Peruvayal Service Co-Operative ... vs Additional/Joint/Deputy/Assistant ...
2022 Latest Caselaw 7536 Ker

              IN THE HIGH COURT OF KERALA AT ERNAKULAM
                              PRESENT
               THE HONOURABLE MR. JUSTICE GOPINATH P.
       FRIDAY, THE 24TH DAY OF JUNE 2022 / 3RD ASHADHA, 1944
                      WP(C) NO. 15861 OF 2022
PETITIONER:

          M/S.PERUVAYAL SERVICE CO-OPERATIVE BANK LTD.,
          PERUVAYAL POST, KOZHIKODE - 673 008,
          REPRESENTED BY ITS SECRETARY.

          BY ADVS.
          T.M.SREEDHARAN (SR.)
          V.P.NARAYANAN
          ALAN PRIYADARSHI DEV



RESPONDENT:

          THE ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF
          INCOME TAX /INCOME TAX OFFICER
          NATIONAL FACELESS ASSESSMENT CENTRE,
          INCOME TAX DEPARTMENT, MINISTRY OF FINANCE,
          ROOM NO.401, 2ND FLOOR, E-RAMP, JAWAHARLAL STADIUM,
          DELHI - 110 003.

          SRI. CHRISTOPHER ABRAHAM (SC)




     THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
24.06.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
 WP(C) NO. 15861 OF 2022

                                   2


                             JUDGMENT

The petitioner has approached this Court challenging Ext.P2

order imposing penalty under Section 270A of the Income Tax Act.

2. The learned counsel appearing for the petitioner submits

that Ext.P2 order is absolutely illegal and unsustainable in law. It is

submitted that for a technical error committed by the assessee

while furnishing its return of income, a huge penalty of Rs.54 lakhs

has been imposed by Ext.P2 order. It is submitted that following the

completion of assessment, there is no tax liability in so far as the

petitioner / assessee is concerned. It is submitted that in such

circumstances, there was no under reporting of income as alleged

and a huge penalty of Rs.54 lakhs ought not to have been imposed

especially considering the fact that the provisions of Section 270A

of the Income Tax Act does not provide for a mandatory penalty.

The learned counsel for the petitioner further points out that going

by the provisions of sub-section (6) of Section 270A of the Income

Tax Act, since there was no suppression or underreporting of any

income by the petitioner and all materials were placed before the

Assessing Officer, the petitioner could not have been mulcted with

any liability.

WP(C) NO. 15861 OF 2022

3. The learned Standing Counsel appearing for the

respondent submits that the petitioner has an effective alternative

remedy by way of appeal and there are no special circumstances,

which will enable the petitioner to approach this court directly

under Section Article 226 of the Constitution of India. It is pointed

out that even if the contention of the petitioner is accepted, the

authority is acted within its jurisdiction and the quantum of penalty

by itself cannot be a reason for this Court to interfere under Article

226 of the Constitution of India, especially when there is an

effective alternative remedy as far as the petitioner is concerned.

4. Having heard the learned counsel for the petitioner and

the learned Standing counsel for the respondent, I am of the

opinion that the petitioner can be relegated to the remedy of

appeal. I find that the Standing Counsel for the Department is right

in contending that there is no jurisdictional error warranting

interference with Ext.P2 order of penalty directly in exercise of

jurisdiction under Article 226 of the Constitution of India. However,

taking note of the fact that there was no tax liability after

assessment and the petitioner is a society running at a loss, I am of

the opinion that Ext.P2 order can be directed to be kept in

abeyance till a decision is taken on the stay petition in the appeal

to be filed by the petitioner. Accordingly, this writ petition will WP(C) NO. 15861 OF 2022

stand disposed of directing that if the petitioner files an appeal

against Ext.P2 order along with an application for stay within three

weeks from the date of receipt of a certified copy of this judgment,

the stay petition shall be considered and decided on merits by the

appellate authority after affording an opportunity of hearing to the

petitioner. The period during which this writ petition was pending

before this Court shall be excluded for the purpose of computing

any period of limitation for filing the appeal. The appellate

authority shall dispose of the stay petition having due regard to the

provisions of sub-section (6) of Section 270A of the Income Tax Act.

Till a decision is taken on the application for stay, all coercive steps

to recover the amount in Ext.P2 shall be kept in abeyance.

Sd/-

GOPINATH P.

JUDGE DK WP(C) NO. 15861 OF 2022

APPENDIX OF WP(C) 15861/2022

PETITIONER EXHIBITS

Exhibit P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 15.2.2021 PASSED BY THE RESPONDENT FOR AY-2018-19.

Exhibit P2 TRUE COPY OF THE ORDER IMPOSING PENALTY U/S 270A OF THE INCOME TAX ACT 1961, DATED 04.02.2022 PASSED BY THE RESPONDENT FOR THE AY 2018-19.

Exhibit P3 TRUE COPY OF THE PROCEEDINGS OF THE INCOME TAX OFFICER, WARD 2 (3) KOZHIKODE FOR THE ASSESSMENT YEAR 2007-08

Exhibit P4 TRUE COPY OF THE PROCEEDINGS OF INCOME TAX OFFICER, WARD 2 (3), KOZHIKODE FOR ASSESSMENT YEAR 2008-09

Exhibit P5 TRUE COPY OF THE PROCEEDINGS OF INCOME TAX OFFICER, WARD 2 (3), KOZHIKODE FOR THE ASSESSMENT YEAR 2009-10

Exhibit P6 TRUE COPY OF THE PROCEEDINGS OF THE INCOME TAX OFFICER, WARD 2 (3), KOZHIKODE FOR THE ASSESSMENT YEAR 2012-13

Exhibit P7 TRUE COPY OF THE APPELLATE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS), KOZHIKODE DATED 07/09/2017 FOR THE ASSESSMENT YEAR 2013-14