P R COMBINES vs. ASSISTANT COMMISSIONER OF INCOME TAX

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WP(C)/28145/2023HC KeralaKLHC01061684202305 September 2023Author: HONOURABLE MR. JUSTICE D. K. SINGH5 pages
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What did the High Court hold?

The High Court disposed of the writ petition with a direction to the petitioner to deposit 20% of the assessed amount within one month. Upon this deposit, the appellate authority was directed to proceed expeditiously with the applications for condoning the delay and the appeals, deciding them in accordance with law. The Court ordered that the impugned demand notices and recovery cum garnishee orders shall be kept in abeyance until the disposal of the applications and appeals. It was clarified that if the petitioner fails to make the 20% deposit, the Department would be free to enforce the recovery orders. The Court explicitly stated that it had not expressed any opinion on the merits of the matter. The ratio decidendi is that in cases where appeals are filed with a significant delay and the assessee offers to deposit a portion of the demand, a balance can be struck by directing a partial deposit and staying recovery pending disposal of the appeal and delay condonation applications.

What were the facts?

The petitioner, P R Combines, filed a writ petition challenging recovery cum garnishee orders dated July 13, 2023, issued by the Assistant Commissioner of Income Tax (third respondent) to recover assessed tax. These orders were pursuant to assessment orders (Exhibits P1 to P4). The petitioner had filed statutory appeals before the Commissioner of Income Tax (Appeals) (second respondent) with a delay of 433 days. Neither the delay had been condoned nor the appeals admitted. The recovery orders were issued pending consideration of the delay condonation applications. The petitioner proposed to deposit 20% of the assessed tax, and the Revenue had no objection.

What were the issues?

1. Whether the recovery cum garnishee orders (Exhibits P17 and P18) are liable to be stayed pending the disposal of the petitioner's appeals before the Commissioner of Income Tax (Appeals), considering the delay in filing the appeals? Assessee's Contention: The petitioner argued that they are willing to deposit 20% of the assessed tax amount, subject to the final outcome of the appeals, and requested that the recovery cum garnishee orders not be enforced. The petitioner relied on the principle that recovery should be stayed when appeals are pending and a substantial part of the demand is offered for deposit. Revenue's Contention: The learned counsel appearing for the Revenue stated that they have no objection to the submission made by the petitioner regarding the deposit of 20% of the assessed tax.

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 TUESDAY, THE 5TH DAY OF SEPTEMBER 2023 / 14TH BHADRA, 1945 WP(C) NO. 28145 OF 2023 PETITIONER: P R COMBINES, 19/1780, NARAYANA, P V SAMY ROAD, CHALAPURAM, KOZHIKODE REPRESENTED BY ITS PARTNER - K N GOPALAKRISHNAN, PIN – 673 002. BY ADVS. R.JAIKRISHNA NARAYANI HARIKRISHNAN C.S.ARUN SHANKAR ANISH P. RESPONDENTS: 1 ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 2, OFFICE OF THE ASSISTANT COMMISSIONER OF INCOME TAX, AAYAKAR BHAVAN, NORTH BLOCK, NEW ANNEXE BUILDING, MANANCHIRA, KOZHIKODE, PIN – 673 001. *2 COMMISSIONER INCOME TAX (APPEALS) NATIONAL FACELESS APPEAL CENTER (NFAC), INCOME TAX DEPARTMENT, NORTH BLOCK, NEW DELHI, PIN – 110 001. DESCRIPTION & ADDRESS OF THE SECOND RESPONDENT IS SUBSTITUTED AS FOLLOWS AS PER ORDER DATED 05.09.2023 IN I.A. NO. 1 OF 2023: COMMISSIONER OF INCOME TAX (APPEALS) OFFICE OF COMMISSIONER OF INCOME TAX (APPEALS) C R BUILDING, I S PRESS ROAD KOCHI – 682 018. 3 ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 1, OFFICE OF THE ASSISTANT COMMISSIONER OF INCOME TAX .AAYAKAR BHAVAN, NORTH BLOCK, NEW ANNEXE BUILDING, MANANCHIRA, KOZHIKODE, PIN – 673 001. 4 VIJAYA BANK AFTER MERGER - BANK OF BARODA KALLAI ROAD JUNCTION CHALLAPURAM, INDUS AVENUE BUILDING KOZHIKODE REPRESENTED BY ITS - BRANCH MANAGER, PIN – 673 002. 5 PUNJAB NATIONAL BANK SHATADBHI BHAVAN, SERVICE BLOCK MINI BYE PASS ROAD, GOVINDAPURAM KOZHIKODE REPRESENTED BY ITS - BRANCH MANAGER, PIN – 673 007. BY ADV. SRI. JOSE JOSEPH, SC, INCOME TAX SRI. SANDEEP ANKARATH, SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 05.09.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C) No. 28145/2023 : 2: DINESH KUMAR SINGH, J. --------------------------------------------------------- W.P.(C). No. 28145 of 2023 --------------------------------------------------------- Dated this the 5th day of September, 2023.

JUDGMENT The present writ petition has been filed impugning Exhibits P17 and P18 recovery cum garnishee orders dated 13.07.2023 issued by the third respondent to recover the assessed tax pursuant to Exhibits P1 to P4 assessment orders.

2.

Against Exhibits P1 to P4 assessment orders, the petitioner has filed Exhibits P9 to P12 statutory appeals before the Commissioner of Income Tax (Appeals), respondent No.2, with a delay of 433 days. Neither the delay has been condoned, nor the appeals admitted.

3.

Pending consideration of the applications for condonation of delay in filing the appeals, the impugned recovery cum garnishee orders have been issued by the third respondent to recover the assessed tax amount.

4.

The learned counsel for the petitioner submits that the petitioner is willing to deposit 20% of the assessed tax amount, subject to the final outcome of the appeals and the recovery cum garnishee orders may not be enforced. The learned counsel appearing for the Revenue does not have any objection to the said submission.

: 3:

5.

Considering the aforesaid facts, the present writ petition is disposed of with a direction to the petitioner to deposit 20% of the assessed amount in Exhibits P1 to P4 within a period of one month from today. On making such deposit, the appellate authority should proceed with the applications for condoning delay and appeals expeditiously and decide the same in accordance with law. Till the disposal of the applications/appeals, the impugned Exhibits P5 to P8 demand notices and Exhibits P17 and P18 recovery cum garnishee orders, shall be kept in abeyance. If the petitioner fails to make deposit of the 20% of the assessed amount, the Department would be free to enforce Exhibits P17 and P19 recovery cum garnishee orders. It is made clear that this Court has not expressed any opinion on the merits of the matter. DINESH KUMAR SINGH, JUDGE.

Rv : 4:

Appendix — schedule of exhibits
APPENDIX OF WP(C) 28145/2023 PETITIONER’S EXHIBITS: Exhibit P1 TRUE COPY OF THE ASSESSMENT ORDER ALONG WITH THE COMPUTATION SHEET ISSUED BY THE 1ST RESPONDENT FOR AY 2015-2016 DATED 28.9.2021. Exhibit P2 TRUE COPY OF THE ASSESSMENT ORDER ALONG WITH THE COMPUTATION SHEET ISSUED BY THE 1ST RESPONDENT FOR AY 2016-2017 DATED 28.9.2021. Exhibit P3 TRUE COPY OF THE ASSESSMENT ORDER ALONG WITH THE COMPUTATION SHEET ISSUED BY THE 1ST RESPONDENT FOR AY 2017-2018 DATED 28.9.2021. Exhibit P4 TRUE COPY OF THE ASSESSMENT ORDER ALONG WITH THE COMPUTATION SHEET ISSUED BY THE 1ST RESPONDENT FOR AY 2018-2019 DATED 29.9.2021. Exhibit P5 TRUE COPY OF THE DEMAND NOTICE ISSUED BY THE 1ST RESPONDENT FOR AY 2015-2016 DATED 28.9.2021. Exhibit P6 TRUE COPY OF THE DEMAND NOTICE ISSUED BY THE 1ST RESPONDENT FOR AY 2016-2017 DATED 28.9.2021. Exhibit P7 TRUE COPY OF THE DEMAND NOTICE ISSUED BY THE 1ST RESPONDENT FOR AY 2017-2018 DATED 28.9.2021. Exhibit P8 TRUE COPY OF THE DEMAND NOTICE ISSUED BY THE 1ST RESPONDENT FOR AY 2018-2019 DATED 29.9.2021. Exhibit P9 TRUE COPY OF THE APPEAL FILED BY THE PETITIONER FOR AY 2015-2016 DATED 8.8.2023. Exhibit P10 TRUE COPY OF THE APPEAL FILED BY THE PETITIONER FOR AY 2016-2017 DATED 8.8.2023. Exhibit P11 TRUE COPY OF THE APPEAL FILED BY THE PETITIONER FOR AY 2017-2018 DATED 8.8.2023. Exhibit P12 TRUE COPY OF THE APPEAL FILED BY THE PETITIONER FOR AY 2018-2019 DATED 8.8.2023. Exhibit P13 TRUE COPY OF THE STAY PETITION FILED BY THE PETITIONER FOR AY 2015-2016 DATED 8.8.2023. Exhibit P14 TRUE COPY OF THE STAY PETITION FILED BY THE PETITIONER FOR AY 2016-2017 DATED 8.8.2023. Exhibit P15 TRUE COPY OF THE STAY PETITION FILED BY THE PETITIONER FOR AY 2017-2018 DATED 8.8.2023. Exhibit P16 TRUE COPY OF THE STAY PETITION FILED BY THE PETITIONER FOR AY 2018-2019 DATED 8.8.2023. Exhibit P17 TRUE COPY OF THE RECOVERY CUM GARNISHEE ORDER ISSUED BY THE 3RD RESPONDENT TO THE 4TH RESPONDENT UNDER SECTION 226 OF INCOME TAX ACT DATED 13.7.2023. W.P.(C) No. 28145/2023 : 5: Exhibit P18 TRUE COPY OF THE RECOVERY CUM GARNISHEE ORDER ISSUED BY THE 3RD RESPONDENT TO THE 5TH RESPONDENT UNDER SECTION 226 OF INCOME TAX ACT DATED 13.7.2023. Exhibit P19 TRUE COPY OF THE JUDGEMENT OF THIS HON'BLE COURT IN WP(C) 29498/2019 DATED 4.11.2019. Exhibit P20 TRUE COPY OF JUDGEMENT OF THIS HON'BLE COURT IN WP(C) 25801/2019 DATED 27.9.2019. RESPONDENTS’ EXHIBITS: NIL True Copy PS To Judge. rv

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