PATHIYOOR FARMERS SERVICE CO-OPERATIVE BANK LTD.NO.1282, vs. THE INCOME TAX OFFICER,

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WP(C)/9349/2022HC KeralaKLHC01019935202224 March 2022Bench: HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS5 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the writ petition was premature and the challenge against the notice under Section 148 of the Income Tax Act, 1961, was not required to be entertained at that stage. The Court noted the petitioner's contentions regarding the untenability of the reasons for reopening, the invalidity of the Joint Commissioner's approval, and the bar of limitation. However, it observed that the assessee was alleged to have not filed returns and that approval under Section 151 was obtained. The Court concluded that the petitioner would be at liberty to challenge the assessment proceedings, including all the mentioned contentions, if orders prejudicial to its interest were passed. Therefore, the writ petition was closed, reserving the petitioner's liberty to challenge any subsequent assessment order.

What were the facts?

The petitioner, Pathiyoor Farmers Service Co-operative Bank Ltd., is aggrieved by notices issued under Section 148 of the Income Tax Act, 1961, proposing to reopen assessments for the assessment years 2013-14, 2014-15, and 2015-16. The petitioner's counsel argued that the reasons for reopening, as stated in Exts. P10, P11, and P12, were not legally tenable, and the approval granted by the Joint Commissioner of Income Tax under Section 151 was invalid due to a lack of application of mind. Furthermore, the petitioner contended that the proposed assessment was barred by limitation. The revenue alleged that the assessee had not filed returns for the relevant assessment years and that approval under Section 151 was obtained to issue the notices.

What were the issues?

1. Whether the reasons provided for reopening the assessment under Section 148 of the Income Tax Act, 1961, are legally tenable? (Question of law) 2. Whether the approval granted by the Joint Commissioner of Income Tax under Section 151 of the Income Tax Act, 1961, is legally valid, considering the alleged lack of application of mind? (Question of mixed law and fact) 3. Whether the proposed assessment proceedings are barred by limitation? (Question of law) Assessee's Contentions: - The reasons for reopening the assessment are not legally tenable. - The approval granted by the Joint Commissioner of Income Tax under Section 151 is legally invalid as he had not applied his mind to the facts and circumstances of the case. - The proposed assessment is barred by limitation. Revenue's Contentions: - The assessee is alleged to have not filed its returns for all the assessment years. - Approval has been obtained under Section 151 of the Act to issue notice.

Which sections of the Income-tax Act were involved?

Section 148,Section 151

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS THURSDAY, THE 24TH DAY OF MARCH 2022 / 3RD CHAITHRA, 1944 WP(C) NO. 9349 OF 2022 PETITIONER: PATHIYOOR FARMERS SERVICE CO-OPERATIVE BANK LTD.NO.1282, KEERIKAD P.O., ALAPPUZHA, PIN-690 508, REPRESENTED BY ITS MANAGING DIRECTOR. BY ADV O.D.SIVADAS RESPONDENTS: 1 THE INCOME TAX OFFICER, WARD NO.III, ALAPPUZHA, PIN-688 001. 2 THE JOINT COMMISSIONER OF INCOME TAX, RANGE 1, KOTTAYAM, PIN-686 002. BY ADV.JOSE JOSEPH - SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 24.03.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C) NO. 9349 OF 2022 2 BECHU KURIAN THOMAS, J. =========================== W.P.(C) No.9349 of 2022 ============================ Dated this the 24th day of March, 2022 JUDGMENT Petitioner is aggrieved by notice issued under Section 148 of the Income Tax Act proposing to conduct assessment for the years 2013-14, 2014-15 and 2015-16. 2. After hearing the learned counsel for the petitioner, Shri.O.D.Sivadas, as well as the learned standing counsel, Shri.Jose Joseph, I am of the view that this writ petition is too premature and the challenge against notice under Section 148 is not required to be entertained at this stage. 3. However, learned counsel for the petitioner invited my attention to Ext.P10, Ext.P11 and Ext.P12, specifying the reasons for re-opening of the assessment, under Section 151 of the Income Tax Act. According to the learned counsel, the reasons for re-opening are not legally tenable and the approval granted by the Joint

WP(C) NO. 9349 OF 2022 3 Commissioner of Income Tax is legally invalid as he had not applied his mind to the facts and circumstances of the case. Learned counsel for the petitioner also contended that the proposed assessment is barred by limitation. 4. The assessee is alleged to have not filed its returns for all the assessment years and approval has been obtained under Section 151 of the Act to issue notice. Having regard to the circumstances of the case, I am of the view that this writ petition is too premature and that the petitioner will be at liberty to challenge the assessment proceedings, taking up all the above mentioned contention, if orders are passed, prejudicial to the interest of the petitioner. Thus reserving the liberty of the petitioner to challenge the order of assessment, if any, issued prejudicial to the petitioner, this writ petition is closed, leaving open all contentions. Sd/- BECHU KURIAN THOMAS JUDGE ssa/

WP(C) NO. 9349 OF 2022 4 APPENDIX OF WP(C) 9349/2022 PETITIONERS’ EXHIBITS Exhibit P1 TRUE COPY OF THE NOTICE DATED 25.03.2021 ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER FOR THE ASSESSMENT YEAR 2013-14. Exhibit P2 TRUE COPY OF THE NOTICE DATED 26.03.2021 ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER FOR THE ASSESSMENT YEAR 2014-15. Exhibit P3 TRUE COPY OF THE NOTICE DATED 26.03.2021 ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER FOR THE ASSESSMENT YEAR 2015-16. Exhibit P4 TRUE COPY OF THE REPLY DATED 31.03.2021 SUBMITTED BY THE PETITIONER TO THE 1ST RESPONDENT FOR THE ASSESSMENT YEAR 2013-14. Exhibit P5 TRUE COPY OF THE REPLY DATED 11.04.2021 SUBMITTED BY THE PETITIONER TO THE 1ST RESPONDENT FOR THE ASSESSMENT YEAR 2014-15. Exhibit P6 TRUE COPY OF THE REPLY DATED 11.04.2021 SUBMITTED BY THE PETITIONER TO THE 1ST RESPONDENT FOR THE ASSESSMENT YEAR 2015-16. Exhibit P7 TRUE COPY OF THE ORDER DATED 10.03.2022 ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER FOR THE ASSESSMENT YEAR 2013-14. Exhibit P8 TRUE COPY OF THE ORDER DATED 10.03.2022 ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER FOR THE ASSESSMENT YEAR 2014-15. Exhibit P9 TRUE COPY OF THE ORDER DATED 10.03.2022 ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER, FOR THE ASSESSEMENT YEAR 2015-16. Exhibit P10 TRUE COPY OF THE APPROVAL ISSUED BY THE 2ND RESPONDENT FOR THE PERIOD 2013-14 DATED 25.03.2021. Exhibit P11 TRUE COPY OF THE APPROVAL ISSUED BY THE 2ND RESPONDENT FOR THE PERIOD 2014-15 DATED

WP(C) NO. 9349 OF 2022 5 25.03.2021. Exhibit P12 TRUE COPY OF THE APPROVAL ISSUED BY THE 2ND RESPONDENT FOR THE PERIOD 2015-16 DATED 26.03.2021.

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