SHRI. P.O.MATHEW vs. THE INCOME TAX OFFICER

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WP(C)/29525/2013HC KeralaKLHC01072710201304 December 2013Bench: HONOURABLE MR.JUSTICE V.CHITAMBARESH3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the question of whether the lenders are agriculturists or whether the amounts advanced were agricultural income is a matter of factual adjudication. The Court noted that the petitioner has an effective alternative remedy of appeal under Section 246 of the Income Tax Act, 1961, against the order imposing penalty. The Court stated that the mere fact that certain circulars of the Board or decisions cited by the petitioner were not reflected in the impugned order is not a sufficient reason to bypass the statutory remedy of appeal. Therefore, the writ petition was disposed of without prejudice to the petitioner's right to pursue the statutory appeal.

What were the facts?

The petitioner, Shri. P.O. Mathew, filed a writ petition challenging an order dated 31.01.2013 (Ext. P1) passed by the Income Tax Officer, Ward-3, Kottayam, and a subsequent notice dated 12.04.2013 (Ext. P2) issued by the Additional Commissioner of Income Tax, Kottayam Range, proposing penalty under Section 271D of the Income Tax Act, 1961. The petitioner also challenged a letter dated 14.10.2013 (Ext. P3) and the final order of penalty dated 30.10.2013 (Ext. P8) imposing penalty under Section 271D. The petitioner claimed the benefit of the second proviso to Section 269SS of the Act, arguing that loans availed by him formed the agricultural income of the lenders. The petitioner had filed several replies (Exts. P4, P5, P6, P7) before the Additional Commissioner.

What were the issues?

1. Whether the loans availed by the petitioner constitute agricultural income of the lenders, thereby entitling the petitioner to the benefit of the second proviso to Section 269SS of the Income Tax Act, 1961? (Question of mixed law and fact) Assessee's contention: The petitioner argued that the loans he availed were from agricultural income of the lenders, and therefore, he should be granted the benefit of the second proviso to Section 269SS. The petitioner relied on certain circulars of the Board and decisions, which were not reflected in the impugned order. Revenue's contention: The judgment does not record any specific contentions from the revenue. However, the revenue issued the impugned penalty order under Section 271D.

Which sections of the Income-tax Act were involved?

Section 271D,Section 269SS,Section 246

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE V.CHITAMBARESH WEDNESDAY, THE 4TH DAY OF DECEMBER 2013/13TH AGRAHAYANA, 1935 WP(C).No. 29525 of 2013 () -------------------------------------- PETITIONER(S): -------------------------- SHRI. P.O.MATHEW 402, PARASSERIL HOUSE THELLAKOM ETTUMANOOR KOTTAYAM BY ADV. SRI.RAMESH CHERIAN JOHN RESPONDENT(S): ---------------------------- 1. THE INCOME TAX OFFICER

WARD -3

KOTTAYAM - 686 001 2. THE ADDITIONAL COMMISSIONER OF INCOME TAX KOTTAYAM RANGE KOTTAYAM

BY SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 04-12-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: DCS

WP(C).No. 29525 of 2013 () APPENDIX PETITIONER(S)' EXHIBITS ------------------------------------- EXT.P1 - TRUE COPY OF THE ORDER DATED 31.01.2013 ISSUED BY THE INCOME TAX OFFICER, WARD -3, KOTTAYAM EXT.P2 - TRUE COPY OF THE NOTICE UNDER SECTION 271 D DATED 12.04.2013 ISSUED BY THE ADDITIONAL COMMISSIONER OF INCOME TAX, KOTTAYAM RANGE, KOTTAYAM EXT.P3 - TRUE COPY OF THE LETTER DATED 14.10.2013 ISSUED BY THE ADDITIONAL COMMISSIONER OF INCOME TAX, KOTTAYAM RANGE, KOTTAYAM EXT.P4 - TRUE COPY OF THE REPLY DATED 16.05.2013 FILED BEFORE THE ADDITIONAL COMMISSIONER OF INCOME TAX, KOTTAYAM RANGE, KOTTAYAM RANGE, KOTTAYAM WITHOUT ANNEXURES EXT.P5- TRUE COPY OF THE REPLY DATED 16.10.2013 FILED BEFORE THE ADDITIONAL COMMISSIONER OF INCOME TAX, KOTTAYAM RANGE, KOTTAYAM EXT.P6- TRUE COPY OF THE LETTER DATED 25.10.2013 FILED BEFORE THE ADDITIONAL COMMISSIONER OF INCOME TAX, KOTTAYAM RANGE, KOTTAYAM EXT.P7- TRUE COPY OF THE LETTER DATED 26.10.2013 FILED BEFORE THE ADDITIONAL COMMISSIONER OF INCOME TAX, KOTTAYAM RANGE, KOTTAYAM WITHOUT ANNEXURES EXT.P8 - TRUE COPY OF THE NOTICE OF DEMAND AND ORDER DATED 30.10.2013 IMPOSING PENALTY UNDER SECTION 271D OF THE ACT BY THE ADDITIONAL COMMISSIONER OF INCOME TAX, KOTTAYAM RANGE, KOTTAYAM RESPONDENT'S EXHIBITS:- NIL /TRUE COPY/ P.A. TO JUDGE DCS

V.CHITAMBARESH,J. ------------------------------- W.P.(C) No.29525 of 2013 --------------------------------------- Dated this the 4th day of December, 2013

J U D G M E N T Ext. P8 order imposing the penalty under Section 271D of the Income Tax Act, 1961 is impugned in this writ petition. One of the questions that arise for consideration is whether the loans availed by the petitioner formed the agricultural income of the lenders. The petitioner in short claims the benefit of the second proviso to Section 269 SS of the Income Tax Act, 1961. 2. Whether the lenders are agriculturists or whether the amounts advanced were agricultural income depends on factual adjudication. The petitioner has got an effective remedy of appeal under Section 246 of the Income Tax Act, 1961 against Ext. P8 order. The mere fact that certain circulars of the Board or the decisions cited by the petitioner are not reflected in Ext. P8 order is no reason to by-pass the statutory remedy. The writ petition is disposed of without prejudice to the right of the petitioner as above. V.CHITAMBARESH JUDGE DCS

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