MKD TALUK GOVT. EMPLOYEES CO-OPERATIVE SOCIETY LTD. vs. ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER
What did the High Court hold?
The High Court held that when a writ court relegates an assessee to an alternate statutory remedy, it is incumbent upon the court to protect the assessee from recovery proceedings pending the disposal of their applications by the appellate authority. The Court found that the learned Single Judge should have granted a stay of recovery to ensure the effectiveness of the appellate process. Accordingly, the High Court modified the impugned judgment of the learned Single Judge. The modification clarified that pending the disposal of the delay condonation application, stay application, or appeal (whichever is earlier) by the appellate authority, recovery proceedings against the appellant for the amounts confirmed by the assessment order shall be kept in abeyance. The rest of the directions in the impugned judgment were not interfered with.
What were the facts?
The appellant, MKD Taluk Govt. Employees Co-operative Society Ltd., challenged an assessment order for assessment year 2020-2021. The appellant filed an appeal, a stay application, and a delay condonation application before the Commissioner of Income Tax (Appeals). During the pendency of these applications, recovery steps were initiated. The appellant then approached the High Court of Kerala through a writ petition. A learned Single Judge disposed of the writ petition by directing the appellant to pursue the alternate remedy before the appellate authority and ordered the appellate authority to decide the delay condonation, stay, or appeal within two months. The appellant filed the present writ appeal against this judgment, contending that the learned Single Judge failed to grant a stay of recovery proceedings until the appellate authority decided the pending applications.
What were the issues?
1. Whether the High Court, in its writ jurisdiction, should have granted a stay of recovery proceedings pending the disposal of the delay condonation application, stay application, or appeal by the appellate authority, when relegating the assessee to the alternate remedy? (Question of law and fact, concerning the powers of the High Court under Article 226 of the Constitution of India and the principles of natural justice). Assessee's contentions: The appellant argued that the learned Single Judge erred by not granting a stay of recovery proceedings while directing the appellant to approach the statutory appellate authority. They contended that recovery steps initiated during the pendency of the appeal and stay application would render the appellate remedy nugatory. Revenue's contentions: The judgment records no specific contentions from the revenue regarding this issue.
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Cause title — parties, addresses and appearances
JUDGMENT Dr. A.K.Jayasankaran Nambiar, J. Against Ext.P1 assessment order for the assessment years 2020- 2021 under the Income Tax Act, the appellant had preferred Ext.P2 appeal, Ext.P3 application for stay and Ext.P4 delay condonation application pending disposal of the appeal. When recovery steps were initiated by the respondents during the pendency of the statutory appeal and stay application, the appellant approached the writ court through WP(C).No.32812 of 2023, which was disposed by a learned Single Judge by judgment dated 13.10.2023 relegating the appellant to the alternate remedy of appeal and directing the Appellate Authority to dispose the delay condonation application, stay application or the appeal within a period of two months. In the appeal before us, the appellant impugns the said judgment of the learned Single Judge solely on the ground that while disposing the Writ Petition, the learned Single Judge did not grant a stay of recovery proceedings till such time as the First Appellate Authority considered the delay condonation application/ stay application/appeal as directed by the learned Single Judge.
We have heard Sri.Harisankar V. Menon, the learned counsel
:3: WA. No.1972 of 2023 for the appellant and Sri.P.G.Jayasankar, the learned Standing counsel for the Income Tax Department.
In our view, since the learned Single Judge had relegated the appellant to the alternate remedy before the statutory authority it was incumbent upon the learned Judge to protect the appellant from recovery proceedings pending disposal of the application by the respondent appellate authority. Accordingly, we modify the impugned judgment of the learned Single Judge to the limited extent of clarifying that pending disposal of the delay condonation application, stay application or appeal whichever is earlier, by the appellate authority, the recovery proceedings against the appellant for recovery of the amounts confirmed against him by Ext.P1 assessment order shall be kept in abeyance. Save for this limited modification, the rest of the directions in the impugned judgment are not interfered with. DR. A.K.JAYASANKARAN NAMBIAR JUDGE DR. KAUSER EDAPPAGATH JUDGE mns
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