RAJAHMUNDRY GANDHIPURAM COOPERATIVE BUILDING SOCIETY LIMITED V. THE INCOME TAX OFFICER

WP/11219/2024

AI Insights

The case involves the Rajahmundry Gandhipuram Cooperative Building Society Limited, which filed a writ petition against the Income Tax Department and other respondents challenging a tax demand of Rs.3,10,29,478 for the assessment year 2018-19. The petitioner argued that the demand was arbitrary and without jurisdiction as the society is not a charitable institution registered under Section 11 of the Income Tax Act. The Income Tax Department had initially accepted the petitioner's return showing no tax payable, but later, due to a system error, a tax demand was generated. The petitioner filed a rectification application which was pending, and during this period, the department insisted on the payment and threatened coercive action. The court's decision focused on ensuring the rectification application was addressed without further delay.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 672737 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 23-12-2024
• Assessment Year: misc
• Laws Referred To: Article 226 of the Constitution of India, Section 11 of the Income Tax Act, Section 142(1) of the Income Tax Act, Section 143(3) of the Income Tax Act, Section 154 of the Income Tax Act, Section 115TD of the Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: ANUP KOUSHIK KARAVADI; DEPUTY SOLICITOR GENERAL OF INDIA
• Assessee Lawyers: R K ACHARYULU
• Keywords: Assessment year 2018-19; Coercive Action; Income Tax Return; Rectification Application; Tax demand; Writ of Mandamus
• Section: 143(3); 142(1); 154; 11; 115TD

Judgement Text

"V IN THE HIGH COURT OF ANDHRA PRADESH :: AMARAVATI ^ (Special Original Jurisdiction) MONDAY, THE TWENTY THIRD DAY OF DECEMBER/ TWO THOUSAND AND TWENTY FOUR v/ PRESENT HON’BLE SRI JUSTICE G.NARENDAR AND HON’BLE SRI JUSTICE T.C.D.SEKHAR v/ WRIT PETITION NO: 11219 OF 2024 Between: Rajahmundry GandHipuram Cooperative Building Society Limited, D.No.47-5- 1, Y Junction, Revenue Ward No.27, Rajamahendravaram, Andhra Pradesh. Represented by its President Mr.J.Satyanarayana Prasad. ...PETITIONERS AND 1. The Income Tax ^cer. Ward 1 (1) Rajamahendravaram, Andhra Pradesh. 2. The Income Tax Officer, Ward 2 (1) Rajamahendr^aram, Andhra Pradesh. _ 3. The Joint Commissioner of Income Tax, Rajamahendravaram, Andhra Pradesh. 4. The Assessment Unit, Income Tax Department, National Faceless AssessmejTt Centre, Delhi, Ministry of Finance, Room No. 401,2nd Floor, E-Ramp, Jawaharlal Nehru Stadium, Delhi-110003. 5. The Union of India, Rep. by its Principal Secretary, Ministry of Finance New Delhi. ^ ...RESPONDENTS Petition under Article 2^^f the Constitution of India is filed praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a writ of mandamus or any other appropriate writ, order or direction (A) declaring the action of the respondents 1 and 2 in / / / % demanding payment of Rs.3,10,29,478/- towards tax under Section 11 STD for the assessment year 2018-19 as arbitrary, unsustainable, and without jurisdiction (B) declare that the Petitioner society is not liable to pay any tax under SectiQh 11 STD since it is not a charitable institution registered under ^ofij^ri direct the 3rd Respondent to ensure disposal of the /•the Petitioner under Section 154 immediately and (D) to intenijot the,J-espondents 1 and 2 from taking coerciv^steps for collection of the tax under Section 11 STD pending disposal of the rectification application under Section 154. lA NO: 1 OF 2024 Petition under Section 151 CPC is filed praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to grant stay of collection of the tax demand of Rs.3,10,29,478/- raised in the computation sheet for the assessmentyear 2018-19 pending disposal of the writ petition. Counsel for the Petitioner: SRI R K ACHARYULU Counsel for the Respondents: SRI ANUP KOUSHIK KARAVADI Counsel for the Respondent No.5; DEPUTY SOLICITOR GENERAL OF INDIA The Court made the following: ORDER IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) MONDAY, THE TWENTY THIRD DAY OF DECEMBER TWO THOUSAND AND TWENTY FOUR APHC010225582024 [3507] PRESENT THE HONOURABLE SRI JUSTICE G.NARENDAR THE HONOURABLE SRI JUSTICE T.C.D.SEKHAR WRIT PETITION No.11219/2024 Between: Rajahmundry Gandhipuram Cooperative Building ...PETITIONER Society Limited AND ...RESPONDENT(S) The Income Tax Officer and Others Counsel for the Petitioner: 1.RKACHARYULU Counsel for the Respondent(S): 1.ANUP KOUSHIK KARAVADI % GN, J &TCDS,J WP 11219 2024 JUDGMENT:- (per Hon’ble Sri Justice T.C.D.Sekhar) The writ petition is a Co-operative Building Society, registered under Societies Act, 1860 bearing Number No.B-793, dt.28.07.1948. The petitioner further contends that, for the assessment year 2018-2019, it filed Income Tax returns on 09.11.2018 offering Rs.47,819/- as gross and net income and the petitioner’s PAN was trust status. Since the portal did not allow to file the return under ITR-V, the return was filed under Form ITR- VII without claiming any exemptions. 1. 2. After scrutiny, notice under section 142(1) of Income Tax, 19061 was issued on 13.11.2020 by requesting the petitioner to furnish income and expenditure statement along with the detailed note of all objectives of trust and the activities carried out along with trust deed/Memorandum of association. Certificate of Registration etc.. 3. The petitioner was also received another notice dt.14.01.2021 and in response to the said notice, it upload the required details. The 4*^^ respondent after verifying material, passed assessment order dt.03.03.2021 under Section 143(3) of 3 GNJ&TCDSJ WP 11219 2024 the Act accepting the return of the petitioner showing the same payable by the petitioner for the year 2018-2019 as ‘Zero’. However in the computation sheet, the system automatically taken the table under section 115 TD of the Act, and computed the tax of Rs.3,10,29,478/- (including interest of Rs.82,13,685/-) at the rate of 30% of the amount of the accredited income of Rs.7,60,52,642/-. Thereafter, the petitioner filed ratification application dt.04.03.2021, before the Income Tax Officer (exemptions), Rajahmundry under Section 154 of the Act to rectify the said mistake apparent from the record in the computed sheet which was inadvertently computed. 4. 5. Thereafter the 1 respondent issued notice dt. 17.05.2023, directing the petitioner to pay the demand of Rs.3,10,29,480/- to which the petitioner has replied 04.03.2021 stating that rectification application is pending. Thereafter, the respondents have issued another notice dt.25.04.2024 raising the same demand to which the petitioner has filed a reply dt.29.04.2024, reiterating that the petitioner is not liable to pay the demanded tax and rectification application dt.04.03.2021 is pending consideration. Despite the same, the on % 4 GNJ&TCDSJ WP 11219 2024 department is insisting to pay the said amount and threatening to take coercive action in the matter. 6. Aggrieved by the said action of the department is 1 insisting to pay amount demanded, the present Writ Petition is I filed. During the course of hearing, both the counsels have 7. agreed to dispose of the writ petition by directing the respondents more particularly, the 3'*^ respondent herein to dispose of the rectification application dt.04.03.2021, filed by the petitioner. which would address the issue in the present writ petition. In that view of the matter, taking into consideration of 8. the submissions made by both the counsels, without going to the merits of the case, this Court directs the 3'^^ respondent to dispose of the rectification application dt.04.03.2021, in accordance with law, within a period of three (03) months from the date of receipt of copy of the order, till the disposal of the same, the respondents are directed not to take any coercive steps against the petitioner. With the above observations, the present Writ 9. Petitions stands disposed of. No order as to costs. 5 GNJ&TCDSJ WP_11219 2024 10. As a sequel thereto, the miscellaneous petitions, if any, pending in this writ petition shall stand closed. pRabhakar rao ASSISTANT REGISTRAR //TRUE COPY// SECTION OFFICER To, Pradish°\"'® ^ Rajamaheng'ravaram Andhra 2. The Income Tax Officer, Ward 2 Pradesh. 3. The Joint Commissioner of Income Tax Pradesh. 5. The Principal Secretary, Union of India, Ministry of Finance, New Delhi. 6. One CC to Sri R K Acharyulu Advocate [OPUCJ 7. One CC to Sri Anup Koushik Kar^adi Advocate [OPUC]^ General (1) Rajamahendravaram, Andhra Rajamahendravaram, Andhra [OPUC] of India, High court of A.P. 9. Three CD Copies TF HIGH COURT DATED:23/12/2024 ORDER WP.No.11219of 2024 DISPOSING OF THE W.P. WITHOUT COSTS "