KERALA TRANSPORT DEVELOPMENT FINANCE V. THE UNION OF INDIA

WP(C)/35383/2018

AI Insights

The case involves the Kerala Transport Development Finance, a non-banking financial company, challenging the rejection of their rectification petitions under Section 154 of the Income Tax Act. The petitioner had previously filed an appeal against an order under Section 201 of the Act, which was still pending. The rectification petitions were rejected by the assessing authority on the grounds that the appeal was pending and some documents were not uploaded. The petitioner argued that the pendency of the appeal should not affect the right to rectification. The court's decision primarily addressed the procedural aspects of handling the rectification petitions, setting aside the rejection order and directing compliance with procedural requirements.

• Counselvise Citation: [2018] 140 COUNSELVISE.COM (IT) 740818 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 13-12-2018
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: KRISHNADAS NAIR; CHRISTOPHER ABRAHAM
• Assessee Lawyers: M NAMBIAR; JOSON MANAVALAN; K MATHAI; KURYAN THOMAS; PAULOSE ABRAHAM; P GOPINATH
• Keywords: Appeal Pending; Income Tax; Non banking financial company; Rectification petition; TDS
• Section: 201; 154; 154(IA)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU THURSDAY,THE 13TH DAY OF DECEMBER 2018 / 22ND AGRAHAYANA, 1940 WP(C).No. 35383 of 2018 PETITIONER: KERALA TRANSPORT DEVELOPMENT FINANCE LEVEL 8(6TH FLOOR)TRANS TOWERS VAZHUTHACAUD THIRUVANANTHAPURAM-695014 REPRESENTED BY ITS MANAGING DIRECTOR MR.RAHUL.R.IRS BY ADVS. SRI.M.GOPIKRISHNAN NAMBIAR SRI.JOSON MANAVALAN SRI.K.JOHN MATHAI SRI.KURYAN THOMAS SRI.PAULOSE C. ABRAHAM SRI.P.GOPINATH RESPONDENTS: 1 THE UNION OF INDIA REPRESENTED BY THE SECRETARY, MINISTRY OF FINANCE (DEPARTMENT OF REVENUE), NORTH BLOCK NEW DELHI-110001 2 THE DEPUTY COMMISSIONER OF INCOME TAX (TDS), (PREVIOUSLY DESIGNATED AS ASSISTANT COMMISSIONER OF INCOME TAX (TDS)), 3RD FLOOR, AAYAKAR BHAVAN, KOWDIAR P.O., THIRUVANANTHAPURAM - 695 003. 3 THE COMMISSIONER OF INCOME TAX AAYAKAR BHAVAN, KOWDIAR P.O. THIRUVANANTHAPURAM - 695 003. BY ADV. SRI.KRISHNADAS P.NAIR, CGC SC FOR INCOME TAX SRI. CHRISTOPHER ABRAHAM THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 13.12.2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 35383 of 2018 2 JUDGMENT The petitioner is a non-banking financial company. Challenging the order under Section 201 of the Income Tax Act, the petitioner has already filed a statutory appeal, now pending before the Commissioner of Income Tax (Appeals). Pending that appeal, the petitioner filed the Exts.P7 and P8 rectification petitions under Section 154 of the Act. But the assessing authority has rejected them through the Ext.P9. Assailing that order, the petitioner has filed this Writ Petition. 2. The petitioner's counsel contends hat the petitioner's request for rectification was rejected essentially on the ground that the appeal is still pending. He contends that the pendency does not affect the petitioner's right to rectification. According to him, under Section 154(IA), the bar operates only when the appeal has been heard and disposed of. 3. The learned Standing Counsel, on the other hand, asserts that the rejection is not only because the appeal is pending, but also because the petitioner has not uploaded a few essential documents. And WP(C).No. 35383 of 2018 3 according to him, some rectifications sought are debatable. 4. In reply, the petitioner's counsel submits that the petitioner is willing to upload whatever the documents the assessing authority has suggested. Once that is done, the authority may consider the petitioner's claim and give effect to the deductions that are permissible without further adjudication. 5. As seen from the instruction that, the assessing officer has communicated to the learned Standing Counsel as follows: ”xxxxxxxx 2. The primary contention of the deductor is that under various sections the demand is based on the figures as per audited financial statements and the total tax paid as per returns (quarterly statements) is deducted from the same to arrive at short fall. Rule 31A of Income Tax Rules 1962 stipulates that the deductor has to ensure that all TDS liable payments should be uploaded in 26Q statements, even when TDS is not deducted by raising flags A/B/C/Y/T/Z as pointed out in Notes to Form 26Q. Hence wherever the deductor had failed to upload a specific payment in the quarterly statement without proper TDS/specific reason for non deduction the same was considered as short deduction on the WP(C).No. 35383 of 2018 4 part of the deductor. Therefore to reduce the demand, the deductor can file correction statements in TRACES by incorporating correct data and the reconciliation of the same with the data provided in 201 proceedings, which is to be submitted to the jurisdictional officer(TDS). xxxxxxxxx” 6. Under these circumstances, without adverting to the merits, I dispose of the Writ Petition as follows: If the petitioner complies with the requirements as set out above, the Assessing Officer will consider the petitioner's Exts.P7 and P8 rectification applications. Essentially for this purpose, I need to set aside Ext.P9, and I do so. Sd/- DAMA SESHADRI NAIDU JUDGE WP(C).No. 35383 of 2018 5 APPENDIX PETITIONER'S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE LETTER DATED 09.02.2016 ISSUED BY THE 2ND RESPONDENT TOT HE PETITIONER 2014-2015. EXHIBIT P1 A TRUE COPY OF THE LETTER DATED 09.02.2016 ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER 2015-2016 EXHIBIT P2 THE TRUE COPY OF THE LETTER DATED 10.10.2017 ISSUED BY THE 2ND RESPONDENT. EXHIBIT P3 THE TRUE COPY OF THE LETTER (WITHOUT ANNEXURES) DATED 20.10.2017 SUBMITTED BY THE PETITIONER. EXHIBIT P3 A THE TRUE COPY OF THE LETTER (WITHOUT ANNEXURE) DATED 31.10.2017 SUBMITTED BY THE PETITIONER. EXHIBIT P4 THE TRUE COPY OF THE LETTER DATED 21.11.2017 (ALONG WITH ANNEXURES) SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. EXHIBIT P5 THE TRUE COPY OF THE LETTER (WITHOUT ANNEXURES) DATED 18.12.2017 SUBMITTED BY THE PETITIONER TO THE 2ND RESPONDENT. EXHIBIT P6 THE TRUE COPY OF THE ORDER DATED 20.04.2018 ISSUED BY THE 2ND RESPONDENT UNDER SECTION 201(1) AND 201 (IA) OF THE ACT. EXHIBIT P7 TRUE COPY OF THE RECTIFICATION PETITION DATED 19.06.2018 (ALONG WITH ANNEXURES) SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENT EXHIBIT P8 THE TRUE COPY OF THE LETTER DATED 13.07.2018 (ALONG WITH ANNEXURES SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. EXHIBIT P9 THE TRUE COPY OF THE ORDER DATED 11.09.2018 ISSUED BY THE 2ND RESPONDENT REJECTING THE NOTIFICATION PETITIONS. RESPONDENTS' EXHIBITS- NIL // TRUE COPY // P.A. TO JUDGE SD "