PAIVA MANUFACTURING CO. vs. THE INCOME TAX OFFICER

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE AMIT RAWAL THUR AY, THE 04TH DAY OF JUNE 2020 / 14TH JYAISHTA, 1942 WP(C).No.10972 OF 2020(V) PETITIONER/S: PAIVA MANUFACTURING CO. (AAKFP7972J), 43/591-M(1), CHITTOOR ROAD, CEMETRY JUNCTION, COCHIN - 682 018, REPRESENTED BY ITS MANAGING PARTNER SHRI TONY PAIVA. BY ADV. SMT.NISHA JOHN RESPONDENT/S: 1 THE INCOME TAX OFFICER NON-CORP. WARD - 1(4), K. R. BUILDINGS, I.S.PRESS ROAD, COCHIN - 682 018. 2 THE ASSISTANT COMMISSIONER OF INCOME TAX CENTRALISED PROCESSING CENTRE, P. B. NO.2, ELECTRONIC CITY POST OFFICE, BANGALORE - 561 100. 3 THE COMMISSIONER OF INCOME TAX (APPEALS) -III 28/243, POORNIMA BUILDING, NEAR MANORAMA JUNCTION, PANAMPILLY NAGAR, KOCHI - 682 036. OTHER PRESENT: SRI JOSE JOSEPH SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 04.06.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C).No.10972 OF 2020(V) 2 JUDGMENT Dated this the 4th day of June 2020 The petitioner, a manufacturing company, carrying on the business of a partnership firm in the year 2008 has approached this court for quashing of the ex-parte assessment orders Exts.P2 and P4 for the assessment years 2012-13 and 2013-14. The skeleton facts of the case are that the petitioner filed income tax return for the year 2012-13 as Nil. They were uploaded the income tax file through electronic system, which is evidenced from Ext.P1. Return was processed under Section 143(1) of the Income Tax Act. Accordingly, an order was issued by the department ie., the Central Processing Centre, (CPC of the Income Tax Department at Bangalore) on 9th May 2013. Upon receipt of the order, it was noticed that the brought forward losses to the extent of Rs.22,94,096/- was not considered and profit of Rs.21,05,953/- for the same assessment year had been set off against the brought

WP(C).No.10972 OF 2020(V) 3 forward losses, w reflected in the Annexure to the return submitted by the petitioner. All these facts are evidenced from the order dated 9th May 2013, Ext.P2. 2. On acquiring the knowledge, the petitioner availed the remedy of Section 154 of the Income Tax Act, by submitting a rectification application dated 5th June 2013, Ext.P4. However for the next assessment year ie., 2013- 14 filed the return, under Section 139 of the Act within the time and claimed the brought forward losses to the extent of Rs.1,88,143/-. A sum of Rs.11,88,143/- was adjusted against the proper assessment year 2013-14. But the petitioner was astonished to notice the intimation under Section 143(1), whereby the adjustment of brought forward losses to the extent of Rs.1,01,633/- was not considered.

WP(C).No.10972 OF 2020(V) 4 Petitioner filed a detailed reply dated 18th March 2019, Ext.P6 but no opportunity had been given and despite the receipt of the reply again a similar notice dated 11th February 2020, Ext.P7 reiterating the demand indicated in Ext.P5 was issued by the respondent. He submitted that as per the information downloaded from the income tax site on 18th February 2020, the rectification application is forwarded to the Juri ictional Assessing Officer but no action has been taken.

WP(C).No.10972 OF 2020(V) 5 by issuing directions to the first respondent to takes a call on the rectification application and to decide the same within a period of 45 days from the date of receipt of the copy of the order. Till then, the demand raised vide notices Exts.P5 and P7 is ordered to be kept in abeyance. However, it is made clear that the petitioner is at liberty to assail the outcome of the decision of the rectification petition, if he so chooses, in accordance with law. The writ petition stands disposed of. Liberty is granted to the Income Tax Authority to move appropriate application in case the averments of the writ petition are found to be false or incorrect. AMIT RAWAL sab JUDGE

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