Kerala State Welfare Corporation for Forward Communities Limited Vs ITO (Kerala High Court)
Reply Filed in Time Ignored by AO- Kerala HC Quashes 154 Rectification & Directs AO to Reconsider 154 Rectification After Hearing Assessee
The petitioner, Kerala State Welfare Corporation for Forward Communities Ltd., challenged the rectification order u/s 154 & consequential demand. For AY 2017-18, the AO issued notice dated 13.11.2024 requiring objections by 21.11.2024. The petitioner filed reply on 20.11.2024, but without considering the same, AO passed rectification order u/s 154 stating that no objection had been filed.
Before the High Court, it was argued that the reply had been submitted in time & ignoring it violated principles of natural justice. The Revenue admitted that reply was indeed filed before the deadline but overlooked in the rectification proceedings.
The Court held that non-consideration of a timely filed objection was a clear violation of natural justice. Accordingly, rectification order & demand were quashed. The matter was remitted to AO with a direction to reconsider the objection & pass fresh orders after granting hearing. AO was directed to complete the process within three months.
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
The petitioner is an assessee under the provisions of the Income Tax Act. Pertaining to the assessment year 2017-2018, the assessment was completed as per Ext.P1, and the appeal filed against the same is pending consideration. In the meantime, Ext.P3 notice was issued by the 2nd respondent, to the petitioner under Section 154 of the Income Tax Act 1961, for rectifying certain mistakes. As per Ext.P3 notice, which is dated 13.11.2024, the petitioner was to furnish a reply on or before 21.11.2024 via email. According to the petitioner a reply in this regard was submitted on 20.11.2024 as evidenced by Ext.P4. However, without considering the same Ext.P5 rectification order was passed under Section 154 of the Income Tax Act, by stating that the petitioner failed to submit any objection. This writ petition is submitted by the petitioner in such circumstances, challenging Ext.P5.
