Kerala High Court: DCIT Must Consider Belated ITR Filing Request Stemming From Corporate Management Deadlock
Background of the Writ Petition
The decision in K. J. Paul Vs DCIT (Kerala High Court) concerns a writ petition where the assessee sought only a procedural relief: a direction to the jurisdictional officer to take a decision on a pending representation for filing delayed income tax returns for multiple years.
The matter arose from a long-standing internal dispute in Seaqueen Builders Pvt. Ltd., which, according to the petitioners, prevented the company from complying with its income tax filing obligations from Assessment Year 2017-18 up to 31.03.2022.
The petition was filed by:
- 1st Petitioner: K. J. Paul, subscriber, shareholder and Director of the company.
- 2nd Petitioner: Seaqueen Builders Pvt. Ltd.
The respondents included the jurisdictional DCIT, who had not yet disposed of the assessee’s representation for permission to file delayed returns.
Corporate Dispute and Its Tax Compliance Impact
Nature of the Management Conflict
The 1st petitioner asserted that a serious dispute emerged regarding the control and management of Seaqueen Builders Pvt. Ltd. between the petitioners and one P. Johnny. This clash:
- Escalated into multiple proceedings before various forums, including the National Company Law Appellate Tribunal.
- Ultimately travelled to the Supreme Court as Civil Appeal No. 6732 of 2026.
The dispute, as narrated by the petitioners, created a deadlock over who was authorized to manage the company and take statutory decisions on its behalf.
Resolution by the Supreme Court
The conflict was brought to a close by the Honourable Supreme Court through Ex.P1 order passed in Civil Appeal No.6732/2026.
The outcome recorded was that:
- Sri. P. Johnny, the individual with whom the petitioners had disputes,
- Was permitted to transfer his shares in favour of the 1st petitioner,
- And thereby exit from the company.
The petitioners relied on this Supreme Court order and connected documents (such as share transfer documentation and resignation) to show that control of the company had finally been regularised and the management issue had been settled.
Alleged Inability to File Returns
According to the petitioners, the management standoff had a direct consequence on tax compliance:
- Income tax returns of the 2nd petitioner company under the Income Tax Act could not be filed
- For several years, from 2017–2018 to 31.03.2022.
They claimed this non-filing was not a wilful default but a practical impossibility arising from:
- Conflicting claims over directorship and signing authority,
- Ongoing litigation before multiple judicial and quasi-judicial bodies, and
- Uncertainty over who was legally empowered to act for the company.
Representation Before the DCIT
Requests Filed by the Petitioners
Once the Supreme Court resolved the corporate dispute and the shareholding/control issue was settled, the petitioners attempted to regularise income tax compliance.
They submitted:
- Ext.P5 request before the jurisdictional officer (DCIT), seeking an opportunity to submit the pending returns,
- Followed by Ext.P6 as a further communication reinforcing the same request (as noted in the article summary).
In the judgment text, the emphasis is on Ext.P5 as the primary representation:
“The petitioners only seek an opportunity to submit the said returns, and highlighting this aspect, the petitioners submitted Ext.P5 request, which is now pending before the respondent herein.”
Limited Relief Claimed in the Writ
The petitioners did not ask the Kerala High Court to itself condone delay or accept the belated returns. Their grievance centered on administrative inaction:
- Key complaint: Ext.P5 remained undecided.
- Relief sought: A direction to the respondent (DCIT) to consider Ext.P5 and pass appropriate orders in accordance with law, after granting an opportunity of hearing.