Madras High Court
N N 571 Okkur Pacs vs The Principal Commissioner Of Income ... on 13 November, 2024
W.P.(MD)No.27001 of 2024
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 13.11.2024
CORAM
THE HONOURABLE MR.JUSTICE K.KUMARESH BABU
W.P.(MD)No.27001 of 2024
and
W.M.P.(MD)Nos.22883 and 22885 of 2024
N N 571 Okkur PACS,
Represented by its Secretary,
Okkur,
Okkur Post,
Sivagangai – 630 557. ...Petitioner
Vs
1.The Principal Commissioner of Income Tax,
Office of the PCIT Madurai – 1,
Madurai Annexe Building,
V.P.Rathinasamy Nadar Road,
C R Building, Bibikulam,
Madurai – 625 002.
2.The Assessment Unit,
Income Tax Department,
Ministry of Finance,
New Delhi. ... Respondents
Prayer: Writ Petition filed under Article 226 of the Constitution of
India praying this Court to issue a Writ of Certiorari, calling for the
records pertaining to the impugned assessment order passed by the
second respondent in DIN: ITBA/AST/S/144/2022-3/1045083776 (1),
dated 31.08.2022, quash the same.
1/10
https://www.mhc.tn.gov.in/judis
W.P.(MD)No.27001 of 2024
For Petitioner : Mr.T.Bashyam
For Respondents : Mr.N.Dilipkumar
Standing Counsel
ORDER
Heard Mr.T.Bashyam, learned counsel for the petitioner and Mr.N.Dilipkumar, learned Standing Counsel for the respondents.
2. The petitioner is a Primary Agricultural Co-operative Credit Societies registered under the provisions of Tamil Nadu Co-operative Societies Act, 1983 and providing credit facilities to their members.
3. The case of the petitioner is that the petitioner is entitled to the deduction under Section 80P(2)(d) of the Income Tax Act, 1961 (hereinafter called as ‘Act’). The petitioner has made investment in the Co-operative Banks, from whom, he has received interest and therefore, the case of the petitioner is that the petitioner is entitled to the deduction under Section 80P(2)(d) of the Act, on the interest received from the Co-operative Banks.
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4. The petitioner has blamed his Auditor for not filing the regular Returns under Section 139(4) of the Act. The petitioner was, therefore, issued with notice under Section 148A(d) of the Act, which was also not responded by the petitioner and ultimately, it was culminated in the order passed under Section 148A(d) of the Act and notice under Section 148 of the Act.
5. After the notice was sent to the petitioner, he has filed his Returns, however, failed to participate in the proceedings initiated against him. The petitioner has again blamed his Auditor for failure to assist him in responding to the notice, which preceded the respective impugned order.
6. Elaborate submissions made by the learned counsel for the petitioner stating that the petitioner is indeed entitled for benefit under Section 80P(2)(d) of the Act. It is submitted that the mandatory requirement under Section 144B of the Act, for issuance of the draft order, has not been complied with.
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7. In this connection, a reference was made on the decision rendered by this Court in M/s.Take solutions limited vs. Income Tax Officer and another in W.P.No.12817 of 2021 dated 19.07.2023.
8. A specific reference was made to para 9 and the conclusion in paras 14, 15 and 16 which reads as under:
“9. The provisions of Section 144B of the Income Tax Act, 1961 as it stood prior to a substitution with the new provisions with effect from 01.04.2022 is clear. Under Sub-clause (xiv) to Sub-section (1) to Section 144B of the Income Tax Act, 1961 as it stood prior to 01.04.2022 for the relevant period in dispute, the assessment unit was required to make a Draft Assessment Order after taking into account all relevant materials available on the records or in a case where intimation referred to in clause (xii) was received from the National Faceless Assessment Centre make a Draft Assessment Order to the best of its judgment, either accepting the income or was payable or was refundable to the assessee as per his Return or making such variation to the said income or same and send a copy of the said order to the National Faceless Assessment Centre. .....
14. It is evident that under Sub clause (xvi) to Sub 4/10 https://www.mhc.tn.gov.in/judis W.P.(MD)No.27001 of 2024 section (1) to Section 144B of the Income Tax Act, 1961, as it stood in case any variation prejudicial to the interest of the assessee, the National Faceless Assessment Centre is required to serve a notice calling upon the assessee to Show Cause as to why the proposed variation should not be made.
15. As impugned order has been passed over looking as safeguard prescribed under the above provision, the Court is inclined to quash the Impugned Order and remit the case back to the respondents to pass a fresh order within a period of sixty (60) days from the date of receipt of a copy of this order.
16. The petitioner shall be heard in accordance with the procedure prescribed in force. The respondents are directed to enable the portal to facilitate the petitioner to file a reply within a period of thirty (30) days from the date of receipt of a copy of this order.”
9. On the other hand, the learned Standing Counsel for the respondent would submit that the petitioner is regularly assessed under the Act and deliberately, failed to file his Returns under Section 139(4) of the Act.
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10. It is, therefore, submitted that in the absence of Return under Section 139(4) of the Act, the benefit of Section 80P(2)(d) of the Act will not available to the petitioner.
11. That apart, it is submitted that the petitioner has neglected assessment in as much as neither filed his Returns nor participated in the proceedings after the notice was issued under Section 148 of the Act and thus, the impugned order has been passed.
12. The learned Standing Counsel for the respondent would also submit that the notice was issued to the addresses of the petitioner, which were received by him. Despite the same, the petitioner has not come forward to participate in the proceedings and thus, the impugned order has been passed.
13. Having considered the submissions made by the learned counsel for the petitioner and the learned Standing Counsel for the respondent, the Court is of the view that the final issue relating to the availability of exemption under Section 80P(2)(d) of the Act, cannot be decided under Article 226 of the Constitution of India. 6/10 https://www.mhc.tn.gov.in/judis W.P.(MD)No.27001 of 2024
14. In this case, no doubt the petitioner has neglected. However, the petitioner does deserve one more opportunity to went out his grievances in the re-assessment proceedings. Therefore, the case is remitted back to the respondent to pass fresh orders on merits and in accordance with law from the stage of show cause notice after the issuance of Section 148 notices to the petitioner, since the petitioner has neglected by not filing of Return both at the stage of filing of regular Return under Section 139(4) of the Act and has not participated in the proceedings, despite the service of the show cause notice through post to the petitioner.
15. Since the petitioner has neglected and did not comply with the requirements of the Act, under new regime, the petitioner is directed to pay a sum of Rs.20,000/- to the credit of Chief Justice Relief Fund, Madras High Court, Chennai, on or before 29.11.2024.
16. It is made clear that the petitioner shall participate in the de-novo proceedings and co-operate with the respondent, failing which, the respondent is at liberty to proceed against the petitioner in accordance with law based on the available material on record. 7/10 https://www.mhc.tn.gov.in/judis W.P.(MD)No.27001 of 2024
17. The impugned order, which stand quashed, shall be treated as addendum to the respective show cause notice issued to the petitioner. The petitioner shall file his consolidated reply within a period of 30 days from the date of receipt of a copy of this order and be ready to upload the same as and when the intimation is received. In any event, the petitioner shall also transmit the same to the jurisdictional Assessing Officer.
18. This Writ Petition is disposed of with above direction. No costs. Consequently, connected miscellaneous petitions are closed. Post the case for reporting compliance on 02.12.2024.
13.11.2024 NCC:yes/no Index:yes/no Internet:yes/no Nsr 8/10 https://www.mhc.tn.gov.in/judis W.P.(MD)No.27001 of 2024 To:
1.The Principal Commissioner of Income Tax, Office of the PCIT Madurai – 1, Madurai Annexe Building, V.P.Rathinasamy Nadar Road, C R Building, Bibikulam, Madurai – 625 002.
2.The Assessment Unit, Income Tax Department, Ministry of Finance, New Delhi.9/10
https://www.mhc.tn.gov.in/judis W.P.(MD)No.27001 of 2024 K.KUMARESH BABU, J.
Nsr W.P.(MD)No.27001 of 2024 13.11.2024 10/10 https://www.mhc.tn.gov.in/judis