M/S. ORISSA MINING CORPORATION EMPLOYEES GRATUITY FUND TRUST, KHURDA. V. DEPUTY DIRECTOR INCOME TAX, BENGALURU.

WP(C)/1919/2024

AI Insights

The case involves M/s. Orissa Mining Corporation Employees Gratuity Fund Trust, which sought exemption from income tax under section 10(25)(iv) of the Income Tax Act, 1961. The trust's rectification application was initially rejected by the Deputy Director of Income Tax, CPC, Bengaluru, leading to the filing of a writ petition. The primary contention was the incorrect assessment of taxable income, which the trust argued was exempt as a gratuity fund. The revenue's rejection was based on the grounds that the rectification application was barred by time and that the issue was not a rectifiable mistake under section 154 of the Income Tax Act. The court found the reasoning provided by the revenue unsatisfactory and lacking clarity, leading to the quashing of the impugned order.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 761586 (HC-MISC)
• Appeal Type: Others
• Pronouncement Date: 10-09-2024
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: A KEDIA
• Assessee Lawyers: S RAY; K K SAHOO; D K SAMAL
• Keywords: Exemption from Income Tax; Gratuity Fund Trust; Income tax demand; Rectification Application
• Section: 154; 143(1); 10(25)(iv)

Judgement Text

" Page 1 of 4 IN THE HIGH COURT OF ORISSA AT CUTTACK W.P.(C) No.1919 of 2024 M/s. Orissa Mining Corporation Employees Gratuity Fund Trust, Khurda …. Petitioner Represented By Adv. – Mr. S. Ray, Sr. Advocate Mr. K.K. Sahoo, Advocate Mr. D.K. Samal, Advocate -versus- Deputy Director Income Tax, CPC, Bengaluru and others …. Opposite Parties Represented By Adv. – Mr. A. Kedia, Jr. Standing Counsel CORAM: THE HON'BLE MR. JUSTICE ARINDAM SINHA AND THE HON'BLE MR. JUSTICE M.S. SAHOO Order No. ORDER 10.09.2024 02. 1. Mr. Ray, learned senior advocate appears on behalf of petitioner-assessee and submits, his client is a gratuity fund trust. It is entitled to exemption from payment of income tax under section 10 (25)(iv) in Income Tax Act, 1961. // 2 // Page 2 of 4 2. He draws attention to intimation given under section 143(1). He demonstrates, the intimation was addressed to his client as a gratuity fund trust. Date of the intimation was 10th March, 2016. Net amount payable was in excess of rupees four crores. His client applied for rectification. Under challenge is communication dated 27th September, 2023, rejecting the rectification application. 3. Mr. Kedia, learned advocate, Junior Standing Counsel appears on behalf of revenue and submits, the rectification application was barred by time. On query from Court he is unable to demonstrate from impugned order that limitation was a ground for rejection. 4. Text of impugned order is reproduced below. “In response to this office recovery letter issued on 14.08.2023 in regards to collection of outstanding demand, you have submitted the compliance that “Dear Sir, it has observed that, while passing the assessment order u/s 143(1)(a) of the Income- Tax Act for the AY 2014-15, your good self has wrongly arrived at taxable amount is Rs. 4,13,27,500/- without considering the status of registered Gratuity Trust of OMC which is exempt u/s 10(25)(iv) of the Income Tax Act, 1961.” // 3 // Page 3 of 4 The order u/s 154 for the AY 2014-15 has been passed based on the facts and materials submitted by you and available during the scrutiny proceeding. The issue involved in the order is not rectifiable mistake under the purview section 154 which is apparent from records. Hence, your petition for rectification of order is rejected.” (emphasis supplied) 5. We notice, petitioner has approached this Court on delay of over ten months considering statement made in paragraph 3.7. Submission on behalf of revenue is, the rectification application was also delayed. We must presume complacency on part of petitioner in thinking it is exempted from payment of income tax. 6. We draw the presumption because reasons given for rejecting the rectification application are two fold. Firstly that the order was passed based on the facts and materials submitted by the assessee. There is no reflection of such facts or materials. The reason purports to be that petitioner-assessee itself provided grounds for rejection of its application. Secondly said was, issue involved in the order is not rectifiable mistake. There is no illumination why petitioner is not // 4 // Page 4 of 4 exempted from paying income tax under section 10(25)(iv) as urged by it and reflected from impugned order itself. 7. Impugned order is set aside and quashed. Revenue will pass fresh order forthwith. The authority may require assistance from petitioner, if necessary. 8. The writ petition is disposed of. (Arindam Sinha) Judge (M.S. Sahoo) Judge Jyoti Digitally Signed Signed by: JYOTIPRAVA BHOL Reason: Authentication Location: HIGH COURT OF ORISSA Date: 10-Sep-2024 18:48:42 Signature Not Verified "