M/S PURAPPUZHA SERVICE CO-OPERATIVE BANK LTD vs. ADDITIONAL/JOINT/ASSISTANT COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER

WP(C)/33815/2022HC KeralaKLHC01072166202227 October 2022Author: HONOURABLE MR. JUSTICE GOPINATH P.4 pages

AI SummaryRemanded

What did the High Court hold?

The High Court acknowledged that the non-consideration of a Division Bench judgment of the High Court by the Assessing Officer is normally a matter to be taken up in appeal. However, to avoid inconvenience and hardship to the petitioner, the Court quashed the assessment order (Ext.P5) and remitted the matter back to the Assessing Officer (1st respondent). The Assessing Officer is directed to complete the assessment afresh after taking note of the Division Bench judgment (Ext.P6). The Court explicitly stated that it had not expressed any opinion on the merits of the matter and that the Assessing Authority is free to decide the case in accordance with the law, including consideration of Ext.P6. No specific amount in dispute was mentioned.

What were the facts?

The petitioner, M/s Purappuzha Service Co-operative Bank Ltd., filed a writ petition before the High Court of Kerala challenging an assessment order (Ext.P5) issued by the Assessing Officer. The petitioner contended that the Assessing Officer failed to consider a Division Bench judgment of the High Court (Ext.P6) that squarely covered the issue in their favour, despite the judgment being brought to the officer's notice. The Revenue, represented by the Standing Counsel, argued that the non-consideration of a judgment by itself is not a sufficient ground to interfere with an assessment order under Article 226 of the Constitution of India. The assessment year(s) are not specified. The dispute pertains to the assessment order passed by the Additional/Joint/Assistant Commissioner of Income Tax/Income Tax Officer, Assessment Unit, National Faceless Assessment Centre.

What were the issues?

1. Whether the failure of the Assessing Officer to consider a binding Division Bench judgment of the High Court, which was brought to his notice, warrants interference with the assessment order under Article 226 of the Constitution of India? Assessee's Contention: The petitioner argued that the Assessing Officer's failure to take note of Ext.P6, a Division Bench judgment of the High Court that squarely covered the issue in their favour, despite it being brought to his attention, is a ground for interference. Revenue's Contention: The Revenue contended that while the Assessing Officer may not have considered the Division Bench judgment, this fact alone is not sufficient ground for the High Court to interfere with an order of assessment under Article 226 of the Constitution of India.

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. THURSDAY, THE 27TH DAY OF OCTOBER 2022 / 5TH KARTHIKA, 1944 WP(C) NO. 33815 OF 2022 PETITIONER: M/S PURAPPUZHA SERVICE CO-OPERATIVE BANK LTD, PURAPPUZHA SCB BUILDING, PURAPUZHA P.O., THODUPUZHA - 685583, REPRESENTED BY ITS SECRETARY BINDUMOL M.J., BY ADVS. S.ARUN RAJ C.T.SUJA ARJUN S.RAJ RESPONDENTS: 1 ADDITIONAL/JOINT/ASSISTANT COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER, ASSESSMENT UNIT, NATIONAL FACELESS ASSESSMENT CENTRE, INCOME TAX DEPARTMENT, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, NEW DELHI – 110003 2 INCOME TAX OFFICER WARD - 1, THODUPUZHA, MAHIMA TOWER, TEMPLE BYE PASS ROAD, THODUPUZHA, IDUKKI – 685 584 3 THE PRINCIPAL COMMISSIONER OF INCOME TAX CENTRAL REVENUE BUILDING, IS PRESS ROAD, ERNAKULAM, KOCHI, PIN – 682018 BY ADV JOSE JOSEPH, SC, INCOME TAX DEPARTMENT, KERALA THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 27.10.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 33815 OF 2022 2

JUDGMENT

This writ petition has been filed on the short ground that Ext.P6 judgment of Division Bench of this Court which squarely covers the issue in favour of the petitioner was not taken note of by the Assessing Officer while issuing Ext.P5 order of assessment, despite the fact that the judgment was brought to his notice.

Learned Standing Counsel for the Income Tax Department states that while it may be true that the Assessing Officer did not consider Ext.P6 Judgment of Division Bench of this Court, that, by itself may not be a ground for interfere with an order of assessment under Article 226 of the Constitution of India.

Having heard the learned counsel for the petitioner and the learned counsel appearing for the Income Tax Department, I am of the view that the fact that a Division Bench judgment of this Court was not noticed by the Assessing Officer, should normally be a matter that should be taken up in appeal and there is no good reason as to why an assessment order should be interfered with under Article 226 of the Constitution of India, on that ground.

WP(C) NO. 33815 OF 2022 3 However, to avoid inconvenience and hardship to the petitioner Ext.P5 order of assessment is quashed and the matter is remitted to the 1st respondent, who shall complete the assessment afresh after taking note of Ext.P6 judgment of the Division Bench of this Court. I make it clear that, I have not expressed any opinion on the merits of the matter and it is open to the Assessing Authority to decide the matter in accordance with law also taking into consideration Ext.P6 judgment of a Division Bench of this Court. GOPINATH P. JUDGE nak

WP(C) NO. 33815 OF 2022 4

Appendix — schedule of exhibits

APPENDIX OF WP(C) 33815/2022 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE SHOW CAUSE NOTICE DATED 24-03-2022 ISSUED BY THE 1ST RESPONDENT FOR THE AY 2020-21 Exhibit P2 TRUE COPY OF THE REPLY DATED 26-03-2022 E-FILED BY THE PETITIONER Exhibit P3 TRUE COPY OF THE SHOW CAUSE NOTICE DATED 13-09-2022 ISSUED BY THE 1ST RESPONDENT FOR THE AY 2020-21 Exhibit P4 TRUE COPY OF THE REPLY DATED 14-09-2022 E-FILED BY THE PETITIONER IN RESPONSE TO THE SHOW CAUSE NOTICE DATED 13-09-2022 Exhibit P5 TRUE COPY OF THE ASSESSMENT ORDER DATED 20-09-2022 PASSED U/S 143(3) R.W.S. 144B OF THE ACT BY THE 1ST RESPONDENT FOR THE ASSESSMENT YEAR 2020-21 Exhibit P6 TRUE COPY OF THE JUDGMENT DATED 1-11-2021 PASSED BY THE DIVISION BENCH OF THIS HONOURABLE COURT IN ITA NO. 323 OF 2019 AND CONNECTED CASES Exhibit P7 TRUE COPY OF THE PENALTY NOTICE DATED 20- 09-2022 UNDER SECTION 274 R.W.S. 270 A OF THE ACT FOR THE AY 2020-21 ISSUED BY THE 1ST RESPONDENT

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