TUMKUR VEERASHAIVA CO-OPERATIVE BANK LIMITED vs. THE PRINCIPAL COMMISSIONER OF INCOME TAX

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WP/11966/2025HC KarnatakaKAHC01026197202523 July 2025Bench: SURAJ GOVINDARAJ9 pages
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the writ petitions. It held that an assessee should not be considered fraudulent solely due to a mistake in filing the return form. If supporting documents are available, the revenue should provide the benefit. The court distinguished between 'sufficient cause' under the Limitation Act and 'genuine hardship' under the Income Tax Act, emphasizing that the latter should be viewed from the assessee's perspective regarding the payment of taxes. The court found that if genuine hardship would be caused to the assessee, the delay should be condoned by the revenue, and the matter should be considered on merits. Consequently, the delay in seeking amendment was condoned, and the matters were remitted to the Income Tax Officer for fresh consideration, allowing the petitioner an opportunity to amend their submissions, supported by existing documents.

What were the facts?

The petitioner, Tumkur Veerashaiva Co-operative Bank Limited Employers Gratuity Fund Trust, filed three writ petitions before the High Court of Karnataka. These petitions challenge orders dated January 16, 2025, passed by the Principal Commissioner of Income-Tax under Section 119(2)(b) of the Income Tax Act, 1961. The orders pertain to Assessment Years 2017-18, 2014-15, and 2013-14. The petitioner sought to quash these orders and sought directions to condone the delay in filing revised returns of income to claim exemption under Section 10(25)(i) of the Act. The petitioner contended that a genuine mistake occurred in not entering the amount for redemption in the returns, despite it being mentioned in Part-B as 'Voluntary contribution for forming part of corpus'. The revenue argued that the Income Tax Officer lacked the power to condone delays exceeding six years except in cases of genuine hardship.

What were the issues?

1. Whether the delay in filing the revised return of income for Assessment Years 2013-14, 2014-15, and 2017-18 should be condoned under Section 119(2)(b) of the Income Tax Act, 1961, to allow the petitioner to claim exemption under Section 10(25)(i) of the Act. Assessee's Contention: The petitioner argued that a genuine mistake was made in not entering the amount for redemption in the returns, which led to the denial of exemption. They relied on the fact that the amount was mentioned in Part-B of the return and that the mistake was not fraudulent. Revenue's Contention: The revenue contended that the Income Tax Officer has no power to condone delays exceeding six years, except on account of genuine hardship. They did not explicitly argue against the existence of a genuine mistake or the applicability of Section 10(25)(i).

Which sections of the Income-tax Act were involved?

Section 119(2)(b),Section 10(25)(i)

AI-generated summary — verify with the full judgment below

Heard together (3 matters)

WP No. 11966 of 2025
WP No. 12132 of 2025
WP No. 12138 of 2025

Read from the judgment's own cause title. This page is filed under one of them.

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HC-KAR NC: 2025:KHC:28156 WP No. 11966 of 2025 C/W WP No. 12132 of 2025 WP No. 12138 of 2025

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 23RD DAY OF JULY, 2025

BEFORE

THE HON'BLE MR. JUSTICE SURAJ GOVINDARAJ

WRIT PETITION NO.11966 OF 2025 (T-IT) C/W WRIT PETITION NO.12132 OF 2025 (T-IT) WRIT PETITION NO.12138 OF 2025 (T-IT)

IN WP No.11966/2025

BETWEEN:

TUMKUR VEERASHAIVA CO-OPERATIVE BANK LIMITED EMPLOYERS GRATUITY FUND TRUST, REPRESENTED BY B.S.KALPANA, TRUSTEE D/O. SHIVANNA AGED ABOUT 58 YEARS RADHAKRISHNAN ROAD, S.S. PURAM TUMKUR-572 102.

…PETITIONER

(BY SRI RAVI SHANKAR S.V., ADVOCATE)

AND:

1.

THE PRINCIPAL COMMISSIONER OF INCOME-TAX BENGALURU - 2 BMTC BUILDING, 80 FEET ROAD 6TH BLOCK, NEAR KHB GAMES VILLAGE KORAMANGALA BENGALURU-560 095. 2. INCOME TAX OFFICER WARD-1 AND TPS, TUMKUR

Digitally signed by SHWETHA RAGHAVENDRA Location: HIGH COURT OF KARNATAKA

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HC-KAR NC: 2025:KHC:28156 WP No. 11966 of 2025 C/W WP No. 12132 of 2025 WP No. 12138 of 2025

AAYAKAR BHAVAN, KUNIGAL ROAD RAMAKRISHNA NAGAR, TUMKUR - 572 103. …RESPONDENTS

(BY SRI E.I. SANMATHI, ADVOCATE) * * *

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE ORDER UNDER SECTION 119(2)(b) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE 'ACT') DATED 16/01/2025 PASSED BY THE RESPONDENT NO.1 IN DIN NO.ITBA/COM/F/17/2024-25/1072219345(1) FOR THE ASSESSMENT YEAR 2017-18 (ANNEXURE-A).

IN WP NO.12132/2025

BETWEEN:

TUMKUR VEERASHAIVA CO-OPERATIVE BANK LIMITED EMPLOYERS GRATUITY FUND TRUST, REPRESENTED BY BS KALPANA, TRUSTEE D/O. SHIVANNA AGED ABOUT 58 YEARS RADHAKRISHNAN ROAD, S.S. PURAM TUMKUR-572 102. UNDER TRUST ACT. ...PETITIONER (BY SRI RAVI SHANKAR S.V., ADVOCATE)

AND: 1. THE PRINCIPAL COMMISSIONER OF INCOME-TAX BENGALURU - 2 BMTC BUILDING, 80 FEET ROAD 6TH BLOCK, NEAR KHB GAMES VILLAGE

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HC-KAR NC: 2025:KHC:28156 WP No. 11966 of 2025 C/W WP No. 12132 of 2025 WP No. 12138 of 2025

KORAMANGALA BENGALURU-560 095.

2.

INCOME TAX OFFICER WARD-1 AND TPS, TUMKUR AAYAKAR BHAVAN, KUNIGAL ROAD RAMAKRISHNA NAGAR, TUMKUR - 572 103. ...RESPONDENTS (BY SRI E.I. SANMATHI, ADVOCATE) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE ORDER UNDER SEC 119(2)(b) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) DATED 16.01.2025 PASSED BY THE R-1 IN DIN NO.ITBA/COM/F/17/2024- 25/1072219224(1) FOR THE ASSESSMENT YEAR 2014-15 (ANNEXURE-A) IN WP NO.12138/2025

BETWEEN:

TUMKUR VEERASHAIVA CO-OPERATIVE BANK LIMITED EMPLOYERS GRATUITY FUND TRUST, REPRESENTED BY BS KALPANA, TRUSTEE D/O. SHIVANNA AGED ABOUT 58 YEARS RADHAKRISHNAN ROAD, S.S. PURAM TUMKUR-572 102. UNDER TRUST ACT. UNDER RULE-2(1) AND (2) OF PART-"C" OF THE IV SCHEDULE OF THE INCOME TAX ACT, 1961. ...PETITIONER (BY SRI RAVI SHANKAR S.V., ADVOCATE)

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HC-KAR NC: 2025:KHC:28156 WP No. 11966 of 2025 C/W WP No. 12132 of 2025 WP No. 12138 of 2025

AND:

1.

THE PRINCIPAL COMMISSIONER OF INCOME-TAX BENGALURU - 2 BMTC BUILDING, 80 FEET ROAD 6TH BLOCK, NEAR KHB GAMES VILLAGE KORAMANGALA BENGALURU-560 095.

2.

INCOME TAX OFFICER WARD-1 AND TPS, TUMKUR AAYAKAR BHAVAN, KUNIGAL ROAD RAMAKRISHNA NAGAR, TUMKUR - 572 103. ...RESPONDENTS (BY SRI E.I. SANMATHI, ADVOCATE)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE ORDER UNDER SECTION 119(2)(b) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) DATED 16.01.2025 PASSED BY THE R-1 IN DIN NO. ITBA/COM/F/17/2024-25/1072219125(1) FOR THE ASSESSMENT YEAR 2013-14 (ANNEXURE-A).

THESE WRIT PETITIONS, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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HC-KAR NC: 2025:KHC:28156 WP No. 11966 of 2025 C/W WP No. 12132 of 2025 WP No. 12138 of 2025

CORAM: HON'BLE MR. JUSTICE SURAJ GOVINDARAJ

ORAL ORDER

1.

In W.P.NO.11966/2025, petitioner is before this Court seeking for the following reliefs: "i) Issue a writ of certiorari or a direction in the nature of writ of certiorari quashing the order under section 119(2)(b) of the Income Tax Act, 1961 (for short 'the Act') dated 16/01/2025 passed by the Respondent No.1 in DIN No: ITBA/COM/F/17/2024- 25/1072219345(1) for the assessment year 2017-18 (Annexure-A).

ii) Issue a writ of mandamus or a direction in the nature of writ of mandamus directing to the respondents condone the delay in filing the revised return of income for the assessment year 2017-18 and to permit the petitioner to file a revised return of income in order to claim exemption in accordance with law. and

iii) And pass such other orders as this Hon'ble Court deems fit and proper in the interest of justice and equity."

2.

In W.P.NO.12132/2025, petitioner is before this Court seeking for the following reliefs: "i) Issue a writ of certiorari or a direction in the nature of writ of certiorari quashing the order under section 119(2)(b) of the Income Tax Act, 1961 (for short 'the Act') dated 16/01/2025 passed by the Respondent No.1 in DIN No: ITBA/COM/F/17/2024- 25/1072219224(1) for the assessment year 2017-18 (Annexure-A).

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HC-KAR NC: 2025:KHC:28156 WP No. 11966 of 2025 C/W WP No. 12132 of 2025 WP No. 12138 of 2025

ii) Issue a writ of mandamus or a direction in the nature of writ of mandamus directing to the respondents condone the delay in filing the revised return of income for the assessment year 2014-15 and to permit the petitioner to file a revised return of income in order to claim exemption in accordance with law. and

iii) And pass such other orders as this Hon'ble Court deems fit and proper in the interest of justice and equity."

3.

In W.P.NO.12138/2025, petitioner is before this Court seeking for the following reliefs: "i) Issue a writ of certiorari or a direction in the nature of writ of certiorari quashing the order under section 119(2)(b) of the Income Tax Act, 1961 (for short 'the Act') dated 16/01/2025 passed by the Respondent No.1 in DIN No: ITBA/COM/F/17/2024- 25/1072219125(1) for the assessment year 2013-14 (Annexure-A).

ii) Issue a writ of mandamus or a direction in the nature of writ of mandamus directing to the respondents condone the delay in filing the revised return of income for the assessment year 2013-14 and to permit the petitioner to file a revised return of income in order to claim exemption in accordance with law. and

iii) And pass such other orders as this Hon'ble Court deems fit and proper in the interest of justice and equity."

4.

Sri Ravi Shankar.S.V., learned counsel for the petitioner, in all the above matters, submits that there is a genuine mistake, which has been committed by the petitioner,

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HC-KAR NC: 2025:KHC:28156 WP No. 11966 of 2025 C/W WP No. 12132 of 2025 WP No. 12138 of 2025

inasmuch as the petitioner being a Trust has not filled in the amount originally for redemption in the returns filed for the Assessment Years 2013-14, 2014-15 and 2017-18 though the amount has been mentioned in Part-B under the heading 'Voluntary contribution for forming part of corpus'. The submission of the learned counsel for the petitioner is that the petitioner being entitled for the benefit of Section 10 (25) (i) of the IT Act, 1961 on the said amount, only due to the mistake of not entering the said amount to claim exemption, has deprived the petitioner of the exemption and respondent No.2 has denied the exemption on the ground that there is a delay in seeking for exemption.

5.

Sri E.I.Sanmathi, learned counsel for the respondent- Revenue would submit that respondent No.2 has no power to condone the delay of more than six years except on account of genuine hardship.

6.

An assessee cannot be held to be a fraud only because there is a mistake in the selection made in the filing of the form. If the rest of the documents would support the

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HC-KAR NC: 2025:KHC:28156 WP No. 11966 of 2025 C/W WP No. 12132 of 2025 WP No. 12138 of 2025

case of the assessee, the benefit of the same would have to be provided by the Revenue to the assessee. The genuine hardship which would be caused would have to be looked at only in the perspective of the assessee being required to make payment of the taxes and by virtue of such payment, if any hardship would be caused to the assesse. It for that reason that the concept of genuine hardship has been used in the Income Tax Act, whereas under Section 5 of the Limitation Act, the applicant would have to satisfy the Court that he had sufficient cause for not preferring the appeal or making application within such period. Section 5 makes applicable the concept of 'sufficient cause', whereas the Income Tax Act makes applicable to the concept of 'genuine hardship'. It should have to be looked at in the different perspective. In that view of the matter, if any genuine hardship would be caused to the assessee the delay would have to be condoned by the Revenue and the matter be considered on merits to ascertain if the assessee would be entitled for the benefit sought for by the assessee.

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HC-KAR NC: 2025:KHC:28156 WP No. 11966 of 2025 C/W WP No. 12132 of 2025 WP No. 12138 of 2025

7.

In that view of the matter, I pass the following: ORDER

i) Writ petitions are allowed.

ii) The delay in seeking amendment is condoned.

iii) The matters are remitted to respondent No.2 for fresh consideration in terms of the above observations, by providing an opportunity to petitioner, to pass such amendment order if necessary, which has supported by the documents already on record.

SD/- (SURAJ GOVINDARAJ) JUDGE

VM List No.: 1 Sl No.: 35

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