Wp(C)/16351/2023 Of Saints Peter And Paul Church v. The Commissioner Of Income Tax (Exemption)

IN THE HIGH COURT OF KERALA AT ERNAKULAMPRESENT THE HONOURABLE MR.JUSTICE N.NAGARESH MONDAY, THE 19 DAY OF JUNE 2023 / 29TH JYAISHTA, 1945 WP(C) NO. 16351 OF 2023 PETITIONER: SAINTS PETER AND PAUL CHURCH,VENDURUTHY,KOCHI ERNAKULAM – 682 004. (REPRESENTED BY ITS VICAR, FR. ALPHONSE PANAKAL). BY ADVS.P.J.ANILKUMAR (A-1768)K.N.SREEKUMARANN.SANTHOSHKUMAR RESPONDENTS: 1THE COMMISSIONER OF INCOME TAX (EXEMPTION)INCOME TAX DEPARTMENT, 2ND FLOOR, SAN JUAN TOWERS, OLD RAILWAY STATION ROAD, ERNAKULAM – 682 018.INCOME TAX DEPARTMENT, 2ND FLOOR, SAN JUAN TOWERS, OLD RAILWAY STATION ROAD, ERNAKULAM – 682 018. INCOME TAX DEPARTMENT, 2ND FLOOR, SAN JUAN TOWERS, 2THE INCOME TAX OFFICER (EXEMPTION)INCOME TAX DEPARTMENT, 2ND FLOOR ,SAN JUAN TOWERS, OLD RAILWAY STATION ROAD , ERNAKULAM – 682 018.INCOME TAX DEPARTMENT, 2ND FLOOR ,SAN JUAN TOWERS, OLD RAILWAY STATION ROAD , ERNAKULAM – 682 018. INCOME TAX DEPARTMENT, 2ND FLOOR ,SAN JUAN TOWERS, 3THE ASSISTANT COMMISSIONER OF INCOME TAX (CPC)INCOME TAX DEPARTMENT, CENTRALIZED PROCESSING CENTRE, POST BAG NO: 2, BANGALORE – 560 100.INCOME TAX DEPARTMENT, CENTRALIZED PROCESSING CENTRE, POST BAG NO: 2, BANGALORE – 560 100. BY ADV CHRISTOPHER ABRAHAM; SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON19.06.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: 2 JUDGMENT Dated this the 19th day of June, 2023 The petitioner is a religious institution represented by itsVicar who is an assessee under the Income Tax Act, 1961. Thepetitioner is registered under Section 12A of the Act and has beenfunctioning as per the terms and conditions of the registrationgranted. 2.The petitioner states that the petitioner has filed Audit Reportdated 14.07.2014 in Form No.10B for the Assessment Year2013-2014 (Financial Year 2012-13) through Online Portal of theIncome Tax Department on 24.09.2014. The same has beenelectronically acknowledged by the portal. Subsequent to the filingof Ext.P1 Audit Report, the petitioner has filed Income Tax Returnon 17.11.2014 through the portal, providing the details of totalreceipts and application as prescribed under Section 11 of the Act.The 3rd respondent-Assistant Commissioner of Income Tax hasrejected the claim of the application submitted by the petitioner andpassed an intimation under Section 143(1) of the Act on W.P(C) No.16351 of 2023 3 27.03.2015 demanding Rs.4,33,286/- without recording anyreasons for rejection by Ext.P3. 3.In response to Ext.P3 intimation, the petitioner submitteda rectification application through the portal and the same wastransferred to the 2nd respondent-Income Tax Officer for rectificationunder Section 154 of the Act. The 2nd respondent-Income TaxOfficer passed Ext.P6 order under Section 154 of the Act on19.07.2021, confirming the intimation on the ground of not filingAudit Report in Form No.10B within the due date, withoutconsidering the Audit Report filed on the Portal. Aggrieved byExt.P6 order, the petitioner filed Revision under Section 264 of theAct before the 1st respondent-Commissioner of Income Tax on03.03.2023 which was also of no avail. 4.Counsel for the petitioner would submit that theimpugned order of the 1st respondent-Commissioner of Income Taxis in violation of Section 12A(b) read with Ext.P8(a) instruction bythe Central Board of Direct Tax. The intention of the CBDT is toensure that a claim under Section 11 and 12 could not be deniedon the ground that the Audit Report is not filed along with the W.P(C) No.16351 of 2023 4 Return and the claim is eligible even on filing the Audit Report onan anterior date. 5. Standing Counsel entered appearance on behalf of the 4.Counsel for the petitioner would submit that theimpugned order of the 1st respondent-Commissioner of Income Taxis in violation of Section 12A(b) read with Ext.P8(a) instruction bythe Central Board of Direct Tax. The intention of the CBDT is toensure that a claim under Section 11 and 12 could not be deniedon the ground that the Audit Report is not filed along with the W.P(C) No.16351 of 2023 4 Return and the claim is eligible even on filing the Audit Report onan anterior date. 5. Standing Counsel entered appearance on behalf of the respondents and resisted the writ petition. The Standing Counselcontroverted all the material allegations made by the petitioner inthe writ petition. On behalf of the respondents, it is submitted thatthe petitioner ought to have filed Audit Report along with IncomeTax Return in view of Section 12 A(b) of the Income Tax Act. In thecircumstances, the writ petition is not maintainable and liable to bedismissed, contends the Standing Counsel. 6.I have heard the learned Counsel for the petitioner andthe learned Standing Counsel representing the respondents. 7.From the pleadings it is evident that the petitioner hadfiled the Audit Report on 24.09.2014. The Income Tax Returns werefiled on 17.11.2014. Though the provision mandates that AuditReport should be filed along with Income Tax Return, as thepetitioner has filed the Audit Report in advance even before filing ofthe Income Tax Return. I am of the view that there is substantialcompliance of mandatory provisions of the Act. W.P(C) No.16351 of 2023 5 In view of the above, the writ petition is disposed of setting aside Ext.P9 order and directing the 2nd respondent to redo the assessment proceedings under the Act, after considering the Audit Report filed by the petitioner. AMR Sd/- N.NAGARESHJUDGE 6 APPENDIX OF WP(C) 16351/2023 PETITIONER’S EXHIBITSExhibit-P1TRUE COPY OF THE E-FILING ACKNOWLEDGEMENTNUMBER:365029051240914 DATED 24..09..2014ALONG WITH AUDIT REPORT DATED 14..07..2014 IN FORM NUMBER 10 B.Exhibit-P1TRUE COPY OF THE E-FILING ACKNOWLEDGEMENTNUMBER:365029051240914 DATED 24..09..2014ALONG WITH AUDIT REPORT DATED 14..07..2014 IN FORM NUMBER 10 B. Exhibit-P2TRUE COPY OF THE INCOME TAX RETURNS FILEDBY THE PETITIONER DATED 17..11..2014 ALONG WITH THE COMPUTATION OF INCOME.BY THE PETITIONER DATED 17..11..2014 ALONG WITH THE COMPUTATION OF INCOME. Exhibit-P3TRUE COPY OF INTIMATION DATED 27..03..2015 U/S.143(1) OF THE ACT ISSUEDBY THE 3RD RESPONDENT.27..03..2015 U/S.143(1) OF THE ACT ISSUEDBY THE 3RD RESPONDENT. Exhibit-P4TRUE COPY OF THE NOTICE DATED 30..06..2021 ISSUED BY THE 2ND RESPONDENTTO THE PETITIONER.30..06..2021 ISSUED BY THE 2ND RESPONDENTTO THE PETITIONER. Exhibit-P5TRUE COPY OF THE REPLY DATED 16..07..2021AGAINST EXT-P4 FILED BEFORE THE 2ND RESPONDENT ALONG WITH THE RELEVANT ANNEXURE .AGAINST EXT-P4 FILED BEFORE THE 2ND RESPONDENT ALONG WITH THE RELEVANT ANNEXURE . Exhibit-P6TRUE COPY OF THE ORDER PASSED BY THE 2ND RESPONDENT DATED 19..07..2021 AGAINST EXT-P4 NOTICERESPONDENT DATED 19..07..2021 AGAINST EXT-P4 NOTICE Exhibit-P7TRUE COPY OF THE PETITION U/S.264 DATED 16..09..2021 ALONG WITH THE NOTARIZED AFFIDAVIT BY THE CHARTERED ACCOUNTANT FILED BEFORE THE 1ST RESPONDENT.16..09..2021 ALONG WITH THE NOTARIZED AFFIDAVIT BY THE CHARTERED ACCOUNTANT FILED BEFORE THE 1ST RESPONDENT. Exhibit-P8TRUE COPY OF THE ARGUMENT NOTE DATED 17..02..2022 FILED BEFORE THE 1ST RESPONDENT.17..02..2022 FILED BEFORE THE 1ST RESPONDENT. Exhibit-P8(a)TRUE COPY OF THE CBDT INSTRUCTION NO: 1148/CBDT DATED 09..02..1978.1148/CBDT DATED 09..02..1978. Exhibit -P9TRUE COPY OF THE ORDER U/S.264 OF THE ACTDATED 03..03..2023 PASSED BY THE 1ST RESPONDENT.DATED 03..03..2023 PASSED BY THE 1ST RESPONDENT.