SAVE A FAMILY PLAN (INDIA) vs. DEPUTY COMMISSIONER OF INCOME TAX (EXEMPTIONS)

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WP(C)/11036/2023HC KeralaKLHC01024725202328 March 2023Author: HONOURABLE MR.JUSTICE ZIYAD RAHMAN A.A.4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court disposed of the writ petition by directing the 1st respondent (Deputy Commissioner of Income Tax) to consider and pass appropriate orders on the petitioner's rectification application (Ext.P5). The Court emphasized that this decision must take into account the earlier order (Ext.P2) which determined the income as nil. The 1st respondent is to make a decision after hearing the parties within three months from the production of the judgment. Crucially, all recovery proceedings pursuant to Ext.P4 were ordered to be kept in abeyance until a decision is taken on the rectification application. The Court did not decide on the merits of the tax assessment itself but focused on the procedural remedy available to the petitioner.

What were the facts?

The petitioner, Save A Family Plan (India), a Trust registered under Section 12A of the Income Tax Act, filed its return for Assessment Year 2020-21 showing nil income, as it was used for charitable purposes. The return was initially accepted, showing nil income as per Ext.P2. Subsequently, the 1st respondent issued Exts.P3 and P4, assessing a tax liability of ₹9,89,68,915/-. Aggrieved by Ext.P4, the petitioner filed a rectification application (Ext.P5) given the nil income assessment in Ext.P2. This writ petition was filed as recovery proceedings were initiated based on Ext.P4.

What were the issues?

1. Whether the assessment order (Ext.P4) is valid when the earlier accepted return (Ext.P2) showed nil income, and the petitioner has filed a rectification application (Ext.P5)? (Question of mixed law and fact, concerning the validity of an assessment order in light of a prior accepted return and a pending rectification). Assessee's Contention: The petitioner argued that Ext.P4, which assesses a substantial tax liability, contradicts Ext.P2 where the income was determined as nil. They have filed a rectification application (Ext.P5) to correct this apparent discrepancy and are aggrieved by the ongoing recovery proceedings based on Ext.P4. Revenue's Contention: The learned Standing Counsel for the respondent acknowledged that Ext.P4 needs reconsideration in light of Ext.P2. They stated that the pending rectification application (Ext.P5) would be considered, and an appropriate decision would be taken by the 1st respondent.

Which sections of the Income-tax Act were involved?

Section 12A

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE ZIYAD RAHMAN A.A. TUESDAY, THE 28TH DAY OF MARCH 2023 / 7TH CHAITHRA, 1945 WP(C) NO. 11036 OF 2023 PETITIONER: SAVE A FAMILY PLAN (INDIA) AGED 46 YEARS AISWARYAGRAM, PARAPPURAM, KANJOOR, ERNAKULAM REPRESENTED BY ITS EXECUTIVE DIRECTOR FR. MARSHEL MELAPPELLY, PIN - 683593 BY ADVS. ABRAHAM JOSEPH MARKOS V.ABRAHAM MARKOS ISAAC THOMAS ALEXANDER JOSEPH MARKOS SHARAD JOSEPH KODANTHARA JOHN VITHAYATHIL AIBEL MATHEW SIBY RESPONDENTS: 1 DEPUTY COMMISSIONER OF INCOME TAX (EXEMPTIONS) CENTRAL REVENUE BUILDING, I.S. PRESS ROAD, KOCHI, PIN - 682018 2 ASSESSMENT UNIT INCOME TAX DEPARTMENT, NATIONAL E-ASSESSMENT CENTRE NEW DELHI, PIN - 110001 3 THE COMMISSIONER OF INCOME TAX CENTRAL REVENUE BUILDING, I.S. PRESS ROAD, KOCHI, PIN - 682018 SRI. JOSE JOSEPH-SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 28.03.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) No.11036/2023 : 2 : JUDGMENT Dated this the 28th day of March, 2023 The petitioner is a Trust registered under Section 12A of the Income Tax Act. For the assessment year 2020-21, the petitioner submitted returns, showing the income as nil, as the income was being used by the Trust for the charitable purposes. The return submitted by the petitioner was accepted as per Ext.P2, by showing the income as nil. Thereafter, Exts.P3 and P4 were issued by the 1st respondent, assessing an amount of `9,89,68,915/- as the tax payable. Being aggrieved by Ext.P4, the petitioner had already submitted Ext.P5 application for rectification, in view of the fact that as per Ext.P2, the income has been determined as nil. This writ petition is submitted in such circumstances as the recovery proceedings are being pursued on the basis of Ext.P4. 2. When the matter came up for consideration, the learned Standing Counsel for the respondent submits that, in the light of Ext.P2 order passed, Ext.P4 has to be reconsidered. WP(C) No.11036/2023 : 3 : Since Ext.P5 application for rectification is pending, it is pointed out that the same shall be considered and appropriate decision will be taken by the 1st respondent. In such circumstances, this writ petition is disposed of directing the 1st respondent to take up and pass appropriate orders on Ext.P5 by taking note of Ext.P2 order passed. A decision thereof shall be taken after hearing the parties, within a period of three months from the date of production of a copy of this judgment. It is further ordered that until such a decision is taken, all further proceedings of recovery pursuant to Ext.P4 shall be kept in abeyance. Sd/- ZIYAD RAHMAN A.A. JUDGE ncd WP(C) No.11036/2023 : 4 : APPENDIX OF WP(C) 11036/2023 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE INTIMATION UNDER SECTION 143(1) DATED 24.12.2021 Exhibit P2

UNDER SECTION 143(3) DATED 22.09.2022 ISSUED BY THE 2ND RESPONDENT Exhibit P3OF COMPUTATION SHEET DATED 22.09.2022 ISSUED BY THE 2ND RESPONDENT Exhibit P4OF THE NOTICE OF DEMAND DATED 22.09.2022 ISSUED BY THE 2ND RESPONDENT Exhibit P5OF THE RECTIFICATION PETITION UPLOADED ON 05.01.2023 BY THE PETITONER

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