By Advs.sri.harisankar v. Menon Smt.meera V.menon

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE TUESDAY, THE 22ND DAY OF NOVEMBER 2016/1ST AGRAHAYANA, 1938 WP(C).No. 31599 of 2016 (Y) ---------------------------- PETITIONER(S):------------- M/S. WEST FORT HIGHER EDUCATION TRUST POTTORE, M.G.KAVU P.O., THRISSUR-680581, REPRESENTED BY ITS MANAGING TRUSTEE, K.M.MOHANDAS. BY ADVS.SRI.HARISANKAR V. MENON SMT.MEERA V.MENON RESPONDENT(S): -------------- 1. THE INCOME TAX OFFICER THRISSUR-680004. THRISSUR-680004. 2. THE PRINCIPAL COMMISSIONER OF INCOME TAX (EXEMPTION) CR BUILDINGS, I.S.PRESS ROAD, KOCHI-682018. CR BUILDINGS, I.S.PRESS ROAD, KOCHI-682018. 3. THE COMMISSIONER OF INCOME TAX (EXEMPTION) C.R.BUILDING, I.S.PRESS ROAD, KOCHI-682018. C.R.BUILDING, I.S.PRESS ROAD, KOCHI-682018. R1 TO R3 BY ADVS. SRI.CHRISTOPHER ABRAHAM, INCOME TAX DEPARTMENT SRI.K.M.V.PANDALAI, INCOME TAX DEPARTMENT THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 22-11-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 31599 of 2016 (Y) ---------------------------- APPENDIX PETITIONER(S)' EXHIBITS-----------------------EXHIBIT P1 COPY OF ORDER ISSUED BY THE 2ND RESPONDENT DATED 17-03-2015.EXHIBIT P2 COPY OF ORDER ISSUED BY THE 1ST RESPONDENT DATED 11-12-2015.EXHIBIT P3 COPY OF CIRCULAR ISSUED BY THE INCOME TAX DEPARTMENT DATED 03-06-1980.EXHIBIT P4 COPY OF APPLICATION SUBMITTED BY THE PETITIONER BEFORE THE 3RD RESPONDENT DATED 19-11-2015.EXHIBIT P5 COPY OF ORDER ISSUED BY THE 3RD RESPONDENT DATED 14-07-2016. RESPONDENT(S)' EXHIBITS NIL----------------------- //TRUE COPY// P.S TO JUDGE MLG A.M. SHAFFIQUE, J.===============W.P. (C) No. 31599 of 2016================== Dated this, the 22[nd] day of November, 2016 J U D G M E N T Petitioner challenges Ext.P5 issued by the Commissioner ofIncome Tax denying condonation of delay under Section 119(2)(b) ofthe Income Tax, 1961. 2.The short facts involved in the writ petition would disclosethat with respect to the assessment year 2010-11, petitioner hadaccumulated `28 lakhs for future application under Section 11(2).Since the Board of taxes had extended the period for filing return forthe said assessment year upto 15/10/2010, petitioner submitted itsreturn on 13/10/2010 and deposited `28 lakhs on 11/10/2010. The2[nd] respondent by order dated 17/3/2015 found that finalisation ofthe assessment by the 1[st] respondent by order dated 14/3/2013 waserroneous and prejudicial to the interest of the revenue andtherefore direction was issued to make a reassessment. Pursuant tothe same, Ext.P2 order had been passed refusing the benefits underthe statute and assessing the petitioner to tax raising a demand of`12,96,280/-. Petitioner thereafter having taken note of Circular -:2:- No.273 dated 3/6/1980 submitted an application, Ext.P4, seekingfor condonation of delay for extending the due date of filing of thereturn of the income for the assessment year 2010-11 and forgiving notice to deposit accumulated amount. This came to berejected by Ext.P5 on the ground that though delay could becondoned for filing Form No.10, since the deposit of accumulationis made under Section 11(2), there is no provision in the circularto condone the delay. 3.Learned counsel for the petitioner places reliance onthe circular itself especially clauses (b) and (d) of the circular bywhich the Commissioners were given power to entertainapplications to condone delay in respect of the said items.Clauses (b) and (d) of Circular No.273 reads as under:- “(b)that the failure to give notice to the Income-tax Officer under section 11(2) of the Act andinvestment of the money in the prescribedsecurities was due only to oversight. (c)..... (d) that the trust agrees to deposit its funds in theprescribed securities prior to the issue of theGovernment sanction extending the time undersection 11(2)”. 3.Learned counsel for the petitioner places reliance onthe circular itself especially clauses (b) and (d) of the circular bywhich the Commissioners were given power to entertainapplications to condone delay in respect of the said items.Clauses (b) and (d) of Circular No.273 reads as under:- “(b)that the failure to give notice to the Income-tax Officer under section 11(2) of the Act andinvestment of the money in the prescribedsecurities was due only to oversight. (c)..... (d) that the trust agrees to deposit its funds in theprescribed securities prior to the issue of theGovernment sanction extending the time undersection 11(2)”. 4.A statement has been filed by the standing counsel inter alia supporting the stand taken by the Commissioner. -:3:- 5.But it is relevant to note that when there is a specificprovision enabling the Commissioner to condone delay even inrespect of “investment of the money in the prescribed securities”if it is found to be on account of oversight, necessarily, theCommissioner can exercise the power under Section 119 (2)(b) ofthe Act. It is not confined to failure to give notice to the IncomeTax Officer under Section 11(2) alone. Even under Clause (d) asextracted above, time can be extended under Section 11(2).There is no prohibition for condoning delay even if the deposit ismade belatedly. Under such circumstances, I am of the view thatthere is justification on the part of the petitioner to challengeExt.P5. Accordingly, this writ petition is allowed. Ext.P5 is set asideand the 3[rd] respondent is directed to reconsider the matter afreshin the light of the observations made above and an order may bepassed within a period of two months from the date of receipt of acopy of this judgment. Rp22/11/2016 Sd/- A.M. SHAFFIQUE, JUDGE //True Copy//