WILSON MATHEW (PAN AILPM2852M), vs. THE INCOME TAX OFFICER,

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WP(C)/8559/2020HC KeralaKLHC01022154202015 March 2024Author: HONOURABLE MR. JUSTICE GOPINATH P.7 pages
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What did the High Court hold?

The High Court held that the writ petition could be disposed of by directing the withdrawal of the attachment orders on the condition that the petitioner remits 20% of the demands for the assessment years 2011-12 to 2015-16. The Court was inclined to grant this relief, taking into consideration the CBDT circulars which provide for an automatic stay of recovery pending appeal if 20% of the demands are remitted. The operative direction is that upon the petitioner remitting 20% of the amounts determined as payable for the specified assessment years, after giving credit for amounts already paid, the attachment orders against the immovable properties will be withdrawn by the Tax Recovery Officer. This benefit is available only if the amounts are remitted on or before April 15, 2024.

What were the facts?

The petitioner, Wilson Mathew, operating as M/s. Kairali Cable Vision, is challenging assessment orders for assessment years 2011-12 to 2015-16. He had appealed these orders before the Commissioner of Income Tax (Appeals). The CIT(A) granted a stay of demand on the condition that the petitioner remit 15% of the total demands by March 15, 2020. The petitioner claims to have made substantial payments but admits a shortfall, leading to recovery proceedings and attachment of his properties. The petitioner seeks withdrawal of the attachment by agreeing to pay 20% of the demands.

What were the issues?

1. Whether the attachment of the petitioner's properties is justified given the admitted shortfall in complying with the stay order conditions. 2. Whether the petitioner should be permitted to remit 20% of the demands as a condition for withdrawal of property attachment, considering CBDT circulars. The assessee argued that the attachment of properties is causing serious prejudice and requested permission to remit 20% of the demands for each assessment year, conditional on the withdrawal of the attachment. The assessee relied on Circulars issued by the Central Board of Direct Taxes (CBDT) which, according to the assessee, provide for an automatic stay upon remittance of 20% of the demands. The revenue contended that the attachment proceedings were initiated due to the petitioner's failure to comply with the conditions stipulated in the stay order (Exhibit P-28), specifically the requirement to remit 15% of the demands by March 15, 2020. The revenue stated that there is an admitted shortfall even today, and therefore, the petitioner is not entitled to any relief.

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. FRIDAY, THE 15TH DAY OF MARCH 2024 / 25TH PHALGUNA, 1945 WP(C) NO. 8559 OF 2020 PETITIONER: WILSON MATHEW (PAN AILPM2852M), M/S. KAIRALI CABLE VISION, P. O. TALIPARAMBA, KANNUR, PIN - 670 141. BY ADVS. NANDAGOPAL S. KURUP A. KUMAR (SR.)(K/529/1992) GEORGE MECHERIL ADITH KIRAN R.S.(K/003142/2022) A. KUMAR (SR.)(K/529/1992) RESPONDENTS: 1 THE INCOME TAX OFFICER, WARD NO.4, KANNUR RANGE, KANNUR, AAYAKAR BHAVAN, KANNOTHUMCHAL, KANNUR-670 005. 2 THE COMMISSIONER OF INCOME TAX (APPEALS), KOZHIKODE - 673 001. 3 THE TAX RECOVERY OFFICER, AAYAKAR BHAVAN, MANANCHIRA, KOZHIKODE. (SOUGHT TO BE IMPLEADED) BY ADV. SRI. P. R. AJITH KUMAR – SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 15.03.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 8559 OF 2020 2 GOPINATH P., J. -------------------------- W.P.(C) No. 8559 of 2020 ------------------------- Dated this the 15th day of February, 2024

JUDGMENT The petitioner suffered Exhibits P-15 to P-17 orders of assessment for the assessment years 2011-12 to 2015-16, against which the petitioner filed appeals before the 2nd respondent. The 2nd respondent issued Exhibit P-28 order on the application for stay directing that the demands shall be remained stayed on the condition that the petitioner remits a total of 15% of the total demands by the 15.03.2020. According to the petitioner, though the petitioner made substantial payments there was some shortfall leading to a situation where the recovery proceedings continued against the petitioner and certain properties of the petitioner came to be attached (see Exhibit P-32).

2.

Sri. A. Kumar, learned Senior Counsel appearing for the petitioner, instructed by Adv. Nandagopal S. Kurup submits that the attachment of the properties is causing serious prejudice to the petitioner. It is submitted that the petitioner may now be permitted to remit an amount equivalent to 20% of the demands in respect of WP(C) NO. 8559 OF 2020 3 each of the assessment orders mentioned in Exhibit P-28 and on that condition the attachment over the properties by Exhibit P-32 may be withdrawn. The learned Standing Counsel appearing for the Income Tax Department would submit that the proceedings for attachment of the properties were taken as the petitioner failed to comply with the condition imposed on Exhibit P-28 order. It is submitted that the petitioner was required, in terms of Exhibit P-28 order, to remit an amount equivalent to 15% of the demands by 15.03.2020. It is submitted that even today, there is an admitted short fall and, therefore, the petitioner is not entitled to any relief from this Court.

3.

The learned Senior Counsel appearing for the petitioner in reply would submit that even in terms of the Circular issued by the Central Board of Direct Taxes, on the petitioner remitting an amount equivalent to 20% of the demands, there is an automatic stay with no further condition. It is submitted that in such circumstances, the petitioner may be permitted to now remit an amount equivalent to 20% of the demands as a condition for stay.

4.

Having heard the learned Senior Counsel appearing for the petitioner and the learned Standing Counsel appearing for the Income Tax Department, I am of the opinion that this writ petition can be WP(C) NO. 8559 OF 2020 4 disposed of directing that on the petitioner remitting 20% of the demands raised against the petitioner in respect of the assessment orders for assessment years 2011-12 to 2015-16 (mentioned in Exhibit P-28 order) the orders attaching the properties of the petitioner shall be withdrawn. I am inclined to grant this relief to the petitioner taking into consideration the fact that in terms of the Circulars issued by the Central Board of Direct Taxes, if the petitioner remits a sum equivalent to 20% of the demands, there will be an automatic stay of recovery pending disposal of the appeal. In the light of the above, this writ petition will stand disposed of directing that on the petitioner remitting an amount equivalent to 20% of the amounts determined as payable by the petitioner for the assessment years 2011-12 to 2015-16 after giving credit to the amounts already paid, the attachment orders against the immovable properties of the petitioner will stand withdrawn by the Tax Recovery Officer. The benefit of this order shall be available to the petitioner only if he remits the amounts on or before 15.04.2024. GOPINATH P. JUDGE Svn

WP(C) NO. 8559 OF 2020 5

Appendix — schedule of exhibits
APPENDIX OF WP(C) 8559/2020 PETITIONER’S EXHIBITS EXHIBIT P1 TRUE COPY OF THE SUMMONS AND LIST OF DOCUMENTS SEIZED BY THE INSPECTION TEAM HEADED BY THE FIRST RESPONDENT ON 16.03.2015 EXHIBIT P2 TRUE COPY OF OBJECTIONS FILED ON 06.10.2016 BY THE PETITIONER TO THE NOTICE FOR RE-OPENING OF THE ASSESSMENT EXHIBIT P3 TRUE COPY OF THE REPLY DATED 24.12.2016 FILED BY THE PETITIONER FOR THE YEAR 2011-12 EXHIBIT P4 TRUE COPY OF THE ASSESSMENT ORDER DATED 29.12.2016 IN RESPECT OF THE ASSESSMENT YEAR 2011-12 EXHIBIT P5 TRUE COPY OF THE RELEVANT PAGES OF THE APPEAL MEMORANDUM FOR THE ASSESSMENT YEAR 2011-12 EXHIBIT P6 TRUE COPY OF THE RELEVANT PAGES OF THE APPEAL MEMORANDUM FOR THE ASSESSMENT YEAR 2012-13 EXHIBIT P7 TRUE COPY OF THE RELEVANT PAGES OF THE APPEAL MEMORANDUM FOR THE ASSESSMENT YEAR 2013-14 EXHIBIT P8 TRUE COPY OF THE RELEVANT PAGES OF THE APPEAL MEMORANDUM FOR THE ASSESSMENT YEAR 2014-15 EXHIBIT P9 TRUE COPY OF THE RELEVANT PAGES OF THE APPEAL MEMORANDUM FOR THE ASSESSMENT YEAR 2015-16 EXHIBIT P10 TRUE COPY OF E-FILING ACKNOWLEDGMENT RECEIPT DATED 26.1.2017 FOR THE YEAR 2011 EXHIBIT P11 TRUE COPY OF E-FILING ACKNOWLEDGMENT RECEIPT DATED 26.1.2017 FOR THE YEAR 2012 EXHIBIT P12 TRUE COPY OF E-FILING ACKNOWLEDGMENT RECEIPT DATED 27.1.2017 FOR THE YEAR 2013 WP(C) NO. 8559 OF 2020 6 EXHIBIT P13 TRUE COPY OF E-FILING ACKNOWLEDGMENT RECEIPT DATED 02.02.2018 FOR THE YEAR 2014 EXHIBIT P14 TRUE COPY OF E-FILING ACKNOWLEDGMENT RECEIPT DATED 02.02.2018 FOR THE YEAR 2015 EXHIBIT P15 TRUE COPY OF THE REVISED ORDER PASSED BY THE FIRST RESPONDENT ON 4.5.2018 FOR 2011-12 EXHIBIT P16 TRUE COPY OF THE REVISED ORDER PASSED BY THE FIRST RESPONDENT ON 4.5.2018 FOR 2012-13 EXHIBIT P17 TRUE COPY OF THE REVISED ORDER PASSED BY THE FIRST RESPONDENT ON 4.5.2018 FOR 2013-14 EXHIBIT P18 TRUE COPY OF THE ORDER PASSED ON 18.06.2018 IN RESPECT OF 2014-15 EXHIBIT P19 TRUE COPY OF THE ORDER PASSED ON 18.06.2018 IN RESPECT OF 2015-16 EXHIBIT P20 TRUE COPY OF THE STAY PETITION FILED ON 06.07.2018 ALONG WITH THE ENDORSEMENT EXHIBIT P21 TRUE COPY OF THE NOTICE OF DEMAND ON 15.5.2019 IN FORM I.T.C.P.I. FOR 2011-12 EXHIBIT P22 TRUE COPY OF THE NOTICE OF DEMAND ON 15.5.2019 IN FORM I.T.C.P.I. FOR 2012-13 EXHIBIT P23 TRUE COPY OF THE NOTICE OF DEMAND ON 15.5.2019 IN FORM I.T.C.P.I. FOR 2013-14 EXHIBIT P24 TRUE COPY OF THE NOTICE OF DEMAND ON 15.5.2019 IN FORM I.T.C.P.I. FOR 2014-15 EXHIBIT P25 TRUE COPY OF THE NOTICE OF DEMAND ON 15.5.2019 IN FORM I.T.C.P.I. FOR 2015-16 EXHIBIT P26 TRUE COPY OF THE DEMAND NOTICE DATED 19.6.2019 ISSUED BY THE FIRST RESPONDENT EXHIBIT P27 TRUE COPY OF JUDGMENT DATED 9.7.2019 IN W.P.(C) NO.18666/2019 OF THIS HONOURABLE COURT WP(C) NO. 8559 OF 2020 7 EXHIBIT P28 TRUE COPY OF THE ORDER DATED 27.2.2020 IN ITA 11105, 11149, 11151, 101618, 10620/2016-17, 2017-18 EXHIBIT P29 TRUE COPY OF THE CHALAN DATED 18.4.2017 FOR RS. 1,16,310/-, FOR THE YEAR 2011-12 EXHIBIT P30 TRUE COPY OF THE CHALAN DATED 18.4.2017 FOR RS.5,31,642/-, FOR THE YEAR 2012-13 EXHIBIT P31 TRUE COPY OF THE CHALAN DATED 18.4.2017 FOR RS.3,69,048/- FOR THE YEAR 2013-14 EXHIBIT P32 TRUE COPY OF THE ATTACHMENT NOTICE DATED 22.02.2024 NUMBERED ITBA/COM/F/17/2023- 24/1061343758(1) ISSUED BY THE TAX RECOVERY OFFICER, KOZHIKODE EXHIBIT P33 TRUE COPY OF THE REPRESENTATION DATED 08.03.2024 REFERRED BY ME TO THE TAX RECOVERY OFFICER, KOZHIKODE

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