MUSLIM EDUCATIONAL ASSOCIATION vs. THE DEPUTY COMMISSIONER OF INCOME TAX (EXEMPTION)

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WP(C)/12203/2021HC KeralaKLHC01033130202115 June 2021Author: HONOURABLE MR.JUSTICE V.G.ARUN4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala, while acknowledging the limited relief sought by the petitioner, disposed of the writ petition. The Court directed the 1st respondent (Deputy Commissioner of Income Tax) to consider the petitioner's rectification application (Ext.P6) filed under Section 154. This consideration must be done after providing notice to the petitioner and passing orders expeditiously, at any rate, within two months from the date of receiving a copy of the judgment. Furthermore, the Court ordered that recovery steps based on the assessment order (Ext.P1) shall be kept in abeyance until orders are passed on Ext.P6. The judgment does not explicitly decide the entitlement to Section 11 benefits but focuses on the procedural direction to decide the rectification application.

What were the facts?

The petitioner, Muslim Educational Association, a Public Charitable Trust, is eligible for benefits under Section 11 of the Income Tax Act, 1961, provided they file a statement in Form 10. For Assessment Year 2017-2018, the petitioner filed Form 10 belatedly. Consequently, the Deputy Commissioner of Income Tax (Exemption) issued an assessment order (Ext.P1) demanding Rs. 1,32,13,830/- in tax, denying Section 11 benefits. The petitioner filed an appeal and stay application, and voluntarily remitted Rs. 20,000/-. Subsequently, the Commissioner of Income Tax (Exemption) condoned the delay in filing Form 10. The petitioner then filed a rectification application (Ext.P6) under Section 154 seeking correction of the assessment order and refund of the amount paid. The writ petition seeks a direction for the 1st respondent to decide Ext.P6 promptly.

What were the issues?

1. Whether the petitioner is entitled to the benefits under Section 11 of the Income Tax Act, 1961, for Assessment Year 2017-2018, given the condonation of delay in filing Form 10? Assessee's Contention: The petitioner argues that upon condonation of the delay in filing Form 10 by the Commissioner of Income Tax (Exemption), they became eligible for the benefits under Section 11. Therefore, the assessment order (Ext.P1) is liable to be corrected, and they are entitled to a refund of the voluntarily paid amount. 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 in the provided text.

Which sections of the Income-tax Act were involved?

Section 11,Section 154

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE V.G.ARUN TUE AY, THE 15TH DAY OF JUNE 2021 / 25TH JYAISHTA, 1943 WP(C) NO. 12203 OF 2021 PETITIONER/S: MUSLIM EDUCATIONAL ASSOCIATION VENGOOR,PATTIKKAD,PERINTHALMANNA, REPRESENTED BY ITS GENERAL SECRETARY, SYED SADIK ALI SHIHAB. BY ADVS. HARISANKAR V. MENON MEERA V.MENON RESPONDENT/S: 1 THE DEPUTY COMMISSIONER OF INCOME TAX (EXEMPTION) 2ND FLOOR,SAN-JUAN TOWERS,I.S.PRESS ROAD,ERNAKULAM,KOCHI- 682018. 2 NATIONAL FACELESS APPEAL CENTRE, DELHI-110001,REPRESENTED BY THE PRINCIPAL CHIEF COMMISSIONER. OTHER PRESENT: SC JOSE JOSEPH THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 15.06.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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JUDGMENT Dated this the 15th day of June, 2021 The petitioner, a Public Charitable Trust registered under the Income Tax, is entitled for the benefits under Section 11 of the Income Tax Act 1961 with respect to the Income held for charitable/ religious purposes. The benefit will be extended only on the assessee filing a statement in Form 10. For the assessment year 2017 -2018, the statement in Form 10 was filed by the petitioner belatedly. On account of the delay, petitioner was issued with Ext.P1 assessment order, without extending the benefits and demanding an amount of Rs.1,32,13,830/- towards the tax due. Aggrieved by the assessment, the petitioner has preferred an appeal and stay application. Pending the appeal, the petitioner remitted an amount of Rs. 20,000,00/- voluntarily towards the tax demanded under Ext.P1. While so, the Commissioner of Income Tax (Exemption), Kochi issued Ext.P5 order condoning the delay in filing the Form 10. According to the petitioner, on condonation of the delay in filing Form 10, he became eligible for the benefits under Section 11 and therefore the assessment as per

WP(C) NO. 12203 OF 2021 3 Ext.P1 is liable to be corrected. Hence, the petitioner filed Ext.P6 application for rectification under Section 154 and also requested for refund of the amount paid voluntarily. The limited relief sought in this writ petition is for a direction to the 1st respondent to pass orders on Ext.P6 without delay.

2.

I have heard the learned standing counsel for the Income Tax Department also. Taking into account the limited relief sought, the writ petition is disposed of directing the 1st respondent to consider Ext.P6 with notice to the petitioner and to pass orders thereon as expeditiously as possible and at any rate within a period of two months from the date of receipt of a copy of this judgment. Till such time as the orders are passed on Ext.P6, recovery steps based on Ext.P1 shall be kept in abeyance. The writ petition is disposed as above. V.G ARUN JUDGE SJ

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Appendix — schedule of exhibits
APPENDIX OF WP(C) 12203/2021 PETITIONER ANNEXURE Exhibit P1 COPY OF ORDER ISSUED BY THE CENTRALIZED PROCESSING CENTRE,BENGALURU FOR THE YEAR 2017- 18 Exhibit P2 COPY OF THE APPEAL FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT Exhibit P3 COPY OF STAY PETITION FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. Exhibit P4 COPY OF THE TAX PRAYER'S COUNTERFOIL GENERATED BY THE HDFC BANK. Exhibit P4(A) COPY OF THE TAX PRAYER'S COUNTERFOIL GENERATED BY THE HDFC BANK. Exhibit P4(B) COPY OF THE TAX PRAYER'S COUNTERFOIL GENERATED BY THE HDFC BANK . Exhibit P4(C) COPY OF THE TAX PRAYER'S COUNTERFOIL GENERAL BY THE HDFC BANK. Exhibit P5 COPY OF ORDER ISSUED BY THE COMMISSIONER OF INCOME TAX(EXEMPTION),KOCHI. Exhibit P6 COPY OF RECTIFICATION PETITION FILED BY THE 1ST RESPONDENT Exhibit P7 COPY OF ARGUMENT NOTE FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT.

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