATED 23.04.2022

WP(C) NO. 11496 OF 2024 5 EXHIBIT P12 A TRUE COPY OF THE LEGAL NOTICE DATED 23/05/2023 EXHIBIT P13 A TRUE COPY OF THE MAIL COMMUNICATION OF THE COVERING LETTER DATED 22.06.2023 EXHIBIT P14 A TRUE COPY OF THE LETTER NO. ITBA/COM/F/17/ 2023-24/1054465829(1) DATED 20/07/2023 EXHIBIT P15 A TRUE COPY OF THE MEDICAL RECORDS OF THE PETITIONER EXHIBIT P16 A TRUE COPY OF THE REPLY ISSUED BY THE 1ST RESPONDENT EXHIBIT P17 A TRUE COPY OF THE ORDER ISSUED BY THE APPELLATE AUTHORITY EXHIBIT P18 A TRUE COPY OF THE ORDER ISSUED BY THE 1ST RESPONDENT EXHIBIT P19 A TRUE COPY OF THE STAY ORDER DATED 02.05.2023 ISSUED BY THE 1ST RESPONDENT EXHIBIT P20 A TRUE COPY OF THE LETTER REFLECTING THE REFUND EXHIBIT P21 A TRUE COPY OF THE EMAIL REQUEST FROM THE INCOME TAX DEPARTMENT EXHIBIT P22 A TRUE COPY OF THE EMAIL INTIMATION REGARDING THE RECOVERY EXHIBIT P23 A TRUE COPY OF THE LETTER REFLECTING THE REFUND EXHIBIT P24 A TRUE COPY OF THE EMAIL INTIMATION SHOWING THE PROPOSED ADJUSTMENT EXHIBIT P25 A TRUE COPY OF THE EMAIL INTIMATION REGARDING THE RECOVERY EXHIBIT P26 A TRUE COPY OF THE CHALLAN RECEIPT EXHIBIT P27 A TRUE COPY OF THE REPLY FROM THE 1ST RESPONDENT DATED 10.11.2023

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