Wp(C)/10745/2024 Of The Centre For Management Development v. The Commissioner Of Income-Tax (Exemptions)

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH FRIDAY, THE 22 DAY OF MARCH 2024 / 2ND CHAITHRA, 1946WP(C) NO. 10745 OF 2024 PETITIONER/S: THE CENTRE FOR MANAGEMENT DEVELOPMENT THYCAUD S.O. CHEMPAKASSERY THIRUVANANTHAPURAM KERALA REPRESENTED BY ITS DIRECTOR, PIN - 695014BY ADVS.NITISH SATHESH SHENOYSHERRY SAMUEL OOMMEN RESPONDENT/S: 1THE COMMISSIONER OF INCOME-TAX (EXEMPTIONS)SAN JUAN TOWERS, 2ND FLOOR, BEHIND CR BUILDING OLD RAILWAY STATION ROAD, KOCHI, PIN - 682018SAN JUAN TOWERS, 2ND FLOOR, BEHIND CR BUILDING OLD RAILWAY STATION ROAD, KOCHI, PIN - 682018 2THE ASSISTANT COMMISSIONER OF INCOME-TAXCENTRALISED PROCESSING CENTRE INCOME TAX DEPARTMENT, BANGALORE, PIN - 560050CENTRALISED PROCESSING CENTRE INCOME TAX DEPARTMENT, BANGALORE, PIN - 560050 3THE ADDITIONAL/ JOINT/ DEPUTY/ ASSISTANT COMMISSIONER OF INCOME TAX/ INCOME-TAX OFFICERNATIONAL FACELESS ASSESSMENT CENTRE, 4TH FLOOR, MAYUR BHAWAN, CONNAUGHT CIRCUS, NEW DELHI, PIN - 110001OF INCOME TAX/ INCOME-TAX OFFICERNATIONAL FACELESS ASSESSMENT CENTRE, 4TH FLOOR, MAYUR BHAWAN, CONNAUGHT CIRCUS, NEW DELHI, PIN - 1100014THE ASSISTANT COMMISSIONER OF INCOME-TAX OFFICE OF THE ASSISTANT COMMISSIONER OF INCOME TAX EXEMPTION CIRCLE THIRUVANANTHAPURAM, PIN - 605003OFFICE OF THE ASSISTANT COMMISSIONER OF INCOME TAX EXEMPTION CIRCLE THIRUVANANTHAPURAM, PIN - 6050035THE NATIONAL FACELESS APPEAL CENTRE (NFAC)MAYUR BHAWAN,CONNAUGHT LANE,BARAKHAMBA,NEW DELHI -REPRESENTED BY ITS COMMISSIONER, PIN - 110001MAYUR BHAWAN,CONNAUGHT LANE,BARAKHAMBA,NEW DELHI -REPRESENTED BY ITS COMMISSIONER, PIN - 110001 OTHER PRESENT: SRI. JOSE JOSEPH -SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON22.03.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 10745 OF 2024 JUDGMENT Dated this the 22[nd] day of March, 2024 The petitioner is a self supporting autonomous educational institution which provides research, consulting and trainingsupport to development agencies, corporate sectors and theGovernment, both at the National and State level. The petitioner ismanaged by a Governing board comprising of a Chairman, threeSenior Secretaries to the Government of Kerala, four ChiefExecutives of public enterprises, two Academicians in the field ofmanagement, two industrialists and two representatives ofprofessional bodies. The Director is the member Secretary to theBoard. The petitioner got certificate under Section 12A of theIncome Tax Act, 1961 ('the IT Act' for short) pursuant to theapproval granted by the respondents on 22.01.2020. Thepetitioner has been claiming exemption under Section 10(23C)(VI)of the IT Act from the payment of income tax on its income. 2.In respect of the assessment years 2018-2019, 2020-2021,2021-2022 and 2022-2023, the notices under Section 143(1) andr/w Sections 153 of the IT Act were issued to the petitioner. Theassessment order got completed with respect of the AssessmentYears 2018-2019, 2020-2021, 2021-2022 and 2022-2023 in Ext.P2series. 3.The petitioner has been denied the exemption as thepetitioner did not submit the audit report on time in respect of theafore mentioned assessment years. After the assessment ordershave passed, the petitioner moved an application under Section119(2)(b) of the IT Act before the 1st respondent in Ext.P3 seriesfor condoning the delay in submitting the audit reports belatedlybefore the assessing authority. However, no decision has beentaken in the said application. In the meantime, the petitioner hasbeen issued with demand notices in Ext.P5 series. 3.The petitioner has been denied the exemption as thepetitioner did not submit the audit report on time in respect of theafore mentioned assessment years. After the assessment ordershave passed, the petitioner moved an application under Section119(2)(b) of the IT Act before the 1st respondent in Ext.P3 seriesfor condoning the delay in submitting the audit reports belatedlybefore the assessing authority. However, no decision has beentaken in the said application. In the meantime, the petitioner hasbeen issued with demand notices in Ext.P5 series. 4.The learned counsel for the petitioner submits that thepetitioner has filed appeals along with the stay petition andcondonation of delay applications against the assessment order inrespect of assessment years 2021-2022. However, in respect of theother assessment years, the petitioner has not filed the appeals.Learned counsel for the petitioner also submits that the petitionerwould file appeal in respect of all the assessment years in questionwithin 15 days from today along with the applications forcondoning the delay in filing the appeals and the stay petitions. 5.Learned counsel for the petitioner further submits that tillthe decision is taken on the application for condoning the delay bythe 1st respondent under Section 119(2)(b), the recoveryproceedings may directed to be kept in abeyance. 6.This court does not find much substance in the submissionsof the learned counsel for the petitioner. The fact remains is thatas of today, the petitioner has suffered the assessment orders andan appeal has been filed only in respect of one assessment yearalong with stay petition. The other assessment orders are notunder challenge till the date in respect of the other assessmentyears as mentioned above. 7.This court cannot presume the outcome of the application filed before the 1st respondent for condoning the delay insubmitting the audit report under Section 119(2)(b). In viewthereof, the present writ petition is disposed of, with direction tothe 1st respondent to consider and pass appropriate order onExt.P3 series applications seeking condonation of delay in filingthe audit reports under Section 119(2)(b) of the IT Act,expeditiously and preferably within a period of two months inaccordance with law. 8.The petitioner may file appeals in respect of otherassessment years along with the applications for condoning thedelay as well as the stay petitions. If the petitioner deposits 20 %of the assessed amount in respect of all the assessment years andfiles the appeals in respect of other assessment years for whichthe petitioner has not filed the appeals, along with the application for condoning of delay and stay petition, the further recovery ofthe assessed amount shall be kept in abeyance till disposal of theappeals . In the result, the present writ petition is disposed of, with theaforesaid directions and liberty. SJ Sd/-DINESH KUMAR SINGH JUDGE APPENDIX OF WP(C) 10745/2024 PETITIONER EXHIBITS 8.The petitioner may file appeals in respect of otherassessment years along with the applications for condoning thedelay as well as the stay petitions. If the petitioner deposits 20 %of the assessed amount in respect of all the assessment years andfiles the appeals in respect of other assessment years for whichthe petitioner has not filed the appeals, along with the application for condoning of delay and stay petition, the further recovery ofthe assessed amount shall be kept in abeyance till disposal of theappeals . In the result, the present writ petition is disposed of, with theaforesaid directions and liberty. SJ Sd/-DINESH KUMAR SINGH JUDGE APPENDIX OF WP(C) 10745/2024 PETITIONER EXHIBITS Exhibit P1(a)A TRUE COPY OF THE APPROVAL GRANTED UNDERSECTION 12A OF THE INCOME-TAX ACT, 1961("THE ACT") DATED 22.01.2020Exhibit P1(b)TRUE COPY OF THE ORDER OF THE CHIEFCOMMISSIONEROFINCOMETAX,THIRUVANANTHAPURAM,DATED23.04.2007GRANTING THE PETITIONER EXEMPTION UNDER10(23)(VI) OF THE ACTExhibit P2(a)TRUE COPY OF THE ORDER BEARING DIN NO.CPC/1819/U7/2004750995 DATED 05.09.2020FOR THE AY 2018-19Exhibit P2(b)TRUE COPY OF THE 143(1) ORDER BEARING DINNO.CPC/2021/A7/164733361DATED24.12.2021 FOR THE AY 2020-21Exhibit P2(c)TRUE COPY OF THE 143(1) ORDER BEARING DINNO.CPC/2122/A7/287627528DATED20.09.2022 FOR THE AY 2021-22Exhibit P2(d)TRUE COPY OF THE 143(1) ORDER BEARING DINNO.CPC/2223/A7/326050128DATED04.04.2023 FOR THE AY 2022-23Exhibit P3(a)A TRUE COPY OF THE REQUEST FORCONDONATION DATED 26.08.2022 BEFORE THE1ST & 3RD RESPONDENTS ALONG WITH THEACKNOWLEDGEMENTExhibit P3(b)A TRUE COPY OF THE REQUEST FORCONDONATION DATED 16.12.2022 BEFORE THE1ST & 3RD RESPONDENTSExhibit P3(c)TRUE COPY OF THE STAY APPLICATION DATED19.10.2022 FILED BEFORE THE 3RD & 4THRESPONDENTS ALONG WITH ACKNOWLEDGEMENTExhibit P3(d)THE PETITIONER SUBMITS A TRUE COPY OF THECONDONATION APPLICATION DATED 19.04.2023FILED BEFORE THE 1ST AND 3RD RESPONDENTSALONG WITH THE ACKNOWLEDGEMENTExhibit P4A TRUE COPY OF THE APPEAL DATED19.10.2022 FILED BY THE PETITIONER BEFORETHE 1ST & 5TH RESPONDENTSExhibit P5THE TRUE COPY OF THE RECOVERY NOTICEDATED 27.09.2023 ISSUED BY THE 4THRESPONDENTExhibit P6A TRUE COPY OF CIRCULAR NO 2/2020 DATED03.01.2020 Exhibit P7 Exhibit P8 Exhibit P9 7 TRUE COPY OF CIRCULAR NO 267/482/77-ITDATED 09.02.1978 A TRUE COPY OF CIRCULAR NO 10[F.NO.197/55/2018-ITA-I] DATED 26.03.2021 A TRUE COPY OF THE JUDGMENT OF THISHON'BLE COURT DATED 10.10.2022 IN WPC NO31513 OF 2022