SREE KADAMPUZHA BHAGAVATHI DEVASWAM vs. DY.COMMISSIONER OF INCOME TAX

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WP(C)/16246/2021HC KeralaKLHC01043206202111 August 2021Author: HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the Centralised Processing Centre (CPC) correctly issued the order (Ext.P7) rejecting the rectification application on the grounds of lack of jurisdiction, as the file had been transferred to the Assessing Officer. The court accepted the revenue's submission that the prima facie view expressed in the CPC's order regarding the absence of error in the original order was merely a consequence of using a standard format and not a decision on merits. The court noted that the petitioner had already filed a rectification application (Ext.P8) with the Assessing Authority on December 16, 2020. Therefore, the court directed the 2nd respondent-Income Tax Officer to take up Ext.P8 application, dispose of it on its merits after affording the petitioner an opportunity of being heard and following due procedure, and issue an appropriate order expeditiously, but not later than three months from the date of receiving a copy of the judgment. The issue of whether the original order sought to be rectified was indeed erroneous was left to be decided by the Assessing Authority.

What were the facts?

The petitioner, Sree Kadampuzha Bhagavathi Devaswam, filed a writ petition before the High Court of Kerala challenging an order (Ext.P7) passed by the Centralised Processing Centre (CPC) of the Income Tax Department. The CPC rejected the petitioner's application for rectification (Ext.P6) on the grounds that it lacked jurisdiction as the file had been transferred to the Assessing Officer. The petitioner argued that the CPC's order also contained a prima facie view that the original order sought to be rectified was without error. The petitioner sought to set aside this part of the CPC's order and be permitted to approach the Assessing Authority with a fresh rectification application. The revenue's counsel conceded that the CPC order was issued due to lack of jurisdiction and that the prima facie view was due to a standard format. The court noted that the petitioner had already filed a rectification application (Ext.P8) with the Assessing Authority on December 16, 2020.

What were the issues?

1. Whether the Centralised Processing Centre (CPC) had the jurisdiction to entertain and decide on the merits of a rectification application when the file had been transferred to the Assessing Officer, as per Section 154 of the Income Tax Act, 1961? Assessee's Contention: The petitioner contended that the CPC's order (Ext.P7) was erroneous to the extent it expressed a prima facie view that the original order was without error, and sought to have this aspect set aside, with liberty to approach the Assessing Authority. They relied on the principle that a jurisdictional defect should not lead to an erroneous finding on merits. Revenue's Contention: The revenue, through its Standing Counsel, conceded that the CPC order was issued solely because the CPC lacked jurisdiction after the file transfer. They stated that the prima facie view recorded in Ext.P7 was due to the use of a standard format and that a proper rectification application filed before the Assessing Authority could be considered on its merits.

Which sections of the Income-tax Act were involved?

Section 154

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 DEVAN RAMACHANDRAN WEDNESDAY, THE 11TH DAY OF AUGUST 2021 / 20TH SRAVANA, 1943 WP(C) NO. 16246 OF 2021 PETITIONER: SREE KADAMPUZHA BHAGAVATHI DEVASWAM KADAMPUZHA, MALAPPURAM-676 553, KERALA REPRESENTED BY EXECUTIVE OFFICER, MRS. SUJATHA. BY ADVS. P.RAGHUNATHAN PREMJIT NAGENDRAN RESPONDENTS: 1 DY.COMMISSIONER OF INCOME TAX P.B.NO.2, CENTRALISED PROCESSING CENTRE, ELECTRONIC CITY P.O., BANGALORE 560500. 2 INCOME TAX OFFICER (EXEMPTIONS) AAYAKAR BHAVAN, MANANCHIRA, CALICUT-673 001. BY SRI. CHRISTOPHER ABRAHAM - SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 11.08.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WPC 16246/21 2

JUDGMENT The petitioner has approached this Court impugning Ext.P7 order issued by the Centralised Processing Centre (CPC) of the Income Tax Department, rejecting their application for rectification, namely Ext.P6, for the reason that the said Authority has no juri iction in the matter, because the file has been transferred to the concerned Assessing Officer.

2.

The petitioner, however, says that Ext.P7 records a prima facie view that the order sought to be rectified is without error and therefore, prays that the same be set aside to that extent; with liberty being granted to them to approach the Assessing Authority appropriately with a fresh rectification application, under the provisions of Section 154 of the Income Tax Act, 1961. 3. I have heard the learned counsel for the petitioner

–

Sri.Premjit

Nagendran

and Sri.Christopher Abraham – learned Standing Counsel appearing for the respondents.

4.

Sri.Christopher Abraham conceded that Ext.P7 order has been issued only because the CPC did not have juri iction, once the files had been transferred to the Assessing Authority. He added that the record of the prima facie view made therein is only on account of the fact that a standard format has been used; and added that if the petitioner files a proper rectification application before their Assessing Authority, the same can be considered in terms of law.

5.

I notice from the pleadings that the petitioner has, in fact, already approached the Assessing Authority through Ext.P8 rectification application on 16.12.2020. I am, therefore, of the view that the said Authority must be now directed to consider it on its merits and issue appropriate orders without any further delay.

In the afore circumstances, recording the afore submissions of Sri.Christopher Abraham, I order this writ petition, directing the 2nd respondent-Income Tax Officer to take up Ext.P8 rectification application of the petitioner and to dispose it of, after affording them an opportunity of being heard and after following due procedure, thus culminating in an appropriate order thereon as expeditiously as is possible, but not later than three months from the date of receipt of a copy of this judgment. RR DEVAN RAMACHANDRAN JUDGE

Appendix — schedule of exhibits
APPENDIX OF WP(C) 16246/2021 PETITIONER EXHIBITS Exhibit P1 PHOTOCOPY OF PROCEEDINGS DATED 14.2.1983 OF COM. OF INCOME TAX, COCHIN RE: REGN. U/S 10(23C)(V). Exhibit P2 PHOTOCOPY OF ORDER OF EXEMPTION U/S 12A DATED 1.5.2009 ISSUED BY CHIEF COMMISSIONER OF INCOME TAX, KOCHI. Exhibit P3 PHOTOCOPY OF RETURN OF INCOME FOR 2018.19(Y.E 31.3.2018) IN ITR-7. Exhibit P4 PHOTOCOPY OF AUDIT REPORT IN FORM 10BB DATED 27.10.2018. Exhibit P5 PHOTOCOPY OF INTIMATION DATED 10.11.2019 U/S 143(1) Exhibit P6 PHOTOCOPY OF APPLICATION FOR RECTIFICATION. Exhibit P7 PHOTOCOPY OF ORDER ON EXT.P6 DATED 12.12.2019. Exhibit P8 PHOTOCOPY OF APPLICATION FOR RECTIFICATION FILED IN TERMS OF EXT.-7 DATED 16.12.20.

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