Wp(C)/8890/2020 Of Sree Narayana Educational And Charitable Society v. The Commissioner Of Income Tax (Exemptions)

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE AMIT RAWAL MONDAY, THE 01ST DAY OF JUNE 2020 / 11TH JYAISHTA, 1942 WP(C).No.8890 OF 2020(I) PETITIONER/S: SREE NARAYANA EDUCATIONAL AND CHARITABLE SOCIETYNENMENI POST, KOLLENGODE, PALAKKAD DISTRICT-678506, BY ADVS.SRI.SAJAN VARGHEESE K.SRI.LIJU. M.P RESPONDENT/S: 1THE COMMISSIONER OF INCOME TAX (EXEMPTIONS)SAN JAUN TOWERS, COCHIN-682018,SAN JAUN TOWERS, COCHIN-682018, 2THE INCOME TAX OFFICER,EXEMPTION WARD, AAYAKAR BHAVAN, INCOME TAX OFFICE, SAKTHAN THAMPURAN NAGAR, THRISSUR-682001.EXEMPTION WARD, AAYAKAR BHAVAN, INCOME TAX OFFICE, SAKTHAN THAMPURAN NAGAR, THRISSUR-682001. OTHER PRESENT: SRI CHRISTOPHER ABRAHAM SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON01.06.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: JUDGMENT Dated this the 1st day of June 2020 The petitioner is an Educational and charitable Society, who in theinstant Writ Petition, sought the indulgence of this Court to issue a writ in thenature of mandamus, directing the 1[st] respondent to dispose of Ext.P3, at theearliest and until such time, the demand in terms of Ext.P4 may be ordered tobe kept in abeyance. As per the facts which emanate from the pleadings,petitioner Society has been issued a certificate under Section 12AA of theIncome Tax Act, 1961 for the assessment year 2017-18, to be filed the Return ofincome. The Income Tax Return was to be filed on before 07/11/2017 in viewof the extension granted by the Central Board of Direct Taxes. However, theReturn could not be filed. 2.On account of non-filing of the Return by the petitioner, thepetitioner was received notice under section 142(1) of the Act to file the Returnon or before 07/04/2018, but the same could not be filed within the timegranted and in fact, it was filed on 04/05/2018. It is in this backdrop of thematter, exemption under Section 11 was denied by the 2[nd] respondent andassessed the Tax by invoking the provisions of Section 143(3) of the IncomeTax Act, 1961, resulting into an assessment order dated 27/02/2019, Ext.P1 andthe Demand Notice of even date Ext.P2 whereby the income was assessed as Rs.1,11,20,325/- by denying the benefit of exemption under Section 11.Mr.Sajan Varghese K, the learned counsel appearing on behalf of the petitionersubmits that there were certain disputes among the members and on accountof that, the Return could not be filed and there was a delay. Under theprovisions of Section 119 2(B) of the Income Tax and the Circular F.No.197/55/2018 – ITA-1 dated 22/05/2019 the guidelines of the Board, the delay infiling of Form 10B Audit Report for assessment years 2016-17 and 2017-18 couldbe condoned. It is in this background of the matter, an application, Ext.P3dated 30.01.2020 was filed. But it is still pending and in the meantime, theDemand, Ext.P4 dated 09.03.2020 calling upon the petitioner to pay a sum ofRs.50,101,576/- has been issued. The petitioner is thus left in lurch in theabsence of any adjudication on Ext.P3. 3.Mr.Christopher Abraham accepts notice on behalf of therespondents and submits that on account of non-filing of Return within theusual period and extended period, the exemption under Section 11 had to bewithdrawn/cancelled. The benefit of exemption had not been grantedresulting into issuance of demand and urges this Court for dismissal of thisWrit Petition. 4.Heard the learned counsel for parties and perused the paper book.The facts narrated above are not in dispute. Once the circular provides the opportunity to assessees having issued a Registration under Section 12AA ofthe Income Tax Act, to seek to recall of the denied exemption in Form 10B andto seek condonation of delay which as noticed above has already been filed inJanuary 2020 vide Ext.P1, but there is no adjudication so far and during itspendency, the impugned Demand Notice of March 2020, Ext.P4 has been issued. 4.Heard the learned counsel for parties and perused the paper book.The facts narrated above are not in dispute. Once the circular provides the opportunity to assessees having issued a Registration under Section 12AA ofthe Income Tax Act, to seek to recall of the denied exemption in Form 10B andto seek condonation of delay which as noticed above has already been filed inJanuary 2020 vide Ext.P1, but there is no adjudication so far and during itspendency, the impugned Demand Notice of March 2020, Ext.P4 has been issued. 5.Without expressing anything on the merit of the matter,particularly contents of Ext.P3, I dispose of this Writ petition by issuingdirections to the 1[st] respondent and take a call on the application, Ext.P3 filedunder Form 10B of the Circular ibid in accordance with law, after affording anopportunity of hearing to the petitioner as expeditiously as possible within aperiod of 2 months. Until such time, the demand raised in Exts.P1, P2 and P4 isalso to be kept in abeyance. It is made clear that the interim order is only tillthe disposal of the application, Ext.P3 and not thereafter. This writ petition stands disposed of in the aforementioned directions. Nsd Sd/- AMIT RAWALJUDGE APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 27.12.2019 PASSED BY THE 2ND RESPONDENT. EXHIBIT P2 TRUE COPY OF THE NOTICE OF DEMAND DATED 27.12.2019 ISSUED BY THE 2ND RESPONDENT. EXHIBIT P3 TRUE COPY OF THE PETITION DATED 30.01.2020 SUBMITTED BEFORE THE FIRST RESPONDENT SEEKING CONDONATION OF DELAY. EXHIBIT P4 TRUE COPY OF THE DEMAND NOTICE DATED 09.03.2020 ISSUED BY THE 2ND RESPONDENT.