Pending rectification application to be considered by CIT(A) as AO started recovery proceedings :HC
Kerala HC directed CIT(A) to consider pending rectification application as AO initiated recovery proceedings
HIGH COURT OF KERALA
Manambur Service Co-Operative Bank Ltd.
v.
Income-tax Officer
W.P. (C) NO. 601 OF 2020(A)
JANUARY 22, 2020
C.A. Jojo, Adv. for the Petitioner. Christopher Abraham, Standing Counsel for the Respondent.
JUDGMENT
1. The facts projected in this Writ Petition (Civil) are as follows: The petitioner is a primary co-operative society who filed return of income for the assessment year 2015-16 declaring total income at Nil after claiming eligible deduction u/s 80P of the Income-tax Act, 1961. The assessing officer completed the assessment u/s 143(3) by Ext.P-1 order dated 29-11-2017 disallowing eligible deduction u/s 80(P)(2)(a)(i) of the Income-tax Act, 1961 and computed total income as Rs. 41,28,889/- as against the declared income of Nil. Ext.P-2 demand notice u/s 156 for Rs. 17,43,640/- also been issued. The assessment was done against the judgment of this Court in Chirakkal Service Co-op. Bank Ltd. v. CIT [IT Appeal No. 212 of 2013 dated 15-2-2016.] The petitioner filed Ext.P-3 statutory appeal before the 3rd respondent challenging Ext.P-1 assessment order. By Ext.P-4 order the 3rd respondent allowed the appeal by granting deduction u/s 80(P)(2)(d)(a)(i) of the Income-tax Act, 1961, by deleting the tax amount assessed by the 1st respondent. After one year of Ext.P-4 order, the 3rd respondent suo motu initiated rectification proceedings u/s 154 of the said Act stating that there is apparent mistake. The petitioner filed objection and also enlightened the 3rd respondent the clarification Circular No.133/6 dated 9.5.2017 issued by the Central Board of Direct Taxes that a co-operative society, irrespective of its classification or nomenclature, is eligible for deduction u/s 80P. But without considering any of the objections raised by the petitioner, the 3rd respondent unilaterally allowed the rectification petition as per Ext.P-6. Consequent to that, the 1st respondent issued Ext.P-7 order giving effect to the order of the 3rd respondent. Aggrieved by Ext.P-6 order, the petitioner filed Ext.P-8 petition for rectification of mistake u/s 154 of the Income-tax Act, 1961, which is pending before the 3rd respondent. Meanwhile, coercive steps are initiated to recover the disputed tax amount from the petitioner. The similar issues occurred for assessment years 2013-14 and 2008-09. The Exts.P-8, P-15 and P-21 statutory rectification petitions are pending before the 3rd respondent. But the 1st respondent initiated coercive steps by Exts.P-22, P-23 and P-24 letters of demand to recover the disputed tax amount. It is in the light of these averments and contentions that the petitioner has filed the instant Writ Petition (Civil) with the following prayers:
| “i. | To issue a writ of certiorari quashing Exts.P-6, P-13 and P-19 rectification orders and P-22, P-23 and P-24 letters of demand issued by the respondents. | |
| ii. | To issue a writ, order or direction to the 1st respondent to keep in abeyance all the recovery proceedings pursuant to Exts.P-22, P-23 and P-24 letters of demand till the final disposal of the appeals before the 3rd respondent. | |
| iii. | To issue a writ of mandamus or other appropriate writ, order or direction to the 2nd respondent to consider the Exts.P-8, P-15 and P-21 rectification petitions on merit and also restrain the respondents from initiating coercive proceedings against the petitioner society till the final orders are passed in Exts.P-8, P-15 and P-21 by the 3rd respondent. | |
| iv. | To grant such other reliefs which this Hon’ble Court may deem fit and proper in the circumstances of the case.” |
2. Heard Sri.C.A. Jojo, learned counsel appearing for the petitioner and Sri.Christopher Abraham, learned Standing Counsel for the Income Tax Department appearing for the respondents.
3. Taking note of the facts and circumstances of the case, it is ordered that the rectification applications as per Exts.P-8, P-15 & P-21 will be taken up for consideration by R-3 without much delay, and affording reasonable opportunity of being heard to the petitioner through authorised representative/counsel, if any, may pass orders thereon without much delay preferably within a period of 4 to 6 weeks from the date of production of a certified copy of this judgment. Until orders are passed on Exts.P-8, P-15 & P-21 as aforestated, further coercive steps for enforcement of the impugned orders shall be kept in abeyance by the respondents concerned.
With these observations and directions, the above Writ Petition (Civil) stands finally disposed of.
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