M/S.PALAKKAD DISTRICT SALAFI EDUCATIONAL ASSOCIATION, vs. THE ASSISTANT COMMISSIONER OF INCOME TAX,

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WP(C)/21825/2019HC KeralaKLHC01055790201909 August 2019Bench: HONOURABLE MR.JUSTICE S.V.BHATTI4 pages
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What did the High Court hold?

The High Court of Kerala, per Justice S.V. Bhatti, found prima facie merit in the petitioner's plea for a direction to the appellate authority. The Court acknowledged the limited prayer made by the petitioner. Consequently, the Court directed the appellate authority (the 2nd respondent) to consider and dispose of the stay petition (Ext.P3) as early as possible, preferably within two months from the date of receiving a copy of the judgment. Additionally, the Court directed the respondents (including the assessing officer) not to take any coercive steps or initiate recovery of the amounts determined in the orders under appeal for a period of ten weeks from the date of the judgment. The Court did not decide on the merits of the appeal or the stay petition itself, focusing solely on ensuring timely consideration of the stay application.

What were the facts?

The petitioner, M/s. Palakkad District Salafi Educational Association, filed a writ petition before the High Court of Kerala. The petition was filed against an assessment order passed under Section 143(3) read with Section 153C of the Income Tax Act, 1961. The petitioner had appealed this assessment order and also filed a stay petition before the appellate authority. The core of the petitioner's grievance was the delay in the disposal of the stay petition, which they contended would lead to the assessing officer initiating recovery proceedings for the disputed tax amount. This, they argued, would render the pending appeal either academic or ineffective. The petitioner sought a direction for the expeditious disposal of their stay petition.

What were the issues?

1. Whether the mere pendency of an appeal before the appellate authority amounts to an automatic grant of stay on the recovery of tax. Assessee's Contention: The petitioner argued that neither the filing of an appeal nor its mere pendency automatically grants a stay. They emphasized that a specific order on the stay petition is necessary. They further contended that the law provides for the expeditious passing of orders on stay petitions to protect the interests of the appellant during the pendency of the appeal. Revenue's Contention: The judgment does not record any specific contentions from the revenue regarding the issues raised by the petitioner.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 153C

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 FRIDAY, THE 09TH DAY OF AUGUST 2019 / 18TH SRAVANA, 1941 WP(C).No.21825 OF 2019(C) PETITIONER/S: M/S.PALAKKAD DISTRICT SALAFI EDUCATIONAL ASSOCIATION, 14/229, P.M.A.COLLEGE, CAMPUS, PARALI, PALAKKAD DISTRICT, REPRESENTED BY K.S.SHAMSUDHEEN, SECRETARY, AGED 48, S/O.SAYED. BY ADVS. SRI.HARISANKAR V. MENON SMT.MEERA V.MENON RESPONDENT/S: 1 THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, AYAKAR BHAVAN, S.T.NAGAR, THRISSUR - 680 001. 2 COMMISSIONER OF INCOME TAX (APPEALS), PANAMPILLY NAGAR, ERNAKULAM - 682 036. SC SRI JOSE JOSEPH THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 09.08.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C).No.21825 OF 2019(C) -2- JUDGMENT The petitioner filed appeal in Ext.P2 aggrieved by the order of assessment in Ext.P1 made under Section 143(3) read with Section 153C of the Income Tax Act, 1961. The petitioner has filed the appeal 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 petition is passed expeditiously. Hence the

WP(C).No.21825 OF 2019(C) -3- writ petition. 3. Perused Exts. P1, P2 and P3. Prima facie I am satisfied that a case is made out for issuing necessary directions to 2nd 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/2nd respondent considers and disposes of Ext.P3 application 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 JS

WP(C).No.21825 OF 2019(C) -4- APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 COPY OF ASSESSMENT ORDER ISSUED BY THE 1ST RESPONDENT FOR THE YEAR 2015-16. EXHIBIT P2 COPY OF APPEAL FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE YEAR 2015-16. EXHIBIT P3 COPY OF STAY PETITION FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE YEAR 2015-16. RESPONDENTS'S/S EXHIBITS: NIL

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