MULLAKODI CO-OPERATIVE RURAL BANK LIMITED F1230, vs. ASSESSMENT UNIT,

PDF · subscribers
WP(C)/9875/2024HC KeralaKLHC01090675202404 April 2024Bench: HONOURABLE MR. JUSTICE D. K. SINGH5 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the writ petition. The Court found no substance in the petitioner's argument for more time, noting the petitioner's consistent lack of cooperation throughout the assessment process. The Court observed that the petitioner did not file responses to notices issued under Sections 142(1) and 143(2) and only sought additional time upon receiving the final show cause notice under Section 144. The Court held that the Assessing Authority was well within its powers to not accede to such a request for extension, given the petitioner's prior conduct. Therefore, the assessment order passed under Section 144 read with Section 144B was upheld implicitly by the dismissal of the challenge.

What were the facts?

The petitioner, Mullakodi Co-operative Rural Bank Limited, filed its income tax return for Assessment Year 2022-23 declaring a total income of Rs. 4,29,940/-. The return was processed under Section 143(1) and subsequently selected for scrutiny under CASS. A notice under Section 143(2) was issued on 02.06.2023. The CASS identified potential issues including high liabilities versus low income, low PBDIT ratio, and claims of deduction under Section 80P by entities with 'Bank' in their name or approved under the Banking Regulation Act. The petitioner failed to respond to notices issued between 02.06.2023 and 25.01.2024. Upon receiving a show cause notice under Section 144 on 03.01.2024, the petitioner requested more time, which was not granted. Consequently, the Assessment Unit, National E-Assessment Centre, passed an assessment order under Section 144 read with Section 144B of the Income Tax Act, 1961.

What were the issues?

1. Whether the Assessment Authority was justified in passing an assessment order under Section 144 read with Section 144B of the Income Tax Act, 1961, without granting further time to the petitioner when requested, despite the petitioner's prior non-cooperation? Assessee's Contention: The petitioner argued that they requested more time in response to the show cause notice under Section 144, but the assessment authority proceeded to pass the order without affording adequate time beyond what was specified in the notice. Revenue's Contention: The revenue, through the Court's observation, contended that the petitioner's conduct throughout the assessment proceedings was uncooperative, as they failed to respond to multiple notices issued under Sections 142(1) and 143(2). The revenue argued that the Assessing Authority was within its powers not to grant further time when the petitioner only sought it at a late stage.

Which sections of the Income-tax Act were involved?

Section 144,Section 144B,Section 143(1),Section 143(2),Section 142(1),Section 80P

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH THURSDAY, THE 4TH DAY OF APRIL 2024 / 15TH CHAITHRA, 1946 WP(C) NO. 9875 OF 2024 PETITIONER/S:

MULLAKODI CO-OPERATIVE RURAL BANK LIMITED F1230, KP-VI/429A, KOLACHERY MUKKU, KOLACHERY, KANNUR, REPRESENTED BY ITS SECRETARY HARIDASAN C., PIN - 670601

BY ADV S.ARUN RAJ RESPONDENT/S:

1 ASSESSMENT UNIT, NATIONAL E-ASSESSMENT CENTRE, INCOME TAX DEPARTMENT, 2ND FLOOR, E- RAMP, JAWAHARLAL NEHRU STADIUM, NEW DELHI, PIN - 110003 2 THE PRINCIPAL COMMISSIONER OF INCOME TAX, AAYAKAR BHAVAN, NORTH BLOCK, MANANCHIRA, KOZHIKODE, PIN - 673001

BY ADVS. P.G.JAYASHANKAR; G.KEERTHIVAS

SRI. G. KEERTHIVAS- SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 04.04.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

W.P.(C) No.9875/2024

-2-

J U D G M E N T

The present writ petition has been filed impugning the Ext.P3 Assessment Order passed by the 1st respondent under Section 144 read with Section 144B of the Income Tax Act 1961 for the Assessment Year 2022-23.

2.

The petitioner is a Co-operative Rural Bank Limited. It filed its return of income for the Assessment Year 2022-23 showing a total income of Rs.4,29,940/-. The income tax return filed by the petitioner was processed under Section 143(1) of the Act. The petitioner’s case was selected for scrutiny under CASS. The petitioner was issued a notice under Section 143(2) of the Act on 02.06.2023 which was duly served on the petitioner.

3.

The CASS would suggest the following issues in the return of the petitioner:

W.P.(C) No.9875/2024

-3-

“(i) High liabilities as compared to low income/receipts, (ii) Very Low PBDIT ratio in specific business code and turnover range where deficiency is reported in audit report & (iii) Claim of deduction under Section 80P by entities having Bank in their name or approved under the Banking Regulation Act.”

4.

The details of opportunities given to the petitioner have been mentioned in paragraph 2 of the Assessment Order, which would suggest that the petitioner did not file response to any of the notices issued to him from 02.06.2023 to 25.01.2024.

5.

The learned Counsel for the petitioner submits that the petitioner, in response to the show cause notice under Section 144 dated 03.01.2024, requested to give him some time. However, without affording any other time except what was mentioned in the show cause notice, the assessment authority proceeded to pass the assessment order.

W.P.(C) No.9875/2024

-4-

6.

The conduct of the petitioner would suggest that the petitioner was not cooperating throughout. He did not file any response to notices issued under Sections 142(1) and 143(2). Suddenly, the petitioner woke up when he received the last show cause notice under Section 144 and asked for time. I am of the considered view that the Assessing Authority was well within its power not to accede to such a request.

I find no substance in the present writ petition, which is hereby dismissed. Sd/- DINESH KUMAR SINGH JUDGE

jjj

W.P.(C) No.9875/2024

-5-

APPENDIX OF WP(C) 9875/2024

PETITIONER EXHIBITS Exhibit P1 A TRUE COPY OF THE SHOW CAUSE NOTICE DATED 25- 1-2024 ISSUED BY THE 1ST RESPONDENT FOR THE AY 2022-23 Exhibit P2 A TRUE COPY OF THE ACKNOWLEDGMENT DATED 6-2- 2024 ON THE REQUEST OF THE PETITIONER FOR 10 DAYS TIME Exhibit P3 A TRUE COPY OF THE ASSESSMENT ORDER DATED 12-2- 2024 UNDER SECTION 144 R.W.S 144B OF THE ACT ISSUED BY THE 1ST RESPONDENT FOR THE AY 2022-23

More judgments on Section 144B

All 10,521 judgments and leading authorities on Section 144B →

Recent GST High Court judgments

Search GST case law →