PHILO RAJAN vs. THE INCOME TAX OFFICER

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WP(C)/6273/2020HC KeralaKLHC01016496202003 March 2020Author: HONOURABLE MR. JUSTICE AMIT RAWAL5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court observed that the Ext.P2 application ought not to have been filed in the manner and mode it was. The petitioner could have best claimed exemption from capital gains by providing detailed reasons for the computation of income and seeking assessment in accordance with the law. However, the Court acknowledged the petitioner's apprehension that the impugned communication (Ext.P5) would prevent her from claiming such exemption if she chose to file a return. To ensure equity and in the interest of justice, the Court disposed of the writ petition with liberty to the petitioner to claim the benefit sought in Ext.P2 by filing her return. The Court directed that if any such benefit is claimed, the income tax authorities will decide the matter without prejudice to Ext.P5, meaning Ext.P5 shall not stand in the way of the assessing authority considering the matter afresh. No specific finding was made on the maintainability of the original application or the correctness of the Village Officer's report.

What were the facts?

The petitioner, Philo Rajan, sought to close an account with SBI after selling land in February 2017, intending to claim exemption on capital gains. She submitted an application (Ext.P2) to the Income Tax Officer (ITO) for this purpose. The ITO rejected her request via Ext.P5, citing a report from the Village Officer stating the property was not agricultural land. The petitioner argued this rejection prejudiced her right to claim exemption when filing her return for the relevant assessment year. The ITO contended that the application was not maintainable and the decision was based on the Village Officer's report, which the petitioner did not counter.

What were the issues?

1. Whether the petitioner's application (Ext.P2) for closing an account based on land sale and claim of capital gains exemption was maintainable in the form submitted. 2. Whether the Income Tax Officer's rejection of the petitioner's request (Ext.P5), based on the Village Officer's report that the property was not agricultural land, was erroneous and prejudiced the petitioner's right to claim exemption. Assessee's Contention: The petitioner argued that while the application might not have been perfectly framed, the impugned communication (Ext.P5) rejecting her request prejudiced her ability to claim exemption on capital gains. She contended that her rights were adversely affected by the rejection based on the Village Officer's report, which would impede her claim during the assessment for the relevant year. Revenue's Contention: The Income Tax Officer argued that the Ext.P2 application was not maintainable. They further submitted that the impugned decision was not erroneous or illegal as it was based on the Village Officer's report, and the petitioner had not provided any documents to counter this report. Therefore, the revenue urged for the dismissal of the writ petition.

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 AMIT RAWAL TUESDAY, THE 03RD DAY OF MARCH 2020 / 13TH PHALGUNA, 1941 WP(C).No.6273 OF 2020(H) PETITIONER/S: PHILO RAJAN AGED 63 YEARS THEKKEKKARA HOUSE, GURU SREE LANE, KOORKKANCHERRY, THRISSUR-680 007. BY ADVS. SRI.HARISANKAR V. MENON SMT.MEERA V.MENON SMT.K.KRISHNA RESPONDENT/S: 1 THE INCOME TAX OFFICER WARD 2(4), AAYAKARA BHAVAN, SAKTHANM THAMPURAM NAGAR, THRISSUR-680 001. 2 THE TAHSILDAR, TALUK OFFICE, KOTHAMANGALAM-686 691. 3 THE VILLAGE OFFICER, KOTTAPPADY VILLAGE, KOTTAPPADY-680 505, THRISSUR DISTRICT. SRI JOSE JOSEPH SC GP DR THUSHARA JAMES THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 03.03.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.6273 OF 2020(H) 2

JUDGMENT The challenge in the present writ petition is Ext.P5 communication dated 20.1.2020 in response to Ext.P2 application submitted by the petitioner intimating the income tax authorities for closing the account kept in the SBI on the premise that the land was sold in February 2017 and she had not been able to buy a home within a reasonable period. Learned Counsel appearing on behalf of the petitioner submitted that though such an application ought not to have been filed petitioner was not properly advised at the best could have claimed the exemption qua the applicablity or non applicability of the capital gain, but her rights are prejudiced on account of the impugned communication Ext.P5, whereby the request made in Ext.P2 has been rejected on the basis of the report of the Village Officer as the nature and character of the property has not been found to be agricultural land. The aforementioned order would be an impediment to the petitioner to claim exemption while filing return for the relevant assessment year.

2.

Learned Counsel appearing for the income tax

WP(C).No.6273 OF 2020(H) 3 authorities would submit that Ext.P2 application was not maintainable. It is also submitted that the impugned decision cannot be said to be erroneous or illegal as it is based on the report of the village officer, and no documents countering the report of the village officer has been placed on record, and urges this Court for the dismissal of the writ petition.

3.

Having heard learned Counsel for the parties I am of the view that Ext.P2 application ought not to have been filed in the manner and mode as indicated above. Petitioner at the best could have claim exemption of non-applicablity of capital gain by giving detailed reason for computation of income and seeks assessment in accordanc with law. The apprehension of the petitioner as expressed in the present writ petition cannot be ignored for the reason that petitioner is prevented from claiming such exemption in case he choses to file return. In order to have equuitious and interest of justice, I dispose of this writ petition with libety to the petitioner to claim the benefit as sought in Ext.P2 by filing return and in case any such benefit is claimed the income tax authorities will decide the matter without prejudice to Ext.P5, in other wards, the same shall not stand in WP(C).No.6273 OF 2020(H) 4 the way of the assessing authority in considering the matter afresh. The writ petition is disposed of. AMIT RAWAL JUDGE Jm/

WP(C).No.6273 OF 2020(H) 5

Appendix — schedule of exhibits
APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 A TRUE COPY OF THE IDENTITY CARD OF THE PETITIONER ISSUED BY THE 3RD RESPONDENT. EXHIBIT P2 A TRUE COPY OF THE DECISION DATED 13/01/2020 BY THE 3RD RESPONDENT ALONG WITH ENGLISH TRANSLATION. EXHIBIT P3 A TRUE COPY OF THE APPLICATION UNDER RIGHT INFORMATION DATED 30/01/2020. EXHIBIT P4 A TRUE COPY OF THE REPLY DATED 31/01/2020 BY THE 3RD RESPONDENT. EXHIBIT P4 A COPY OF ENGLISH TRANSLATION OF EXT.P4 REPORT ISSUED BY THE 3RD RESPONDENT. EXHIBIT P5 TRUE COPY OF THE LETTER ISSUED BY THE 3RD RESPONDENT DATED 16/01/2020 TO THE 4TH RESPONDENT. EXHIBIT P6 TRUE COPY OF THE LETTER OF EXPRESSION OF INTEREST FORWARDED BY THE 4TH RESPONDENT DATED 16/01/2020. EXHIBIT P1 COPY OF DEPOSIT RECEIPT OF THE PETITIONER (PASS BOOK) FROM STATE BANK OF INDIA. EXHIBIT P2 COPY OF APPLICATION FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT. EXHIBIT P3 COPY OF APPLICATION FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. EXHIBIT P4 COPY OF REPORT ISSUED BY THE 3RD RESPONDENT. EXHIBIT P4 A COPY OF ENGLISH TRANSLATION OF EXT.P4 REPORT ISSUED BY THE 3RD RESPONDENT. EXHIBIT P5 COPY OF ORDER ISSUED BY THE 1ST RESPONDENT.

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