USAFF CHEENAMMADATH, vs. ASSESSMENT UNIT, NATIONAL FACELESS ASSESSMENT CENTRE, NEW DELHI,

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WP(C)/27205/2024HC KeralaKLHC01126898202431 July 2024Author: HONOURABLE MR. JUSTICE GOPINATH P.4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala disposed of the writ petition by directing the 3rd respondent (Commissioner of Income Tax (Appeals)) to consider and pass orders on the stay application (Ext.P3) filed in the appeal (Ext.P2) within one month of receiving a certified copy of the judgment. The Court ordered that further recovery proceedings would remain suspended pending this consideration. It was also clarified that the petitioner could request the 3rd respondent to direct the lifting of the attachment under Section 226(3) of the Income Tax Act, 1961, during the pendency of the stay petition's consideration. The Court did not decide on the merits of the assessment order or the appeal itself.

What were the facts?

The petitioner, Usaaff Cheenammadath, received an order of assessment under the Income Tax Act, 1961. He filed an appeal (Ext.P2) and a stay petition (Ext.P3) before the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (3rd respondent). While the stay petition was pending, recovery proceedings were initiated against the petitioner's bank account with Union Bank of India (5th respondent) under Section 226(3) of the Act. The credit balance in the account was stated to be Rs. 33,000/-. The petitioner sought suspension of recovery proceedings pending the decision on his stay petition.

What were the issues?

1. Whether recovery proceedings initiated under Section 226(3) of the Income Tax Act, 1961, should be suspended pending the disposal of a stay petition filed along with an appeal before the appellate authority? (Question of law and fact, turning on Section 226(3) of the Income Tax Act, 1961). Assessee's Contention: The petitioner argued that recovery proceedings should be suspended pending the consideration of his stay petition by the appellate authority, especially given the limited balance in his bank account. The petitioner also sought the possibility of requesting the lifting of the attachment. Revenue's Contention: The judgment records that the learned Standing Counsel for the respondent Department was heard, but their specific contentions are not detailed.

Which sections of the Income-tax Act were involved?

Section 226(3)

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 GOPINATH P. WEDNESDAY, THE 31ST DAY OF JULY 2024 / 9TH SRAVANA, 1946 WP(C) NO. 27205 OF 2024 PETITIONER/S: USAFF CHEENAMMADATH, AGED 61 YEARS S/O. ABOOBACKER, FAIZAL MANZIL, VAININGAL, BANGALAM P.O.,KASARAGOD, PIN - 671314 BY ADV S.ARUN RAJ RESPONDENT/S: 1 ASSESSMENT UNIT, NATIONAL FACELESS ASSESSMENT CENTRE, NEW DELHI, INCOME TAX DEPARTMENT, 2ND FLOOR, E- RAMP, JAWAHARLAL NEHRU STADIUM, NEW DELHI, PIN - 110003 2 INCOME TAX OFFICER, WARD-1& TPS, AAYAKAR BHAVAN, VIDHYANAGAR, KASARAGOD, PIN - 671123 3 COMMISSIONER OF INCOME TAX (APPEALS), NATIONAL FACELESS APPEAL CENTRE, INCOME TAX DEPARTMENT, 2ND FLOOR, E- RAMP, JAWAHARLAL NEHRU STADIUM, NEW DELHI, PIN - 110003 4 THE PRINCIPAL COMMISSIONER OF INCOME TAX AAYAKAR BHAVAN, NORTH BLOCK, MANANCHIRA, KOZHIKODE, PIN - 673001 5 UNION BANK OF INDIA, MAHAMAYA BUIDING, TEROLE, NILESHAWAR, KASARAGOD, REPRESENTED BY ITS BRANCH MANAGER, PIN - 671314 BY ADV KEERTHIVAS GIRI OTHER PRESENT: SRI. P G JAYASHANKAR (SC -IT DEPT) SRI. ASP KURUP (SC- UBI) THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 31.07.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P (C) No.27205/2024 -2-

J U D G M E N T The petitioner suffered Ext.P1 order of assessment under the provisions of the Income Tax Act, 1961 ('the 1961 Act'). The petitioner has preferred Ext.P2 appeal along with Ext.P3 stay petition before the 3rd respondent. Pending consideration of the stay petition, proceedings have been initiated against the bank account maintained by the petitioner with the 5th respondent bank under Section 226 (3) of the 1961 Act. The petitioner prays that the recovery proceedings may be suspended pending consideration of the stay petition by the Appellate Authority. It is also pointed out that the credit balance in the account maintained with the 5th respondent is only Rs.33,000/-.

2.

Heard the learned Standing Counsel for the respondent Department the learned Standing Counsel for the 5th respondent bank.

3.

Having heard the learned respective counsel as above, this writ petition will stand disposed of directing the 3rd respondent to consider and pass orders on Ext.P3 application for stay filed in Ext.P2 appeal after affording an opportunity of hearing to the petitioner within a period of one month from the date of receipt of a certified copy of this judgment. Further recovery proceedings will remain suspended pending consideration of the matter by the 3rd respondent as directed above. It will also be open to the -3- petitioner to request the 3rd respondent to direct the lifting of attachment under Section 226 (3) of the 1961 Act while the stay petition is being considered.

The writ petition is disposed of as above. GOPINATH P. JUDGE AMG -4-

Appendix — schedule of exhibits
APPENDIX OF WP(C) 27205/2024 PETITIONER EXHIBITS Exhibit P1 A TRUE COPY OF THE ASSESSMENT ORDER DATED 9-1-2023 UNDER SECTIONS 147 R.W.S 144 AND144B OF THE ACT PASSED BY THE 1ST RESPONDENT FOR THE AY 2018-19 Exhibit P2 A TRUE COPY OF THE FIRST APPEAL DATED 10-8-2023 E- FILED BY THE PETITIONER BEFORE THE 3RD RESPONDENT ON 16-8-2023 FOR THE AY 2018-19 Exhibit P3 A TRUE COPY OF THE STAY PETITION DATED 10-8-2023 FOR THE AY 2018-19 E-FILED BEFORE THE 3RD RESPONDENT:- CIT (APPEALS), NATIONAL FACELESS APPEAL CENTRE, DELHI ON 16-8-2023 SEEKING STAY OF RECOVERY BASED ON EXHIBIT P-1 ASSESSMENT ORDER Exhibit P4 A TRUE COPY OF THE NOTICE U/S 226 (3) OF THE ACT ISSUED TO THE 5TH RESPONDENT BANK BY THE 2ND RESPONDENT

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