HOLY CROSS FORANE CHURCH CHERPUNKAL, vs. PRINCIPAL COMMISSIONER OF INCOME TAX ,

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WP(C)/19557/2021HC KeralaKLHC01050871202130 September 2021Author: HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS7 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the writ petition was not a fit case for invoking its extraordinary jurisdiction under Article 226 of the Constitution of India. The Court found that the petitioner had not exhausted the statutory remedies available to them. It reiterated that the normal course of action for an assessee is to approach the statutory appellate authorities, except in very limited circumstances such as a breach of fundamental rights, violation of principles of natural justice, orders passed in excess of jurisdiction, or challenges to the constitutionality of a statute. The Court concluded that none of these exceptional circumstances existed in the present case. Therefore, the petitioner was relegated to the remedy of a statutory appeal. The writ petition was dismissed, with liberty reserved to the petitioner to pursue appropriate statutory remedies.

What were the facts?

The petitioner, Holy Cross Forane Church Cherpunkal, a religious and charitable trust registered under Section 12A(a) of the Income Tax Act, 1961, filed a writ petition challenging an assessment order dated August 12, 2021, for the assessment year 2018-19. The petitioner argued that expenditures on building construction, land development, and compound wall were properly recorded. They contended that the assessing officer wrongly relied on judgments from other High Courts instead of the jurisdictional High Court's rulings. Furthermore, the petitioner claimed the assessment order was perverse regarding the sale of agricultural land, as it disregarded their reply and relied on the Sub-Registrar's letter. An addition of Rs. 8,00,000 was also challenged as it was not part of any notice or assessment proceedings.

What were the issues?

1. Whether the assessment order dated 12.08.2021 for AY 2018-19 is liable to be quashed on the grounds of the assessing officer relying on irrelevant High Court judgments and disregarding the jurisdictional High Court's precedents concerning expenditures recorded in the trust's books? (Question of law) 2. Whether the assessment order is perverse in its conclusion regarding the sale of agricultural land, by failing to consider the petitioner's reply and relying on the Sub-Registrar's letter, when the land falls outside the definition of a capital asset? (Question of mixed law and fact) 3. Whether the addition of Rs. 8,00,000 to the income, which was neither the subject of a notice nor part of the assessment proceedings, vitiates the entire assessment order? (Question of law) Assessee's Contentions: The petitioner argued that the assessment order was flawed by relying on irrelevant judgments and ignoring favorable jurisdictional High Court decisions. They contended the order was perverse regarding the sale of agricultural land, as their reply was disregarded. The addition of Rs. 8,00,000, which was not previously notified, was also challenged as vitiating the assessment. Revenue's Contentions: No specific contentions for the revenue were recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 12A(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 BECHU KURIAN THOMAS THURSDAY, THE 30TH DAY OF SEPTEMBER 2021 / 8TH ASWINA, 1943 WP(C) NO. 19557 OF 2021 PETITIONER: HOLY CROSS FORANE CHURCH CHERPUNKAL, CHERPUNKAL P.O., KOTTAYAM-686 584, REPRESENTED BY ITS TRUSTEE MR.THOMAS MATHEW ARAMPULICKAL. BY ADVS. SRI.A.KUMAR SRI.P.J.ANILKUMAR SMT.G.MINI(1748) SRI.P.S.SREE PRASAD SRI.JOB ABRAHAM SRI.AJAY V.ANAND RESPONDENTS: 1 PRINCIPAL COMMISSIONER OF INCOME TAX , PUBLIC LIBRARY BUILDING, LAL BAHADUR SASTRI ROAD, KOTTAYAM-686 001. 2 NATIONAL FACELESS ASSESSMENT CENTRE, NORTH BLOCK, NEW DELHI-110 001, REPRESENTED BY PRINCIPAL CHIEF COMMISSIONER. 3 ADDITIONAL COMMISSIONER, NATIONAL FACELESS ASSESSMENT CENTRE, NORTH BLOCK, NEW DELHI-110 001. W.P.(C) No.19557/21 -:2:- SRI.JOSE JOSEPH-SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 20.09.2021, THE COURT ON 30.09.2021 DELIVERED THE FOLLOWING: W.P.(C) No.19557/21 -:3:- BECHU KURIAN THOMAS, J. ----------------------------------------- W.P.(C) No.19557 of 2021 ---------------------------------------- Dated this the 30th day of September, 2021

JUDGMENT Petitioner, a religious and charitable trust registered under section 12A(a) of the Income Tax Act, 1961, challenges Ext.P9 order of assessment dated 12.08.2021 for the assessment year 2018-19. 2. Learned counsel for the petitioner Adv. A.Kumar has raised various contentions assailing the order of assessment. The main contention was that the expenditure incurred on construction of the building, land development and construction of compound wall were duly recorded in the books of accounts of the Trust and that without relying upon the judgments of the juri ictional High Court, which are in favour of the petitioner, the assessing officer has relied upon judgments of other High Courts, that too, which have no relation to the facts arising in the instant case. It was also argued that in relation to the sale of agricultural land, which falls outside the definition of a capital asset, the assessment order fails to consider the reply of the petitioner and instead relies upon the letter of the Sub Registrar for concluding the nature of the land, thereby rendering the entire assessment order as perverse. It is further argued that the issue relating to addition of Rs.8,00,000/-, which was never the subject matter of notice nor in the proceedings for assessment has found its way into the order of assessment, thereby vitiating the assessment order itself. On the aforesaid basis, it is contended by the learned counsel for petitioner that this is a fit case for invoking the juri iction under Article 226 of the Constitution of India.

3.

I have heard learned counsel for the petitioner, Adv.A.Kumar as well as Adv. Jose Joseph, learned Standing Counsel for the respondents.

4.

Having bestowed my anxious consideration to the contentions raised by the petitioner, I find that this is not a fit case to invoke the extraordinary juri iction of this Court under Article 226 of the Constitution of India after bypassing the statutory remedies available to the petitioner. The normal course of remedy open to every assessee is to move the statutory appellate authorities, except in very limited and exceptional circumstances like a breach of fundamental rights or violation of the principles of natural justice or if the order is passed in excess of juri iction or when there is a challenge to the constitutionality of the statute in question. (See G.Veerappa Pillai Proprietor, Sathi Vilas Bus Service, Porayar, Tanjore District, Madras v. Raman and Raman Ltd., Kumbakonam, Tanjore District and Others (AIR 1952 SC 192) and Assistant Commissioner of State Tax and Others v. M/s.Commercial Steel Ltd. (C.A. No.5121 of 2021).

5.

Having regard to the contentions raised by the learned counsel for the petitioner as well as the facts arising in the case, I am of the view that none of the circumstances mentioned above exists in the instant case warranting interference under Article 226 of the Constitution of India and that the petitioner can be relegated to the remedy of statutory appeal.

Hence this writ petition stands dismissed reserving liberty of the petitioner to pursue appropriate statutory remedies. BECHU KURIAN THOMAS JUDGE vps

Appendix — schedule of exhibits
APPENDIX OF WP(C) 19557/2021 PETITIONER'S/S' EXHIBITS EXHIBIT P1 TRUE COPY OF THE REGISTRATION CERTIFICATE ISSUED BY INCOME TAX AUTHORITIES DATED 12.02.1974. EXHIBIT P2 TRUE COPY OF THE PAN CARD DATED NIL. EXHIBIT P3 TRUE COPY OF THE ITR RETURN FOR AY 2018- 19 DATED 08.10.2018. EXHIBIT P4 TRUE COPY OF THE ACKNOWLEDGMENT DATED 08.10.2018. EXHIBIT P5 TRUE COPY OF THE RECEIPT EVIDENCING PAYMENT TO THE AGRICULTURAL WORKERS WELFARE FUND BY PETITIONER. EXHIBIT P5(a) TRUE COPY OF THE RECEIPT EVIDENCING PAYMENT TO THE AGRICULTURAL WORKERS WELFARE FUND BY PURCHASER LAND. EXHIBIT P6 TRUE COPY OF THE DRAFT ASSESSMENT ORDER DATED 23.04.2021. EXHIBIT P7 TRUE COPY OF THE REPLY DATED 02.05.2021. EXHIBIT P8 TRUE COPY OF THE STATEMENT OF THE PURCHASER DATED NIL. EXHIBIT P9 TRUE COPY OF ASSESSMENT ORDER DATED 12.08.2021. EXHIBIT P10 TRUE COPY OF NOTICE OF DEMAND DATED 12.08.2021. EXHIBIT P11 TRUE COPY OF PENALTY NOTICE DATED 12.08.2021. EXHIBIT P12 TRUE COPY OF THE JUDGMENT DATED 02.07.1987 OF THIS HON'BLE COURT IN 1988 170 ITR 62 KER. EXHIBIT P13 TRUE COPY OF THE JUDGMENT DATED 12.02.2019 OF HON'BLE MADRAS HIGH COURT IN 310 CTR 483 (MAD.) W.P.(C) No.19557/21 -:7:- EXHIBIT P14 TRUE COPY OF THE JUDGMENT DATED 09.08.1995 OF HON'BLE KARNATAKA HIGH COURT IN (2000) 162 CTR KAR 261.

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