THE TRAVANCORE CEMENTS V. THE COMMISSIONER OF INCOME TAX

WP(C)/12790/2014

AI Insights

The case revolves around The Travancore Cements Employees Co-operative Bank Ltd., which sought condonation for the delay in filing income tax returns for the assessment years 2006-07 and 2008-09. The petitioner argued that the delay was due to the late audit by the Co-operative department of the State, which was necessary for filing the returns. However, the Commissioner of Income Tax rejected the application for condonation, noting that the delay was partly due to the society's own actions, as indicated by the auditor's report. The High Court, referencing a similar case (Pala Marketing Co-operative Society Ltd. v. Union of India), distinguished the facts and upheld the Commissioner's decision, emphasizing that the society did not meet the criteria for relief under the cited section of the Income Tax Act.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 699709 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 07-08-2014
• Assessment Year: misc
• Other Referred Cases: Pala Marketing Co-operative Society Ltd. v. Union of India and others [(2009) 311 ITR 177 (Kerala)]
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH
• Assessee Lawyers: RAJU MATHEWS
• Keywords: Audit Delay; Co-operative Society; Condonation of delay; Income Tax
• Section: 119(2)(b); 44 AB

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN THURSDAY, THE 7TH DAY OF AUGUST 2014/16TH SRAVANA, 1936 WP(C).No. 12790 of 2014 (W) ------------------------------------------ PETITIONER : --------------------- THE TRAVANCORE CEMENTS EMPLOYEES CO-OPERATIVE BANK LTD. NO.K-234, NATTAKOM, KOTTAYAM DISTRICT, REPRESENTED BY SECRETARY MR.M.P.RAMESH. BY ADV. SRI.RAJU K.MATHEWS RESPONDENT : ------------------------ THE COMMISSIONER OF INCOME TAX, KOTTAYAM - 686 002. BY ADV.SRI.JOSE JOSEPH, S.C THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 07-08-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Msd. WP(C).No. 12790 of 2014 (W) ------------------------------------------- APPENDIX PETITIONER(S)' EXHIBITS ------------------------------------- EXHIBIT-P1: A TRUE COPY OF THE APPLICATION FOR CONDONATION OF THE DELAY IN RESPECT OF THE ASSESSMENT YEAR 2006-2007. EXHIBIT-P1(A): A TRUE COPY OF THE APPLICATION FOR CONDONATION OF THE DELAY IN RESPECT OF THE ASSESSMENT YEAR 2008-2009. EXHIBIT-P2: A TRUE COPY OF THE ORDER NO.C.304 (15)/COND/CIT/KTM/2011-12 DATED 18.11.2011. EXHIBIT-P2(A): A TRUE COPY OF THE ORDER NO.C.304(33)/COND/CIT/KTM/2011-12 DATED 31.12.2012. RESPONDENT(S)' EXHIBITS: ----------------------------------------- NIL //TRUE COPY// P.A.TO JUDGE. Msd. K. VINOD CHANDRAN, J. ===================== W.P.(C) No. 12790 of 2014 ====================== Dated this the 7th day of August, 2014 J U D G M E N T The petitioner is aggrieved with the non acceptance of the returns and the rejection of the application for condonation of delay filed under Section 119(2)(b) of the Income Tax Act, 1961. The subject assessment years are 2006-07 and 2008-09. The petitioner, a Co-operative Society failed to file the returns within the time provided ie., within the due date, which is on the 30th of October of the assessment year. The petitioner's contention is that, for filing the returns, an audit is mandatory and with respect to a Co-operative Society it has to be carried on by the Co-operative department of the State. It is only by reason of the delay committed thereon, which is not attributable to the petitioner that, there was delay in filing of the returns is the argument. The petitioner relies on a judgment of this W.P.(C) No. 12790 of 2014 2 Court in Pala Marketing Co-operative Society Ltd. v. Union of India and others in [(2009) 311 ITR 177 (Kerala)]. 2. The learned Standing Counsel, Government of India (Taxes) would however distinguish the aforecited judgment, on the ground that, the judgment took in the delay caused by the department, in appointing auditors with respect to Co-operative Societies. Herein, the contention raised on behalf of the Union of India is that, the delay is attributable to the petitioner itself and not solely on the department of the State Government. 3. The admitted case is that for both the years, the audit certificates were received respectively on 10.05.2010 and 06.05.2011. The returns were filed for the respective years on 13.01.2011 and 11.11.2011. Hence, for the first year, there was a delay of 8 months and for the second year a delay of 6 months. The Commissioner, who was exercising the discretion conferred under Section 119(2) (b) of the Act rejected the delay condonation application for W.P.(C) No. 12790 of 2014 3 both the years, since the explanation given was found to be unsatisfactory. Even going by the dates as mentioned above, there is a further delay after the audit was completed. For this, the official respondent has filed a statement, contending that the auditor who conducted the audit, in the annexure to the audit statement, specifically stated that the delay in completing the audit report is due to non receipt of necessary statements from the Society in time. 4. Pala Marketing Co-operative Society (supra) found on facts that the delay in audit in that case was not attributable to the assessee therein. The hardship contemplated under Section 119(2)(b) was also found in favour of the assessee since huge amounts were due as refund and the assessee had been reeling under heavy loss for very many years. The learned Single Judge categorically found that to consider belated return for refund, necessarily the delay has to be condoned under Section 119(2)(b) and on facts found the grounds raised for such condonation to W.P.(C) No. 12790 of 2014 4 be satisfactory. 5. In the instant case, it cannot be said that the delay was not attributable to the petitioner Society. Though the assessee in the cited case and that herein are Co-operative Societies; the similarity ends there. The statutory audit to be carried out by the department was delayed; but the auditor has specifically noticed in the audit report that the delay was attributable to the Society. In fact there is further delay after receipt of the audit report which the petitioner seeks to baance the Chartered Accountant who, according to the petitioner has to conduct the audit under Section 44 AB of the Act. 6. While for the assessment year 2006-07, the petitioner by Ext.P1 application raises the contention on the basis of Section 44 AB; for the assessment year 2008-09 the petitioner notices in Ext.P1(a) application the proviso to sub-clause(d) of Section 44 AB. The said proviso exempts any person required to get his accounts audited by any other law from subjecting itself to another audit as W.P.(C) No. 12790 of 2014 5 mandated in the provision. The contentions raised are conflicting and in the totality of circumstance is liable to be rejected. There is no hardship also pleaded by the petitioner in Ext.P1 and P1(a). 7. The Commissioner having exercised the discretionary power and having rejected the delay condonation application; this Court is not inclined to invoke the extra ordinary jurisdiction under Article 226 of the Constitution of India, causing interference of the discretion exercised or the refusal to exercise it by the Commissioner. There is nothing on facts to commend this Court to make such interference. The Writ petition hence stands dismissed. Parties are left to suffer their respective costs. K. VINOD CHANDRAN, JUDGE SB "