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527 orders · Page 6 of 11
The High Court held that questions (i) and (ii) concerning replanting expenses and upkeep of immature plants are covered by a Full Bench order dated 01.08.2022. Consequently, these questions are answered in favour of the assessee and against the Revenue for statistical purposes, and the matter is remitted to the Assessing Officer for fresh assessment in light of the Full Bench order. Regarding the loss from the rubber sheet factory (issue iii), the Court found that the Assessing Officer and the Tribunal did not properly appreciate the circumstances relevant to determining whether the activity was incidental to agriculture or a separate commercial activity. The findings of the Assessing Officer and the Tribunal on this issue were set aside, and the matter was remitted to the Assessing Officer for fresh consideration, with liberty to the assessee to file additional material. Questions (iv) and (v) regarding prior period expenses and perverse findings of fact were considered outside the scope of Section 260A and were answered in favour of the Revenue and against the assessee. The appeal was allowed in part.
The High Court addressed the substantial questions of law. Questions (i), (ii), (iv), (v), (vi), and (viii) were answered in favour of the assessee, based on the Full Bench's order dated 01.08.2022, and remitted to the Assessing Officer for fresh consideration. Question (iii), concerning whether replanting was in an already planted unproductive area or a new area, was also answered in favour of the assessee, acknowledging that the Full Bench's findings on entitlement were subject to conditions like replanting in unproductive, non-abandoned areas. The Court noted that findings on this aspect were inconsistent and not in line with the assessee's material. Question (vii), regarding maintenance expenses on immature areas, was answered in favour of the Revenue and against the assessee. The Court found that the Tribunal's finding, based on the Rehabilitation Plantations Ltd. judgment, that expenditure on planting and development up to maturity must be capitalized, was binding and not subject to interference. The operative direction was to allow the IT Appeal as indicated, meaning certain issues were remitted for fresh assessment in accordance with the High Court's findings.
The High Court disposed of the writ petition by directing the 1st respondent (Income Tax Officer) to consider and pass orders on Ext.P8, the petitioner's application for rectification. This decision is to be made after affording the petitioner an opportunity of hearing, within a period of 2 months from the date of receipt of a certified copy of the judgment. The Court further directed that the penalty proceedings initiated against the petitioner shall not be finalized until orders are passed on Ext.P8. Additionally, any proceedings for recovery of the amounts due under Ext.P5 (the tax demand) are to be kept in abeyance pending the consideration of Ext.P8 by the 1st respondent. The Court did not decide the merits of the rectification application itself.
The High Court, in light of the Full Bench's decision dated 01.08.2022, answered questions (i), (ii), and (iv) in favour of the assessee. The Full Bench held that under Rule 7A(2), an assessee is entitled to an allowance for the cost of replacing dead and useless rubber trees in a non-abandoned area, subject to Section 10(31), and that upkeep and maintenance expenses for immature rubber trees until maturity are revenue expenditures deductible under Section 37. Consequently, questions (v) and (vi) were rendered not warranting consideration. Question (iii), concerning the nature of the replanted area, was also answered in favour of the assessee, with the Court noting inconsistent findings and remitting the matter for re-examination by the Assessing Officer. Questions (vii) and (viii), relating to maintenance expenses on immature areas, were answered in favour of the Revenue, as the Court found no grounds to interfere with the authorities' findings. The appeal was allowed for statistical purposes and remitted to the Assessing Officer for a fresh assessment.
The Tribunal decided that questions (i), (ii), and (iii) were covered by a previous Full Bench order, favoring the assessee. Question (iv) was also answered in favor of the assessee based on similar reasoning and remand.
The Tribunal's disallowance of replantation and upkeep expenses was set aside, remitting the matter for fresh assessment based on a Full Bench order. The disallowance of loss from the rubber sheet factory was also set aside and remitted for fresh consideration.
The High Court, following a Full Bench decision, held that replanting expenses and upkeep of immature rubber plants are eligible for deduction. However, the matter was remitted to the Assessing Officer for fresh assessment.
The High Court, following a Full Bench decision, held that while replanting expenses for dead/useless trees are eligible for allowance under Rule 7A(2) subject to Section 10(31), upkeep and maintenance expenses for immature plants until maturity are revenue expenditures deductible under Section 37.
The High Court noted that the questions of law framed in the present appeal were covered by a Full Bench order dated August 1, 2022, in I.T.A No.201/2013 and batch. The Full Bench had considered the question of whether plantation companies are entitled to an allowance for replanting expenses and further deduction for upkeep and maintenance of immature plants. The Full Bench held that under Rule 7A of the Rules, an assessee is entitled to an allowance for the cost of replacement of dead and useless rubber trees in a plantation, subject to Section 10(31) of the Act. Furthermore, upkeep and maintenance expenses incurred until the maturity of rubber trees are revenue expenditures eligible for deduction under Section 37 of the Act. Consequently, the High Court answered the questions in favour of the Assessee and against the Revenue for statistical purposes. The orders of the Assessing Officer, CIT(A), and ITAT were set aside, and the matter was remitted to the Assessing Officer for fresh assessment in light of the Full Bench's ratio.
The High Court of Kerala noted that the substantial questions of law framed in the present appeals were covered by a Full Bench order dated 01.08.2022 in I.T.A No.201/2013 and batch. The Full Bench had considered whether assessees under Rule 7A(2) were entitled to an allowance for replanting expenses and further deduction for upkeep and maintenance of immature plants. The Full Bench held that under Rule 7A(2), an assessee is entitled to an allowance for the cost of replacement of dead and useless rubber trees in a rubber plantation (not abandoned), subject to Section 10(31). Furthermore, upkeep and maintenance expenses for immature plants until maturity are revenue expenditures eligible for deduction under Section 37. Consequently, the High Court answered the questions in favour of the Assessee and against the Revenue for statistical purposes. The orders of the Assessing Officer, CIT(A), and ITAT were set aside. The matter was remitted to the Assessing Officer for fresh assessment in light of the Full Bench's ratio.
The High Court held that the questions of law framed in the appeal were covered by a Full Bench order dated 01.08.2022 in I.T.A No.201/2013 and batch. The Full Bench had decided that under Rule 7A(2) of the Income Tax Rules, 1962, an assessee is entitled to an allowance for the cost of replacing dead and useless rubber trees in an area not abandoned, subject to Section 10(31) of the Income Tax Act, 1961. Furthermore, the Full Bench held that upkeep and maintenance expenses incurred for immature rubber trees until maturity are revenue expenditures eligible for deduction under Section 37 of the Act. Consequently, the High Court answered the questions in favor of the assessee and against the revenue for statistical purposes. The orders of the Assessing Officer, CIT(A), and ITAT were set aside, and the matter was remitted to the Assessing Officer for fresh assessment in light of the Full Bench's ratio.
The High Court, following its Full Bench order dated 01.08.2022 in I.T.A No.201/2013 and batch, held that under Rule 7A of the Rules, 1962, the assessee is entitled to an allowance for the cost of replacement of dead and useless rubber trees in an area not abandoned, subject to Section 10(31) of the Act, 1961. Furthermore, the upkeep and maintenance expenses incurred by the assessee until the maturity of rubber trees are considered revenue expenditures eligible for deduction under Section 37 of the Act, 1961. Consequently, the questions of law were answered in favour of the assessee and against the revenue. The orders of the Assessing Officer, Commissioner (Appeals), and the ITAT were set aside. The case was remitted to the Assessing Officer for fresh assessment in light of the Full Bench's ratio.
The High Court noted that the Tribunal focused on the timing of payments and loan sanction, overlooking the crucial aspect of when the residential house was completed. The Court found a serious flaw in the application and appreciation of Section 54F to the assessee's circumstances. The Court agreed with the assessee's argument that the completion of the residential house within three years of the sale of the original asset is the decisive factor, and that construction could commence prior to the sale. The Court observed that the CIT(Appeals) had not noted all sequential events but arrived at a finding for relief. However, the Tribunal's reversal was based solely on the timing of payments. Consequently, the High Court set aside the orders of the CIT(Appeals) and the Tribunal and remitted the matter back to the CIT(Appeals) for a fresh decision, allowing the assessee to file additional material. For statistical purposes, the questions were answered in favour of the assessee and against the Revenue.
The High Court directed the Income Tax Appellate Tribunal (ITAT), Kochi Bench, to consider and pass orders on the stay petitions filed by the petitioner (Exts.P8, P9 & P10) within a period of three months from the date of receipt of a certified copy of the judgment. The court further ordered that the demand raised pursuant to the assessment orders (Ext.P11) shall be kept in abeyance until such orders are passed by the Tribunal. The High Court did not decide on the merits of the appeals or the stay petitions themselves, but rather on the procedural aspect of ensuring timely consideration of the stay applications. The principle established is that courts may intervene to direct expeditious disposal of statutory remedies like stay petitions when there is a genuine apprehension of coercive action.
The High Court held that the proceedings initiated under Section 148A of the Income Tax Act and the consequent notice under Section 148 were unsustainable. The Court reasoned that there could be no escapement of income warranting the exercise of power under Section 148 for Assessment Year 2015-2016, particularly because the provisions of Section 56(2)(x) of the Income Tax Act, as they currently stand, were not applicable for that assessment year. The Court found that the difference between the actual consideration paid and the stamp duty valuation could not be taxed as income in the hands of the petitioner for the said assessment year. Consequently, the writ petition was allowed, and the impugned proceedings and notice were quashed. No issue was expressly left undecided.
The High Court held that the Appellate Authority should have exercised its discretion to condone the delay of 12 days in filing the statutory appeal, considering the short duration of the delay. The Court also noted that the notice issued by the Appellate Authority under Section 250 of the Income Tax Act did not request the petitioner to upload any documents in support of the reason stated in the application for condonation of delay. Consequently, the order (Ext.P5) of the Appellate Authority was set aside. The delay of 12 days in filing the appeal (Ext.P2) was condoned, and the Appellate Authority (2nd respondent) was directed to hear and dispose of the appeal on merits after affording an opportunity of hearing to the petitioner in accordance with law. The issue of whether the petitioner had an effective alternative remedy was implicitly set aside by the Court's intervention on merits.
The High Court observed that the assessee's apprehension regarding the jurisdiction issue could not be ignored. They directed that the remand by the Tribunal should proceed, with the assessing officer to decide the jurisdiction objection uninfluenced by any prior observations.
The High Court, while acknowledging the assessee's apprehension regarding the remand and the jurisdictional issue, observed that the ITAT's order of remand dated 10.02.2022 was specifically on the issues under appeal. The Court directed that the assessing officer, upon remand, should decide the objection regarding jurisdiction independently, uninfluenced by any observations made by the Commissioner. The Court found that the assessee's apprehension could not be ignored in the given circumstances. The appeals were dismissed with these observations, implying that the remand order would stand, but with a clear direction for the assessing officer to address the jurisdictional challenge.
The High Court acknowledged the assessee's apprehension regarding the potential difficulties arising from the Commissioner's findings on jurisdiction, especially since the ITAT had not explicitly ruled on this specific ground. The Court observed that the ITAT's remand order was based on issues in appeal. The High Court directed that upon remand, the assessing officer should decide the objection regarding jurisdiction independently, uninfluenced by any observations made by the Commissioner on that aspect. The assessing officer is to decide the objection in accordance with the law. The appeals were dismissed with these observations. The specific amount in dispute and the assessment years were not recorded in the judgment.
The High Court acknowledged the assessee's apprehension that the remand by the ITAT might lead to difficulties, particularly concerning the findings on the assessing officer's jurisdiction. The Court, while not directly deciding the jurisdictional issue itself, observed that the remand by the ITAT was limited to the issues under appeal. The Court directed that the Assessing Officer should decide the objection regarding jurisdiction independently, uninfluenced by any prior observations made by the Commissioner. The Court found no ground warranting interference with the remand order under Section 250A of the Act, given the specific circumstances and the clarification provided regarding the Assessing Officer's future decision-making process. The appeals were dismissed with these observations.
The High Court acknowledged the assessee's apprehension that the findings on the competence or jurisdiction of the assessing officer, as recorded by the Commissioner, might influence the subsequent assessment after remand. The Court found merit in this apprehension, stating that it could not be ignored. Consequently, the Court directed that the remand by the Tribunal, dated 10.02.2022, should proceed only on the issues that were the subject of the appeal before the Tribunal. Crucially, the Court stipulated that the assessing officer must decide the objection concerning their own jurisdiction, uninfluenced by any prior observations of the Commissioner on that specific point, and in accordance with the law. The appeals were dismissed with these observations.
The High Court of Kerala held that the issue is covered by the Supreme Court's decision in Union of India (UOI) and Ors. v. Ashish Agarwal. Consequently, the notice issued to the petitioner under Section 148 of the Income Tax Act, 1961, shall be treated as a show-cause notice under Section 148A of the Act. The Assessing Officer is directed to complete the proceedings in accordance with the directions issued by the Supreme Court in the aforementioned judgment. This includes providing the petitioner with the information and material relied upon by the Revenue, allowing the petitioner two weeks to reply, and thereafter passing orders under Section 148A(d). The Supreme Court's judgment also clarified that the requirement of conducting an enquiry under Section 148A(a) is dispensed with as a one-time measure for notices issued under the unamended Section 148 from 01.04.2021 till the date of the judgment. All defenses available to the assessee, including those under Section 149, and rights of the parties under the Finance Act, 2021, and in law, shall continue to be available.
The High Court disposed of the writ petition by directing the respondents to provide a link to enable the petitioner to upload a stay petition in their pending appeal (Ext.P2) within 10 days of receiving a certified copy of the judgment. If the petitioner files the stay petition within one week of receiving the link, recovery proceedings to enforce the demand arising from Ext.P1 shall be kept in abeyance until a decision is taken on the stay petition. The court did not decide on the merits of the appeal or the stay petition itself, but facilitated the filing of the stay petition.
The High Court observed that the assessee's apprehension regarding the jurisdiction issue could not be ignored. They directed that the remand by the Tribunal should proceed, with the assessing officer to decide the jurisdiction objection uninfluenced by any prior observations.
The High Court noted the submissions of both parties. The Income Tax Department confirmed that the employer had remitted the TDS amount of Rs.79,207/- for FY 2016-17 on July 8, 2022, and had filed a revised TDS statement. This amount was credited to the petitioner's PAN and reflected in his Form 26AS for AY 2017-18. The Department further submitted that upon this credit, the entire demand, including interest, would be extinguished, and the petitioner would be entitled to a refund. The liability for interest on delayed payment would be pursued against the employer. The Court recorded these submissions and closed the writ petition, making it clear that the petitioner could approach the competent authority for any necessary applications regarding the refund or any other consequential relief.
The High Court declined to interfere with the assessment order (Ext.P10) under Article 226, finding no reason to hold that it was issued in violation of principles of natural justice, despite acknowledging that several pages were illegible. The Court directed the Assessing Officer to provide a legible copy of Ext.P10 to the petitioner upon application. The period for filing an appeal against Ext.P10 was to be computed from the date of receipt of the legible copy. Similarly, the penalty order (Ext.P14) under Section 270A was not quashed. The Court held that the petitioner has an adequate remedy of appeal against the penalty order and directed that the limitation for filing this appeal would also be counted from the date of receipt of a legible copy of the penalty order. The Court noted that prima facie, no grounds for challenging the constitutional validity of Section 270A had been established, but left the question of its constitutional validity open for adjudication in appropriate proceedings later. Recovery steps for both assessment and penalty were to be stayed until a decision on stay petitions by the appellate authority.
The High Court of Kerala, upon considering the submissions of both the petitioner and the respondents, was of the opinion that the writ petition could be disposed of with a direction. The Court directed the 3rd respondent (Commissioner of Income Tax (Appeals), NFAC) to consider and pass orders on the stay petition (Ext.P4) within a period of two months from the date of receipt of a copy of the judgment. Furthermore, all steps to recover amounts under the demand notice (Ext.P3) were ordered to remain stayed until a decision is taken on the stay petition, after affording the petitioner an opportunity of hearing. The Court did not decide on the merits of the assessment or the appeal.
The High Court did not decide the merits of the case. Instead, it directed the Appellate Authority (3rd respondent) to consider and pass appropriate orders on the pending appeals (Exts. P3, P6, P9) expeditiously. The Court also granted interim relief by directing that no coercive steps would be initiated against the petitioner pursuant to the assessment orders (Exts. P1, P4, P7) and demand notices (Exts. P2, P5, P8) until the disposal of the appeals. The primary issue regarding the validity of the Section 80P deduction in light of the Supreme Court's judgment was therefore left to be decided by the appellate authority.
The High Court of Kerala, considering the submissions of both the petitioner and the respondents, decided to dispose of the writ petition with a specific direction. The 3rd respondent, the Commissioner of Income Tax (Appeals), NFAC, Delhi, is directed to consider and pass orders on the stay petition (Ext.P4) within a period of two months from the date of receipt of a copy of the judgment. Furthermore, all steps to recover amounts under the demand notice (Ext.P3) are to remain stayed until a decision is taken on the stay petition, after affording the petitioner an opportunity of hearing. The court did not decide on the merits of the assessment order or the appeal.
The High Court of Kerala disposed of the writ petition by directing the 2nd respondent (Commissioner of Income Tax (Appeals)) to consider and pass orders on the stay petition (Ext.P3). The Court further directed that any demand arising from the assessment order (Ext.P1) shall be kept in abeyance until a decision is taken on the stay petition. The Court's decision is based on the fact that similar matters have been disposed of by directing coercive steps to be held back until the stay petition is decided. The substantive issue of the Section 80P exemption was not decided on merits by the High Court; it was deferred pending the decision on the stay petition by the appellate authority. No issue was expressly left undecided by the High Court, but the core issue of the Section 80P claim was not adjudicated.
The High Court, having considered the submissions and the documents (Exts.P2, P3, and P4), was of the opinion that the petitioner should be granted an opportunity to respond to the draft assessment order before the proceedings were finalized. Consequently, the Court set aside the impugned assessment order (Ext.P5). The respondent was directed to provide a link to enable the petitioner to upload his reply. If the petitioner submitted a reply within five days of the link being provided, the assessment was to be completed afresh, considering the reply and affording an opportunity of hearing if requested. If no reply was submitted within the stipulated period, Ext.P5 would be treated as restored, and the petitioner would not be entitled to the benefit of the judgment. The Court did not decide on the merits of the assessment itself but focused on the procedural fairness.
The High Court held that the assessment order (Ext.P8) was not issued in violation of the principles of natural justice. The court noted that several notices had been issued to the petitioner and that his previous replies had been considered. While the request for a ten-day extension made on 28.03.2022 was not acceded to, the court found a genuine reason for this refusal, namely, that the assessment was getting time-barred on 31.03.2022. The court also observed that the petitioner made the request for adjournment only on 28.03.2022, despite the notice being issued on 23.03.2022. Consequently, the court refused to interfere under Article 226 of the Constitution. The petitioner was granted liberty to challenge the assessment order before the First Appellate Authority. The period during which the writ petition was pending was excluded for calculating the limitation period for filing the appeal, provided the appeal and stay petition were filed within one week. Recovery proceedings were deferred until the Appellate Authority decided the stay petition.
The High Court of Kerala did not decide the merits of the case. Instead, it directed the Commissioner of Income Tax (Appeals) (1st respondent) to consider and pass appropriate orders on the petitioner's pending appeal (Ext.P2) expeditiously, within a period of 2 months from the date of receipt of a copy of the judgment. The Court also ordered that no coercive steps shall be initiated against the petitioner pursuant to the assessment order (Ext.P1) and another order (Ext.P3) until the disposal of the appeal. The primary issue regarding the applicability of the Mavilayi Service Co-operative Bank Ltd. judgment and the eligibility for deduction under Section 80P was left to be decided by the appellate authority.
The High Court of Kerala disposed of the writ petition by directing that further recovery proceedings against the petitioner to enforce any demand arising out of Ext.P1 (the penalty order) shall be kept in abeyance until orders are passed on Ext.P4 (the stay application) filed in Ext.P2 (the appeal). The Court also mandated that the petitioner be given an opportunity of hearing before the stay petition (Ext.P4) is decided. The High Court did not decide the merits of the penalty order or the appeal itself, but rather provided interim relief concerning recovery.
The High Court held that the question of the petitioner's liability for any penalty would depend on the orders to be passed by the First Appellate Authority following the remand by the Tribunal. The Court also noted that the Supreme Court's decision in Mavilayi Service Co-operative Bank Ltd. v. Commissioner of Income Tax, which deals with exemption under Section 80P, is a matter that the First Appellate Authority will need to consider. Taking these factors into account, the Court decided to set aside the impugned penalty order (Ext.P1). However, it clarified that this setting aside would not preclude the initiation of fresh penalty proceedings if deemed necessary at a later stage. The operative direction is the setting aside of the penalty order with liberty to initiate fresh proceedings.
The High Court of Kerala did not decide the merits of the case. Instead, it noted that the petitioner had already preferred an appeal (Ext.P3) before the Commissioner of Income Tax (Appeals) (2nd respondent), which was pending consideration. Therefore, the Court deemed it appropriate to dispose of the writ petition by directing the Appellate Authority to consider the pending appeal in a time-bound manner. The Court issued a direction to the competent respondent to consider and pass appropriate orders on Ext.P3 expeditiously. Furthermore, the Court ordered that no coercive steps shall be initiated against the petitioner pursuant to the assessment order (Ext.P1) and the demand notice (Ext.P6) until the disposal of the appeal. No specific finding was made on the correctness of the assessment or the applicability of the Supreme Court judgment.
The High Court held that the writ petitions would stand disposed of in terms of the Supreme Court's judgment in Union of India v. Ashish Agarwal. The Court directed that the notices issued under Section 148 of the Income Tax Act to the petitioners shall be treated as show-cause notices under Section 148A of the Income Tax Act. The proceedings are to be completed as directed by the Supreme Court. Specifically, the impugned Section 148 notices are deemed to have been issued under the substituted Section 148 and construed as show-cause notices under Section 148A(b). The Assessing Officer must provide information relied upon within thirty days, allowing assessees two weeks to reply. The requirement of conducting an enquiry under Section 148A(a) is dispensed with as a one-time measure for notices issued under the unamended Section 148 from April 1, 2021, to date. The Assessing Officer shall then pass orders under Section 148A(d) and subsequently issue notice under the substituted Section 148. All defenses and rights available to assessees and the Revenue under the Finance Act, 2021, and law remain available.
The High Court held that the writ petitions would stand disposed of in light of the Supreme Court's judgment in Union of India (UOI) and Ors. v. Ashish Agarwal. The Supreme Court had directed that notices issued under the unamended Section 148 of the Income Tax Act, which were the subject matter of writ petitions before various High Courts, shall be deemed to have been issued under the substituted Section 148 of the Finance Act, 2021, and construed as show-cause notices in terms of Section 148A(b). The Assessing Officer was directed to provide information and material relied upon by the Revenue within thirty days, allowing the Assessees two weeks to reply. The requirement of conducting an enquiry under Section 148A(a) was dispensed with as a one-time measure for notices issued under the unamended Act from April 1, 2021, till the date of the judgment. The Assessing Officers were to pass orders under Section 148A(d) and thereafter issue notices under the substituted Section 148, with all defenses and rights available to the Assessees and Revenue preserved. The operative direction was to treat the Section 148 notices as show-cause notices under Section 148A and complete proceedings as directed by the Supreme Court.
The High Court held that the writ petitions would stand disposed of in terms of the Supreme Court's judgment in Union of India v. Ashish Agarwal. The Court directed that the notices issued under Section 148 of the Income Tax Act to the petitioners shall be treated as show-cause notices under Section 148A of the Income Tax Act. The proceedings are to be completed as directed by the Supreme Court. Specifically, the impugned Section 148 notices are deemed to have been issued under the substituted Section 148 and construed as show-cause notices under Section 148A(b). The Assessing Officer must provide information relied upon within thirty days, allowing assessees two weeks to reply. The requirement of conducting an enquiry under Section 148A(a) is dispensed with as a one-time measure for notices issued under the unamended Section 148 from April 1, 2021, to date. The Assessing Officer shall then pass orders under Section 148A(d) and subsequently issue notice under the substituted Section 148. All defenses and rights available to assessees and the Revenue under the Finance Act, 2021, and law remain available.
The High Court held that the Tribunal was justified in confirming the denial of exemption under Section 11. The Court found that the appellant could not be considered an educational trust within the meaning of Section 2(15) of the Income Tax Act. The Court reasoned that while education is included in the definition of 'charitable purpose', the purpose and object of each trust must be examined on a case-by-case basis. Mere coaching given to students, as found by the authorities, does not fall within the meaning of 'education' as provided under Section 2(15). The Court noted that the Supreme Court in Sole Trustee, Lok Shikshana Trust v. CIT, Mysore, defined education as systemic instruction, schooling, or training for the work of life, and the development of knowledge, skill, mind, and character through normal schooling. The Court also observed that the Section 12AA registration certificate explicitly stated that it was not a finding regarding the charitable nature of the fund. The judgment of the Division Bench in W.A. No. 750 of 2006 was deemed irrelevant as it pertained to service tax and the respondent was not a party. Therefore, the finding that the appellant was engaged in profit-making activities through coaching centers was upheld. Consequently, question of law No. (ii) was answered against the appellant, and all other questions of law were also answered against the appellant as they flowed from the answer to question (ii). The appeals were dismissed.
The High Court dismissed the appeals. On issue (ii), the Court held that the Tribunal was justified in holding that the appellant cannot be considered an educational trust within the meaning of Section 2(15) of the Act. The Court reasoned that while education is included in the definition of 'charitable purpose', each Trust's purpose and object must be examined on a case-by-case basis. Mere coaching given to students, as found by the authorities, does not fall within the meaning of 'education' as provided under Section 2(15) when it is coupled with profit-making. The Court cited the Apex Court's dictum in Sole Trustee (supra) that education connotes systematic instruction, schooling, or training for the work of life, and the whole course of scholastic instruction. The Court found that the Assessing Officer and appellate authorities correctly determined that the appellant's activities of giving coaching to students were not charitable. The Court also noted that the Section 12AA registration certificate explicitly stated it was not a finding regarding the charitable nature of the fund. The judgment in W.A. No. 750 of 2006 was in respect of service tax and its findings regarding the charitable nature of the Trust could not be imported into the Income Tax Act. As issue (ii) was answered against the appellant, all other questions of law were also answered against the appellant as they flowed from the answer to issue (ii). The Court did not expressly leave any issue undecided.
The High Court noted the submission made by the learned counsel for the 4th respondent Bank. It was stated that the sum of Rs. 35,610, representing the income tax refund due to the petitioner, had been credited to the petitioner's account with the State Bank of India, Shanmugham Road, Ernakulam, on 25.03.2022. Based on this submission, the Court found that the grievance raised by the petitioner had been redressed. Therefore, no further directions were deemed necessary. The writ petition was closed. The ratio decidendi is that once the refund is demonstrably credited to the assessee's account, the High Court will close the writ petition as infructuous.
The High Court disposed of the writ petition based on the submissions made by the learned Standing Counsel for the Department. The Court directed the competent respondent to provide a link to enable the petitioner to upload stay petitions in connection with the pending appeals (Exts.P3 and P7) within 10 days of receiving a certified copy of the judgment. Furthermore, if the petitioner files the stay petitions within one week of receiving the link, recovery proceedings to enforce any demand arising from the assessment orders and demand notices shall be kept in abeyance until a decision is taken on the stay petitions. The Court did not decide on the merits of the appeals themselves, focusing solely on the procedural aspect of enabling the petitioner to file stay applications and granting interim relief.
The High Court disposed of the writ petition by directing the additional 4th respondent, the National Faceless Appeal Centre (NFAC), to dispose of the stay petition (Ext.P25) filed along with the appeal (Ext.P19). The Court ordered that until orders were passed on the stay petition, any demand arising from the assessment order (Ext.P16) would be kept in abeyance. The reasoning was based on the submissions of both parties, acknowledging the pendency of the statutory appeal and stay application. The Court effectively deferred the adjudication of the merits of the assessment order to the appellate process, prioritizing the expeditious disposal of the stay application and providing interim relief by halting recovery.
The High Court of Kerala did not decide on the merits of the assessment order or the appeal. Instead, the Court deemed it fit to dispose of the writ petition by directing the Appellate Authority (the 1st respondent) to consider and pass appropriate orders on the petitioner's pending appeal (Ext.P2) expeditiously. The Court also granted interim relief by ordering that no coercive steps shall be initiated against the petitioner pursuant to the assessment order (Ext.P1) and the demand notice (Ext.P3) until the disposal of the appeal. The core of the decision is procedural: to ensure the pending appeal is heard and decided in a time-bound manner, thereby providing an avenue for the petitioner to address their grievances regarding the assessment.
The High Court of Kerala did not decide the merits of the case. Instead, it directed the Appellate Authority (Respondent 1) to consider and pass appropriate orders on the pending appeal (Ext.P3) expeditiously. The Court acknowledged that the appeal was already before the Appellate Authority. The reasoning for this disposal was that the appeal was pending, and therefore, the writ petition could be disposed of by directing the Appellate Authority to act promptly. No coercive steps were to be initiated against the petitioner pursuant to the assessment order and demand notices until the disposal of the appeal. The Court did not express any opinion on the validity of the assessment order or the applicability of the Supreme Court judgment.
The High Court disposed of the writ petition by directing the 3rd respondent (Commissioner of Income Tax (Appeals)) to consider and pass orders on the stay application (Ext.P4) filed by the petitioner. This consideration must be after affording an opportunity of hearing to the petitioner. Crucially, the Court ordered that until such time as orders are passed on Ext.P4, proceedings for the recovery of any amount due under the assessment order (Ext.P1) shall be kept in abeyance. The Court did not decide on the merits of the appeal or the stay application itself, but rather on the procedural aspect of ensuring the stay application is heard and decided promptly, with a temporary halt to recovery.
The High Court of Kerala disposed of the writ petition. The Court took note of the department's submission regarding Rule 37BA(2) of the Income Tax Rules. The Court directed that upon a proper application being made by the petitioner, the Income Tax department would provide a link for uploading the necessary documents to facilitate the transfer of TDS credit from the managing partner to the firm's account. This transfer is subject to the petitioner complying with all procedural formalities as per Rule 37BA(2). Additionally, any proceedings initiated against the petitioner for the recovery of amounts due under an assessment order (Ext.P1) were to be kept in abeyance for a period of two months. This period is intended to allow the petitioner to avail the option under Rule 37BA(2). The Court did not explicitly leave any issue undecided.
The High Court held that the petitioner is entitled to succeed. The Court reasoned that the sale by the original mortgagor (5th respondent) to the 6th respondent, occurring after the mortgage was created with the 4th respondent Bank, only transferred the equity of redemption to the 6th respondent. This equity of redemption was subsequently lost when the property was brought to sale by the 4th respondent under the SARFAESI Act and purchased by the petitioner. Therefore, the 6th respondent had no subsisting right over the property. The Court also noted that the 6th respondent had not raised any claim or initiated litigation against the 4th respondent despite the latter taking possession of the secured asset. The Income Tax Department had also stated in court that they had no objection to the attachment being effaced. Accordingly, the Court directed the 2nd respondent (Sub Registrar) to register the sale certificate cum sale deed in favour of the petitioner and the 3rd respondent (Village Officer) to effect mutation upon application.
The High Court held that the petitioner should be granted an opportunity to respond to the draft assessment order before finalization. Consequently, the assessment order (Ext.P5) was set aside. The respondent was directed to provide a link for the petitioner to upload his reply. If the petitioner submitted a reply within five days of the link being provided, the assessment was to be completed afresh, considering the reply and affording an opportunity of hearing if requested. If no reply was submitted within the stipulated time, the benefit of the judgment would not apply, and Ext.P5 would stand restored. The court's reasoning was based on the acknowledgment of the petitioner's request for adjournment as evident from Exts.P2, P3, and P4, indicating that the petitioner's right to respond was not adequately addressed.