CUTLER HAMMER PROVIDENT FUND TRUST V. INCOME TAX OFFICER

CWP/28224/2022

AI Insights

The case involves the Cutler Hammer Provident Fund Trust, which filed a writ petition against the Income Tax Officer challenging a penalty notice dated 18.07.2022 under Section 221(1) of the Income Tax Act, 1961, for filing a wrong return for the assessment year 2013-14. The respondent argued that the petitioner had filed the return in the wrong ITR form and section, leading to a demand of Rs. 68,36,280. The court noted that the petitioner had previously corrected a similar mistake for the assessment year 2014-15 and had knowledge of the incorrect filing. The court dismissed the petition, emphasizing the petitioner's awareness and previous corrective actions.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 749481 (HC-MISC)
• Appeal Type: Others
• Pronouncement Date: 29-08-2024
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: VARUN ISSAR
• Assessee Lawyers: SAMARVIR SINGH; AGAM BANSAL; SUPARNA SINGH; ANSHUL; JIVESH MALIK
• Keywords: Assessment Year 2013-14; Defective return; Exemption Claim; Penalty notice; Wrong ITR form
• Section: 143(3); 154; 143(1); 156; 139(4A); 249; 221(1)

Judgement Text

"CWP-28224-2022 107+226 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CUTLER HAMMER PROVIDENT FUND TRUST INCOME TAX OFFICER CORAM: HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON’BLE MR. JUSTICE Present: Mr. Mr. Agam Bansal, Advocate Ms. Suparna Mr. Anshul, Advocate Mr. Jivesh Malik, Advocate for the Mr. Varun Issar, for the respondent SANJEEV PRAKASH SHARMA, J.(Oral) CM-5739-CWP Application for placing on record to R3 and seeking exemption from filing certified copy thereof is allowed. Registry to place the same at appropriate place. Main case 1. The writ petition has been penalty notice dated 18.07.2022 passed under Section 221(1) of the 2022 (O&M) Page 1 of 6 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CUTLER HAMMER PROVIDENT FUND TRUST Vs. INCOME TAX OFFICER **** HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON’BLE MR. JUSTICE SANJAY VASHISTH **** Mr. Samarvir Singh, Advocate with Mr. Agam Bansal, Advocate Ms. Suparna Jain Singh, Advocate Mr. Anshul, Advocate Mr. Jivesh Malik, Advocate for the petitioner. Mr. Varun Issar, Sr. Standing Counsel for the respondent. **** SANJEEV PRAKASH SHARMA, J.(Oral) CWP-2024 Application for placing on record to R3 and seeking exemption from filing certified copy thereof is allowed. Registry to place the same at appropriate place. The writ petition has been preferred by the petitioner assailing the penalty notice dated 18.07.2022 passed under Section 221(1) of the IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CM-5739-CWP-2024 in/and CWP-28224-2022 (O&M) Date of Decision: 29.08.2024 CUTLER HAMMER PROVIDENT FUND TRUST . . . . Petitioner . . . . Respondent HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA SANJAY VASHISTH Samarvir Singh, Advocate with Jain Singh, Advocate Sr. Standing Counsel SANJEEV PRAKASH SHARMA, J.(Oral) Application for placing on record reply along with Annexure R1 to R3 and seeking exemption from filing certified copy thereof is allowed. Registry to place the same at appropriate place. preferred by the petitioner assailing the penalty notice dated 18.07.2022 passed under Section 221(1) of the in/and (O&M) .2024 Petitioner . . . . Respondent reply along with Annexure R1 preferred by the petitioner assailing the penalty notice dated 18.07.2022 passed under Section 221(1) of the MOHIT GOYAL 2024.08.29 17:13 I attest to the accuracy and integrity of this document CWP-28224-2022 Income Tax Act, 1961 account of filing wrong return for the AY 2013 2. Notice was issued by this Court w respondent, and it is stated by the respondent as under: are wrong and denied. It is submitted herein that return of income for the assessment year 2013 30.03.2014. Further, the case was processed u/s 143(1) of the Income Tax Act, 1961, on 17.03.2015, creating a demand of Rs. 68,36,280/ the case then it is noticed that the Petitioner has filed ITR Form 7 u/s 139(4A) du the same is filed in wrong ITR form and section which is not applicable in the case of the assesee. The intimation regarding the defective ITR is sent by CPC the assessee as seen from the CPC 2.0 portal Tax Department. The screenshot of the CPC 2.0 is attached Annexure R centralised processing centre (hereinafter refer as CPC) the same return has been transferred to the Jurisdictional assessing The ITR has been Assessing officer but as the same is filed under wrong ITR form and section the system does not taken up the exemption of the Petitioner and a demand Therefore, the claim of the exemption is rejected by the system due to filing wrong ITR form and Wrong section also. The Processing sheet/intimation as available with the respondent is attached as annexure R Petitioner in the Assessment Year 2014 again filed the ITR Form 7 under section 139(4A) and the same got declared invalid by the CPC and when the 2022 (O&M) Page 2 of 6 Income Tax Act, 1961 (for short ‘the Act’) account of filing wrong return for the AY 2013 Notice was issued by this Court whereafter reply has been filed by the respondent, and it is stated by the respondent as under: “2. That the contents of Para No. 2 of the petition are wrong and denied. It is submitted herein that return of income for the assessment year 2013 30.03.2014. Further, the case was processed u/s 143(1) of the Income Tax Act, 1961, on 17.03.2015, creating a demand of Rs. 68,36,280/-. If we go into the background of the case then it is noticed that the Petitioner has filed ITR Form 7 u/s 139(4A) due to which his return got defective as the same is filed in wrong ITR form and section which is not applicable in the case of the assesee. The intimation regarding the defective ITR is sent by CPC the assessee as seen from the CPC 2.0 portal Tax Department. The screenshot of the CPC 2.0 is attached Annexure R-1. Since the Petitioner does not respond to the centralised processing centre (hereinafter refer as CPC) the same return has been transferred to the Jurisdictional assessing officer i.e. office of the undersigned respondent. The ITR has been processed by the then Jurisdictional Assessing officer but as the same is filed under wrong ITR form and section the system does not taken up the exemption of the Petitioner and a demand Therefore, the claim of the exemption is rejected by the system due to filing wrong ITR form and Wrong section also. The Processing sheet/intimation as available with the respondent is attached as annexure R The above mistake has again repe Petitioner in the Assessment Year 2014 again filed the ITR Form 7 under section 139(4A) and the same got declared invalid by the CPC and when the (for short ‘the Act’) imposing penalty on account of filing wrong return for the AY 2013-14. hereafter reply has been filed by the respondent, and it is stated by the respondent as under: 2. That the contents of Para No. 2 of the petition are wrong and denied. It is submitted herein that return of income for the assessment year 2013-14 was filed on 30.03.2014. Further, the case was processed u/s 143(1) of the Income Tax Act, 1961, on 17.03.2015, creating a . If we go into the background of the case then it is noticed that the Petitioner has filed ITR e to which his return got defective as the same is filed in wrong ITR form and section which is not applicable in the case of the assesee. The intimation regarding the defective ITR is sent by CPC- Bangalore to the assessee as seen from the CPC 2.0 portal of the Income Tax Department. The screenshot of the CPC 2.0 is attached 1. Since the Petitioner does not respond to the centralised processing centre (hereinafter refer as CPC) the same return has been transferred to the Jurisdictional officer i.e. office of the undersigned respondent. processed by the then Jurisdictional Assessing officer but as the same is filed under wrong ITR form and section the system does not taken up the exemption of the Petitioner and a demand is created. Therefore, the claim of the exemption is rejected by the system due to filing wrong ITR form and Wrong section also. The Processing sheet/intimation as available with the respondent is attached as annexure R-2. The above mistake has again repeated by the Petitioner in the Assessment Year 2014-15 wherein he again filed the ITR Form 7 under section 139(4A) and the same got declared invalid by the CPC and when the imposing penalty on hereafter reply has been filed by the MOHIT GOYAL 2024.08.29 17:13 I attest to the accuracy and integrity of this document CWP-28224-2022 Petitioner receive mail from CPC regarding defective return, he revised the same and the same got processed. The screenshot of the CPC 2.0 module of the Income Tax Department substantiating the above stated fact is attached as annexure R is clear that there is mistake from the petitioner side for Assessment Year 2013 question was raised. 143(3) and section 156. Both of this is not applicable in the case of the assesee as per procedure laid down in the Income 3. The respondent circumvented 154 of the Act, and also has not availed the remedy of appeal as provided under Section 249 of the Act. 4. Faced submits that the respondent has not given him fair opportunity. The demand of Rs.68,36,280/ with a fresh notice to be given to the petitioner under Sectio the Act, so that the petitioner may be able to correct his return accordingly. 5. We have considered the submissions. as under: from the record an income section 116 may, 2022 (O&M) Page 3 of 6 Petitioner receive mail from CPC regarding defective return, he revised the same and filed ITR Form No. 5 and the same got processed. The screenshot of the CPC 2.0 module of the Income Tax Department substantiating the above stated fact is attached as annexure R is clear that there is mistake from the petitioner side for Assessment Year 2013-14 due to which the demand in question was raised. The petitioner further stated about the intimation u/s 143(3) and section 156. Both of this is not applicable in the case of the assesee as per procedure laid down in the Income Tax Act, 1961.” The respondent has further objected that the petitioner has circumvented the remedy available to him as enshrined under Section 154 of the Act, and also has not availed the remedy of appeal as provided under Section 249 of the Act. Faced with the said objections, learned counsel for the petitioner submits that the respondent has not given him fair opportunity. The demand of Rs.68,36,280/- by way of penalty ought to be withdrawn a fresh notice to be given to the petitioner under Sectio the Act, so that the petitioner may be able to correct his return accordingly. We have considered the submissions. Section 154 of the Act provides as under: “154. Rectification of mistake. - [(1) With a view to rectifying any mistake apparent from the record an income-tax authority referred to in section 116 may,- Petitioner receive mail from CPC regarding defective filed ITR Form No. 5 and the same got processed. The screenshot of the CPC 2.0 module of the Income Tax Department substantiating the above stated fact is attached as annexure R-3. Therefore, it is clear that there is mistake from the petitioner side for the 14 due to which the demand in The petitioner further stated about the intimation u/s 143(3) and section 156. Both of this is not applicable in the case of the assesee as per procedure laid down in the objected that the petitioner has the remedy available to him as enshrined under Section 154 of the Act, and also has not availed the remedy of appeal as with the said objections, learned counsel for the petitioner submits that the respondent has not given him fair opportunity. The by way of penalty ought to be withdrawn a fresh notice to be given to the petitioner under Section 143(1) of the Act, so that the petitioner may be able to correct his return Section 154 of the Act provides 154. Rectification of mistake. [(1) With a view to rectifying any mistake apparent tax authority referred to in objected that the petitioner has the remedy available to him as enshrined under Section 154 of the Act, and also has not availed the remedy of appeal as with the said objections, learned counsel for the petitioner submits that the respondent has not given him fair opportunity. The by way of penalty ought to be withdrawn n 143(1) of the Act, so that the petitioner may be able to correct his return Section 154 of the Act provides MOHIT GOYAL 2024.08.29 17:13 I attest to the accuracy and integrity of this document CWP-28224-2022 provisions of this Act;] under sub 27 of section 206CB.] [Inserted by Finance Act, 2015 (No. 20 of 2015), dated 14.5.2015.] decided in any proce relating to an order referred to in sub authority passing such order may, notwithstanding anything contained in any law for the time being in force, amend the order under that sub matter other than the matter which has been so considered and decided.] [ Inserted by Act 31 of 1964, Section 7 (w.e.f. 6.10.1964).] the authority concerned of its own motion, and such mistake which has been brought to its notice by the assessee, and where the authority concerned is the [* * *] [ Certain words omitted by Act 21 of 1998, Section 65 (w.e.f. by Act 29 of 1977, Section 29 (w.e.f. 10.7.1978).], by the [Assessing Officer] [ Substituted by Act 4 of 1988, Section 2, for \" Income 38 (w.e.f. 1.6.1994).] enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee, shall not be made under this section unless the authority concerned has 2022 (O&M) Page 4 of 6 (a) amend any order passed by it under the provisions of this Act;] (b) [ amend any intimation or deemed intimation under sub-section (1) of section 143.] [ Substituted by Act 27 of 1999, Section 65, for Clause (b) (w.e.f. 1.6.1999).] (d) [ amend any intimation under sub section 206CB.] [Inserted by Finance Act, 2015 (No. 20 of 2015), dated 14.5.2015.] [(1-A) Where any matter has been considered and decided in any proceeding by way of appeal or revision relating to an order referred to in sub authority passing such order may, notwithstanding anything contained in any law for the time being in force, amend the order under that sub-section in relation to a matter other than the matter which has been so considered and decided.] [ Inserted by Act 31 of 1964, Section 7 (w.e.f. 6.10.1964).] (2) Subject to the other provisions of this section, the authority concerned- (a) may make an amendment under sub of its own motion, and (b) shall make such amendment for rectifying any such mistake which has been brought to its notice by the assessee, and where the authority concerned is the [* * *] [ Certain words omitted by Act 21 of 1998, Section 65 (w.e.f. 1.10.1998).] [Commissioner (Appeals)] [ Inserted by Act 29 of 1977, Section 29 (w.e.f. 10.7.1978).], by the [Assessing Officer] [ Substituted by Act 4 of 1988, Section 2, for \" Income-tax Officer\" (w.e.f. 1.4.1988).] also. [* * *] [ Proviso omitted by Act 38 (w.e.f. 1.6.1994).] (3) An amendment, which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee, shall not be made under this section unless the authority concerned has amend any order passed by it under the [ amend any intimation or deemed intimation section (1) of section 143.] [ Substituted by Act 1999, Section 65, for Clause (b) (w.e.f. 1.6.1999).] [ amend any intimation under sub-section (1) of section 206CB.] [Inserted by Finance Act, 2015 (No. 20 of A) Where any matter has been considered and eding by way of appeal or revision relating to an order referred to in sub-section (1), the authority passing such order may, notwithstanding anything contained in any law for the time being in force, section in relation to any matter other than the matter which has been so considered and decided.] [ Inserted by Act 31 of 1964, Section 7 (w.e.f. Subject to the other provisions of this section, may make an amendment under sub-section (1) shall make such amendment for rectifying any such mistake which has been brought to its notice by the assessee, and where the authority concerned is the [* * *] [ Certain words omitted by Act 21 of 1998, Section 65 1.10.1998).] [Commissioner (Appeals)] [ Inserted by Act 29 of 1977, Section 29 (w.e.f. 10.7.1978).], by the [Assessing Officer] [ Substituted by Act 4 of 1988, Section tax Officer\" (w.e.f. 1.4.1988).] also. [* * *] [ Proviso omitted by Act 32 of 1994, Section An amendment, which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee, shall not be made under this section unless the authority concerned has given MOHIT GOYAL 2024.08.29 17:13 I attest to the accuracy and integrity of this document CWP-28224-2022 notice to the assessee of its intention so to do and has allowed the assessee a reasonable opportunity of being heard. an order shall be passed in writing by the income authority concerned. any such amendment has the effect of reducing the assessment, the [Assessing Officer] [ Substituted by Act 4 of 1988, Section 2, for \" Income 1.4.1988).] shall make any refund which may b such assessee. enhancing the assessment or reducing a refund already made, the [Assessing Officer] [Substituted by Act 4 of 1988, Section 2, for \" Income 1.4.1988).] shall serve o in the prescribed form specifying the sum payable, and such notice of demand shall be deemed to be issued under section 156 and the provisions of this Act shall apply accordingly. sub section shall be made after the expiry of four years [from the end of the financial year in which the order sought to be amended was passed] [ Substituted by Act 67 of 1984, Section 29, for \" f amended\" (w.e.f. 1.10.1984).]. section (7), where an application for amendment under this section is made by the assessee on or after the 1st day of June, 2001 to an in section (1), the authority shall pass an order, within a period of six months from the end of the month in which the application is received by it, 2022 (O&M) Page 5 of 6 notice to the assessee of its intention so to do and has allowed the assessee a reasonable opportunity of being heard. (4) Where an amendment is made under this section, an order shall be passed in writing by the income authority concerned. (5) Subject to the provisions of section 241, where any such amendment has the effect of reducing the assessment, the [Assessing Officer] [ Substituted by Act 4 of 1988, Section 2, for \" Income 1.4.1988).] shall make any refund which may b such assessee. (6) Where any such amendment has the effect of enhancing the assessment or reducing a refund already made, the [Assessing Officer] [Substituted by Act 4 of 1988, Section 2, for \" Income 1.4.1988).] shall serve on the assessee a notice of demand in the prescribed form specifying the sum payable, and such notice of demand shall be deemed to be issued under section 156 and the provisions of this Act shall apply accordingly. (7) Save as otherwise provided in section sub-section (4) of section 186, no amendment under this section shall be made after the expiry of four years [from the end of the financial year in which the order sought to be amended was passed] [ Substituted by Act 67 of 1984, Section 29, for \" from the date of the order sought to be amended\" (w.e.f. 1.10.1984).]. (8) [ Without prejudice to the provisions of sub section (7), where an application for amendment under this section is made by the assessee on or after the 1st day of June, 2001 to an income-tax authority referred to in sub section (1), the authority shall pass an order, within a period of six months from the end of the month in which the application is received by it,- notice to the assessee of its intention so to do and has allowed the assessee a reasonable opportunity of being (4) Where an amendment is made under this section, an order shall be passed in writing by the income-tax Subject to the provisions of section 241, where any such amendment has the effect of reducing the assessment, the [Assessing Officer] [ Substituted by Act 4 of 1988, Section 2, for \" Income-tax Officer\" (w.e.f. 1.4.1988).] shall make any refund which may be due to (6) Where any such amendment has the effect of enhancing the assessment or reducing a refund already made, the [Assessing Officer] [Substituted by Act 4 of 1988, Section 2, for \" Income-tax Officer\" (w.e.f. n the assessee a notice of demand in the prescribed form specifying the sum payable, and such notice of demand shall be deemed to be issued under section 156 and the provisions of this Act shall apply (7) Save as otherwise provided in section 155 or section (4) of section 186, no amendment under this section shall be made after the expiry of four years [from the end of the financial year in which the order sought to be amended was passed] [ Substituted by Act 67 of 1984, rom the date of the order sought to be (8) [ Without prejudice to the provisions of sub- section (7), where an application for amendment under this section is made by the assessee on or after the 1st day of tax authority referred to in sub- section (1), the authority shall pass an order, within a period of six months from the end of the month in which the MOHIT GOYAL 2024.08.29 17:13 I attest to the accuracy and integrity of this document CWP-28224-2022 6. Keeping petitioner was having full knowledge of having filed return in the wrong format. More so, as he had also filed return for the AY 2014 in the ITR Form 7, which was later on revised by him a filed under Form No.5 subsequently. Once he has himself corrected his ITR for the subsequent AY 2014 petitioner not to correct his ITR for AY 2013 7. Be that as it may, the petitioner has remedy in terms of Sec the Act as above for seeking necessary rectifications. If such an application is moved by the petitioner, the respondent shall decide the same on the basis as above, and allow the petitioner, if required, to file return. 8. No further adjudication is accordingly dismissed in aforesaid terms. 9. All pending applications also stand disposed of accordingly. August 29, 2024 Mohit goyal 1. Whether speaking/reasoned? 2. Whether reportable? 2022 (O&M) Page 6 of 6 (a) making the amendment; or (b) refusing to allow the claim.] Keeping in view the provisions as above, it is apparent that the petitioner was having full knowledge of having filed return in the wrong format. More so, as he had also filed return for the AY 2014 in the ITR Form 7, which was later on revised by him a filed under Form No.5 subsequently. Once he has himself corrected his ITR for the subsequent AY 2014-15, there was no occasion for the petitioner not to correct his ITR for AY 2013 Be that as it may, the petitioner has remedy in terms of Sec the Act as above for seeking necessary rectifications. If such an application is moved by the petitioner, the respondent shall decide the same on the basis as above, and allow the petitioner, if required, to file No further adjudication is required by this Court at this stage. Petition is accordingly dismissed in aforesaid terms. All pending applications also stand disposed of accordingly. (SANJEEV PRAKASH SHARMA , 2024 1. Whether speaking/reasoned? Yes/No 2. Whether reportable? Yes/No making the amendment; or refusing to allow the claim.]” in view the provisions as above, it is apparent that the petitioner was having full knowledge of having filed return in the wrong format. More so, as he had also filed return for the AY 2014-15 in the ITR Form 7, which was later on revised by him and ITR was filed under Form No.5 subsequently. Once he has himself corrected his 15, there was no occasion for the petitioner not to correct his ITR for AY 2013-14. Be that as it may, the petitioner has remedy in terms of Section 154 of the Act as above for seeking necessary rectifications. If such an application is moved by the petitioner, the respondent shall decide the same on the basis as above, and allow the petitioner, if required, to file is required by this Court at this stage. Petition is accordingly dismissed in aforesaid terms. All pending applications also stand disposed of accordingly. SANJEEV PRAKASH SHARMA) JUDGE (SANJAY VASHISTH) JUDGE Yes/No Yes/No in view the provisions as above, it is apparent that the petitioner was having full knowledge of having filed return in the 15 nd ITR was filed under Form No.5 subsequently. Once he has himself corrected his 15, there was no occasion for the tion 154 of the Act as above for seeking necessary rectifications. If such an application is moved by the petitioner, the respondent shall decide the same on the basis as above, and allow the petitioner, if required, to file is required by this Court at this stage. Petition MOHIT GOYAL 2024.08.29 17:13 I attest to the accuracy and integrity of this document "