2020 (1) TMI 1117 - HC - Income Tax

Rectification of mistake - deduction u/s 80P - petition for rectification of mistake u/s 154 of the Income Tax Act, 1961, which is pending before the 3rd respondent meanwhile, coercive steps are initiated to recover the disputed tax amount from the petitioner - HELD THAT - Rectification applications as per Exts.P-8, P-15 P-21 will be taken up for consideration by R-3 without much delay, and affording reasonable opportunity of being heard to the petitioner through authorised representative/counsel, if any, may pass orders thereon without much delay preferably within a period of 4 to 6 weeks from the date of production of a certified copy of this judgment. Until orders are passed on Exts.P-8, P-15 P-21 as aforestated, further coercive steps for enforcement of the impugned orders shall be kept in abeyance by the respondents concerned.

Summary

Issues involved:
1. Disallowance of eligible deduction u/s 80P of the Income Tax Act, 1961.
2. Rectification proceedings initiated under section 154 of the Income Tax Act, 1961.
3. Coercive steps for recovery of disputed tax amount.
4. Pending rectification petitions before the 3rd respondent.
5. Relief sought through the Writ Petition.

Analysis:
1. The petitioner, a primary co-operative society, filed a return of income for the assessment year 2015-16 claiming deduction u/s 80P of the Income Tax Act, 1961. The assessing officer disallowed the deduction and computed the total income at ?41,28,889, issuing a demand notice for ?17,43,640. The petitioner challenged this assessment through a statutory appeal, which was allowed by the 3rd respondent, granting the deduction. However, the 3rd respondent later initiated rectification proceedings under section 154, stating an apparent mistake, and unilaterally allowed the rectification petition, leading to coercive recovery steps by the 1st respondent. Similar issues arose for assessment years 2013-14 and 2008-09, with pending rectification petitions. The Writ Petition seeks to quash the rectification orders and demand letters, and to restrain coercive proceedings until the final disposal of the appeals.

2. The Court, after hearing both parties, ordered that the pending rectification applications will be considered by the 3rd respondent without delay, providing an opportunity for the petitioner to be heard. The 3rd respondent is directed to pass orders on the rectification petitions within 4 to 6 weeks from the date of the judgment. Until the final orders are passed, coercive steps for enforcing the impugned orders are to be kept in abeyance by the concerned respondents. The Writ Petition is finally disposed of with these observations and directions, ensuring a fair consideration of the rectification petitions and halting coercive measures during the process.