KERALA STATE SERVICE PENSIONERS CO-OPERATIVE SOCIETY vs. THE INCOME TAX OFFICER

The petitioner’s case is that, it is the Co-operative Society of retired employees. The petitioner had filed annual return on 29.10.2015, declaring a total income of Rs.20,570/-. The petitioner was ignorant that it had to show the income providing credit facility to its members. Later, the petitioner furnished all the requisite details to the first respondent. The petitioner was assessed, for the assessment year, 2015-16 for an amount of Rs.11,75,409/- at a high pitched rate, without giving benefit of Sections 80P & 40A(3) of the Income Tax Act, 1961. The petitioner had challenged the order through a statutory appeal before the second respondent. The appeal was taken up for consideration by the third respondent. Although notice was sent by e-mail to the petitioner, as per the version of the third respondent, the petitioner’s e-mail was not operational for a long time. Hence, the petitioner could not submit its argument notes before the appellate authority. The third respondent, without considering the matter on merits, by the impugned Ext P4 order, has rejected the appeal for non-prosecution. Ext P4 clearly reveals that the third respondent has not considered any of the contentions raised by the petitioner, which is in violation of the law laid down by the Hon'ble Supreme Court in Balaji Steel Re-Rolling Mills v. Commissioner of Central Excise and Customs [2015 AIR SCW 426]. The entire proceedings leading to Ext P4 is vitiated and unsustainable in law. Hence, the writ petition.

Heard; Sri. C.A.Jojo, the learned counsel appearing for the petitioners and Sri.Jose Joseph, the learned standing counsel appearing for the respondents.

Sri. C.A.Jojo, placed reliance on the decision of the Division Bench of this Court in Uzhuva Service Co-operative Bank v. Income Tax Officer& Ors. [W.A.No.1257/2020] to fortify his contention that the Appellate Tribunal shall not be dismiss an appeal for non-prosecution and is obliged to consider the matter on its merits. Thus, according to him, Ext P4 is bad in the eyes of law and is liable to be set aside.

Sri.Jose Joseph, on the other hand, defended Ext P4 order and submitted that the petitioner has an alternative statutory remedy, by filing a Second Appeal before the next forum. Hence, this Court may not entertain the writ petition.

The short point is whether Ext P4 order is to be interfered by this Court.

A reading of Ext P4 order reveals that the Appellate Tribunal has not considered the matter on merits, instead has dismissed the appeal for default, on the finding that, despite multiple opportunities being afforded by the petitioner with hearing dates on 13.01.2021, 12.04.2023 & 22.05.2023, the petitioner has not availed the benefit.

The Division Bench of this Court in Uzhuva Service Co-operative Bank (supra), after referring to the decision of the Hon'ble Supreme Court in Balaji Steel Re-Rolling Mills (supra) has categorically laid down the law that the Appellate Tribunal shall not dismiss an appeal for non-prosecution, instead has to decide the matter on its merits.

On an overall appreciation of the pleadings and materials on record, I am of the definite view that Ext P4 order is passed against the principles laid down in Uzhuva Service Co-operative Bank (supra) and is hence liable to be quashed. At the same time, I make it clear that the petitioner has to be more vigilant in verifying its e-mail address and take note of the date fixed by the third respondent for hearing of Ext P3 appeal. Resultantly, in exercise of the plenary powers of this Court under Article 226 of the Constitution of India, I order the writ petition as follows: (i) Ext P4 order is set aside. (ii) The third respondent is directed to re-consider Ext P3 appeal in accordance with law and on its merits, after affording the petitioner an opportunity of being heard. (iii) The third respondent shall send an e-mail to the registered e-mail of the petitioner fixing the date of hearing of Ext P3 appeal. (iv) It would be up to the petitioner to verify the notice sent by the third respondent and be ready for arguments on the date fixed by the third respondent. (v) Until such time orders are passed on Ext P3, all further proceedings pursuant to Ext P5 notice shall stand deferred. C.S.DIAS,JUDGE DST/08.08.23 //// P.A.To Judge