S.ABDUL HAMEED V. THE INCOME TAX OFFICER

WP(C)/13406/2020

AI Insights

The case involves S. Abdul Hameed, the petitioner, who contested the rejection of his revised income tax return for the assessment year 2014-2015. Initially, the petitioner filed a return claiming a refund, which was processed. However, after a property acquisition where TDS was deducted, he filed a revised return which was not accepted. The petitioner sought condonation for the delay in filing this revised return, which was rejected by the Principal Commissioner of Income Tax. The court, referencing a previous decision and the specifics of the Income Tax Act, found that the rejection was not legally sustainable and directed the reassessment considering the revised return.

• Counselvise Citation: [2020] 140 COUNSELVISE.COM (IT) 692179 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 24-09-2020
• Assessment Year: misc
• Other Referred Cases: Pala Marketing Co-operative Society Limited v. Union of India and Others [2008 (1) KHC 637]
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: CHRISTOPHER ABRAHAM; THUSHARA JAMES
• Assessee Lawyers: HARISANKAR MENON; MEERA MENON; K KRISHNA
• Keywords: Compulsory Acquisition; Condonation of delay; Income Tax; Refund; Revised return; TDS
• Section: 139(4); 139(5); 119(2)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR THURSDAY, THE 24TH DAY OF SEPTEMBER 2020 / 2ND ASWINA, 1942 WP(C).No.13406 OF 2020(A) PETITIONER: S.ABDUL HAMEED HIJAS MANZIL, SASTHAVATTOM P.O. MURUKKUMPUZHA, THIRUVANANTHAPURAM 695 305. BY ADVS. SRI.HARISANKAR V. MENON SMT.MEERA V.MENON SMT.K.KRISHNA RESPONDENTS: 1 THE INCOME TAX OFFICER WARD 1 (1) AAYAKAR BHAVAN, 5TH FLOOR, KOWDIAR P.O. THIRUVANANTHAPURAM 695 003. 2 THE SPECIAL TAHSILDAR, LAND ACQUISITION AND SREEPANDARAVAKA LANDS NO. III, CIVIL STATION, THIRUVANANTHAPURAM 695 005. 3 THE COMMISSIONER OF INCOME TAX, AAYAKAR BHAVAN, KOWDIAR P.O. THIRUVANANTHAPURAM 695 003. 4 THE PRINCIPAL COMMISSIONER OF INCOME AAYAKAR BHAVAN, KOWDIAR P.O. THIRUVANANTHAPURAM 695 003. R1, R3-4 BY SRI.CHRISTOPHER ABRAHAM, INCOME TAX DEPARTMENT BY GOVERNMENT PLEADER DR.THUSHARA JAMES THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 24.09.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.13406 OF 2020(A) 2 JUDGMENT The petitioner, who is an assessee under the Income Tax Act, had filed Ext.P1 return for the assessment year 2014-2015 returning an amount of Rs. 2,06,160/- and claiming refund of an amount of Rs. 670/-. On processing the return submitted by him, the respondents refunded the said amount to him. It would appear that a property owned by the petitioner was acquired by the 2nd respondent and an amount of Rs.46,39,856/- was paid to the petitioner, after deducting an amount of Rs.9,28,642/- towards TDS. The 2nd respondent had deducted the tax at source while making payment towards compensation to the petitioner in respect of the land compulsorily acquired from him. The petitioner, therefore, revised his return for the assessment year 2014-2015 through Ext.P2 revised return filed on 11.05.2015. On coming to know that the revised return filed by him would not be considered by the respondents, the petitioner preferred an application under Section 119(2) of the Income Tax Act for condonation of the delay in filing the revised return. The said application came to be rejected by Ext.P9 order of the Principal Commissioner of Income Tax dated 24.09.2019, inter alia, on the finding that the petitioner had failed to furnish any document to support his claim that the Tahsildhar (LA) had filed the TDS return belatedly. The Principal Commissioner also found that the petitioner had not established that he would face genuine financial hardship if the refund WP(C).No.13406 OF 2020(A) 3 was not granted to him. It is apparent from Ext.P9 order that the Principal Commissioner was guided by the contents of Ext.P11 Circular that was issued by the Central Board of Direct Taxes prescribing guidelines for the exercise of discretion under Section 119 (2) (b) of the Income Tax Act. 2. A statement has been filed on behalf of the respondents, wherein the averments in the Writ Petition are refuted and the findings of the Principal Commissioner of Income Tax in Ext.P9 order are sought to be justified for the reasons contained therein. It is, in particular, pointed out that inasmuch as the first return filed by the petitioner was itself belated, the petitioner could not have filed a belated return under S. 139 (5) and hence the Principal Commissioner could not have considered the request for a condonation of delay in filing the revised return. 3. Through a reply affidavit filed by the learned counsel for the petitioner, my attention has been drawn to a decision of this Court in Pala Marketing Co-operative Society Limited v. Union of India and Others [2008 (1) KHC 637], wherein on the aspect of condonation of delay, it was held by this Court that the Board should condone the delay if failure to condone the delay causes genuine hardship to the assessee no matter whether the delay in filing the return is meticulously explained WP(C).No.13406 OF 2020(A) 4 or not. 4. I have heard the learned counsel for the petitioner and the learned Standing counsel for the respondents. 5. On a consideration of the facts and circumstances of the case and the submissions made across the Bar, I find that Ext.P9 order of the 4th respondent cannot be legally sustained. At the outset, I find that as per the provisions of S.139 (4), as it stood prior to its amendment with effect from 01.04.2017, any person who had not furnished a return within the time allowed to him under sub-section (i), could furnish a return of any previous year at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier. The petitioner not having filed a return for the assessment year within the time allowed to him under sub- section (i) could, therefore, have filed a revised return on or before 31.03.2016, the date of expiry of one year from the end of the relevant assessment year viz.2014-2015. In the instant case, as already noticed, the petitioner filed two returns, one on 06.11.2014 (Ext.P1), followed by another on 11.05.2015 (Ext.P2). Perhaps, the petitioner did not have to seek a condonation of delay in filing Ext.P2 return since it was a return that could be traced to S. 139 (4), as it then stood, and in that event, one that was filed within the time allowed by the Section. In the instant case, however, I need not consider the said issue since it is the admitted case WP(C).No.13406 OF 2020(A) 5 that the petitioner did file an application under S.119 (2) of the Act, for a relaxation from the rigours of S.139, and the said application was considered by the 4th respondent on merits and rejected by Ext.P9 order. What I am called upon to decide here is the legality of Ext.P9 order and whether the reasons stated therein would justify a rejection of the delay condonation application preferred by the petitioner. 6. It is not in dispute that the assessment of the petitioner for the said year (2014-2015) is yet to be completed. The delay that the petitioner sought to get condoned was only 42 days. Through Ext.P2 revised return, the petitioner had in fact brought to the notice of the Department, the details of tax that had been deducted at source from amounts received by the petitioner by way of compensation for land acquired from him during the previous year relevant to the assessment year. Even if the petitioner had not filed a revised return, I am of the view that the assessing authority cannot ignore the fact of deduction of tax at source, from payments made to the petitioner during the relevant previous year, while completing the assessment for the assessment year in question. This would be more so because, after deduction of tax at source, the person deducting tax at source would have issued the necessary intimation to the Income Tax Department while forwarding the deducted tax amounts to the Department on behalf of the petitioner assessee. I, therefore, find that there was no valid justification for the WP(C).No.13406 OF 2020(A) 6 4th respondent to have rejected the request of the petitioner under S. 119 (2) of the Act, more so when granting the relaxation as prayed for by the petitioner would not have prejudiced the interests of the department in any manner. The decision relied upon by counsel for the petitioner also justifies the said finding. The reasons given in Ext.P9 order for rejecting the application preferred by the petitioner are neither convincing nor justified. Accordingly, I quash Ext.P9 order and direct the respondents to consider the details given in Ext.P2 revised return also while finalising the assessment in relation to the petitioner for the assessment year 2014-2015 with consequential benefits to the petitioner. The Writ Petition is disposed as above. Sd/- A.K.JAYASANKARAN NAMBIAR JUDGE mns WP(C).No.13406 OF 2020(A) 7 APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 COPY OF RETURN FILED BY THE PETITIONER FOR THE YEAR 2014-15 DATED 06.11.2014. EXHIBIT P2 COPY OF REVISED RETURN FILED BY THE PETITIONER FOR THE YEAR 2014-15 DATED 11.05.2015. EXHIBIT P3 COPY OF APPLICATION FOR CON DONATION OF DELAY ND GRANT OF REFUND SUBMITTED BEFORE THE 1ST RESPONDENT DATE 11.06.2018. EXHIBIT P4 COPY OF MEDICAL CERTIFICATE SUBMITTED BY THE PETITIONER BEFORE THE 1ST RESPONDENT. EXHIBIT P5 COPY OF APPLICATION FOR CONDONATION OF DELAY AND GRANT OF REFUND SUBMITTED BEFORE THE 3RD RESPONDENT DATED 19.06.2019. EXHIBIT P6 COPY OF NOTICE ISSUED BY THE 1ST RESPONDENT DATED 02.08.2019. EXHIBIT P7 COPY OF APPLICATION SUBMITTED BEFORE THE 1ST RESPONDENT DATED 08.8.2019. EXHIBIT P8 COPY OF APPLICATION SUBMITTED BEFORE THE 1ST RESPONDENT DATED 14.08.2019. EXHIBIT P9 COPY OF ORDER ISSUED BY THE 4TH RESPONDENT DATED 24.09.2019. EXHIBIT P10 COPY OF JUDGMENT IN WPC NO. 18876/2004 OF THIS HONBLE COURT DATED 17.10.2016. EXHIBIT P11 COPY OF CIRCULAR NO. 9/2015 ISSUED BY THE CENTRAL BOARD, OF DIRECTOR TAXES, NEW DELHI 09.06.2015. EXHIBIT P12 COPY OF FORM 26AS OF THE PETITIONER FOR THE YEAR 2014- 15. RESPONDENTS EXHIBITS:NIL //TRUE COPY// P.A TO JUDGE "