M/S CAVERY EDUCATION SOCIETY vs. THE DEPUTY COMMISSIONER OF INCOME TAX

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WP/17365/2025HC KarnatakaKAHC01034653202514 August 2025Bench: M.NAGAPRASANNA7 pages
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the writ petitions. It quashed the orders dated 03.03.2025 and 10.03.2025 passed under Section 154, as well as the intimation letters dated 24.12.2016 and 10.03.2016. The matters were remitted back to the Deputy Commissioner of Income Tax (Respondent No. 1). The court directed Respondent No. 1 to assess the rectification returns filed by the petitioner for Assessment Years 2015-16 and 2014-15 in accordance with law and pass necessary orders. All subsequent actions taken pursuant to the impugned orders and intimation letters were declared obliterated. The reasoning was based on the petitioner's submission that rectification returns were filed due to the assessee's own mistakes, and the court deemed it appropriate to direct the revenue to assess these rectification returns.

What were the facts?

The petitioner, M/s. Cavery Education Society, a charitable organization registered under Section 12A of the Income Tax Act, 1961, filed its income tax returns for Assessment Years (AY) 2014-15 and 2015-16, claiming exemptions under Section 10(23C)(iiiad). The returns were processed under Section 143(1), and intimations were issued on 10.03.2016 and 24.12.2016, respectively, treating the entire receipts as income and raising a demand. The petitioner, realizing errors in gross receipts and the head of claim, filed rectification returns on 27.01.2017. While these rectification returns were pending, the petitioner received demand recovery notices. The respondents rejected the petitioner's request to process the rectification returns by passing orders under Section 154 of the Act on 03.03.2025 and 10.03.2025, stating there was no error apparent on the face of the record.

What were the issues?

1. Whether the orders passed by the Deputy Commissioner of Income Tax under Section 154 of the Income Tax Act, 1961, rejecting the petitioner's rectification applications, are sustainable in law, considering the petitioner's claim of having filed rectification returns due to mistakes made by the assessee. Assessee's contention: The petitioner argues that the rectification returns were filed due to mistakes committed by the petitioner while filing the original returns. Therefore, the respondents ought to have processed these rectification returns. The petitioner seeks a direction for the respondents to assess the rectification returns. Revenue's contention: The revenue contends that the orders under Section 154 were passed because there was no error apparent on the face of the record committed by the revenue. Consequently, the rejection of the rectification returns submitted by the petitioner is justified, and no fault can be found with the orders passed.

Which sections of the Income-tax Act were involved?

Section 154,Section 143(1),Section 12A

AI-generated summary — verify with the full judgment below

Heard together (2 matters)

WP No. 17230 of 2025
WP No. 17365 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:31511 WP No. 17230 of 2025 C/W WP No. 17365 of 2025

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 14TH DAY OF AUGUST, 2025 BEFORE THE HON'BLE MR. JUSTICE M.NAGAPRASANNA WRIT PETITION NO. 17230 OF 2025 (T-IT) C/W WRIT PETITION NO. 17365 OF 2025 (T-IT)

IN WP No. 17230/2025 BETWEEN:

M/S. CAVERY EDUCATION SOCIETY REPRESENTED BY ITS SECRETARY BOPANNA K. P., AGED ABOUT 56 YEARS POST BOX NO. 5, GONIKOPPAL KODAGU – 571 213, PAN: AABFC4875A. …PETITIONER (BY SRI RAVI SHANKAR S. V., ADVOCATE) AND:

1.

THE DEPUTY COMMISSIONER OF INCOME TAX EXEMPTIONS CIRCLE -1, UNITY BUILDING ANNEXE, BENGALURU – 560 027.

2.

THE INCOME TAX OFFICER EXEMPTIONS WARD -1 UNITY BUILDING ANNEXE, BENGALURU – 560 027.

Digitally signed by NAGAVENI Location: High Court of Karnataka

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HC-KAR NC: 2025:KHC:31511 WP No. 17230 of 2025 C/W WP No. 17365 of 2025

3.

THE INCOME TAX OFFICER EXEMPTIONS WARD MYSORE – 570 008.

4.

THE CENTRALIZED PROCESSING CENTRE POST BAG NO. 2 ELECTRONIC CITY POST OFFICE BENGALURU – 560 500. …RESPONDENTS (BY SRI ARVIND V.CHAVAN, ADVOCATE FOR R1 TO R4)

THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT OF CERTIORARI OR DIRECTION IN THE NATURE OF A WRIT OF CERTIORARI QUASHING THE ORDER PASSED UNDER SECTION 154 DATED 03/03/2025 BEARING DIN NO.ITBA/COM/F/17/2024-25/1073951555(1) PASSED BY THE RESPONDENT NO.1 FOR THE ASSESSMENT YEAR 2015-16 HEREIN MARKED AS ANNEXURE A.

IN WP NO. 17365/2025

BETWEEN: M/S. CAVERY EDUCATION SOCIETY REPRESENTED BY ITS SECRETARY BOPANNA K. P., AGED ABOUT 56 YEARS POST BOX NO-5, GONIKOPPAL KODAGU – 571 213, PAN: AABFC4875A

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HC-KAR NC: 2025:KHC:31511 WP No. 17230 of 2025 C/W WP No. 17365 of 2025

REGISTERED U/S 12A OF THE INCOME TAX ACT, 1961.

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

AND: 1. THE DEPUTY COMMISSIONER OF INCOME TAX EXEMPTIONS CIRCLE 1, UNITY BUILDING ANNEXE, BENGALURU – 560 027.

2.

THE INCOME TAX OFFICER EXEMPTIONS WARD -1 UNITY BUILDING ANNEXE BENGALURU – 560 027.

3.

THE INCOME TAX OFFICER EXEMPTIONS WARD MYSORE – 570 008.

4.

THE CENTRALIZED PROCESSING CENTRE POST BAG NO.2 ELECTRONIC CITY POST OFFICE BENGALURU – 560 500. ...RESPONDENTS (BY SRI ARVIND V.CHAVAN, ADVOCATE FOR R1 TO R4) THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT OF CERTIORARI OR DIRECTION IN THE NATURE OF A WRIT OF CERTIORARI QUASHING THE ORDER PASSED UNDER SECTION 154 DATED 10/03/2025 BEARING DIN NO.

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HC-KAR NC: 2025:KHC:31511 WP No. 17230 of 2025 C/W WP No. 17365 of 2025

ITBA/COM/F/17/2024-25/1074306098(1) PASSED BY THE RESPONDENT NO.1 FOR THE ASSESSMENT YEAR 2014-15 HEREIN MARKED AS ANNEXURE A.

THESE PETITIONS, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE M.NAGAPRASANNA

ORAL ORDER The petitioner - common in both the petitions, is before this Court calling in question orders dated 03.03.2025 and 10.03.2025, passed under Section 154 of the Income Tax Act, 1961 (for short ‘the Act’), declining to process the rectification / revised application filed by the petitioner, on the score that there is no error apparent in the original returns of the income of the petitioner. 2. Heard Sri Ravi Shankar S.V., learned counsel for petitioner and Sri Arvind V. Chavan, learned counsel for respondent Nos.1 to 4. 3. The petitioner is said to be a charitable organization registered under Section 12A of the Act. The petitioner files its

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HC-KAR NC: 2025:KHC:31511 WP No. 17230 of 2025 C/W WP No. 17365 of 2025

return of income for the assessment years 2013-14 upto 2016- 17. On 27.09.2015 and 01.12.2014, the petitioner files its return of income claiming exemptions of the receipts as obtaining under Section 10(23C)(iiiad) of the Act, in both the petitions, for the assessment years 2015-16 and 2014-15 respectively. The returns of income were processed under Section 143(1) of the Act and intimation letters dated 24.12.2016 and 10.03.2016, respectively, were issued to the petitioner treating that the entire receipts, as income and raised a demand by the revenue. 4. The petitioner realizing that the gross receipts indicated in the returns were erroneous and the claims were made under an erroneous head, files rectification returns on 27.01.2017. When the rectification returns were pending, the petitioner receives recovery notices or demand recovery notices as the case would be. The respondents not adhering to the request of the petitioner for processing the rectification returns that were filed for rectification of the mistakes committed by the petitioner - assessee while filing the returns of income, is before this Court, in the subject petitions.

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HC-KAR NC: 2025:KHC:31511 WP No. 17230 of 2025 C/W WP No. 17365 of 2025

5.

Learned counsel for the petitioner would reiterate the contentions or the averments made in the petitions and submits that the matter has been precipitated further by the respondents - revenue against the petitioner, while rejecting the claim of the petitioner under Section 154 of the Act. 6. Learned counsel appearing for the respondents - revenue would submit that the orders are passed under Section 154 of the Act, owing to the fact that there is no error apparent committed by the revenue. Therefore, no fault can be found with the orders so passed, by rejecting the rectification returns submitted by the petitioner. 7. Learned counsel for petitioner submits that the rectification returns were filed owing to the mistake committed by the petitioner and not by the revenue. Therefore, the petitioner is seeking that the rectification of returns be directed to be processed by the respondents – revenue. 8. In the light of the submissions made by both the learned counsel, I deem it appropriate to direct the respondents – revenue to assess the rectification returns so

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HC-KAR NC: 2025:KHC:31511 WP No. 17230 of 2025 C/W WP No. 17365 of 2025

filed by the petitioner for the assessment years 2015-16 and 2014-15 respectively, in accordance with law. 9. For the aforesaid reasons, the following: ORDER a. The writ petitions are allowed. b. The orders dated 03.03.2025 and 10.03.2025 and intimation letters dated 24.12.2016 and 10.03.2016, impugned at Annexures ‘A’ and ‘A1’ in both the petitions, stand quashed. c. The matters are remitted back to respondent No.1 – Deputy Commissioner of Income Tax and respondent No.1 is directed to assess the rectification returns filed by the petitioner for the assessment years 2015-16 and 2014-15 respectively and pass necessary orders, in accordance with law. d. All subsequent actions taken pursuant to the impugned orders and intimation letters, stand obliterated. Ordered accordingly.

Sd/- (M.NAGAPRASANNA) JUDGE

NVJ List No.: 1 Sl No.: 24 CT:SS

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