MARATHA VIDYA PRASARAK SAMAJ vs. DEPUTY DIRECTOR OF INCOME TAX CPC BENGALURU AND ORS

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WP/1743/2024HC BombayHCBM01006450202420 February 2024Bench: HON'BLE SHRI JUSTICE K.R. SHRIRAM,HON'BLE JUSTICE DR. NEELA KEDAR GOKHALE4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court, in view of the statements made by the Revenue, did not grant the relief as prayed for in the petition. However, the Court directed the Assessing Officer to grant a personal hearing to the Petitioner and permit them to file necessary documents before passing an order in accordance with law. The Court explicitly clarified that no observations were made on the merits of the matter, including the Petitioner's entitlement to exemption under Section 11 of the Act. The Petitioner was also permitted to apply to the CIT(A) for expeditious hearing of their stay application and appeal against the Section 143(1) intimation. Until the disposal of the stay application or March 31, 2024, whichever was earlier, no coercive steps were to be taken for recovery of the amount mentioned in the Section 143(1) intimation. The petition was disposed of.

What were the facts?

The Petitioner, Maratha Vidya Prasarak Samaj, a trust running educational institutions, challenged an intimation dated December 18, 2023, issued under Section 143(1) of the Income Tax Act, 1961. The intimation denied the Petitioner's claimed exemption under Section 11 of the Act, computed total income at Rs. 676,70,25,818/-, and denied TDS credit of Rs. 1,92,49,542/-. The Petitioner argued the intimation lacked reasons for denial and that a notice under Section 143(2) had been issued, raising apprehension of a scrutiny assessment without an opportunity to explain. The Petitioner had also filed an appeal before the CIT(A) against the Section 143(1) intimation.

What were the issues?

1. Whether the intimation dated December 18, 2023, issued under Section 143(1) of the Income Tax Act, 1961, is bad in law for denying the Petitioner's claimed exemption under Section 11 of the Act and TDS credit without stating reasons. Assessee's Contentions: - The intimation under Section 143(1) is bad in law as it denies the entire exemption claimed under Section 11 of the Act and TDS credit without providing any reasons. - There is an apprehension that the scrutiny assessment under Section 143(3) will proceed without an opportunity to explain the incorrect computation of total income and denial of TDS credit. Revenue's Contentions: - A notice under Section 143(2) has been issued, and during the scrutiny assessment under Section 143(3), the Petitioner will be called upon to file necessary documents and make submissions. - The Petitioner will be heard before a final assessment order is passed under Section 143(3), allowing them to explain their entitlement to exemption under Section 11 and TDS credit. - The Assessing Officer will pass an order in accordance with the law after hearing the Petitioner.

Which sections of the Income-tax Act were involved?

Section 11,Section 143(1),Section 143(2),Section 143(3),Section 246A

AI-generated summary — verify with the full judgment below

1/4 453-aswp-1743-2024.doc IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 1743 OF 2024 Maratha Vidya Prasarak Samaj …Petitioner Versus Deputy Director of Income Tax, CPC, Bengaluru & Ors. …Respondents Mr. Devendra Jain, i/b. Ms. Radha Halbe, for Petitioner. Mr. Suresh Kumar, for Respondents-Revenue. CORAM: K. R. SHRIRAM & DR. NEELA GOKHALE, JJ. DATED: 22nd February 2024 PC:- 1. Mr. Jain, at the outset, states the resolution as directed in this Court’s order dated 12th February 2024 has been filed online and also tenders physical copy for Court’s address. 2 Petitioner is a trust registered under the Bombay Public Trust Act, 1950 and under the Societies Registration Act, 1860. Petitioner runs several educational institutions and gets grants from the Government. 3. Petitioner is challenging the intimation dated 18th December 2023 issued under Section 143(1) of the Income Tax Act, 1961 (“the Act”). According to Petitioner, the intimation is bad in law because the entire exemption claimed by Petitioner under Section 11 of the Shivgan SHAMBHAVI NILESH SHIVGAN Digitally signed by SHAMBHAVI NILESH SHIVGAN Date: 2024.02.26 19:02:20 +0530

2/4 453-aswp-1743-2024.doc Act has been denied and total income is computed at Rs.676,70,25,818/-. According to Petitioner, even the credit for tax deducted at source amounting to Rs.1,92,49,542/- has been denied. Mr. Jain submitted that the intimation does not even state the reason for denying the claim under Section 11 of the Act. 4. Petitioner, prior to receiving the intimation under Section 143(1) of the Act, had received a notice under Section 143(2) of the Act for a proposed detailed scrutiny under Section 143(3) of the Act. Mr. Jain submits that the Petitioner’s apprehension is the scrutiny assessment will proceed without giving Petitioner an opportunity to explain that the computation of total income at Rs.676,70,25,818/- as reflected in the intimation under Section 143(1) of the Act was wrong or for that matter the credit for TDS at Rs.1,92,49,542/- has to be given. 5. Mr. Suresh Kumar states, during scrutiny assessment under Section 143(3) of the Act, in view of the notice issued under Section 143(2) to Petitioner, Petitioner will be called upon to file necessary documents and make submissions. Mr. Suresh Kumar further states that before passing a final order assessment order under Section 143(3) of the Act, Petitioner will be heard and Petitioner can explain to the Assessing Officer (“AO”) that it is entitled to exemption under Section 11 of the Act and also credit for TDS as alleged in the Shivgan

3/4 453-aswp-1743-2024.doc petition. Mr. Suresh Kumar states that the AO after hearing Petitioner will pass order in accordance with law. Therefore, this Court should not grant the prayers as prayed for in the petition. 6. In view of the statements made by Mr. Suresh Kumar, we do not wish to grant the relief as prayed for, in the petition. 7. We would, however, direct the Assessing Officer to give a personal hearing to Petitioner and also permit Petitioner to file necessary documents and then pass order in accordance with law. We clarify we have not made any observation on the merits of the matter. 8. In Paragraph 4.6 of the petition, Petitioner has disclosed having filed an appeal before the Commissioner of Income Tax (Appeals) (“CIT(A)”) under Section 246A of the Act against the impugned intimation issued by Respondent No.1 under Section 143(1) of the Act. Petitioner may apply to the CIT (A) for expeditious hearing of the stay application as well as appeal and the CIT(A) may consider the application. Until the disposal of the stay application or 31st March 2024, whichever is earlier, no coercive steps shall be taken to recover the amount mentioned in the intimation under Section 143(1) of the Act.We would once again clarify that we have not considered the matter on merits or given any opinion on Petitioner’s contention that it is entitled to exemption under Section 11 of the Act. Shivgan

4/4 453-aswp-1743-2024.doc 9. Petition disposed. (DR. NEELA GOKHALE, J.) (K. R. SHRIRAM, J.) Shivgan

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