M/S.SAFE DEVELOPMENT ALMS TRUST vs. THE COMMISSIONER OF INCOME TAX

WP(C)/21683/2019HC KeralaKLHC01055426201908 August 2019Bench: HONOURABLE MR.JUSTICE S.V.BHATTI4 pages

AI SummaryPartly Allowed

What did the High Court hold?

The High Court held that a case was made out for issuing necessary directions to the second respondent (appellate authority) to dispose of the stay petition (Ext.P3) as early as possible, preferably within two months from the date of receipt of a copy of the judgment. Additionally, the respondents were directed not to take coercive steps or recover the amounts determined in the orders under appeal for ten weeks from the date of the judgment. The court was satisfied that the writ petition could be disposed of with these limited directions, given the prayer and grounds presented. No issue was expressly left undecided.

What were the facts?

The petitioner, M/s. Safe Development Alms Trust, filed an appeal (Ext.P2) against an assessment order (Ext.P1) passed under Section 143(3) of the Income Tax Act. Along with the appeal, the petitioner filed a stay petition (Ext.P3). The petitioner approached the High Court of Kerala through a writ petition seeking a direction to the appellate authority (second respondent) to consider and dispose of the stay petition expeditiously. The petitioner argued that the delay in disposing of the stay petition could lead to coercive recovery steps by the assessing officer, rendering the appeal ineffective. The High Court perused the documents and found a prima facie case for issuing directions.

What were the issues?

1. Whether the appellate authority should be directed to consider and dispose of the stay petition expeditiously? (Question of procedure, turning on principles of natural justice and effective appellate remedy). Assessee's Contentions: - Mere filing or pendency of an appeal does not amount to a grant of stay by the appellate authority. - Delay in considering the stay petition can result in the assessing officer initiating recovery proceedings. - Such recovery actions, if successful, would render the statutory appeal academic or ineffective. - The law provides for expeditious disposal of stay petitions to protect the appellant's interest pending appeal. Revenue's Contentions: - No specific contentions from the revenue are recorded in the judgment regarding the disposal of the stay petition.

Which sections of the Income-tax Act were involved?

Section 143(3)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI THURSDAY, THE 08TH DAY OF AUGUST 2019 / 17TH SRAVANA, 1941 WP(C).No.21683 OF 2019(I) PETITIONER: M/S.SAFE DEVELOPMENT ALMS TRUST 1, MELAMURI, PALAKKAD, REPRESENTED BY ITS CHAIRMAN AND MANAGING TRUSTEE, P.V. MOHAMMED HARIF, AGED 51, S/O. P.V. HASSAN, BY ADVS. SRI.HARISANKAR V. MENON SMT.MEERA V.MENON RESPONDENTS: 1 THE COMMISSIONER OF INCOME TAX CENTRAL CIRCLE, THRISSUR-680001. 2 COMMISSIONER OF INCOME TAX (APPEALS) PANAMPILLY NAGAR, ERNAKULAM-682036. BY SRI. JOSE JOSEPH, SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08.08.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C).No.21683 OF 2019(I) 2 JUDGMENT The petitioner filed appeal in Ext.P2 aggrieved by the order of assessment in Ext.P1 made under Section 143(3) of the Income Tax Act. The petitioner has filed the appeal along with Ext.P3 stay petition. The petitioner prays for appropriate direction to the appellate authority to consider and dispose of Ext.P3 expeditiously. 2. The case of petitioner is that either the mere filing of appeal or mere pendency of appeal does not amount to granting stay by the appellate authority. The delay in considering and disposing of Ext.P3 results in the assessing officer taking steps for recovering the tax amount which is under challenge in Ext.P2. The assessing officer, if is successful in his effort the statutory appeal would become either academic or ineffective. It is further contended by the petitioner that in the manner the law provides for protecting the interest of appellant pending appeal, the order on stay

WP(C).No.21683 OF 2019(I) 3 petition is passed expeditiously. Hence the writ petition. 3. Perused Ext. P1, P2 and P3. Prima facie I am satisfied that a case is made out for issuing necessary directions to second respondent to dispose of the stay petition in Ext.P3. Having regard to the limited prayer and the grounds referred to above, this Court is satisfied that the writ petition can be disposed of by this order: (a) The

appellate

authority/second respondent considers and disposes of Ext.P3 stay petition as early as possible, preferably within two months from the date of receipt of copy of this judgment. (b) The respondents are directed not to take coercive steps or recover the amounts determined in the orders under appeal for ten weeks from today. SD/- S.V.BHATTI JUDGE DCS

WP(C).No.21683 OF 2019(I) 4 APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 COPY OF ASSESSMENT ORDER ISSUED BY THE 1ST RESPONDENT FOR THE YEAR 2017-18 DATED 27.12.2018 EXHIBIT P2 COPY OF APPEAL FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE YEAR 2017-18 DATED 26.01.2019. EXHIBIT P3 COPY OF THE STAY PETITION FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE YEAR 2017-18 DATED 10.07.2019.

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