ALEYAMMA JACOB, vs. THE ASSISTANT COMMISSIONER OF INCOME TAX,

WP(C)/26215/2021HC KeralaKLHC01066020202125 November 2021Author: HONOURABLE MR.JUSTICE MURALI PURUSHOTHAMAN4 pages

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What did the High Court hold?

The High Court directed the 1st respondent, Assistant Commissioner of Income Tax, Aluva, to consider the petitioner's pending Rectification Petition (Ext.P9) after providing the petitioner with an opportunity of being heard. This consideration must be completed within two months from the date of receiving a copy of the judgment. Furthermore, the court ordered a stay on the recovery of amounts demanded under Exts.P6 and P8 until the aforesaid orders are passed on the rectification petition. The court did not decide on the merits of the proposed adjustment or the validity of the original intimation, focusing solely on the procedural aspect of hearing the rectification petition.

What were the facts?

The petitioner, Aleyamma Jacob, an assessee, filed her Income Tax Returns for assessment year 2017-2018 and paid admitted taxes. The 3rd respondent, Deputy Commissioner of Income Tax, CPC, Bangalore, issued a notice under Section 143(1)(a) proposing an adjustment of Rs. 3,32,01,658/-. This adjustment was based on an alleged inconsistency between amounts in Schedule SI and Schedule CG/OS. Consequently, an intimation under Section 143(1) was issued reflecting this adjustment. The petitioner contended this violated principles of natural justice and filed a Rectification Petition (Ext.P7), which was rejected without a hearing. A subsequent Rectification Petition (Ext.P9) is pending before the 1st respondent, Assistant Commissioner of Income Tax, Aluva. The petitioner's prayer is for expeditious consideration of Ext.P9.

What were the issues?

1. Whether the rejection of the petitioner's Rectification Petition (Ext.P7) without affording an opportunity of hearing violates the principles of natural justice, turning on Section 143(1)(a) of the Income Tax Act, 1961. Assessee's Contention: The petitioner argued that the rejection of Ext.P7 without a hearing was a violation of natural justice. The petitioner also contended that Ext.P4, proposing the adjustment, was issued without proper application of mind and that the inconsistency cited was a mere mismatch in data entry, not an incorrect claim. The petitioner relied on the principle that principles of natural justice must be followed before any adverse order is passed. Revenue's Contention: The revenue did not record any specific arguments against the petitioner's contentions regarding natural justice or the merits of the adjustment. The Standing Counsel for the 1st respondent appeared before the court.

Which sections of the Income-tax Act were involved?

Section 143(1)(a)

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 MURALI PURUSHOTHAMAN THURSDAY, THE 25TH DAY OF NOVEMBER 2021 / 4TH AGRAHAYANA, 1943 WP(C) NO. 26215 OF 2021 PETITIONER: ALEYAMMA JACOB, AGED 83 YEARS NECHUPADAM HOUSE, KADAYIRUPPU, KOLENCHERY, ERNAKULAM DISTRICT, COCHIN - 682 311. BY ADVS. SRI. JOSEPH MARKOSE (SR.) SRI. ABRAHAM MARKOS SRI. ABRAHAM JOSEPH MARKOS SRI. ISAAC THOMAS SRI. P.G. CHANDAPILLAI ABRAHAM SRI. ALEXANDER JOSEPH MARKOS SRI. SHARAD JOSEPH KODIANTHARA RESPONDENTS: 1 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE - 1, ALUVA - 683 101. 2 COMMISSIONER OF INCOME TAX, KOCHI – 682 018. 3 DEPUTY COMMISSIONER OF INCOME TAX, CENTRALISED PROCESSING CENTRE, BANGALORE - 560 500. 4 THE ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX, INCOME TAX OFFICER, NATIONAL E-ASSESSMENT CENTRE, NEW DELHI - 110 001. SRI. CHRISTOPHER ABRAHAM – SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 25.11.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.26215 OF 2021 2

JUDGMENT The petitioner, an assessee under the provisions of the Income Tax Act, 1961 (for short 'the IT Act') has filed Income Tax Returns for the assessment year 2017-2018 and paid all admitted taxes. The 3rd respondent by Ext.P4 issued under Section 143(1)(a) of the IT Act proposed an adjustment of Rs.3,32,01,658/- as an incorrect claim for the reason the amount entered in Schedule SI are inconsistent with the corresponding amount entered in Schedule CG/Schedule OS. pursuant thereto, Ext.P6 intimation under Section 143(1) was issued making the adjustment as proposed in Ext.P4. 2. Contending that this is in violation of principles of Natural Justice, the petitioner filed Ext.P7 Rectification Petition. However, by Ext.P8, the same was rejected without hearing the petitioner. The petitioner therefore, filed Ext.P9 Rectification Petition which is pending before the 1st respondent. The limited prayer of the petitioner at this stage is for a direction to consider Ext.P9 Rectification Petition, at the earliest.

WP(C).No.26215 OF 2021 3

Heard Sri.Joseph Markose, the learned Senior Counsel for the petitioner assisted by Sri.Abraham Joseph Markos and also Sri.Christopher Abraham, the learned Standing Counsel for the 1st respondent. Having regard to the facts and circumstances of the case, there will be a direction to the 1st respondent to consider Ext.P9 Rectification Petition, after hearing the petitioner, within a period of two months from the date of receipt of a copy of the judgment. Till such time the orders as above are passed, there will be a stay of recovery of the amounts demanded under Exts.P6 and P8. The writ petition is disposed of with the above direction. MURALI PURUSHOTHAMAN JUDGE SPR

WP(C).No.26215 OF 2021 4

Appendix — schedule of exhibits

APPENDIX PETITIONER'S EXHIBITS:- EXHIBIT P1 TRUE COPY OF THE RETURN ACKNOWLEDGEMENT DATED 30.07.2017 FOR ASSESSMENT YEAR 2017-18. EXHIBIT P2 TRUE COPY OF THE RETURN FORM FOR ASSESSMENT YEAR 2017-18. EXHIBIT P3 TRUE COPY OF THE COMPUTATION OF INCOME FOR ASSESSMENT YEAR 2017-18. EXHIBIT P4 TRUE COPY OF THE COMMUNICATION DATED 10.08.2018 ISSUED BY THE 3RD RESPONDENT UNDER SECTION 143(1) (a) OF THE INCOME TAX ACT, 1961. EXHIBIT P5 TRUE COPY OF THE OBJECTIONS DATED 11.03.2019 FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT. EXHIBIT P6 TRUE COPY OF THE INTIMATION DATED 28.03.2019 ISSUED BY THE 3RD RESPONDENT UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961. EXHIBIT P7 TRUE COPY OF THE RECTIFICATION PETITION DATED 11.04.2019 FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT UNDER SECTION 154 OF THE INCOME TAX ACT, 1961. EXHIBIT P8 TRUE COPY OF THE COMMUNICATION DATED 28.06.2019 ISSUED BY THE 3RD RESPONDENT TO THE PETITIONER. EXHIBIT P9 TRUE COPY OF THE RECTIFICATION PETITION DATED 02.02.2020 FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT. EXHIBIT P10 TRUE COPY OF THE COMMUNICATION DATED 13.02.2020 ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER. EXHIBIT P11 TRUE COPY OF THE REPLY DATED 13.02.2020 FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT. RESPONDENTS'S EXHIBITS:- NIL.

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