THARU AND SONS V. ASSISTANT COMMISSIONER OF INCOME TAX

WP(C)/11027/2020

AI Insights

Tharu and Sons, a partnership firm engaged in contract work with clients including Southern Railway, approached the Kerala High Court to quash demand notices issued by the Income Tax Department. The firm had been facing issues since 2008-09 with the non-crediting of TDS amounts deducted by Southern Railway and reported in Form 16A, despite filing rectification applications under Section 154 of the Income Tax Act for several assessment years. The court did not decide on the merits of the credit entitlement but directed the Income Tax Department to resolve the pending rectification applications and keep the demand notices in abeyance until a decision is made.

• Counselvise Citation: [2020] 140 COUNSELVISE.COM (IT) 764484 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 04-06-2020
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: DINESH RAO; CHRISTOPHER ABRAHAM
• Assessee Lawyers: ANIL NAIR
• Keywords: Demand notice; Form 16A; Income Tax; Rectification Application; TDS
• Section: 154; 194C

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE AMIT RAWAL THURSDAY, THE 04TH DAY OF JUNE 2020 / 14TH JYAISHTA, 1942 WP(C).No.11027 OF 2020(C) PETITIONER/S: THARU AND SONS 418/2, KARIPPAYI ROAD, RAJAGIRI P. O., KALAMASSERY, ERNAKULAM - 683 104, REPRESENTED BY ITS MANAGING PARTNER MR. ANTONY THARU. BY ADV. SRI.ANIL D. NAIR RESPONDENT/S: 1 ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 1, ALUVA. 2 THE DIVISIONAL MECHANICAL ENGINEER SOUTHERN RAILWAY, DRM'S OFFICE, THYCAUD, THIRUVANANTHAPURAM. OTHER PRESENT: SRI DINESH RAO SC FOR RAILWAY, SRI CHRISTOPHER ABRAHAM SC FOR INCOME TAX THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 04.06.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.11027 OF 2020(C) ..2.. JUDGMENT Dated this the 4th day of June 2020 The petitioner, a partnership firm, carrying on contract work with different clients, including the Southern Railway; one of the major clients, has approached this Court for quashing of Exts.P14 and P14A, the demand notices raised by the Income T ax Department. 2. In support of the aforementioned prayer, it has been alleged that on account of the business/work of the Southern Railway, on receipt of the payment from them, there was a deduction as per the provisions of Section 194 C of the Income T ax Act and accordingly, Form 16A was issued. On that basis the petitioner filed the income tax returns by taking credit on the tax deducted at source (TDS) as evidenced by Form 16A. But when the assessment was done, it was found that no such credit was given. The petitioner had been facing such problem WP(C).No.11027 OF 2020(C) ..3.. from 2008-09 onwards. After completion of the assessment, the petitioner had preferred Ext.P1 application under Section 154 of the Act for rectification of the assessment order, while producing the TDS certificates issued by the Southern Railway pertaining to the assessment year 2008-09. This position continued for every year and the petitioner had been filing applications under Section 154 of the Act for the assessment years 2009-10, 2010-11, 2012-13, 2013-14 and 2014-15, as evidenced from Exts.P2 to P6. 3. The learned counsel for the petitioner submits that the rectification application, Ext.P1 was filed way back on 19.11.2010. It is also submitted that the petitioner had filed Exts.P2 to P6 rectification applications respectively on 16.02.2011 (for the assessment year 2009-10), 10.12.2013 (for the assessment year 2010-11), 31.03.2015 (for the assessment year 2012-13), WP(C).No.11027 OF 2020(C) ..4.. 23.03.2016 (assessment year 2013-14) and 06.03.2018 (for the assessment year 2014-15) and all applications are pending. The petitioner again filed a consolidated representation, showing the statements of the rectification applications vide Ext.P12 dated 09.06.2016, which is also pending consideration. Despite the pendency of the aforesaid applications, the petitioner received Exts.P14 and P14A demand notices, to make the payment for the assessment years referred above. It is contended that the concerned officer of the Income T ax Department had not taken any call or decision on the rectification applications; particularly when Form 16A had been issued. It is yet to be decided whether the petitioner is correct or not, but there has to be a decision, in accordance with law. 4. Issue notice before admission. Sri.Christopher Abraham, learned Standing Counsel for the Income T ax Department submits that the petitioner is not entitled to WP(C).No.11027 OF 2020(C) ..5.. the credit as submitted, but do not deny the status of the pendency of the applications as evidenced from Exts.P2 to P6 and stated that the writ petition can be disposed of by directing the 1st respondent to decide the rectification applications; Exts.P2 to P6 (supra). 5. Having heard the learned counsel for both parties and without expressing any opinion on merits, I dispose of this writ petition by issuing directions to the 1st respondent to consider and dispose of all the rectification applications at Exts.P2 to P6; the particulars of which have already been given and the status of which is evident from Ext.P12 dated 09.06.2016, after affording an opportunity of hearing to the petitioner, by issuing a speaking order, as to whether the benefit of the credit on account of Form 16A TDS, the petitioner is entitled to or otherwise, within a period of two months from the date of receipt of a copy of this writ petition. Till such time, the demand raised at WP(C).No.11027 OF 2020(C) ..6.. Exts.P14 and P14A shall be kept in abeyance. It is also made clear that the interim stay is only till the adjudication of the rectification applications. The writ petition is disposed of accordingly. Sd/- AMIT RAWAL SB/08/06/2020 JUDGE WP(C).No.11027 OF 2020(C) ..7.. APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF LETTER DATED 19.11.2010 FOR THE ASSESSMENT YEAR 2008-09. EXHIBIT P2 TRUE COPY OF SEC.154 RECTIFICATION APPLICATION FILED FOR THE YEAR 2009- 10. EXHIBIT P3 TRUE COPY OF SEC.154 RECTIFICATION APPLICATION FILED FOR THE YEAR 2010- 11. EXHIBIT P4 TRUE COPY OF SEC.154 RECTIFICATION APPLICATION FILED FOR THE YEAR 2012- 13. EXHIBIT P5 TRUE COPY OF SEC.154 RECTIFICATION APPLICATION FILED FOR THE YEAR 2013- 14. EXHIBIT P6 TRUE COPY OF 143(1) INTIMATION FOR THE ASSESSMENT YEAR 2014-15. EXHIBIT P7 TRUE COPY OF 143(1) INTIMATION FOR THE ASSESSMENT YEAR 2015-16. EXHIBIT P8 TRUE COPY OF INCOME TAX REFUND STATUS FOR THE ASSESSMENT YEAR 2016-17. EXHIBIT P9 TRUE COPY OF INCOME TAX REFUND STATUS FOR THE ASSESSMENT YEAR 2017-18. EXHIBIT P10 TRUE COPY OF THE INCOME TAX REFUND STATUS FOR THE ASSESSMENT YEAR 2018- 19. EXHIBIT P11 TRUE COPY OF THE INCOME TAX REFUND STATUS FOR THE ASSESSMENT YEAR 2019- 20. WP(C).No.11027 OF 2020(C) ..8.. EXHIBIT P12 TRUE COPY OF LETTER DATED 9.6.2016 FOR THE ASSESSMENT YEAR 2008-09 SUBMITTED BY THE PETITIONER. EXHIBIT P13 TRUE COPY OF LETTER DATED 15.5.2019 ISSUED BY THE 1ST RESPONDENT TO THE 2ND RESPONDENT. EXHIBIT P14 TRUE COPY OF LETTER DATED 12.2.2020 ISSUED BY THE 1ST RESPONDENT. EXHIBIT P14 A TRUE COPY OF LETTER DATED 12.5.2020 ISSUED BY THE 1ST RESPONDENT. "