OMASSERY MILK PRODUCERS CO-OPERATIVE SOCIETY LTD. NO.D80 vs. THE INCOME TAX OFFICER

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WP(C)/36861/2022HC KeralaKLHC01079177202228 November 2022Author: HONOURABLE MR. JUSTICE GOPINATH P.5 pages
AI SummaryQuashed

What did the High Court hold?

The High Court of Kerala quashed the notice (Ext.P4) issued under Section 148A of the Income Tax Act, 1961. The reasoning was that the notice was issued based on a PAN which incorrectly identified the petitioner as a firm, contrary to their actual status as a co-operative society. The Court held that this misidentification rendered the notice invalid. The operative direction was to quash the notice, while explicitly allowing the respondent department to initiate fresh proceedings in accordance with law. Additionally, the Court directed the competent authority to decide on the petitioner's request for cancellation of the earlier, erroneous PAN within three months of receiving a certified copy of the judgment.

What were the facts?

The petitioner, Omassery Milk Producers Co-operative Society Ltd., filed a writ petition before the High Court of Kerala. They were aggrieved by a notice (Ext.P4) issued under Section 148A of the Income Tax Act, 1961, for assessment year 2018-2019. This notice was issued based on a Permanent Account Number (PAN) that incorrectly identified the petitioner as a firm, rather than a co-operative society. The petitioner had previously applied for the cancellation of this erroneous PAN (Ext.P2) and had been issued a new PAN correctly reflecting their status. The respondent department had no instructions regarding the action taken on the cancellation request.

What were the issues?

1. Whether the notice issued under Section 148A of the Income Tax Act, 1961, is liable to be quashed when it is based on an incorrect PAN that misrepresents the assessee's status as a firm instead of a co-operative society? The assessee argued that the notice (Ext.P4) was fundamentally flawed as it was issued based on an incorrect PAN which wrongly classified them as a firm. They had already rectified this by obtaining a new PAN reflecting their correct status as a co-operative society and had requested the cancellation of the erroneous PAN. The revenue, through its standing counsel, stated they had no instructions on the action taken regarding the cancellation of the earlier PAN. However, they conceded that the notice issued under the incorrect PAN might be quashed, reserving their right to issue a fresh notice in accordance with law.

Which sections of the Income-tax Act were involved?

Section 148A

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 GOPINATH P. MONDAY, THE 28TH DAY OF NOVEMBER 2022 / 7TH AGRAHAYANA, 1944 WP(C) NO. 36861 OF 2022 PETITIONER: OMASSERY MILK PRODUCERS CO-OPERATIVE SOCIETY LTD. NO.D80 AGED 54 YEARS OMASSERY, KODUVALLY, KOZHIKODE REPRESENTED BY ITS SECRETARY, SHRI KESAVAN NAMBOOTHIRI , PIN - 673572 BY ADVS. A.KUMAR P.J.ANILKUMAR G.MINI(1748) P.S.SREE PRASAD JOB ABRAHAM RESPONDENTS: 1 THE INCOME TAX OFFICER WARD 2(3), KOZHIKODE, AAYAKAR BHAVAN, INCOME TAX OFFICE, SOUTH BLOCK, MANCHIRA, KOZHIKODE , PIN - 673001 2 THE PRINCIPAL COMMISSIONER OF INCOME TAX AAYAKAR BHAVAN, INCOME TAX OFFICE, SOUTH BLOCK, MANCHIRA, KOZHIKODE , PIN - 673001 BY ADV JOSE JOSEPH, SC, INCOME TAX DEPARTMENT, KERALA OTHER PRESENT: 0 ADV. CHRISTOPHER ABRAHAM (SC) THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 28.11.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P. (C) No. 36861 of 2022 ..2.. JUDGMENT Dated this the 28th day of November, 2022 The petitioner has approached this Court being aggrieved by the fact that Ext.P4 notice has been issued to the petitioner in respect of the assessment year2018-2019 under Section 148A of the Income Tax Act, 1961 by quoting a PAN issued to the petitioner, showing the status of the petitioner to be a firm and not a co-operative society. 2. It is the submission of the learned counsel appearing for the petitioner that though initially a PAN was generated showing the status of the petitioner as a firm, on the application of the petitioner, a new PAN has been issued to the petitioner, correctly showing the petitioner to be a co- operative society. It is submitted that the petitioner has already approached the department through Ext.P2, seeking cancellation of the earlier PAN issued to the petitioner. 3. The learned standing counsel appearing for the respondent department states that he has no instructions as W.P. (C) No. 36861 of 2022 ..3.. to whether any action has been taken to cancel the earlier PAN issued to the petitioner. It is submitted that since Ext.P4 notice has been issued in the PAN of the petitioner, showing the petitioner as a firm, the same may be quashed reserving the right of the respondents to issue a fresh notice in accordance with law. 4. Having heard the learned counsel appearing for the petitioner and the learned counsel appearing for the respondent department, this writ petition will stand disposed of in the following manner:- (i) Ext.P4 notice will stand quashed as it has been issued under a PAN showing the status of the petitioner as a firm. However, it will be open to the respondent department to initiate fresh proceedings in accordance with law. (ii) The competent authority shall take a decision on Ext.P2 request made by the W.P. (C) No. 36861 of 2022 ..4.. petitioner for cancellation of the earlier PAN issued to the petitioner, in accordance with law, within a period of three months from the date of receipt of a certified copy of this

judgment. The writ petition is disposed of as above. GOPINATH P. JUDGE RMV

W.P. (C) No. 36861 of 2022 ..5.. APPENDIX OF WP(C) 36861/2022 PETITIONER EXHIBITS Exhibit P1OF THE ASSESSMENT ORDER DATED 27.12.2019 PASSED FOR THE ASSESSMENT YEAR 2017-18. Exhibit P2OF THE COMPLAINT LODGED THROUGH THE PETITIONER'S CHARTERED ACCOUNTANT DATED NIL Exhibit P3OF THE ACKNOWLEDGEMENT DATED 31.5.2022. Exhibit P4OF THE NOTICE DATED 24.3.2022 FOR THE ASSESSMENT YEAR 2018-19. RESPONDENTS' EXHIBITS:NILP.A.TO JUDGE

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