Wa/184/2024 Of St. John The Baptist Church v. The Income Tax Officer (Exemption)

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR & THE HONOURABLE MR.JUSTICE V.G.ARUN FRIDAY, THE 9 DAY OF FEBRUARY 2024 / 20TH MAGHA, 1945 WA NO. 184 OF 2024 AGAINST THE JUDGMENT DATED 15.012024 IN WP(C) 18468/2023 OF HIGH COURT OF KERALA APPELLANT/PETITIONER: ST. JOHN THE BAPTIST CHURCH,AGED 57 YEARSMOONUMURY, MATTATHUR, IRINJALAKUDA, THRISSUR, (REPRESENTED BY ITS VICAR, FR. GEORGE VEZHAPARAMBIL), PIN – 680684 BY ADVS.K.N.SREEKUMARANN.SANTHOSHKUMAR P.J.ANILKUMAR (A-1768) RESPONDENTS/RESPONDENTS: 1THE INCOME TAX OFFICER (EXEMPTION),AAYAKAR BHAVAN, INCOME TAX OFFICE, SAKTHANTHAMPURAN NAGAR, THRISSUR, PIN – 680001 2THE INCOME TAX OFFICER (EXEMPTION),SAN JUAN TOWER, BEHIND C R BUILDING, ERNAKULAM-682018., PIN – 682018 3THE COMMISSIONER OF INCOME TAX (EXEMPTION),SAN JUAN TOWER, BEHIND C R BUILDING, ERNAKULAM-682018., PIN – 682018 4THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX (EXEMPTION), 25TH FLOOR, E2 BLOCK, PRATYAKSH KAR BHAWAN CIVIC CENTRE, J.L.N. MARG, NEW DELHI-110002., PIN – 110002 WANo.184 of 2024 5THE ADDITIONAL DIRECTOR OF INCOME TAX (INV),AYAKAR BAHVAN, INCOME TAX OFFICE, SAKTHANTHAMPURAN NAGAR, THRISSUR-680001., PIN – 680001AYAKAR BAHVAN, INCOME TAX OFFICE, SAKTHANTHAMPURAN NAGAR, THRISSUR-680001., PIN – 680001 6THE ASSISTANT COMMISSIONER OF INCOME TAX (CPC),CENTRALIZED PROCESSING CENTRE, POST BAG NO: 2, BANGALORE -560100., PIN - 560100CENTRALIZED PROCESSING CENTRE, POST BAG NO: 2, BANGALORE -560100., PIN - 560100 BY ADV.SRI.JOSE JOSEPH, SC THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON09.02.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: JUDGMENT Dr. A.K.Jayasankaran Nambiar, J. The writ petitioner in WP(C).No.18468 of 2023 is the appellantbefore us aggrieved by the judgment dated 15.01.2024 of the learnedSingle Judge. 2. Briefly stated, the facts necessary for a disposal of this writappeal are as follows: The Writ Petition was filed challenging Ext.P9 order of theIncome Tax Department under Section 148A(d) of the Income Tax Act.A perusal of the said order clearly reveals that the appellant herein,who is an assessee under the Income Tax Act and registered underSection 12AA of the Income Tax Act in its capacity as St. John theBaptist Church, a religious institution, had not accounted for certaincash loans and repayments for the assessment year 2016-2017. It waswith a view to scrutinizing the said unaccounted transactions and toascertain whether there had been a violation of the provisions ofSection 12AA of the Income Tax Act, and a possible violation of Section269 SS and 269 T of the Income Tax Act that the notice under Section148A was served on the appellant. In response to the said notice, theappellant, vide its response dated 05.04.2023, sought an adjournmentfor 15 days to submit details. The said adjournment request was acceded to and time was granted up to 20.04.2023 for furnishing thereply. In the reply submitted by the appellant on 18.04.2023, noexplanation was given in respect of the unaccounted cash loan andrepayments, and hence, the authorities had no option but to pass Ext.P9order to issue notice under Section 148 of the Income Tax Act forreassessment of the income of the appellant for the said assessmentyear. 3. The learned Single Judge who considered the challengeagainst Ext.P9 order found that the appellant's acceptance ofRs.1,87,69,000/- in cash and repayment of the same was an apparentviolation of Section 12AA and the action of the assessing authority inissuing the notice under Section 148 could not be said to be erroneousin law. The Writ Petition was, therefore, dismissed as devoid of merit. 3. The learned Single Judge who considered the challengeagainst Ext.P9 order found that the appellant's acceptance ofRs.1,87,69,000/- in cash and repayment of the same was an apparentviolation of Section 12AA and the action of the assessing authority inissuing the notice under Section 148 could not be said to be erroneousin law. The Writ Petition was, therefore, dismissed as devoid of merit. 4. In the appeal before us, it is the contention ofSri.K.N.Sreekumaran, the learned counsel for the appellant, that thealleged escaped income, even if taken into account, would not attractany tax liability since the appellant enjoys an exemption in terms ofSection 12AA of the Income Tax Act. We note, however, that theexemption under Section 11 read with Section 12AA of the Income TaxAct is one that is subject to certain conditions, and the question to bedecided in the proceedings under Section 148 of the Income Tax Act is WANo.184 of 2024 essentially as to whether the unaccounted transactions and the allegedescaped income would merit an exemption or not. It is for the saidexamination on merits that the proceedings under Section 148 of theIncome Tax Act have been initiated. At this stage, where what isimpugned is Ext.P9 order under Section 148 A(d), we see no reason tointerdict those proceedings at the instance of the appellant. The WritAppeal, therefore, fails and is accordingly dismissed. Before parting with this appeal, and taking note of the request ofthe learned counsel for the appellant, we make it clear that if theappellant files the return in response to the notice under Section 148within two weeks from the date of receipt of a copy of this judgment,then, the assessing authority shall consider the return and finalize theproceedings under Section 148 of the Income Tax Act after hearing theappellant within a period of three months thereafter. Sd/- DR. A.K.JAYASANKARAN NAMBIAR JUDGE Sd/- mns V.G.ARUN JUDGE