Wp(C)/2582/2020 Of St.josephs Monastery v. Income Tax Officer(Exemptions)

THE HONOURABLE MR. JUSTICE AMIT RAWAL THURSDAY, THE 20TH DAY OF FEBRUARY 2020 / 1ST PHALGUNA, 1941 WP(C).No.2582 OF 2020(W) JUDGMENT (Dated this the 20[th] day of February, 2020) Petitioner in the instant case has impugned order dated21.03.2019 Ext.P6 rejecting the review petition referred underSection 264 of the Income Tax Act, 1961. It is contended thatthe assessee petitioner is a Religious and Charitable institutionunder the name and style M/s.St.Joseph's Monastery,Koonammavu P.O., Ernakulam. For the assessment year 2015,e-return was filed through net on 27.02.2017 declaring 'nil'income claiming exemption under Section 11 of the Income TaxAct. Assessment was completed under Section 144 of theIncome Tax Act. Learned counsel appearing on behalf of thepetitioner submits that though the matter reached upto the levelof ITAT, the fact remains that no effective opportunity was givento the petitioner to claim exemption under 12A of the Income-tax Act. After verification of return, best judgment assessmentwas passed ex parte adopting the income as returned atRs.1,59,83,844/- for being taxed, rejecting the entire expenses.Rs,1,64,27,399/- as per the return and even 15% legitimateaccumulation under Section 11 were denied. The tax liability was calculated at Rs.76,89,590/-. 2.The pith and substance of the impugned order revealsthat the petitioner failed to respond to the notice issued underSection 142(1) of the Act. The Chartered Accountant of thepetitioner could not appear in the matter. The order impugnedlacks cogent reasons and review has been rejected merely on theground that the petitioner did not respond to the notice issued. 3.Per contra, learned counsel for the Income-taxDepartment Sri Christopher Abraham supports the impugnedorders by urging that the petitioner has failed to place on recordany material. 4.Having heard learned counsel on both sides and onperusing the records, I am of the opinion that the impugnedorder Ext.P4 lacks reasons as to how and under whatcircumstances, the petitioner is not entitled to exemption being aReligious and Charitable Institution. The only ground for rejectionof the review is that the petitioner did not respond to the noticesissued under Section 142 of the Act. For the sake ofconvenience, operative portion of the said order is extractedbelow: “I have carefully examined the submission of the assessee. I have also perused the report of the Assessing Officer. Afterconsidering the assessee's submissions and going throughfacts and circumstances of the case, it is seen that there wasnon-compliance to the notices issued by the Assessing Officerwhich is accepted by the assessee. In this case, the assesseewas given sufficient opportunity by the Assessing Officer toprove its case. I, therefore, decline to interfere with the orderof the Assessing Officer as the assessee has given no cogentreason for not responding to the Assessing Officer's queriesand the petition U/s.264 dated 25.01.2018 is thereby notentertained and the same is filed.” For the aforementioned reasons the writ petition is bereft ofmaterial. The Officers vested with an obligation to dischargejudicial functions are legitimately expected to resort toapplication of mind in a pragmatic and reasonable manner whichis conspicuously absent in the instant case. For that reason, theimpugned order Ext.P6 is set aside. The matter is remitted tothe Commissioner of Income-tax (Exemption), Kochi to considerthe revision petition afresh after affording an opportunity ofhearing to the petitioner. Sd/-AMIT RAWAL JUDGE dsn APPENDIX PETITIONER'S EXHIBITS: