M/S.PALAKKAD DISTRICT SALAFI EDUCATIONAL ASSCIATION, vs. THE ASST. COMMISSIONER OF INCOME TAX,

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WP(C)/21824/2019HC KeralaKLHC01055787201909 August 2019Author: HONOURABLE MR.JUSTICE S.V.BHATTI4 pages
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What did the High Court hold?

The High Court, after perusing the assessment order, appeal, and stay petition (Exts. P1, P2, and P3), was satisfied that a case was made out for issuing necessary directions to the appellate authority. The Court found the limited prayer and grounds presented by the petitioner to be sufficient for disposing of the writ petition. The operative directions were: (a) The appellate authority (2nd respondent) was directed to consider and dispose of the stay application (Ext.P3) as early as possible, preferably within two months from the date of receipt of a copy of the judgment. (b) The respondents were directed not to take coercive steps or recover the amounts determined in the orders under appeal for ten weeks from the date of the judgment. The principle derived is that courts can direct expeditious disposal of stay petitions when there is a risk of the appeal becoming infructuous due to recovery actions.

What were the facts?

The petitioner, M/s. Palakkad District Salafi Educational Association, filed a writ petition before the High Court of Kerala. The petition challenged an assessment order (Ext.P1) passed under Section 143(3) read with Section 147 of the Income Tax Act, 1961. The petitioner had filed an appeal (Ext.P2) against this assessment order and a stay petition (Ext.P3) with the appellate authority, the Commissioner of Income Tax (Appeals). The petitioner contended that the mere filing or pendency of an appeal does not automatically grant a stay. They expressed concern that the delay in deciding the stay petition would lead to recovery proceedings by the assessing officer, rendering the appeal ineffective. The petitioner sought a direction for the expeditious disposal of their stay petition.

What were the issues?

1. Whether the High Court should issue a direction to the appellate authority to consider and dispose of the stay petition expeditiously, given the potential for recovery proceedings to render the appeal ineffective? The petitioner argued that the law provides for the prompt disposal of stay petitions pending appeal to protect the appellant's interests. They contended that the delay in deciding Ext.P3 could lead to coercive recovery steps by the assessing officer, which might make the statutory appeal either academic or ineffective. The petitioner sought an appropriate direction to the appellate authority to consider and dispose of Ext.P3 expeditiously. The revenue did not record any specific arguments in the judgment.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI FRIDAY, THE 09TH DAY OF AUGUST 2019 / 18TH SRAVANA, 1941 WP(C).No.21824 OF 2019(C) PETITIONER/S: M/S.PALAKKAD DISTRICT SALAFI EDUCATIONAL ASSCIATION, 14/229, P.M.A.COLLEGE, CAMPUS, PARALI, PALAKKAD DISTRICT, REPRESENTED BY K.S.SHAMSUDHEEN, SECRETARY, AGED 48, S/O.SAYED. BY ADVS. SRI.HARISANKAR V. MENON SMT.MEERA V.MENON RESPONDENT/S: 1 THE ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, AYAKAR BHAVAN, S.T.NAGAR, THRISSUR - 680 001. 2 COMMISSIONER OF INCOME TAX (APPEALS), PANAMPILLY NAGAR, ERNAKULAM - 682 036. SC SRI JOSE JOSEPH THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 09.08.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.21824 OF 2019(C) -2-

JUDGMENT The petitioner filed appeal in Ext.P2 aggrieved by the order of assessment in Ext.P1 made under Section 143(3) read with Section 147 of the Income Tax Act, 1961. The petitioner has filed

the appeal with Ext.P3 stay petition. The petitioner prays for appropriate direction to the appellate authority to consider and dispose of Ext.P3 expeditiously.

2.

The case of petitioner is that either the mere filing of appeal or mere pendency of appeal does not amount to granting stay by the appellate authority. The delay in considering and disposing of Ext.P3 results in the assessing officer taking steps for recovering the tax amount which is under challenge in Ext.P2. The assessing officer, if is successful in his effort the statutory appeal would become either academic or ineffective. It is further contended by the petitioner that in the manner the law provides for protecting the interest of appellant pending appeal, the order on stay petition is passed expeditiously. Hence the writ petition.

WP(C).No.21824 OF 2019(C) -3-

3.

Perused Exts. P1, P2 and P3. Prima facie I am satisfied that a case is made out for issuing necessary directions to 2nd respondent to dispose of the stay petition in Ext.P3. Having regard to the limited prayer and the grounds referred to above, this Court is satisfied that the writ petition can be disposed of by this order: (a) The appellate authority/2nd respondent considers and disposes of Ext.P3 application as early as possible, preferably within two months from the date of receipt of copy of this judgment. (b) The respondents are directed not to take coercive steps or recover the amounts determined in the orders under appeal for ten weeks from today. S.V.BHATTI JUDGE JS

WP(C).No.21824 OF 2019(C) -4-

Appendix — schedule of exhibits
APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 COPY OF ASSESSMENT ORDER ISSUED BY THE 1ST RESPONDENT FOR THE YEAR 2017-18. EXHIBIT P2 COPY OF APPEAL FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE YEAR 2017-18. EXHIBIT P3 COPY OF STAY PETITION FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE YEAR 2017-18. RESPONDENTS'S/S EXHIBITS: NIL

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