PADMANABHAN VISWANATHAN vs. THE ASSISTANT DIRECTOR OF INCOME TAX

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WP(C)/33283/2023HC KeralaKLHC01074230202312 October 2023Author: HONOURABLE MR. JUSTICE D. K. SINGH4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala directed the appellate authority (3rd respondent) to consider the petitioner's application for condonation of delay expeditiously, preferably within a period of two months. If the delay is condoned, the appellate authority is further directed to take up the stay application filed by the petitioner and dispose of the same expeditiously. The writ petition is disposed of with these directions. The Court did not decide on the merits of the FTC claim or the validity of the demand, but rather focused on expediting the procedural steps before the appellate authority. The ratio is that procedural delays in appeals should be addressed promptly by appellate authorities, and High Courts can direct such expedition through writs.

What were the facts?

The petitioner, Padmanabhan Viswanathan, filed his income tax return for assessment year 2021-22 on March 31, 2022, declaring a total income of Rs. 5,87,59,725/- and claiming foreign tax credit (FTC) of Rs. 1,79,29,048/-. The assessing authority, via an intimation dated October 28, 2022, under Section 143(1) of the Income Tax Act, 1961, disagreed with the FTC claim, resulting in a demand of Rs. 2,28,80,370/-. The petitioner then filed an application under Section 154 of the Act challenging the rejection of the FTC claim. This rectification application was rejected by an order dated January 11, 2023, leading to a revised demand of Rs. 2,41,49,000/-. The petitioner subsequently filed an appeal before the Commissioner of Income Tax (Appeals) under Section 246 of the IT Act, along with an application for condonation of a 234-day delay.

What were the issues?

1. Whether the petitioner is entitled to a writ of mandamus directing the Assistant Commissioner of Income Tax (2nd respondent) to refrain from recovering the demand pursuant to the rectification order (Exhibit P1) pending disposal of the appeal and stay petition (Exhibits P3 and P4) before the Commissioner of Income Tax (Appeals) (3rd respondent) for the assessment year 2021-22? Assessee's Contention: The petitioner seeks a direction to stay recovery proceedings while his appeal and stay application are pending before the appellate authority. Revenue's Contention: The judgment does not record any specific contentions from the revenue regarding the stay of recovery or the merits of the case. The focus is on the procedural aspect of the pending appeal and stay application.

Which sections of the Income-tax Act were involved?

Section 143(1),Section 154,Section 246

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH THURSDAY, THE 12TH DAY OF OCTOBER 2023 / 20TH ASWINA, 1945 WP(C) NO. 33283 OF 2023 PETITIONERS: PADMANABHAN VISWANATHAN AGED 44 YEARS, 39, HOMETOKS GOLDEN DEW VILLAS, VENNALA HIGH SCHOOL ROAD, COCHIN, PIN – 682028 BY ADVS. DIVYA RAVINDRAN ALAN PRIYADARSHI DEV RESPONDENTS: 1 THE ASSISTANT DIRECTOR OF INCOME TAX CENTRAL PROCESSING CENTRE, 1ST FLOOR, PRESTIGE ALPHA NO 48/1, HOSUR ROAD, UTTARAHALLI HOBLI, BENGALURU, KARNATAKA, PIN – 560100 2 THE ASSISTANT COMMISSIONER OF INCOME TAX DCIT, CIRCLE INTERNATIONAL TAXATION, AAYAKAR BHAVAN, 1ST FLOOR, KAWDIAR PO, TRIVANDRUM, PIN – 695003 3 THE COMMISSIONER OF INCOME TAX (APPEALS) NATIONAL FACELESS APPEAL CENTRE (NFAC), NEW DELHI, PIN – 110001 BY ADV. SHRI. JOSE JOSEPH, SC, THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 12.10.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

J U D G M E N T Dated this the 12th day of October, 2023 The present writ petition has been filed by the petitioner for a writ of mandamus commanding the 2nd respondent to refrain from recovering the demand pursuant to Exhibit P1 rectification order, pending disposal of the appeal and stay petition (Exhibits P3 and P4), before the 3rd respondent in respect of the assessment year 2021-22. 2. The petitioner filed return of his income for the assessment year 2021-22 on 31.3.2022 declaring total income of Rs.5,87,59,725/-. The petitioner claimed foreign tax credit of Rs.1,79,29,048/-. The assessing authority did not agree with the claim of the petitioner for FTC vide intimation dated 28.10.2022 under Section 143(1) of the Income Tax Act, 1961 and a demand of Rs.2,28,80,370/- was made.

3.

Petitioner thereafter filed application under Section 154 of the Income Tax Act against the rejection of FTC claim. However, rectification application was rejected vide order dated 11.1.2023 and demand of Rs.2,41,49,000/- was raised from the petitioner. Petitioner has filed an appeal along with an application for condonation of delay.

The appeal is filed under Section 246 of IT Act before the 3rd respondent. There is a delay of 234 days in filing the appeal.

4.

There is huge delay in filing the appeal. In view of the aforesaid, this Court directs the appellate authority to consider the application for condonation of delay expeditiously, preferably within a period of two months and if delay is condoned, the appellate authority should take up the stay application filed by the petitioner and dispose the same expeditiously. With the aforesaid direction, this writ petition stands disposed of. Dinesh Kumar Singh, Judge sou.

Appendix — schedule of exhibits
APPENDIX OF WP(C) 33283/2023 PETITIONER EXHIBITS EXHIBIT P1 TRUE COPY OF RECTIFICATION ORDER DATED 11.01.2023 PASSED BY THE FIRST RESPONDENT EXHIBIT P2 TRUE COPY OF THE ACKNOWLEDGMENT OF THE RETRUN FILED FOR AY 2021-22 EXHIBIT P3 TRUE COPY OF FORM NO.35 APPEAL MEMO DATED 1.10.2023 EXHIBIT P4 TRUE COPY OF THE STAY PETITION DATED 1.10.2023 EXHIBIT P5 TRUE COPY OF THE LETTER ISSUED BY THE 2ND RESPONDENT DATED 18.09.2023 EXHIBIT P6 TRUE COPY OF THE REPLY FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT DATED 3.10.2023

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