THENHIPALAM CO-OPERATIVE RURAL BANK LTD vs. INCOME TAX OFFICER,
What did the High Court hold?
The High Court allowed the writ petition and set aside the impugned order (Ext.P5). The Court was convinced that the necessary fees for the statutory appeal (Ext.P2) had already been paid by the petitioner, as evidenced by Ext.P3. Consequently, the Court directed the competent authority of the Income Tax Department to take up the appeal (Ext.P2) and dispose of it in accordance with law, following due procedure. The issue of whether the 2nd respondent was the competent authority under the Faceless Appeal Scheme was implicitly resolved by directing the 'competent authority' to hear the appeal, leaving it to the department to identify the correct authority. The Court did not explicitly decide on the merits of the original appeal.
What were the facts?
The petitioner, Thenhipalam Co-operative Rural Bank Ltd., filed a writ petition challenging an order (Ext.P5) issued by the Income Tax Department under Section 250 of the Income Tax Act, 1961. The order rejected the bank's statutory appeal (Ext.P2) solely on the ground that no challan evidencing payment of fees was enclosed. The petitioner contended that the necessary fees were remitted on 22.02.2016, as evidenced by Ext.P3, and therefore, the order of rejection was erroneous. The respondents' counsel conceded that Ext.P3 showed fee payment and that the appeal should be decided on merits. However, they raised a point regarding the competent authority under the Faceless Appeal Scheme.
What were the issues?
1. Whether the Income Tax Department's order rejecting the statutory appeal for non-enclosure of fee challan, despite evidence of fee payment, is sustainable in law? 2. Whether the competent authority under the Faceless Appeal Scheme should hear the appeal? Assessee's Contention: The petitioner argued that the fees for the statutory appeal were paid on 22.02.2016, as evidenced by Ext.P3. Therefore, the rejection of the appeal for non-enclosure of the challan was incorrect. The petitioner sought to have the appeal heard on its merits by a competent authority. Revenue's Contention: The revenue conceded that the fee payment was evidenced by Ext.P3 and that the appeal should be decided on merits. However, they submitted that due to the implementation of the Faceless Appeal Scheme, the 2nd respondent (Commissioner of Income Tax (Appeals)) might not be the competent authority, and prayed for the court to direct the appropriate authority to hear the appeal.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
JUDGMENT The petitioner, which is stated to be a Co- operative Bank, has approached this Court impugning Ext.P5 order issued by the Income Tax Department under Section 250 of the Income Tax Act, 1961, rejecting its statutory Appeal solely for the reason that “no Chellan evidencing payment of fees has been enclosed with the Appeal” (sic).
The petitioner asserts that, as is evident from Ext.P3, necessary fees had been remitted as early as on 22.02.2016 and therefore, that the Authority could not have issued Ext.P5 order in the manner as it is presently worded. The petitioner, therefore, prays that Ext.P5 be set aside and the 2nd respondent be directed to take up Ext.P2 statutory Appeal and dispose it of on its merits.
Shri.Christopher Abraham, learned Standing Counsel appearing for the respondents, conceded that since Ext.P3 evidences the payment of necessary fees, Ext.P2 Appeal will have to be decided by the WP(C) NO. 16488 OF 2021 3 competent Authority in terms of law. He, however, submitted that since the “Faceless Appeal Scheme” has already came into force, it may not be the 2nd respondent who is the competent Authority; and thus prayed that this Court may allow such Authority to take up the Appeal and dispose it of in terms of law.
I, therefore, asked Shri.Harisankar V.Menon, learned counsel for the petitioner, whether his client is insisting that the 2nd respondent himself must hear Ext.P2 Appeal, to which, he responded by saying that his client only wants its contentions to be properly appreciated by a competent Authority and therefore, leaves it to this Court to issue appropriate orders. In the afore circumstances and since I am convinced that the necessary fees in support of Ext.P2 Appeal has already been paid by the petitioner, as is evident from Ext.P3, I allow this writ petition and set aside Ext.P5; with a resultant direction to the competent Authority of the Income
WP(C) NO. 16488 OF 2021 4 Tax Department to take up Ext.P2 Appeal and dispose it of as per law, following due procedure. DEVAN RAMACHANDRAN JUDGE MC/18.8
WP(C) NO. 16488 OF 2021 5
Appendix — schedule of exhibits
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