T.S. AJI vs. INCOME TAX OFFICER

WP(C)/33920/2023HC KeralaKLHC01075943202316 October 2023Author: HONOURABLE MR. JUSTICE D. K. SINGH4 pages

AI SummaryRemanded

What did the High Court hold?

The High Court disposed of the writ petition by directing the petitioner to file a fresh stay application before the appellate authority within one week. The appellate authority was instructed to consider this application on its merits. Crucially, the appellate authority was directed to take into account Office Memorandums issued by the Central Board of Direct Taxes (Ext.P5 to Ext.P7) and the Supreme Court's decision in Principal Commissioner of Income Tax-5 & Others Vs. LG Electronics India Private Limited. The Supreme Court judgment clarified that administrative circulars do not fetter quasi-judicial authorities and that it is open for authorities to grant deposit orders of a lesser amount than 20% pending appeal, based on the facts of individual cases. The operative direction is for the appellate authority to consider the stay application in light of these precedents and circulars.

What were the facts?

The petitioner, T.S. Aji, filed a writ petition challenging a notice dated July 20, 2023 (Ext.P4) and seeking a direction for the Income Tax Officer (1st respondent) to reconsider a stay application (Ext.P3). The petitioner's appeal against an assessment order was pending before the Commissioner of Income Tax (Appeals) (2nd respondent) and the National Faceless Appeals Centre (3rd respondent). The petitioner was granted one week to file a stay application before the appellate authority. The appellate authority was directed to consider the application on its merits, taking into account Office Memorandums issued by the Central Board of Direct Taxes (Ext.P5 to Ext.P7) and a Supreme Court judgment.

What were the issues?

1. Whether the petitioner should be granted a direction to the 1st respondent to reconsider Ext.P3 stay application, given that an appeal is pending before the appellate authority? (Question of mixed law and fact, concerning procedural remedies). Assessee's Contention: The petitioner sought reconsideration of the stay application and challenged the notice dated July 20, 2023. The petitioner relied on the principle that stay applications should be considered on merits, taking into account relevant CBDT circulars and Supreme Court pronouncements. Revenue's Contention: The judgment does not record any specific arguments made by the revenue. However, the court's direction implies that the revenue's role would be in the appellate authority's consideration of the stay application.

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 DINESH KUMAR SINGH MONDAY, THE 16TH DAY OF OCTOBER 2023 / 24TH ASWINA, 1945 WP(C) NO. 33920 OF 2023 PETITIONER/S: T.S. AJI, AGED 50 YEARS S/O. LATE SUNNY THANDEKKATTU THOMAS, THANDEKKATTIL HOUSE, MEENANGADI P.O., WAYANAD DISTRICT, PIN – 673591. BY ADVS. G.KEERTHIVAS LAKSHMI DAS RESPONDENT/S: 1 INCOME TAX OFFICER WARD NO.1, KALPETTA, PIN - 673122 2 COMMISSIONER OF INCOME TAX (APPEALS) AYAKAR BHAVAN, KOZHIKODE DISTRICT, PIN - 673001 3 NATIONAL FACELESS APPEALS CENTRE C-BLOCK, SPM CIVIC CENTRE, NEW DELHI, REPRESENTED BY PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX(NFAC)., PIN - 110001 SRI.JOSE JOSEPH, SC, INCOME TAX DEPT. OTHER PRESENT: SMT.RESHMITA RAMACHANDRAN-GP THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 16.10.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 33920 OF 2023 2

J U D G M E N T

The present writ petition has been filed impugning Ext.P4 notice dated 20.07.2023 and for a direction to the 1st respondent to reconsider Ext.P3 stay application.

After some arguments, learned Counsel for the petitioner submitted that an appeal against the assessment order is pending before the appellate authority, i.e., 2nd/3rd respondent.

The petitioner is granted one week time to file a stay application before the appellate authority concerned. The appellate authority is directed to consider the said application on its merit after taking into consideration Ext.P5 to Ext.P7 Office Memorandums issued by Central Board of Direct Taxes as well as the judgment of the Supreme Court in the case of Principal Commissioner of Income Tax-5 & Others Vs. LG Electronics India

WP(C) NO. 33920 OF 2023 3 Private Limited [(2018) 18 SCC 447] wherein it has been observed as under; “2. Having heard Shri.Vikramjit Banerjee, learned ASG appearing on behalf of the appellant, and giving credence to the fact that he has argued before us that the administrative circular will not operate as a fetter on the Commissioner since it is a quasi-judicial authority, we only need to clarify that in all cases like the present, it will be open to the authorities, on the facts of individual cases, to grant deposit orders of a lesser amount than 20%, pending appeal.”

With aforesaid, the present writ petition stands disposed of. Pending interlocutory application/s, if any, in the writ petition stand/s dismissed. DINESH KUMAR SINGH

JUDGE jg

WP(C) NO. 33920 OF 2023 4

Appendix — schedule of exhibits

APPENDIX OF WP(C) 33920/2023 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE ASSESSMENT ORDER ALONG WITH DEMAND NOTICE DATED 21.4.2021 ISSUED BY THE INCOME TAX OFFICER, NATIONAL E-ASSESSMENT CENTRE Exhibit P2 TRUE COPY OF THE STATUTORY APPEAL PREFERRED BEFORE THE COMMISSIONER OF INCOME TAX (APPEAL) DATED 29.10.2021 Exhibit P3 TRUE COPY OF THE STAY APPLICATION FILED BEFORE THE 1ST RESPONDENT DATED 18.7.2023 Exhibit P4 TRUE COPY OF THE NOTICE DATED 20.7.2023 ISSUED BY THE 1ST RESPONDENT Exhibit P5 TRUE COPY OF THE OFFICE MEMORANDUM DATED 31.7.2017 ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES Exhibit P6 TRUE COPY OF THE OFFICE MEMORANDUM DATED 29.2.2016 ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES Exhibit P7 TRUE COPY OF THE INSTRUCTION NO.1914

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