SHRI K.C. UNNIKRISHNAN vs. THE INCOME TAX OFFICER,

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WP(C)/16188/2020HC KeralaKLHC01040889202016 September 2020Author: HONOURABLE MR.JUSTICE N.NAGARESH6 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala disposed of the writ petition, directing the respondents to consider the petitioner's rectification application (Ext.P6) with reference to the TDS certificate (Ext.P3). The Court acknowledged that TDS had been deducted as per Ext.P3 by the Life Insurance Corporation of India. While the petitioner asserted that the original certificate was submitted with the return, the respondents claimed it was not reflected in their database and the original was not furnished. The Court found that if the petitioner asserts having submitted the original, they cannot be compelled to produce it again. The first respondent was granted liberty to obtain necessary information from the Life Insurance Corporation to decide the issue. Crucially, the first respondent was also directed to consider whether a reduction in interest dues was warranted for the petitioner. The Court did not explicitly decide on the genuineness of the TDS or the exact amount of refund/demand but remanded the matter for fresh consideration.

What were the facts?

The petitioner, Shri K.C. Unnikrishnan, filed his income tax return for assessment year 2007-08 on February 8, 2008. The Life Insurance Corporation of India deducted TDS of ₹1,15,034/- from payments made to the petitioner, which was higher than the petitioner's tax liability of ₹64,025/- for the said assessment year. The petitioner expected a refund. However, the Income Tax Officer (respondent 1) issued a notice (Ext.P5) demanding payment of ₹99,030/- towards tax and interest. The petitioner challenged this demand by filing a rectification application (Ext.P6), asserting that the TDS certificate (Ext.P3) had already been submitted with the return and the demand was therefore unsustainable.

What were the issues?

1. Whether the Income Tax Officer (respondent 1) erred in demanding payment of ₹99,030/- from the petitioner for assessment year 2007-08, contrary to the TDS deducted and claimed by the petitioner? The petitioner argued that the demand was unsustainable as the TDS of ₹1,15,034/- deducted by the Life Insurance Corporation of India, as evidenced by Ext.P3 Form 16A, had already been submitted with the return of income. Therefore, the petitioner could not be asked to pay the demanded amount. The revenue (respondents) contended that the petitioner failed to furnish the original TDS Certificate to the Department. Consequently, the TDS amount of ₹1,15,034/- was not credited at the time of processing the return under Section 143(1). Furthermore, the revenue stated that the said TDS amount was not reflected in the Department's TDS Database. The revenue also indicated that they would make necessary inquiries from the deductor regarding the genuineness of the TDS credit and its remittance to the Central Government account.

Which sections of the Income-tax Act were involved?

Section 143(1)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE N.NAGARESH WEDNE AY, THE 16TH DAY OF SEPTEMBER 2020 / 25TH BHADRA, 1942 WP(C).No.16188 OF 2020(W) PETITIONER: SHRI K.C. UNNIKRISHNAN,PAN AAFPU8345M, KOTTALATHODY HOUSE, ALATHUR, PALAKKAD-678 722. BY ADV. SMT.DIVYA RAVINDRAN RESPONDENTS: 1 THE INCOME TAX OFFICER, WARD-3, PALAKKAD RANGE, PALAKKAD-678 014. 2 THE PRINCIPAL COMMISSIONER OF INCOME TAX,C.R.BUILDING, I.S. PRESS ROAD, KOCHI-682 018. R1-R2 BY ADV. SRI.P.K.RAVINDRANATHA MENON (SR.) R1-R2 BY SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 16.09.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

JUDGMENT Dated this the 16th day of September, 2020 The petitioner seeks to quash Ext.P5 and direct the first respondent to rectify the TDS mismatch after taking into account Ext.P2 Return and Ext.P3 Form 16A TDS Certificate and to issue refund along with interest for the delayed period from the date of deduction of TDS to the date of actual granting of refund in accordance with the claim by the petitioner.

2.

The petitioner filed return of income tax for assessment year 2007-08 in Form No.3 on 08.02.2008. As per Ext.P3, an amount of `1,15,034/- was deducted by the Life Insurance Corporation of India from the payment made to the petitioner towards TDS, while tax payable by the petitioner for the assessment year 2007-08 was only `64,025/-. The petitioner was awaiting refund.

3.

However, by Ext.P5, the respondent required the petitioner to pay `99,030/- towards tax and interest dues. The petitioner, filed Ext.P6 application for rectification pointing out that the TDS effected as per Ext.P3 is already with the respondent and therefore Ext.P5 is unsustainable.

4.

The learned standing counsel appearing for the respondents filed a statement in the writ petition and opposed the prayers of the petitioner. According to the respondents, the petitioner failed to furnish the original TDS Certificate to the Department. In the absence of original TDS Certificate, the then Assessing Officer has not given credit for the TDS amount of `1,15,034/- at the time of processing the Return under Section 143(1). Further on verification, it is found that the said TDS amount is not reflected in the TDS Database of the Department, contended the Standing Counsel.

5.

The learned Standing Counsel appearing for the respondents further submitted that in the absence of TDS credit in the TDS Database of the Department and also due to the non availability of the original TDS Certificate (Form No. 16A), the first respondent will make necessary enquiries from the deductor regarding the genuineness of the TDS credit and as to whether the tax deducted at source has been credited to the Central Government account.

6.

Heard.

7.

It is seen that TDS has been deducted as per Ext.P3 Certificate issued by the Life Insurance Corporation of India. According to the petitioner, the petitioner produced original of Ext.P3 along with Ext.P1 ITR. The case of the respondents is that this remittance is of the year 2007-08 and its entry is not reflected in Database. When the petitioner asserts that original of Ext.P3 has already been submitted before the Income Tax Authorities, the petitioner cannot be called upon to produce the original again.

8.

In the circumstances, the writ petition is disposed of directing the respondents to consider Ext.P6 rectification application with reference to Ext.P3. The first respondent will be at liberty to get necessary information from the Life Insurance Corporation to decide the issue. While deciding the issue the first respondent shall also consider whether necessary reduction is to be given towards interest dues, to the petitioner. The writ petition is disposed of as above. N. NAGARESH JUDGE ncd

Appendix — schedule of exhibits
APPENDIX PETITIONER'S EXHIBITS: EXHIBIT P1 THE TRUE COPY OF INCOME TAX RETURN IN FORM NO.3 DATED 08.02.2008 FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT FOR AY 2007-08. EXHIBIT P2 THE TRUE COPY OF INCOME TAX RETURN IN FORM NO.4 DATED 3.11.2008 FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT FOR AY 2007-08. EXHIBIT P3 TRUE COPY OF THE FORM 16A TDS CERTIFICATE OBTAINED FROM THE BRANCH MANAGER LIC OF INDIA ALATHUR BRANCH DATED 12.4.2009. EXHIBIT P4 TRUE COPY OF THE LETTER DATED 17.7.2009 FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT. EXHIBIT P5 TRUE COPY OF THE INTIMATION DATED 30.3.2010 RECEIVED UNDER SECTION 143(1) OF THE ACT FROM THE 1ST RESPONDENT. EXHIBIT P6 TRUE COPY OF THE RECTIFICATION APPLICATION DATED 23.4.2020 FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT. EXHIBIT P7 TRUE COPY OF THE INTIMATION DATED 4.3.2016 RECEIVED FROM THE 1ST RESPONDENT UNDER SECTION 245 OF THE ACT FOR AY 2015-16. EXHIBIT P8 TRUE COPY OF THE E-FILING RESPONSE DATED 5.5.2016 SENT TO THE 1ST RESPONDENT FOR AY 2015-16. EXHIBIT P9 TRUE COPY OF THE E-FILING REFUND STATUS FOR A7 2015-16 DATED 21.12.2016. EXHIBIT P10 TRUE COPY OF THE LETTER DATED 26.8.2019 SENT BY THE PETITIONER TO THE 1ST RESPONDENT FOR AY 2015-16.

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