THE MARTHOMA CHURCH EDUCATIONAL SOCIETY V. THE ASSISTANT COMMISSIONER OF INCOME TAX

WP(C)/23945/2022

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The case involves The Marthoma Church Educational Society, a registered society, which sought a certificate under Section 197 of the Income Tax Act to receive amounts without deduction of tax at source for the year 2022-23. The request was denied by the Income Tax Officer due to pending demands for the assessment years 2015-16 and 2016-17. The society argued that since they had stayed the demands by depositing 20% of the demands, the denial was unjust. The court found that the previous demands being stayed and the issuance of similar certificates for subsequent years indicated that the denial was not sustainable.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 683006 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 23-08-2022
• Assessment Year: misc
• Other Referred Cases: WP(C) No.12918 of 2018
• Laws Referred To: Income Tax Act, Registration, Travancore-Cochin, Literary, Scientific and Charitable Societies Act, 1955
• Result in Favour of: Applicant
• Court: HIGH COURT
• Department Lawyers: CHRISTOPHER ABRAHAM
• Assessee Lawyers: ANIL NAIR; TELMA RAJU; EDATHARA KRISHNAN; P K BIJU
• Keywords: Certificate under Section 197; Income Tax; Pending demands; Stay on demands
• Section: 12A; 197

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE GOPINATH P. TUESDAY, THE 23RD DAY OF AUGUST 2022 / 1ST BHADRA, 1944 WP(C) NO. 23945 OF 2022 PETITIONER: THE MARTHOMA CHURCH EDUCATIONAL SOCIETY, MUKKOLAKKAL, THIRUVANANTHAPURAM - 695043, KERALA REPRESENTED BY ITS SECRETARY MR.MATHEW GEORGE. BY ADVS. ANIL D. NAIR TELMA RAJU EDATHARA VINEETA KRISHNAN P.K.BIJU RESPONDENTS: 1 THE ASSISTANT COMMISSIONER OF INCOME TAX, AAYAKAR BHAVAN, KOWDIAR, THIRUVANANTHAPURAM – 695 003. 2 THE INCOME TAX OFFICER, TDS CIRCLE, THIRUVANANTHAPURAM – 695 003. BY SRI.CHRISTOPHER ABRAHAM THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 23.08.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 23945 OF 2022 2 JUDGMENT The petitioner is a society registered under the Registration, Travancore-Cochin, Literary, Scientific and Charitable Societies Act, 1955. It has been issued with Ext.P1 certificate of registration under Section 12A of the Income Tax Act. For the assessment years 2015-16 and 2016-17, certain demands were raised on the petitioner. It is stated that the statutory appeals filed in respect of the assessment years 2015-16 and 2016-17 are pending consideration before the appellate authority and all demands are stayed on the petitioner depositing 20% of the demand raised for each of those years. The petitioner applied for the issuance of a certificate under Section 197 of the Income Tax Act to enable the petitioner to receive amounts without deduction of tax at source. That request of the petitioner has been denied by Ext.P3 on the ground that there are pending demands against the petitioner in respect of the assessment years 2015-16 and 2016-17. 2. The learned counsel appearing for the petitioner points out that since the demands have been stayed on the WP(C) NO. 23945 OF 2022 3 petitioner remitting 20% of the demands for those years, the certificate requested for by the petitioner (for the year 2022- 23) could not have been rejected on the ground that there were pending demands. 3. Heard the learned counsel appearing for the respondent Department also. 4. The learned counsel for the respondents very fairly states that since the demands in respect of the years 2015-16 and 2016-17 have been stayed and presently there are no demands against the petitioner, Ext.P3 order by which the request of the petitioner has been turned down (on the ground that there are pending demands for years 2015-16 and 2016- 17) cannot be sustained. It is also pointed out that for the years 2020-21 and 2021-22 certificates have been issued under Section 197 of the Income Tax Act. 5. Having regard to the facts and circumstances of the case and having heard counsel as above, this writ petition is allowed and Ext.P3 order is set aside. The 2nd respondent will consider the issuance of the certificate under Section 197 of the Income Tax Act after taking note of the fact that the demands WP(C) NO. 23945 OF 2022 4 for the assessment years 2015-16 and 2016-17 are stayed and presently there is no demand in respect of those years against the petitioner. The needful shall be done within a period of two months from the date of receipt of a certified copy of this judgment. The writ petition will stand disposed of as above. Sd/- GOPINATH P. JUDGE DK WP(C) NO. 23945 OF 2022 5 APPENDIX OF WP(C) 23945/2022 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE REGISTRATION CERTIFICATE DATED 7.05.1999 Exhibit P2 TRUE COPY OF THE APPLICATION DATED 25.04.2022 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT Exhibit P3 TRUE COPY OF THE ORDER DATED 23.05.2022 Exhibit P4 TRUE COPY OF THE JUDGMENT DATED 11.04.2018 WP(C) NO.12918 OF 2018 Exhibit P5 TRUE COPY OF THE ORDER UNDER SEC 197 DATED 26.08.2020 FOR THE ASSESSMENT YEAR 2020-21 Exhibit P6 TRUE COPY OF THE ORDER UNDER SECTION 197 DATED 29.06.2021 FOR THE ASSESSMENT YEAR 2021-22 "