Kerala HC Orders for ITR, Non-filing on Bonafide Belief of Tax Exemption U/S 80P

The Kerala High Court has issued a directive regarding the Income Tax Returns (ITR) in cases where income tax returns were not filed due to a genuine belief in the exemption provided under Section 80P of the Income Tax Act, 1961.

The current writ petitions contend the notices issued under Section 148 of the Income Tax Act, 1961, and subsequent proceedings taken in accordance with the notices for the Assessment Year 2019-20.

The petitioner, The Muvattupuzha Housing Co-operative Society Ltd, is a cooperative society registered under the Kerala Co-operative Societies Act 1969 and its rules.

They did not file their income tax return for the Assessment Year 2019-20 believing that their entire income was exempt under Section 80P of the Income Tax Act, thus considering it not applicable to file the return.

The assessing authority suspected that the petitioners had concealed their income and attempted to evade assessment. Consequently, notices were issued to the petitioners under Section 148A, and after considering their response, orders were issued to proceed with the assessment.

However, the petitioners did not file their income tax returns in response to the orders issued under Section 148 of the Income Tax Act.

The counsel representing the petitioners requested that the petitions be disposed of, granting the petitioners the liberty to file their income tax returns and take all pleas regarding their claim for income exemption under Section 80P of the Income Tax Act.

In response, a Single Bench of the court stated that the present writ petitions would be disposed of, allowing the petitioners to file their income tax returns within one month from the date of the order.

If the petitioners comply and file their returns within the provided timeline, the assessing authority will review the returns following the law and promptly issue the final assessment orders.