HC directs appellate authority to consider modified Form 26AS while disposing of appeal

Jagadeesan Chellappan Achary Vs Income Tax Officer (Kerala High Court)

The case of Jagadeesan Chellappan Achary vs. Income Tax Officer before the Kerala High Court involved a senior citizen who received a notice under Section 148 of the Income Tax Act, 1961, for the assessment year 2013-14, as the Income Tax Officer believed that the petitioner’s income had escaped assessment.

The petitioner, a practicing Advocate, was further served with a notice under Section 142(1) of the Act, stating that he had received a total interest income of Rs. 75,73,122/- and total professional income of Rs. 4,000/- during the financial year 2012-13. The petitioner was directed to produce books of accounts, details of source of income, bank account statements, and income tax returns for the assessment year 2013-14 corresponding to the financial year 2012-13.

The petitioner’s counsel argued that the reported interest income of Rs. 75,73,122/- was a mistake made by the bank, which was later rectified. The bank issued a letter confirming the rectification, and Form 26AS was also corrected accordingly. Despite this communication, the assessment order (Exhibit P-2) was completed, and the petitioner’s rectification application was rejected on the grounds that an appeal had been filed.

Considering the evidence provided by the bank’s letter and the corrected Form 26AS (Exhibit P-9 and P-10), which indicated that no TDS was deposited by the bank and no interest income accrued to the petitioner, the court directed the Faceless Appellate Centre to expedite the petitioner’s appeal (Exhibit P-11). The court instructed the appellate authority to consider the modified Form 26AS while disposing of the appeal and ordered that no coercive measures be taken against the petitioner for enforcing the tax demand until the appeal was decided.

In conclusion, the court disposed of the writ petition with directions to the appellate authority, emphasizing the importance of considering all relevant evidence, including rectification documents, in tax assessment cases to ensure fairness and accuracy.

FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT

1. The petitioner, a senior citizen is an assessee under the provisions of the Income Tax Act, 1961. Petitioner was served with a notice dated 30.03.2021 by the 1^st respondent under Section 148 of the said Act requiring him to file tax return for the assessment year 2013-14 as the 1^st respondent has been of the opinion that the petitioner’s income had escaped assessment.

2. Petitioner is a practicing Advocate. The petitioner was issued another notice under Sub-section (1) of Section 142 of the Act stating that total interest from income of the petitioner was Rs. 75,73,122/- and total professional income of the petitioner was Rs. 4,000/- during the financial year 2012-13. The petitioner was directed to produce books of accounts, details of source of income, bank account statements and income tax returns for the assessment year 2013-14 corresponding to the financial year 2012-13.

3. The learned Counsel for the petitioner submits that the amount of Rs. 75,73,122/- as interest income of the petitioner was a mistake on the part of the Bank and the Bank had issued a letter and the 26 AS Form has been rectified by the Bank. The Bank has issued a letter and the 26 AS Form has been rectified by the Bank. The fact was also communicated vide the letter dated 18.04.2022 in Exhibit P-9. Despite the aforesaid communication, the assessment order was completed in Exhibit P-2, against which the petitioner has filed the appeal. The petitioner’s rectification application has been rejected on the ground that since the petitioner has filed the appeal, the rectification application is not maintainable. Considering the fact that the Bank has already modified Form 26 AS and letter has been issued in Exhibit P-9 which would suggest that no TDS was deposited by the Bank and no interest income of Rs. 75,73,122/- accrued to the petitioner, it would be appropriate to dispose of this writ petition with direction to the Faceless Appellate Centre to consider and dispose of Exhibit P-11 appeal of the petitioner expeditiously, preferably within period of two months. While considering the appeal, the appellate authority should take into account the modified Form 26 AS in Exhibit P-10. Till the disposal of the appeal, it is provided that no coercive measures to be taken against the petitioner for enforcing the demand of tax made.

With the aforesaid directions, the present writ petition is hereby disposed of.