KUNNAPPILLY BUILDERS LL.P vs. ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/ INCOME TAX OFFICER

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WA/1916/2023HC KeralaKLHC01082148202303 November 2023Author: HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR,HONOURABLE DR. JUSTICE KAUSER EDAPPAGATH4 pages
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What did the High Court hold?

The High Court held that since the learned Single Judge had directed the appellant to pursue the alternate remedy before the statutory authority, it was incumbent upon the learned Judge to protect the appellant from recovery proceedings pending the disposal of the application by the respondent appellate authority. Accordingly, the High Court modified the impugned judgment of the learned Single Judge to the extent that pending the disposal of the stay application or appeal, whichever is earlier, by the appellate authority, the 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, Kunnapilly Builders LLP, challenged an assessment order for Assessment Year 2015-2016. They filed a statutory appeal and a stay application before the Commissioner of Income Tax (Appeals). While these were pending, recovery steps were initiated by the revenue. The appellant then filed a writ petition before the High Court of Kerala. A learned Single Judge disposed of the writ petition by directing the appellant to pursue the alternate remedy of appeal and ordered the Appellate Authority to decide the stay application or appeal within two months. The appellant filed the present writ appeal, aggrieved by the Single Judge's judgment, specifically because it did not grant a stay of recovery proceedings until the Appellate Authority decided the stay application/appeal.

What were the issues?

1. Whether the High Court, while relegating the appellant to the alternate remedy of appeal before the statutory authority, should have granted a stay of recovery proceedings pending the disposal of the stay application or appeal by the Appellate Authority? Assessee's Contention: The appellant argued that the learned Single Judge erred by not granting a stay of recovery proceedings until the First Appellate Authority had considered the stay application/appeal, as directed by the learned Single Judge. The appellant sought protection from recovery actions during the pendency of their statutory remedies. Revenue's Contention: The judgment records no specific arguments from the revenue regarding this issue.

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 DR. JUSTICE A.K.JAYASANKARAN NAMBIAR & THE HONOURABLE DR. JUSTICE KAUSER EDAPPAGATH FRIDAY, THE 3RD DAY OF NOVEMBER 2023 / 12TH KARTHIKA, 1945 WA NO. 1916 OF 2023 AGAINST THE JUDGMENT DATED 17.10.2023 IN WP(C) 33187/2023 OF HIGH COURT OF KERALA APPELLANT/PETITIONER: KUNNAPPILLY BUILDERS LL.P 40/1803, N2, FLAT NO.7C, SAMUDRA DARSHAN APARTMENT, MARINE DRIVE, KOCHI, KERALA REPRESENTED BY ITS PARTNER MS. SREEDEVI GOPALAKRISHNAN, PIN – 682011 BY ADVS. SRI.ANIL D. NAIR SMT.TELMA RAJU SRI.AADITYA NAIR RESPONDENTS/RESPONDENTS: 1 ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/ INCOME TAX OFFICER NATIONAL FACELESS ASSESSMENT CENTRE, DELHI, PIN – 110001 2 COMMISSIONER OF INCOME TAX (APPEALS), NATIONAL FACELESS ASSESSMENT CENTRE (NFAC), NEW DELHI, PIN – 110001 3 THE INCOME TAX OFFICER CORPORATE WARD 1 (1), KOCHI, PIN - 682018 :2: WA. No.1916 of 2023 BY SRI JOSE JOSEPH, SC THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 03.11.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: :3: WA. No.1916 of 2023

JUDGMENT Dr. A.K.Jayasankaran Nambiar, J. Against Ext.P1 assessment order for the assessment years 2015- 2016 under the Income Tax Act, the appellant had preferred Ext.P2 appeal and Ext.P3 application for stay of recovery 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.33187 of 2023, which was disposed by a learned Single Judge by judgment dated 17.10.2023 relegating the appellant to the alternate remedy of appeal and directing the Appellate Authority to dispose the 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 stay application/appeal as directed by the learned Single Judge.

2.

We have heard Sri.Anil D.Nair, the learned counsel for the appellant and Sri.Jose Joseph, the learned Standing counsel for the :4: WA. No.1916 of 2023 Income Tax Department.

3.

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 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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