THE CENTRE FOR MANAGEMENT DEVELOPMENT, V. THE COMMISSIONER OF INCOME-TAX (EXEMPTIONS),

WP(C)/10745/2024

AI Insights

The case involves the Centre for Management Development, an autonomous educational institution, which sought exemption from income tax under Section 10(23C)(VI) of the Income Tax Act, 1961. The institution faced issues with the timely submission of audit reports for several assessment years, leading to the denial of tax exemption and subsequent recovery notices. The petitioner filed for condonation of delay in submitting these reports, which was not decided before the issuance of demand notices. The court's decision focused on procedural fairness, allowing the petitioner to appeal against the assessments while ensuring that the matter of condonation was addressed expeditiously.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 738031 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 22-03-2024
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH
• Assessee Lawyers: NITISH SHENOY; SHERRY OOMMEN
• Keywords: Assessment years; Audit report delay; Condonation of delay; Income Tax Act; Income tax exemption
• Section: 143(1); 153; 12A; 119(2)(b); 10(23C)(vi)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH FRIDAY, THE 22ND DAY OF MARCH 2024 / 2ND CHAITHRA, 1946 WP(C) NO. 10745 OF 2024 PETITIONER/S: THE CENTRE FOR MANAGEMENT DEVELOPMENT THYCAUD S.O. CHEMPAKASSERY THIRUVANANTHAPURAM KERALA REPRESENTED BY ITS DIRECTOR, PIN - 695014 BY ADVS. NITISH SATHESH SHENOY SHERRY SAMUEL OOMMEN RESPONDENT/S: 1 THE COMMISSIONER OF INCOME-TAX (EXEMPTIONS) SAN JUAN TOWERS, 2ND FLOOR, BEHIND CR BUILDING OLD RAILWAY STATION ROAD, KOCHI, PIN - 682018 2 THE ASSISTANT COMMISSIONER OF INCOME-TAX CENTRALISED PROCESSING CENTRE INCOME TAX DEPARTMENT, BANGALORE, PIN - 560050 3 THE ADDITIONAL/ JOINT/ DEPUTY/ ASSISTANT COMMISSIONER OF INCOME TAX/ INCOME-TAX OFFICER NATIONAL FACELESS ASSESSMENT CENTRE, 4TH FLOOR, MAYUR BHAWAN, CONNAUGHT CIRCUS, NEW DELHI, PIN - 110001 4 THE ASSISTANT COMMISSIONER OF INCOME-TAX OFFICE OF THE ASSISTANT COMMISSIONER OF INCOME TAX EXEMPTION CIRCLE THIRUVANANTHAPURAM, PIN - 605003 5 THE NATIONAL FACELESS APPEAL CENTRE (NFAC) MAYUR BHAWAN,CONNAUGHT LANE,BARAKHAMBA,NEW DELHI - REPRESENTED BY ITS COMMISSIONER, PIN - 110001 OTHER PRESENT: SRI. JOSE JOSEPH -SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 22.03.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 10745 OF 2024 2 JUDGMENT Dated this the 22nd day of March, 2024 The petitioner is a self supporting autonomous educational institution which provides research, consulting and training support to development agencies, corporate sectors and the Government, both at the National and State level. The petitioner is managed by a Governing board comprising of a Chairman, three Senior Secretaries to the Government of Kerala, four Chief Executives of public enterprises, two Academicians in the field of management, two industrialists and two representatives of professional bodies. The Director is the member Secretary to the Board. The petitioner got certificate under Section 12A of the Income Tax Act, 1961 ('the IT Act' for short) pursuant to the approval granted by the respondents on 22.01.2020. The petitioner has been claiming exemption under Section 10(23C)(VI) of the IT Act from the payment of income tax on its income. 2.In respect of the assessment years 2018-2019, 2020-2021, 2021-2022 and 2022-2023, the notices under Section 143(1) and r/w Sections 153 of the IT Act were issued to the petitioner. The assessment order got completed with respect of the Assessment Years 2018-2019, 2020-2021, 2021-2022 and 2022-2023 in Ext.P2 series. WP(C) NO. 10745 OF 2024 3 3.The petitioner has been denied the exemption as the petitioner did not submit the audit report on time in respect of the afore mentioned assessment years. After the assessment orders have passed, the petitioner moved an application under Section 119(2)(b) of the IT Act before the 1st respondent in Ext.P3 series for condoning the delay in submitting the audit reports belatedly before the assessing authority. However, no decision has been taken in the said application. In the meantime, the petitioner has been issued with demand notices in Ext.P5 series. 4.The learned counsel for the petitioner submits that the petitioner has filed appeals along with the stay petition and condonation of delay applications against the assessment order in respect of assessment years 2021-2022. However, in respect of the other assessment years, the petitioner has not filed the appeals. Learned counsel for the petitioner also submits that the petitioner would file appeal in respect of all the assessment years in question within 15 days from today along with the applications for condoning the delay in filing the appeals and the stay petitions. 5.Learned counsel for the petitioner further submits that till the decision is taken on the application for condoning the delay by the 1st respondent under Section 119(2)(b), the recovery proceedings may directed to be kept in abeyance. WP(C) NO. 10745 OF 2024 4 6.This court does not find much substance in the submissions of the learned counsel for the petitioner. The fact remains is that as of today, the petitioner has suffered the assessment orders and an appeal has been filed only in respect of one assessment year along with stay petition. The other assessment orders are not under challenge till the date in respect of the other assessment years as mentioned above. 7.This court cannot presume the outcome of the application filed before the 1st respondent for condoning the delay in submitting the audit report under Section 119(2)(b). In view thereof, the present writ petition is disposed of, with direction to the 1st respondent to consider and pass appropriate order on Ext.P3 series applications seeking condonation of delay in filing the audit reports under Section 119(2)(b) of the IT Act, expeditiously and preferably within a period of two months in accordance with law. 8.The petitioner may file appeals in respect of other assessment years along with the applications for condoning the delay as well as the stay petitions. If the petitioner deposits 20 % of the assessed amount in respect of all the assessment years and files the appeals in respect of other assessment years for which the petitioner has not filed the appeals, along with the application WP(C) NO. 10745 OF 2024 5 for condoning of delay and stay petition, the further recovery of the assessed amount shall be kept in abeyance till disposal of the appeals . In the result, the present writ petition is disposed of, with the aforesaid directions and liberty. Sd/- DINESH KUMAR SINGH JUDGE SJ WP(C) NO. 10745 OF 2024 6 APPENDIX OF WP(C) 10745/2024 PETITIONER EXHIBITS Exhibit P1(a) A TRUE COPY OF THE APPROVAL GRANTED UNDER SECTION 12A OF THE INCOME-TAX ACT, 1961 (\"THE ACT\") DATED 22.01.2020 Exhibit P1(b) TRUE COPY OF THE ORDER OF THE CHIEF COMMISSIONER OF INCOME TAX, THIRUVANANTHAPURAM, DATED 23.04.2007 GRANTING THE PETITIONER EXEMPTION UNDER 10(23)(VI) OF THE ACT Exhibit P2(a) TRUE COPY OF THE ORDER BEARING DIN NO. CPC/1819/U7/2004750995 DATED 05.09.2020 FOR THE AY 2018-19 Exhibit P2(b) TRUE COPY OF THE 143(1) ORDER BEARING DIN NO. CPC/2021/A7/164733361 DATED 24.12.2021 FOR THE AY 2020-21 Exhibit P2(c) TRUE COPY OF THE 143(1) ORDER BEARING DIN NO. CPC/2122/A7/287627528 DATED 20.09.2022 FOR THE AY 2021-22 Exhibit P2(d) TRUE COPY OF THE 143(1) ORDER BEARING DIN NO. CPC/2223/A7/326050128 DATED 04.04.2023 FOR THE AY 2022-23 Exhibit P3(a) A TRUE COPY OF THE REQUEST FOR CONDONATION DATED 26.08.2022 BEFORE THE 1ST & 3RD RESPONDENTS ALONG WITH THE ACKNOWLEDGEMENT Exhibit P3(b) A TRUE COPY OF THE REQUEST FOR CONDONATION DATED 16.12.2022 BEFORE THE 1ST & 3RD RESPONDENTS Exhibit P3(c) TRUE COPY OF THE STAY APPLICATION DATED 19.10.2022 FILED BEFORE THE 3RD & 4TH RESPONDENTS ALONG WITH ACKNOWLEDGEMENT Exhibit P3(d) THE PETITIONER SUBMITS A TRUE COPY OF THE CONDONATION APPLICATION DATED 19.04.2023 FILED BEFORE THE 1ST AND 3RD RESPONDENTS ALONG WITH THE ACKNOWLEDGEMENT Exhibit P4 A TRUE COPY OF THE APPEAL DATED 19.10.2022 FILED BY THE PETITIONER BEFORE THE 1ST & 5TH RESPONDENTS Exhibit P5 THE TRUE COPY OF THE RECOVERY NOTICE DATED 27.09.2023 ISSUED BY THE 4TH RESPONDENT Exhibit P6 A TRUE COPY OF CIRCULAR NO 2/2020 DATED 03.01.2020 WP(C) NO. 10745 OF 2024 7 Exhibit P7 TRUE COPY OF CIRCULAR NO 267/482/77-IT DATED 09.02.1978 Exhibit P8 A TRUE COPY OF CIRCULAR NO 10 [F.NO.197/55/2018-ITA-I] DATED 26.03.2021 Exhibit P9 A TRUE COPY OF THE JUDGMENT OF THIS HON'BLE COURT DATED 10.10.2022 IN WPC NO 31513 OF 2022 "