STATE COUNCIL FOR OPEN AND LIFE LONG EDUCATION – KERALA (SCOLE-KERALA) vs. THE PRINCIPAL COMMISSIONER OF INCOME TAX

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WP(C)/12274/2024HC KeralaKLHC01095086202426 March 2024Bench: HONOURABLE MR. JUSTICE D. K. SINGH5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court directed the Principal Commissioner of Income Tax (1st respondent) to consider the petitioner's application for a Section 12A certificate (Ext.P2) expeditiously and pass an order in accordance with law, preferably within two months. The Court also directed the petitioner to inform the authorities about this order to defer the proceedings initiated by the show cause notice dated 23.02.2024 under Section 147. The Court found it appropriate to defer the Section 147 proceedings given the pendency of the Section 12A application and the fact that a provisional certificate was already granted for subsequent assessment years. The issue of the validity of the Section 147 notice was not decided on merits but was deferred pending the decision on the Section 12A application. The writ petition was finally disposed of with these directions.

What were the facts?

The petitioner, State Council for Open and Life Long Education - Kerala (SCOLE-KERALA), a charitable society established by the State Government, has filed a writ petition challenging a show cause notice issued under Section 147 of the Income Tax Act, 1961. The petitioner's income is claimed to be exempt under Section 23C of the Act. For Assessment Year (AY) 2019-2020, the petitioner had applied for a Section 12A certificate (Ext.P2), which remained pending. The petitioner also holds a provisional Section 12A certificate for AY 2022-2023 to 2024-2025. The petitioner argued that the Section 147 notice was premature as the application for the relevant AY was not decided. The Income Tax Department did not dispute the pendency of the Section 12A application.

What were the issues?

1. Whether the show cause notice issued under Section 147 of the Income Tax Act, 1961, for Assessment Year 2019-2020 is valid when the application for a Section 12A certificate for the same year (Ext.P2) is pending consideration before the competent authority? Assessee's contentions: - The petitioner society is established by the State Government for promoting education and is a charitable society registered under the Travancore Cochin Literary Scientific and Charitable Societies Registration Act, 1955. - Its income is exempt under Section 23C of the Income Tax Act, 1961. - A provisional certificate under Section 12A has been issued for AY 2022-2023 to 2024-2025. - For AY 2019-2020, an application for a Section 12A certificate (Ext.P2) was filed and is still pending. - The Section 147 notice is premature and should be kept in abeyance until the Section 12A application is decided. Revenue's contentions: - The learned counsel for the Income Tax Department did not dispute the pendency of Ext.P2 for consideration.

Which sections of the Income-tax Act were involved?

Section 147,Section 23C,Section 12A

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. 12274 OF 2024 PETITIONER: STATE COUNCIL FOR OPEN AND LIFE LONG EDUCATION - KERALA (SCOLE-KERALA) REPRESENTED BY ITS SECRETARY, VIDYA BHAVAN, POOJAPPURA, TRIVANDRUM., PIN - 695012 BY ADV P.C.SASIDHARAN RESPONDENTS: 1 THE PRINCIPAL COMMISSIONER OF INCOME TAX O/O THE PRINCIPAL COMMISSIONER OF INCOME TAX, ERNAKULAM, COCHIN, PIN - 682018 2 THE COMMISSIONER OF INCOME TAX (APPEALS) NATIONAL FACELESS APPEAL CENTRE, DELHI, PIN - 110001 3 JOINT COMMISSIONER OF INCOME TAX (EXEMPTION) OFFICE OF THE COMMISSIONER OF INCOME TAX (E), AYANKAR BHAVAN, KAWADIAR, THIRUVANANTHAPURAM., PIN - 695003 SRI. CYRIAC TOM -SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 26.03.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WPC No.12274 of 2024 2 JUDGMENT Dated this the 26th day of March, 2024 The present writ petition has been filed by the petitioner impugning Ext.P9 show cause notice issued to the petitioner by the respondent authorities under Section 147 of the Income Tax Act,1961 (hereinafter referred to as ‘the I.T. Act, 1961’). 2. The learned counsel for the petitioner submits that the petitioner society has been established by the State Government for promoting the education to illiterate population. It is a charitable society registered under the provisions of the Travancore Cochin Literary Scientific and Charitable Societies Registration Act, 1955. The petitioner’s income is exempted under the provisions of Section 23C of the I.T. Act, 1961. The petitioner has been issued provisional certificate under Section 12A of the I.T. Act, 1961, from the assessment year 2022-2023 to 2024- 2025 vide certificate dated 07.04.2022. In respect of the relevant assessment year for which the impugned

WPC No.12274 of 2024 3 notice has been issued, i.e, 2019-2020, the petitioner has already moved an application for granting certificate under Section 12A of the I.T, Act, 1961 in Ext.P2. The said application has not been disposed of till date and still pending consideration. 3. The learned counsel for the petitioner submits that, on the one hand, the respondent authority is not considering Ext.P2 application and on the the other other hand, they have issued notice under Section 147 to re-open the assessment for the assessment year 2019-2020. 4. The learned counsel for the petitioner further submits that the impugned show cause notice under the said circumstances is to be kept in abeyance till the competent authority takes decision on Ext.P2 application filed by the petitioner seeking certificate under Section 12A for the assessment year 2019-2020. 5. The learned counsel for the Income Tax Department has not disputed the pendency of Ext.P2 for consideration.

WPC No.12274 of 2024 4 6. Considering the aforesaid facts and that the petitioner has already been granted provisional certificate for the assessment year 2022-2023 to 2024- 2025, this Court will deem it appropriate to direct the 1st respondent to consider Ext.P2 application expeditiously, and pass order in accordance with law, preferably within a period of two months. 7. The petitioner may inform the authorities regarding the order passed today in this writ petition for deferring the proceedings initiated vide Ext.P9 notice dated 23.02.2024. With the aforesaid directions, the present writ petition stands finally disposed of. Sd/-

DINESH KUMAR SINGH JUDGE AP

WPC No.12274 of 2024 5 APPENDIX OF WP(C) 12274/2024 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE RELEVANT PAGES OF MEMORANDUM OF ASSOCIATION AND RULES AND REGULATIONS FOR STATE COUNCIL FOR OPEN AND LIFE LONG EDUCATION - KERALA Exhibit P2 TRUE COPY OF THE APPLICATION DATED 28/3/2019 Exhibit P3 TRUE COPY OF THE ACKNOWLEDGMENT RECEIVED FROM THE INCOME TAX DEPARTMENT Exhibit P4 TRUE COPY OF THE LETTER DATED 26-10-2019 ADDRESSED TO THE 3RD RESPONDENTS ALONG WITH ENGLISH TRANSLATION Exhibit P5 TRUE COPY OF THE COVERING LETTER DATED 5- 11-2020 SUBMITTED BY THE PETITIONER ALONG WITH ENGLISH TRANSLATION Exhibit P6 TRUE COPY OF THE PROVISIONAL REGISTRATION ORDER DATED 7/4/2022 Exhibit P7 TRUE COPY OF THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2022-2023 DOWNLOADED FROM THE WEBSITE Exhibit P8 TRUE COPY OF THE REPRESENTATION DATED 17/3/2023 SUBMITTED BEFORE THE PRINCIPAL COMMISSIONER OF INCOME TAX (E), KOCHI Exhibit P9 TRUE COPY OF THE NOTICE DATED 23/2/2024 ISSUED BY THE 2 ND RESPONDENT Exhibit P10 TRUE COPY OF THE EXPLANATION DATED 28/2/2024 SUBMITTED BY THE PETITIONER

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