S. PADMAKUMAR vs. THE INCOME TAX OFFICER/ASSESSING OFFICER

WP(C)/26600/2022HC KeralaKLHC01056180202223 August 2022Author: HONOURABLE MR. JUSTICE GOPINATH P.4 pages

AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala disposed of the writ petition by directing the respondent Income Tax Officer to consider and pass orders on the petitioner's rectification application (Ext.P5). The petitioner is to be afforded an opportunity of hearing before a decision is made. Crucially, the demand raised against the petitioner through Ext.P3 is to be kept in abeyance until the rectification application is decided. The Court did not decide on the merits of the TDS credit claim itself but focused on ensuring the rectification process is duly followed. The ratio is that procedural fairness requires consideration of rectification applications before enforcing demands, especially when a potential error in accounting for tax credits is alleged.

What were the facts?

The petitioner, S. Padmakumar, is challenging an assessment order for assessment year 2009-10. The petitioner contends that the assessment was completed without giving credit for Tax Deducted at Source (TDS) amounts, and only self-assessment tax was credited. Consequently, the petitioner received a demand notice (Ext.P3) for Rs. 3,51,160/-. The petitioner asserts that proper credit for TDS would eliminate any demand. To address this, the petitioner filed a rectification application (Ext.P5) which is currently pending before the respondent Income Tax Officer/Assessing Officer.

What were the issues?

1. Whether the assessment order for assessment year 2009-10 correctly accounted for the Tax Deducted at Source (TDS) amounts paid by the petitioner, as required under the Income Tax Act. Assessee's Contention: The assessee argues that the assessment was completed without giving proper credit for TDS, leading to an erroneous demand. They rely on the principle that TDS is a payment towards the final tax liability. Revenue's Contention: The revenue's contentions are not explicitly recorded in the judgment. However, their participation as the respondent in a writ petition implies a defense against the assessee's claim.

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. TUESDAY, THE 23RD DAY OF AUGUST 2022 / 1ST BHADRA, 1944 WP(C) NO. 26600 OF 2022 PETITIONER: S. PADMAKUMAR, AGED 50 YEARS, S/O.SUKUMARAN NAIR, PARVATHY NILAYAM, ALATHRA, SREEKARYAM P.O., THIRUVANANTHAPURAM DISTRICT, PIN - 695017 BY ADV BABU S. NAIR RESPONDENT: THE INCOME TAX OFFICER/ASSESSING OFFICER, WARD 1(2), AYAKKAR BHAVAN, KOWDIYAR P.O., THIRUVANANTHAPURAM, PIN – 695 003. BY ADV CHRISTOPHER ABRAHAM, SC, INCOME TAX DEPARTMENT, KERALA THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 23.08.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 26600 OF 2022 2

JUDGMENT The petitioner suffered an order of assessment (in respect of assessment year 2009-10) under the provisions of the Income Tax Act. It is the case of the petitioner that without giving credit to amounts of TDS, the assessment was completed against the petitioner by giving credit only to the self assessment tax paid by the petitioner. It is submitted that the petitioner has now been issued with Ext.P3 notice demanding an amount of Rs.3,51,160/-. It is submitted that if proper credit is given to the TDS amounts, there will be no demand against the petitioner. It is submitted that the petitioner has filed Ext.P5 application for rectification and the same is pending consideration of the respondent.

Heard the learned Standing Counsel appearing for the respondent Department.

Having regard to the facts and circumstances of the case, this writ petition is disposed of directing the respondent to consider and pass orders on Ext.P5 application for rectification after affording to the petitioner an opportunity of WP(C) NO. 26600 OF 2022 3 hearing. Till such time as orders are passed on Ext.P5, the demand raised against the petitioner through Ext.P3 shall be kept in abeyance. The writ petition is disposed of as above. GOPINATH P. JUDGE DK

WP(C) NO. 26600 OF 2022 4

Appendix — schedule of exhibits

APPENDIX OF WP(C) 26600/2022 PETITIONER EXHIBITS Exhibit P1 A TRUE COPY OF THE CHALAN SHOWING THE PAYMENT OF RS.39,781/- DATED, 1-3-2010 Exhibit P2 A TRUE COPY OF THE COMPUTATION STATEMENT SUBMITTED BY THE PETITIONER DURING THE YEAR 2009-10 Exhibit P3 A TRUE COPY OF THE NOTICE ISSUED TO THE PETITIONER DATED, 16-1-2020 Exhibit P4 TRUE COPY OF THE REPLY GIVEN BY THE PETITIONER IN THE WEB PORTAL OF THE INCOME TAX DEPARTMENT Exhibit P5 TRUE COPY OF THE APPLICATION FOR RECTIFICATION SUBMITTED BY THE PETITIONER DATED, 18-3-2022

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