M/S KERALA KERA KARSHAKA SAHAKARANA FEDERATION LTD vs. THE ADDITIONAL COMMISSIONER OF INCOME TAX RANGE-2

WP(C)/5677/2019HC KeralaKLHC01014860201925 February 2019Author: HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU3 pages

AI SummaryRemanded

What did the High Court hold?

The High Court held that procedural fairness requires the revenue authorities to wait before taking further steps until the appellate authority decides on the stay petition. The Court acknowledged that the petitioner had exercised its statutory remedy by filing an appeal and a stay petition on time. Therefore, the Court directed the respondent authority to defer coercive steps until the 2nd respondent (Commissioner of Income Tax (Appeals)) considers the stay petition. The Court also expressed hope that the 2nd respondent would dispose of the stay petition expeditiously. The operative direction was to suspend coercive steps pending the decision on the stay petition.

What were the facts?

The petitioner, M/s Kerala Kera Karshaka Sahakarana Federation Ltd., is an assessee under the Income Tax Act. The petitioner challenged an assessment order passed by the 1st respondent, the Additional Commissioner of Income Tax, Range-2, before the 2nd respondent, the Commissioner of Income Tax (Appeals). The petitioner also filed a stay petition along with its appeal. The petitioner filed this writ petition before the High Court of Kerala alleging that the revenue authorities were taking coercive steps before the appellate authority could decide on the stay petition.

What were the issues?

1. Whether the revenue authorities can take coercive steps against the assessee while a stay petition is pending before the appellate authority? (Question of procedure and fairness) Assessee's Contention: The petitioner argued that coercive steps were being taken prematurely, before the appellate authority had an opportunity to consider its stay petition. This, according to the petitioner, was a violation of procedural fairness. Revenue's Contention: The judgment does not record any specific contentions from the revenue's side. The Standing Counsel for the respondents was heard, but their arguments are not detailed in the judgment.

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 DAMA SESHADRI NAIDU MONDAY ,THE 25TH DAY OF FEBRUARY 2019 / 6TH PHALGUNA, 1940 WP(C).No. 5677 of 2019 PETITIONER/S: M/S KERALA KERA KARSHAKA SAHAKARANA FEDERATION LTD KERALA TOWER, KERA FED KERA WATER WORKS COMPOUND VELLAYAMBALAM, THIRUVANANTHAPURAM- 695033-REPRESENTED BY ITS MANAGER, F AND A SHRI.A.M.SOMASEKHARAN BY ADVS. SRI.T.M.SREEDHARAN (SR.) SMT.DIVYA RAVINDRAN SRI.V.P.NARAYANAN RESPONDENT/S: 1 THE ADDITIONAL COMMISSIONER OF INCOME TAX RANGE-2, RANGE-2, AYAKKAR BHAWAN, KOWDIAR.P.O. THIRUVANANTHAPURAM-695005. 2 THE COMMISSIONER OF INCOME TAX(APPEALS) AAYAKAR BHAWAN, KOWDIAR, THIRUVANANTHAPURAM-695005. 3 THE MANAGER,INDIAN OVERSEAS BANK K.K BUILDINGS, ARISTO JUNCTION, THAMAPANOOR, THIRUVANANTHPAURAM. OTHER PRESENT: SC SRI. CHRISTOPHER ABRAHAM THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 25.02.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: -2- W.P.(C). No. 5677 of 2019

JUDGMENT The petitioner, an assessee under the Income Tax Act, on the rolls of the 1st respondent, questioned the Ext.P1 assessment order, before the 2nd respondent. The petitioner has also filed a stay petition in the appeal. Ventilating its grievance that the authorities are taking coercive steps before the appellate authority could consider the stay petition, the petitioner has filed this writ petition.

Heard the learned counsel for the petitioner and the learned Standing Counsel for the respondents.

I reckon the petitioner has exercised on time his statutory remedy of filing an appeal. It appears that it has also filed a stay petition. Procedural fairness demands that the authorities may wait, before taking further steps, until the appellate authority decides on the stay petition. Therefore, I dispose of the writ petition directing the respondent authority to defer coercive steps until the 2nd

-3- W.P.(C). No. 5677 of 2019 respondent considers the stay petition. I also hope that the 2nd respondent will dispose of the stay petition expeditiously. Because of this arrangement, Ext.P5 stands suspended. DAMA SESHADRI NAIDU JUDGE das

Appendix — schedule of exhibits

APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 27/12/2918 (WRONGLY MENTIONED AS 27.12.2017) PASSED BY THE 1ST RESPONDENT. EXHIBIT P2 TRUE COPY OF THE MEMORANDUM OF APPEAL DATED 28/01/2019 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. EXHIBIT P3 TRUE COPY OF THE STAY PETITION DATED 24/01/2019 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. EXHIBIT P4 TRUE COPY OF THE APPLICATION DATED 24/01/2019 SUBMITTED BY THE PETITIONER U/S 220(6) BEFORE THE 1ST RESPONDENT EXHIBIT P5 TRUE COPY OF THE GARNISHEE PROCEEDINGS DATED 21/02/2019 ISSUED BY THE 1ST RESPONDENT TO THE 3RD RESPONDENT BANK.

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