ANIE JOSEPH, vs. THE INCOME TAX OFFICER,

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WP(C)/20865/2022HC KeralaKLHC01043024202228 June 2022Author: HONOURABLE MR. JUSTICE GOPINATH P.3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court directed the 3rd respondent (National Faceless Assessment Centre) to consider and pass orders on the petitioner's rectification application (Ext.P4) for assessment year 2014-2015 within three months of receiving a certified copy of the judgment. The petitioner is to be given an opportunity for a hearing. Crucially, the Court ordered that any demand arising from the assessment order (Ext.P3) shall not be enforced against the petitioner until orders are passed on the rectification application. The Court explicitly stated that it had not expressed any opinion on the merits of the matter. The principle is that rectification applications should be considered promptly, and coercive recovery should be stayed pending their disposal, especially when a strong arguable case for error exists based on subsequent developments.

What were the facts?

The petitioner, Anie Joseph, is challenging an assessment order (Ext.P3) for assessment year 2014-2015. The assessment pertains to compensation received from compulsory land acquisition. The petitioner has filed a rectification application (Ext.P4) arguing that a subsequent appellate order for a later assessment year granted exemption from capital gains tax under Section 10(37) of the Income Tax Act, 1961, for compensation received from the same acquisition. The petitioner fears recovery proceedings while the rectification application is pending. The High Court heard the petitioner and the Standing Counsel for the Income Tax Department.

What were the issues?

1. Whether the assessment order (Ext.P3) is liable to be rectified in light of a subsequent appellate order granting exemption under Section 10(37) of the Income Tax Act, 1961, for compensation received from the same compulsory land acquisition. Assessee's Contention: The petitioner argues that the assessment order is erroneous because compensation received from the same acquisition was later exempted under Section 10(37) by an appellate authority for a subsequent year. Therefore, the assessment order should be rectified. Revenue's Contention: The judgment records that the learned Standing Counsel for the Income Tax Department was heard, but their specific contentions are not detailed.

Which sections of the Income-tax Act were involved?

Section 10 (37)

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 28TH DAY OF JUNE 2022 / 7TH ASHADHA, 1944 WP(C) NO. 20865 OF 2022 PETITIONER: ANIE JOSEPH, AGED 70 YEARS, PULAYATH HOUSE, MAMALA P.O, THIRUVANKULAM, ERNAKULAM DISTRICT. BY ADVS. HARISANKAR V. MENON MEERA V.MENON RESPONDENTS: 1 THE INCOME TAX OFFICER, WARD 1(1), NON- CORPORATE, C.R. BUILDING, I.S. PRESS ROAD, KOCHI 682 018. 2 THE COMMISSIONER OF INCOME TAX (APPEALS)- II, PANAMPILLY NAGAR, ERNAKULAM, KOCHI 682 036. 3 THE ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER, NATIONAL FACELESS ASSESSMENT CENTRE, DELHI 110 001. ADV. SRI. CHRISTOPHER ABRAHAM, SC. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 28.06.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P (C) No.20865/2022 -2-

J U D G M E N T The petitioner has approached this Court challenging Ext.P3 order of assessment in respect of which the petitioner has filed Ext.P4 application for rectification. It is the case of the petitioner that the petitioner was found liable to tax under Ext.P3 in respect of compensation received by the petitioner from out of compulsory acquisition of land. It is submitted that in respect of the subsequent assessment year there is an order of the appellate authority finding that the petitioner is exempted from payment of tax on capital gains under Section 10 (37) of the Income Tax Act. It is submitted that the compensation received under the very same acquisition has been factored while computing the tax payable by the petitioner under Ext.P3. The petitioner submits that taking into account the above facts and circumstances and especially considering the order of the appellate authority for the subsequent year, Ext.P3 order is liable to be rectified. The petitioner apprehends recovery proceedings pending consideration of the application for rectification.

2.

Heard the learned Standing Counsel for the Income Tax Department also. Having regard to the facts and circumstances of the case, I am of the opinion that the writ petition can be disposed of directing the 3rd respondent to consider and pass orders on Ext.P4 application for rectification in respect of assessment year 2014-2015 after affording an opportunity hearing to the petitioner within a period of 3 months from the date of receipt of a receipt of a certified copy of this judgment. Till orders are passed on Ext.P4 application for rectification any demand pursuant to Ext.P3 order of assessment shall not be enforced against the petitioner. I make it clear that I have not expressed any opinion on the merits of the matter. GOPINATH P. JUDGE AMG

W.P (C) No.20865/2022 -3-

Appendix — schedule of exhibits
APPENDIX OF WP(C) 20865/2022 PETITIONER EXHIBITS Exhibit P1 COPY OF ORDER ISSUED BY THE 2ND RESPONDENT FOR THE YEAR 2015-16. Exhibit P2 COPY OF RETURN FILED BY THE PETITIONER FOR 2015-16. Exhibit P3 COPY OF ASSESSMENT ORDER ISSUED BY THE 3RD RESPONDENT FOR THE YEAR 2014-15. Exhibit P4 COPY OF APPLICATION FOR RECTIFICATION FILED BY THE PETITIONER BEFORE THE 3RD RESPONDENT.

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