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The High Court held that the issue of levying late filing fees under Section 234E of the Income Tax Act, 1961, is no longer res integra. The Court referred to its own previous judgment in W.P.(C.) No.37715/2018, which was upheld by a Division Bench in W.A. No.722/2019. Furthermore, a learned Single Judge had followed these precedents in W.P.(C.) No.1078/2022. Finding no reason to deviate from the established legal position, the Court allowed the writ petition. The intimations (Exts. P1, P2, and P3) were quashed to the extent they demanded the late fee under Section 234E. The ratio decidendi is that the levy of late fee under Section 234E is not permissible based on the High Court's prior pronouncements.
The High Court of Kerala admitted the writ petition. The Court noted the submission by the Standing Counsel for the respondents regarding Circular No. 16/22 dated 19.07.2022, which empowers Commissioners of Income Tax to admit applications for condonation of delay in filing Form No. 10B. Since the petitioner had already preferred an application for condonation of delay (Ext.P4), the Court directed the 4th respondent (Commissioner of Income Tax (Exemption)) to consider this application and pass appropriate orders within one month. Furthermore, consequential changes in the assessment were to be made within six months thereafter. The Court also ordered that any recovery steps initiated against the petitioner would remain suspended until a decision on the condonation application is taken.
The High Court allowed the writ petition and quashed the order of the Settlement Commission. Regarding the non-disclosure of interest on non-performing assets, the Court held that the Settlement Commission's finding was unsustainable. It relied on Section 45Q of the RBI Act and the Supreme Court's decision in CIT v. Vasisth Chay Vyapar Ltd., which established that RBI regulations on income recognition take precedence over the Income Tax Act. Therefore, the petitioner was not required to disclose interest on non-performing assets as income. Concerning the purity of gold, the Court found that the Settlement Commission erred in concluding a failure to make a full and true disclosure based solely on a single instance of higher purity recorded for one customer. The Court noted that there appeared to be material to suggest the assessee's yardstick was correct and that the Department's documents could also be scrutinized. The Court directed that the application for settlement, having been restored due to the quashing of the Settlement Commission's order, would be considered afresh by the Interim Board for Settlement, affording opportunities to both the petitioner and the respondent department. The Court clarified that no observation would prevent the Interim Board from considering the application in accordance with law.
The High Court of Kerala, while acknowledging the petitioner's challenge to the assessment order on the grounds of insufficient time to present their case, noted the submission from the Standing Counsel for the revenue. The revenue stated that no adjournment request was made by the petitioner, which led the officer to proceed with the assessment. The Court observed that the petitioner has an alternate remedy available through an appeal. Without prejudice to the petitioner's right to file an appeal, the writ petition was closed. The Court did not decide on the merits of the petitioner's claim regarding insufficient time.
The High Court allowed the writ petition and set aside the assessment order dated 13.12.2022 passed by the 1st respondent. The matter was remitted back to the 1st respondent for fresh consideration. The Court directed the 1st respondent to pass appropriate orders in accordance with law, after hearing the petitioner and taking into account the principles laid down by the Hon'ble Supreme Court in the Mavilayi Service Co-operative Bank case. The reasoning was that the assessment order was based on a High Court decision that had been reversed by the Supreme Court, and this crucial development was not considered by the assessing officer. The principle is that assessment orders must be based on prevailing law, including Supreme Court pronouncements.
The High Court disposed of the writ petition by directing the 1st respondent (Deputy Commissioner of Income Tax) to consider and pass appropriate orders on the petitioner's rectification application (Ext.P5). The Court emphasized that this decision must take into account the earlier order (Ext.P2) which determined the income as nil. The 1st respondent is to make a decision after hearing the parties within three months from the production of the judgment. Crucially, all recovery proceedings pursuant to Ext.P4 were ordered to be kept in abeyance until a decision is taken on the rectification application. The Court did not decide on the merits of the tax assessment itself but focused on the procedural remedy available to the petitioner.
The High Court disposed of the writ petition with a limited prayer. It directed the respondents to consider and pass orders on the petitioner's rectification application (Ext.P3) at the earliest, and at any rate, within four months from the date of receipt of a copy of the judgment. Furthermore, the Court ordered that coercive steps for enforcing the demand in Ext.P2 shall be kept in abeyance until the disposal of the rectification application. The Court did not decide on the merits of the rectification application itself, but rather on the procedural aspect of ensuring its timely consideration. No specific issue was left undecided, as the Court focused on directing the appropriate authority to act.
The High Court of Kerala, in its writ jurisdiction, has disposed of the writ petition. The Court noted that the petitioner has already availed the statutory remedy by filing an appeal (Ext.P2) against the assessment order (Ext.P1). Therefore, the Court directed the Appellate Authority (the 2nd respondent) to consider the pending appeal and pass orders thereon at the earliest. Additionally, the Court ordered that no coercive steps shall be taken against the petitioner pursuant to the assessment order (Ext.P1) until the disposal of the appeal (Ext.P2). The Court did not decide on the merits of the claim for deduction under Section 80P or the validity of the assessment order itself, as the primary focus was on directing the expeditious disposal of the statutory appeal.
The High Court of Kerala, in its limited consideration of the writ petition, disposed of the matter by directing the 4th respondent (Income Tax Officer) to consider and pass orders on Ext.P6 representation. This consideration is to be done after hearing the petitioner and other necessary persons, and the order is to be passed at the earliest, within a period of three months from the date of receipt of a copy of the judgment. The prayer for the 1st respondent to order an enquiry and take action against erring officials was not explicitly addressed in the operative part of the judgment, implying it was either subsumed within the direction to consider the representation or not pressed. The ratio decidendi is that when a representation is made to tax authorities, and a writ petition is filed seeking a direction for its consideration within a time limit, the court may grant such a direction, ensuring due process by requiring a hearing for the petitioner and other necessary parties.
The High Court admitted the writ petition. It directed the 4th respondent, the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, to consider and pass orders on the appeal at the earliest, and at any rate, within a period of six months from the date of receipt of a copy of the judgment. The Court also ordered that coercive steps against the petitioner shall be kept in abeyance until a decision is taken on the appeal. The judgment does not record any specific arguments from the revenue beyond taking notice.
The High Court noted the submission by the petitioner's counsel that a subsequent writ petition had been filed and that the petitioner did not intend to prosecute the current writ petition. Based on this submission, the Court dismissed the writ petition. The dismissal was explicitly stated to be without prejudice to the contentions of the petitioner in the subsequent writ petition, WP(C) No. 36936/2022. No decision on the merits of the case was made.
The High Court held that the petitioner has an alternate remedy of preferring an appeal against the appellate order. The Court did not delve into the merits of whether the appellate authority was justified in not entertaining the request for time extension made by letter. The primary reasoning for closing the writ petition was the existence of an effective alternative remedy. The operative direction was to close the writ petition without prejudice to the petitioner's right to file an appeal against the appellate order. No issue was expressly left undecided, as the Court's decision was based on the availability of an alternate remedy.
The High Court admitted the writ petition and noted that the standing counsel for the respondents took notice. However, the Court observed that the requests for adjournment were made after the date fixed for response. Consequently, the Court held that the issue of not affording an opportunity of hearing could not be considered in the writ petition. The Court directed that this grievance would have to be taken up before the statutory authority in appeal. The writ petition was accordingly closed, preserving the petitioner's right to prefer an appeal against the appellate order (Ext.P5). No specific finding was made on the assessment order itself, as the matter was relegated to the appellate forum.
The High Court of Kerala allowed the writ petition. It held that the orders Ext.P6 & P6(a) were issued against a dead person, rendering them invalid. Consequently, these orders were set aside. The court clarified that this decision is without prejudice to the right of the Income Tax Department to proceed against the legal heirs, should they be entitled and advised to do so. The ratio decidendi is that tax proceedings cannot be validly initiated or continued against a deceased individual without proper substitution of legal heirs.
The High Court held that the writ petition is allowed and the assessment order (Ext.P3) is quashed. The Court found that the assessment order was passed ex-parte without considering the petitioner's request for adjournment made on 16.03.2022, which sought time until 22.03.2022. It was apparent that the Assessing Officer was not aware of this request when passing the order on 22.03.2022, especially since the petitioner's objections (Exts.P5 to P8) were submitted on the same day the order was passed. The Court reasoned that in the interest of justice, the respondent should pass fresh orders after considering the response filed by the petitioner. The operative direction was for the respondent to pass fresh orders of assessment after considering Exts.P5 to P8, in accordance with law.
The High Court held that the amendment to Section 234E of the Income Tax Act, 1961, takes effect only from June 1, 2015. This is because Section 200A of the Act, which deals with the processing of TDS statements and the levy of fees, was made effective only from that date. The court found that the proceedings challenged in the writ petition were issued based on the amendment and related to a period prior to the amendment coming into force. Consequently, the demands for late filing levy under Section 234E were quashed. All consequential actions were also set aside. The ratio of the decision is that the levy under Section 234E cannot be enforced for periods before the effective date of the amendment to Section 200A.
The High Court disposed of the writ petition with specific directions. It ordered the second respondent (National Faceless Appeal Centre, Delhi) to consider and pass orders on the stay petition (Ext.P3) within a maximum period of two months from the date of the order. Furthermore, the Court directed that all further proceedings pursuant to the assessment order (Ext.P1) shall be kept in abeyance until orders are passed on the stay petition. The Court did not decide the merits of the appeal itself but focused on ensuring a timely decision on the interim relief sought.
The High Court of Kerala disposed of the writ petition with specific directions. The Court directed the second respondent (Commissioner of Income Tax (Appeals)) to consider and pass orders on the stay petition (Ext.P3) within an outer limit of two months from the date of the order. Furthermore, the Court ordered that further proceedings pursuant to the assessment order (Ext.P1) shall be kept in abeyance until orders are passed on the stay petition. The Court did not decide on the merits of the assessment or the appeal itself, focusing solely on expediting the procedural aspect of the stay application.
The High Court of Kerala, after hearing both sides, disposed of the writ petition with specific directions. The 2nd respondent (National Faceless Appeal Centre, Delhi) is directed to consider the petitioner's application for condonation of delay (Ext.P3) in accordance with law. Following the decision on the delay condonation petition, the 2nd respondent shall consider the stay petition (Ext.P4) within an outer limit of two months from the date of the order. Furthermore, until orders are passed on the delay condonation and stay petitions as directed, further proceedings pursuant to the assessment order (Ext.P1) shall be kept in abeyance. The court did not decide on the merits of the appeal or the assessment order itself, focusing solely on the procedural aspect of expeditious disposal of the pending applications.
The High Court of Kerala, while considering the writ petition, recorded the submission made by the learned standing counsel for the Income Tax Department. The standing counsel stated that all details provided by the petitioner in Ext.P8 and their reply to Ext.P9 would be duly considered during the finalization of the assessment for the assessment year 2018-2019. Based on this submission, the High Court closed the writ petition. No specific finding on the merits of Ext.P8 or the assessment itself was made, as the petition was disposed of based on the departmental assurance. The operative direction was to close the writ petition.
The High Court held that a claim for deduction under Section 80P must be made in a valid return filed within the time prescribed by the Income Tax Act. Belatedly filed returns, even if accepted for other limited purposes like limiting interest accrual, cannot be used to claim such deductions.
The High Court, after hearing both sides, was inclined to dispose of the writ petition with a direction to the second respondent (Income Tax Appellate Tribunal) to take up the stay petition (Ext.P4) and pass orders on it within a period of two months from the date of receipt of a copy of the judgment. Furthermore, the Court directed that all further proceedings pursuant to the assessment order (Ext.P1) shall be kept in abeyance until a decision is taken on the stay petition. The judgment does not record any decision on the merits of the appeal itself, focusing solely on the procedural aspect of expeditious disposal and interim relief.
The High Court held that the belated returns filed by the assessee for AY 2009-10 and AY 2010-11 were indeed non-est and could not be acted upon by the Assessing Officer, even though they were filed before the completion of assessment. The Court reasoned that the requirement of making a claim for deduction in a return of income filed by the assessee is a statutory pre-condition. Such provisions for deduction or exemption must be strictly construed against the assessee. The Court found that the argument that belated returns could be considered for deduction claims was contrary to the express statutory provisions and the principle that pre-conditions for deductions must be met. The Court also noted that subsequent amendments to Section 80AC by the Finance Act 2018 fortify this view by making claims conditional on filing returns within the due date prescribed under Section 139(1). The Court distinguished the applicability of Sections 139(8)/(9) and 234A, stating they are for specific purposes like limiting interest accrual and do not enable the department to act upon belated returns for allowing deduction claims. The substantial questions of law were answered in favour of the Revenue.
The High Court of Kerala held that the intimations Exts. P1 and P2 demanding the late filing levy under Section 234E for the period 2012-13 cannot be legally sustained. The Court's reasoning was based on the submissions of both sides, acknowledging that the issue was covered by the High Court's earlier judgment in M/s. Sarala Memorial Hospital v. Union of India. Consequently, the Court quashed Exts. P1 and P2 to the extent they demanded the late filing levy under Section 234E for the period 2012-13. The writ petition was disposed of accordingly.
The High Court held that disputes concerning the manner of communication and whether communications were received are not matters that can be adjudicated in proceedings under Article 226 of the Constitution of India. The court found that the petitioner has an alternate remedy of filing an appeal against the assessment. Therefore, the writ petition was disposed of by directing the petitioner to approach the statutory appellate authority. The appellate authority was directed to consider and pass necessary orders on the petitioner's contentions regarding the lack of proper notice. The appeal, if filed within two weeks from the date of the order, was to be treated as filed within the period of limitation.
The High Court of Kerala, in its limited writ jurisdiction, disposed of the writ petition with a specific direction. The Court directed the 2nd respondent (Commissioner of Income Tax (Appeals)) to take up the petitioner's appeal (Ext.P2) and stay petition (Ext.P3) and to hear and dispose of the stay petition within two months from the date of receipt of a copy of the judgment. Furthermore, the Court ordered that coercive steps for recovery of the demand shall be kept in abeyance until the disposal of the stay petition. The Court did not decide on the merits of the assessment or the appeal itself, focusing solely on the procedural aspect of timely disposal.
The High Court of Kerala, in its writ jurisdiction, did not decide the merits of the case regarding the eligibility for deduction under Section 80P. Instead, the Court noted that the petitioner had already availed the statutory remedy by filing an appeal (Ext.P2) before the Appellate Authority (1st respondent). Therefore, the writ petition was disposed of by directing the Appellate Authority to consider and pass orders on the appeal at the earliest. Additionally, the Court ordered that no coercive steps shall be taken against the petitioner pursuant to the assessment order (Ext.P1) until the disposal of the appeal. The specific finding on the ingredients of a Primary Agricultural Credit Society or the applicability of the Mavilayi judgment was left to be decided by the Appellate Authority.
The High Court of Kerala disposed of the writ petition by directing the 1st respondent (Income Tax Officer, Ward-4, Kollam) to consider and pass orders on Ext.P4. This decision is to be made after hearing the petitioner, at the earliest, and at any rate within three months from the date of receipt of a copy of the judgment. Furthermore, any steps initiated as per Ext.P5 are to remain stayed until a decision is taken on Ext.P4. The court did not delve into the merits of the advance tax remittance error itself but focused on ensuring the grievance is addressed by the appropriate authority within a stipulated timeframe. The principle here is that administrative authorities must act expeditiously on representations filed by taxpayers, and courts can direct such action and stay coercive measures pending resolution.
The High Court admitted the writ petition and directed the Standing Counsel to take notice for the respondents. Given the limited prayer of the petitioner, the Court disposed of the writ petition with a specific direction to the 2nd respondent (NFAC). The NFAC is ordered to take up the appeal (Ext.P2) and the stay petition (Ext.P3) and hear and dispose of the stay petition within two months from the date of receipt of a copy of the judgment. Furthermore, the Court ordered that coercive steps for recovery of the disputed amount shall be kept in abeyance until the stay petition is disposed of. No specific finding was made on the merits of the assessment order or the appeal itself, as the petition was disposed of based on the prayer for expeditious disposal.
The High Court of Kerala did not decide on the merits of the assessment order or the eligibility for deduction under Section 80P. Instead, it noted that the petitioner had already availed the statutory remedy by filing an appeal (Ext.P2) before the appellate authority. Therefore, the Court disposed of the writ petition by directing the Appellate Authority to consider and pass orders on the appeal at the earliest. The Court also directed that no coercive steps would be taken against the petitioner pursuant to the assessment order (Ext.P1) until the disposal of the appeal. The issue of the validity of the assessment order and the eligibility for Section 80P deduction was therefore left undecided by the High Court, as it was pending before the appellate authority.
The High Court of Kerala admitted the writ petition and directed the second respondent (Income Tax Officer, Ward-IV, Tirur) to consider and pass orders on the petitioner's representation (Ext.P10) after hearing the petitioner. This consideration is to be done at the earliest, within two months from the receipt of a copy of the judgment. The operation of Ext.P11 was stayed until the disposal of Ext.P10. The court did not decide on the merits of quashing Exts.P3 and P4 but rather remanded the matter for consideration of the petitioner's representation. The specific issues raised in Ext.P10 and the potential grounds for quashing the intimations were not adjudicated upon by the High Court in this order.
The High Court allowed the writ petition, setting aside the assessment order (Ext.P1) and the demand notice (Ext.P2). The Court reasoned that the assessing officer had not specifically gone into the crucial question of whether the petitioner was a Primary Agricultural Credit Society or a Primary Co-operative Agricultural and Rural Development Bank, which is essential for determining eligibility for the deduction under Section 80P. The Court noted that this issue was not specifically addressed in the assessment order, despite the petitioner making a clear claim in their return. The Court referenced its own prior judgment in W.A. No.753/2021, where a similar assessment order was set aside for failing to specifically answer the relevant question. The Court directed the assessing officer to pass a fresh assessment order after providing the petitioner an opportunity to present their case and necessary documents to establish their entitlement under Section 80P.
The High Court did not decide the merits of the case. Instead, it noted that the petitioner had already availed the statutory remedy by filing an appeal (Ext.P2) against the assessment order (Ext.P1). Consequently, the writ petition was disposed of by directing the Appellate Authority to consider and pass orders on the appeal at the earliest. The Court also granted interim relief, directing the respondents not to take any coercive steps against the petitioner pursuant to the assessment order until the appeal is disposed of. The core issue of eligibility for Section 80P deduction was therefore left undecided by the High Court, pending the appellate proceedings.
The High Court of Kerala, in view of the limited prayer made by the petitioner, disposed of the writ petition with a specific direction. The 2nd respondent, the Commissioner of Income Tax (Appeals), was directed to take up Exts.P3 & P4 appeals and Exts.P5 & P6 stay petitions. The respondent was further directed to hear and dispose of the stay petitions within two months. Additionally, the court ordered that no further amount should be adjusted from the petitioner's attached bank account, and the petitioner was permitted to operate the account without any interference. The judgment does not provide any findings on the merits of the assessment orders or the appeals themselves, focusing solely on the procedural aspect of expediting the disposal of pending matters and providing interim relief regarding the bank account.
The High Court held that a detailed scrutiny of the matter was required, particularly given the significant difference of over Rs. 21 Crore between the amounts stated in the assessment order and the amounts confirmed by the bank certificates. Consequently, the Court set aside Ext.P6 (assessment order) and Ext.P12 (rectification order). The 2nd respondent was directed to pass fresh assessment orders after providing the petitioner with an opportunity to be heard and after considering the certificates issued by the respective banks regarding the deposit amounts. The Court did not explicitly leave any issue undecided, as the matter was remitted for fresh consideration.
The High Court of Kerala, in view of Circular No. 16/2022 dated 19.07.2022, directed that the Commissioners of Income Tax are authorized to admit applications for condonation of delay in filing Form 10B for the relevant assessment years. The petitioners are to approach the concerned Commissioners of Income Tax with an appropriate application for condonation of delay within one month from the date of the order. The Commissioners are to consider these applications and pass orders within one month. Consequential changes in assessments are to be made within six months thereafter. The orders previously issued and any recovery steps initiated are to remain suspended until a decision is taken on the condonation applications. The writ petitions are disposed of in terms of this direction.
The High Court of Kerala directed the 2nd respondent (Joint Assistant Commissioner (Appeals)) to take up the petition for condoning the delay (Ext.P3) and pass orders thereon. If the delay is condoned, the 2nd respondent is further directed to consider the application for stay (Ext.P4) filed along with the appeal (Ext.P2) and dispose of the stay petition within two months. Coercive steps for recovery pursuant to the assessment order (Ext.P1) are to be kept in abeyance until the disposal of the delay and stay petitions. The Court did not decide on the merits of the assessment order or the appeal itself, focusing solely on procedural directions.
The High Court of Kerala, in view of Circular No. 16/2022 dated 19.07.2022, directed that the Commissioners of Income Tax are authorized to admit applications for condonation of delay in filing Form 10B for the relevant assessment years. The petitioners are to approach the concerned Commissioners of Income Tax with an appropriate application for condonation of delay within one month from the date of the order. The Commissioners are to consider these applications and pass orders within one month. Consequential changes in assessments are to be made within six months thereafter. The orders previously issued and any recovery steps initiated are to remain suspended until a decision is taken on the condonation applications. The writ petitions are disposed of in terms of this direction.
The High Court noted that the respondents' counsel placed before it Circular No. 16/2022 dated 19.07.2022, which authorizes Commissioners of Income Tax to admit applications for condonation of delay in filing Form 10B for the relevant assessment years. In light of this circular, the Court directed the petitioners to approach the concerned Commissioners of Income Tax with applications for condonation of delay. If these applications are filed within one month from the date of the order, they shall be considered and orders passed within one month. Consequential changes in the assessment are to be made within six months thereafter. The orders already issued and recovery steps initiated are to remain suspended until a decision is taken on the condonation applications. The writ petitions were disposed of in terms of this direction.
The High Court noted that the Commissioners of Income Tax have been authorized by Circular No. 16/2022 dated 19.07.2022 to admit applications for condonation of delay in filing Form 10B for the relevant assessment years. Therefore, the Court directed the petitioners to approach the concerned Commissioners of Income Tax with an appropriate application for condonation of delay in submitting the audit reports in Form 10B. If such applications are filed within one month from the date of the order, they shall be considered and orders passed within one month. Consequential changes in the assessment are to be made within six months thereafter. The orders previously issued and any recovery steps initiated are to remain suspended until a decision is taken on the condonation applications. The writ petitions were disposed of in terms of this direction.
The High Court of Kerala, after hearing the counsel for the petitioner, noted that the matter had become infructuous. Consequently, the Court dismissed the writ petition as infructuous. The reasoning is solely based on the submission made by the petitioner's counsel that the case is no longer alive or relevant. No decision was made on the merits of any underlying tax dispute or procedural challenge. The operative direction was to dismiss the petition.
The High Court of Kerala disposed of the writ petition, directing the petitioner to approach the concerned Assessing Authority for opening the portal to file a stay application within two weeks. The Appellate Authority was directed to take up the stay application along with the appeal and consider the appeal itself, passing orders unless the workload prevented it. In such a scenario, the Appellate Authority was to consider the stay application with particular reference to the decisions cited by the petitioner (State of Kerala V. C.Velukutty and Taneja Developers & Infrastructure Ltd., V. Assistant Commissioner of Income Tax & Ors.) and pass appropriate orders. All coercive steps were to be kept in abeyance until a decision was taken by the Appellate Authority. The Court found it onerous to burden the petitioner with a condition of paying a portion of the tax in a case that clearly fell under the 'high pitched' category, especially since the appeal had been pending for about nine months. The Court acknowledged the petitioner's contention that the assessment was high-pitched, being approximately 71 times the returned income, and agreed that this classification was supported by the cited judicial precedents.
The High Court allowed the writ petition and set aside the assessment order (Ext.P3). The Court found merit in the petitioner's contention that the 24-hour period granted to respond to the draft assessment order was insufficient, thus violating the principles of natural justice. The Court directed the 2nd respondent (National Faceless Assessment Centre) to pass fresh draft assessment orders in accordance with law. Crucially, the Court mandated that sufficient time must be given to the petitioner to respond to these fresh draft orders. The issue of limitation, though raised, was not decided as the petitioner sought relief primarily in the form of adequate time for response.
The High Court held that the respondents were not entitled to refuse the adjustment of the amounts payable under the Direct Taxes Vivad se Vishwas Act, 2020, against the cash seized from the petitioner. The Court reasoned that the department's own case was that even cash seized from other individuals actually belonged to the petitioner. Therefore, a different yardstick could not be applied for adjustment. The Court also noted the affidavits from the individuals confirming the cash belonged to the petitioner. The Court found no justification for the department's stand. The writ petition was allowed with a direction to the 3rd respondent to adjust the amounts payable under the Vivad se Vishwas Act from the seized cash and pass orders on the rectification application (Ext.P14), issuing rectified certificates under Section 5 of the Act for the assessment years 2001-2002, 2016-2017, and 2017-2018. The adjustment was to be in accordance with the rectified certificates, with necessary action to be completed within three months.
The High Court allowed the writ petition. It held that the assessing authority's reasoning for sustaining defect No.II was unsustainable. While acknowledging the burden of proof on the assessee under Section 9 of the Act, the Court stated that the assessee can only be expected to prove what is possible and cannot be compelled to prove a negative or a transaction that, according to them, did not exist. The Court found no logic in directing the assessee to prove a sales return when their contention was that no sale had occurred. Such a direction would only be justifiable if there was proof of a sale. Consequently, the finding regarding defect No.II in Ext.P3 order was set aside, and it was clarified that no recovery proceedings could be initiated based on this finding. The Court noted that this was not a case where the respondent refused to carry out the superior tribunal's directions, as other defects were resolved in the assessee's favor.
The High Court held that the Assessing Authority was not correct in treating 50% of AMC receipts as attributable to the supply of spares. For the assessment years 2007-08 and 2008-09, the matter was remitted with a direction to the assessee to produce books of account, which the assessee failed to comply with. The Court found that restoring the earlier order due to non-compliance would perpetuate the illegality found in the assessment orders for 2005-2006. The appellate authority, having found the assessment order bad, should not have restored it merely due to non-production of accounts. Instead, a fresh order should have been passed. To serve the interests of justice, the Court fixed 6% of the AMC receipts for the assessment years 2005-2006, 2007-2008, and 2008-2009 as representing the value of spares sold. The Assessing Authority was directed to pass revised orders accordingly within two months. For the assessment year 2009-10, the Court set aside the impugned order and directed the Assessing Authority to re-assess based on the specific directions in the appellate order (Ext. P2), which allowed for verification of disclosed turnover for spares consumed in AMC and assessment of Rs. 122,411.00 with reasonable gross profit if goods transferred were ascertainable, or 50% of the contract amount otherwise. The Writ Petition concerning 2009-10 was allowed.
The High Court held that the Assessing Authority was not correct in treating 50% of AMC receipts as attributable to the supply of spares. For the assessment years 2007-08 and 2008-09, the matter was remitted with a direction to the assessee to produce books of account, which the assessee failed to comply with. The Court found that restoring the earlier order due to non-compliance would perpetuate the illegality found in the assessment orders for 2005-2006. The appellate authority, having found the assessment order bad, should not have restored it merely due to non-production of accounts. Instead, a fresh order should have been passed. To serve the interests of justice, the Court fixed 6% of the AMC receipts for the assessment years 2005-2006, 2007-2008, and 2008-2009 as representing the value of spares sold. The Assessing Authority was directed to pass revised orders accordingly within two months. For the assessment year 2009-10, the Court set aside the impugned order and directed the Assessing Authority to re-assess based on the specific directions in the appellate order (Ext. P2), which allowed for verification of disclosed turnover for spares consumed in AMC and assessment of Rs. 122,411.00 with reasonable gross profit if goods transferred were ascertainable, or 50% of the contract amount otherwise. The Writ Petition concerning 2009-10 was allowed.
The High Court allowed the writ petition. It quashed the assessment order (Ext.P2) and the demand notice (Ext.P3). The Court directed the 2nd respondent (Income Tax Officer, National Faceless Assessment Centre) to pass fresh assessment orders in accordance with the law. The reasoning was based on the High Court's previous decisions in similar circumstances, specifically relying on the judgments in Peroorkada Service Co-operative Bank Ltd., Mavilayi Service Co-operative Bank Ltd., and M/s. Poonjar Service Co-operative Bank Ltd. v. Income Tax Officer. The ratio decidendi is that co-operative banks are entitled to deductions under Section 80P on their interest income, and assessment orders denying such deductions, contrary to Supreme Court and High Court precedents, are liable to be quashed and reconsidered.
The High Court admitted the writ petition and directed the Government Pleader to take notice for the respondents. Given the limited prayer of the petitioner for a direction to dispose of the appeal and stay petition, the Court disposed of the writ petition. The second respondent, the Commissioner of Income Tax (Appeals), was directed to take up the appeal (Ext.P2) and the stay petition (Ext.P3), hear and dispose of the stay petition within two months from the date of receipt of a copy of the judgment. Coercive steps for recovery of the demand were ordered to be kept in abeyance until the disposal of the stay petition. The High Court did not decide the merits of the assessment order or the appeal itself, focusing solely on the procedural aspect of expeditious disposal.
The High Court admitted the writ petition and directed the Government Pleader to take notice for the respondents. Given the limited prayer, the Court disposed of the writ petition by directing the 2nd respondent (Commissioner of Income Tax (Appeals)) to take up the petitioner's appeal (Ext.P2) and stay petition (Ext.P3) for hearing and disposal. The Court specifically ordered that the stay petition should be disposed of within two months from the date of receipt of a copy of the judgment. Furthermore, the Court ordered that coercive steps for recovery of demand should be kept in abeyance until the disposal of the stay petition. The principle established is that courts can direct appellate authorities to dispose of pending matters within a reasonable timeframe, especially when there is a prayer for stay of coercive recovery.