Santhosh George V. The Principal Commissioner of Income Tax and The Income Tax Officer, Ward -1(4) and The Deputy Commissioner of Income Tax, Centralised Processing Centre

WP(C)/7446/2021

AI Insights

The case involves Santhosh George, the petitioner, who challenged the order Ext.P5 passed by the Principal Commissioner of Income Tax. The dispute arose from the assessment of the petitioner's contract receipts as income under Section 143(1) of the Income Tax Act, 1961. The petitioner initially filed a rectification application, which was rejected, leading to a revision petition under Section 264. This revision was also dismissed without a proper hearing, prompting the writ petition. The Principal Commissioner, in their counter affidavit, acknowledged the procedural error in dismissing the revision without considering the merits and admitted the need for rectification.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 808276 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 30-11-2023
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: CHRISTOPHER ABRAHAM
• Assessee Lawyers: T M; NISHA JOHN; ALAN DEV
• Keywords: Assessment; Income Tax; Opportunity of Hearing; Rectification; Revision
• Section: 143(1); 264

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH THURSDAY, THE 30TH DAY OF NOVEMBER 2023/9TH AGRAHAYANA, 1945 WP(C) NO. 7446 OF 2021 PETITIONER: SANTHOSH GEORGE, THEKKEMURIYIL, ULICKAL, KANNUR-670 705 BY ADVS. T.M.SREEDHARAN (SR.) NISHA JOHN ALAN PRIYADARSHI DEV RESPONDENTS: 1 THE PRINCIPAL COMMISSIONER OF INCOME TAX AAYAKAR BHAVAN, NORTH BLOCK, NEW ANNEXE BUILDING, MANANCHIRA, KOZHIKODE-673 001 2 THE INCOME TAX OFFICER, WARD -1(4), AAYAKAR BHAVAN, KANNUR-670 006 3 THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRALISED PROCESSING CENTRE, INCOME TAX DEPARTMENT, BANGALURE-560 500 BY SRI. CHRISTOPHER ABRAHAM, SC THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 30.11.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P .(C.) No.7446/2021 2 JUDGMENT The present writ petition has been filed impugning Ext.P5 order passed by the Principal Commissioner of Income Tax. The main contention of the learned counsel for the petitioner is that the entire contract receipts have been assessed as income and the assessment order has been issued under Section 143(1) of the Income Tax Act, 1961 against which, the petitioner filed rectification application. However, the rectification application was not considered and came to be rejected to which, the petitioner filed revision before the Principal Commissioner under Section 264 of the Income Tax Act. However without affording an opportunity of hearing, the said revision has came to be dismissed by Ext.P5. 2. In response to the writ petition, a counter affidavit has been filed by the Principal Commissioner of the Income Tax Department. Paragraph 5 of the said counter affidavit reads as under:- W.P .(C.) No.7446/2021 3 “5. It is submitted that this respondent now realises that the rejection of the revision petition citing certain lapses on the part of the assessee and without adverting to the merits of the case is not proper. It would appear that the mistake committed by the assessee in choose the wrong return form and showing the entire contract receipts under the head 'income from other sources' would have led to the fixation of the gross contract receipts as the total income. Whatever may be the reason, the fact remains that the entire contract receipts have been treated as the taxable income of the petitioner. This mistake needs to be rectified. This can be done by considering the petitioner's grievance again u/s 264 of the IT Act. If the Hon'ble Court is pleased to set aside the Exhibit-P5 order with a direction to re-do the same after affording the petitioner a proper opportunity of being heard, the grievance of the petitioner can be addressed and his correct taxable income can be fixed. It is prayed that the Hon'ble Court may be pleased to do so.” Considering the said stand of the respondents, the writ petition is allowed. Ext.P5 order is set aside. The matter is remitted back to the file of the first respondent to decide the revision petition of the petitioner in accordance with the law afresh. The petitioner should be afforded an opportunity of hearing by the first respondent. W.P .(C.) No.7446/2021 4 Let notice of hearing be issued to the petitioner by the Principal Commissioner of the Income Tax Department and on receipt of such notice, the petitioner should appear before the Principal Commissioner and make submissions. Sd/- DINESH KUMAR SINGH JUDGE DCS/01.12.2023 W.P .(C.) No.7446/2021 5 APPENDIX PETITIONER EXHIBITS EXHIBIT P1 TRUE COPY OF THE RETURN OF INCOME IN FORM NO.ITR- V DATED FILED BY THE PETITIONER ALONG WITH COMPUTATION OF INCOME ON 31.03.2018 FOR AY-2017-18 EXHIBIT P1A TRUE COPY OF THE ANNUAL TAX STATEMENT IN FORM 26AS ISSUED BY THE INCOME TAX DEPARTMENT EXHIBIT P2 TRUE COPY OF THE INTIMATION ISSUED U/S 143(1) DATED 30.03.2019 ISSUED BY THE 3RD RESPONDENT EXHIBIT P3 TRUE COPY OF THE RECTIFICATION ORDER DATED 31.10.2019 ISSUED BY THE 3RD RESPONDENT EXHIBIT P4 TRUE COPY OF REVISION APPLICATION DATED 12.03.2020 FILED U/S 264 BY THE PETITIONER BEFORE THE 1ST RESPONDENT EXHIBIT P5 TRUE COPY OF THE ORDER DATED 4.03.2021 ISSUED BY THE 1ST RESPONDENT FOR AY-2017- 18 U/S 264 "