MATHEW K.CHERIAN vs. THE ASSISTANT COMMISSIONER OF INCOME TAX

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WP(C)/9871/2019HC KeralaKLHC01024801201901 April 2019Bench: HONOURABLE MR.JUSTICE S.V.BHATTI5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that Ext.P4 suffers from excessive brevity and is made for uninformed reasons and grounds, leading to the petitioner being subjected to the condition of depositing 20% of the disputed tax amount. The Court agreed with the petitioner's contention that the order lacked proper reasoning. Consequently, the Court set aside Ext.P4 and remitted the matter back to the second respondent (Commissioner of Income Tax (Appeals) - III) for consideration and disposal of the stay petition (Ext.P2(a)). The Commissioner was directed to pass orders expeditiously, within six weeks from the date of the order. The respondents were also directed not to take coercive steps against the petitioner for a period of six weeks from the date of the order.

What were the facts?

The petitioner, Mathew K. Cherian, filed a writ petition challenging an order (Ext.P4) passed by the Commissioner of Income Tax (Appeals) - III, the second respondent. The petitioner contended that the order was unsustainable due to its unreasoned and brief nature, failing to consider the grounds urged by him. The impugned order, Ext.P4, stated that a stay of demand could only be granted if 20% of the total outstanding demand was deposited. The petitioner sought to set aside Ext.P4 and obtain a stay pending the disposal of his appeals. The respondents argued that the Commissioner had imposed the 20% condition based on the scheme of the Act and the grounds urged. Alternatively, they suggested remitting the matter for fresh consideration if the Court was not convinced by Ext.P4.

What were the issues?

1. Whether the order passed by the Commissioner of Income Tax (Appeals) - III (Ext.P4) is vitiated by brevity and lack of reasoning, thereby failing to consider the grounds urged by the petitioner, as contemplated under the Income Tax Act, 1961? Assessee's Contention: The petitioner argued that Ext.P4 is unsustainable because it is unreasoned and brief, failing to address the grounds raised by him. He sought to set aside the order and obtain a stay pending appeal. Revenue's Contention: The respondents contended that the Commissioner, considering the scheme of the Act and the grounds urged, imposed the condition of depositing 20% of the demand, as stipulated by the statute. Without prejudice, they submitted that if the Court found Ext.P4 to be brief, it could be set aside and the stay application remitted to the Commissioner for reconsideration.

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 MONDAY ,THE 01ST DAY OF APRIL 2019 / 11TH CHAITHRA, 1941 WP(C).No. 9871 of 2019 PETITIONER: MATHEW K.CHERIAN AGED 62 YEARS S/O. CHERIAN,KOSAMATTAM HOUSE, MANGANAM.P.O,KOTTAYAM-686 018. BY ADVS. SRI.T.M.SREEDHARAN (SR.) SMT.DIVYA RAVINDRAN SMT.NISHA JOHN SRI.R.BHASKARA KRISHNAN SRI.V.P.NARAYANAN RESPONDENTS: 1 THE ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE,KOTTAYAM-686 001. 2 THE COMMISSIONER OF INCOME TAX(APPEALS)-III, 28/243,'POORNIMA',NEAR MANORAMA JUNCTION, PANAMPILLY NAGAR, KOCHI-682 036. SC SRI. JOSE JOSEPH., SRI. NAVNEETH N NATH THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 01.04.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

-2- WP(C).No. 9871 of 2019 JUDGMENT Heard Sri. V.P Narayanan the learned counsel for the petitioner and Sri.Navneeth N. Nath, appeared on behalf of the learned Standing Counsel for the respondents. 2. The petitioner challenges Ext.P4 order passed by the 2nd respondent as completely unsustainable. In the facts and circumstances of the case, the non-consideration of the grounds urged by the petitioner is evident from the unreasoned and brief order made in Ext.P4. The counsel for the petitioner to bring home his contention invites the attention of this Court to Ext.P4, which reads thus: “ Please refer to your request for stay of demand for aforesaid Assessment Year. 2. With respect to your above request, this is to inform you that stay of demand in your case can only be granted if you have deposited 20% of the total outstanding demand. In case you have paid the aforesaid demand, the recovery proceedings for the aforesaid demand is to be stayed till the disposal of your appeals before the undersigned. 3. In the light of the above, the above referred stay petition pending in this office stands disposed off“.

-3- WP(C).No. 9871 of 2019 3. Therefore, he prays for, firstly setting aside Ext.P4 and grant stay pending disposal of the appeal. 4. The counsel appearing for the respondents by referring to the order under appeal, tries to sustain Ext.P4 by contending that the 2nd respondent having regard to the scheme of the Act, the grounds urged etc., has put the petitioner on the condition of 20%, which the statute stipulates in this behalf. Without prejudice to his first contention, he contends that this Court if for any reason is not convinced with the brief order Ext.P4. The Ext.P4 could be set aside. Stay application is sent back to the 2nd respondent for consideration and disposal in accordance with law. To appreciate the rival contentions to the extent required, this Court has gone through the record and prima facie is in agreement with the contention urged by the petitioner that Ext.P4 suffers from too much of brevity and for uninformed reasons and grounds the

-4- WP(C).No. 9871 of 2019 petitioner is put on the condition of depositing 20% of disputed tax amount. Hence, order Ext.P4 is set aside and matter remitted to 2nd respondent for consideration and disposal of Ext.P2(a) stay petition, as expeditiously as possible, and pass orders within six weeks from today. The respondents are directed not to take coercive steps for six weeks from today. Sd/- S.V.BHATTI JUDGE JS/01.04

-5- WP(C).No. 9871 of 2019 APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 31.12.2017 ALOGN WITH DEMAND NOTICE AND COMPUTATION OF INCOME FOR THE ASST.YEAR 2015-16 PASSED BY THE FIRST RESPONDENT. EXHIBIT P2 TRUE COPY OF MEMORANDUM OF APPEAL DATED 5.2.2018 SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. EXHIBIT P2 A TRUE COPY OF STAY PETITION DATED 7-2- 2018 SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. EXHIBIT P2 B TRUE COPY OF PETITION FOR CONDONATION OF DELAY IN FILING THE APPEAL DATED 5- 2-2018 SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. EXHIBIT P3 TRUE COPY OF THE ORDER U/S. 220(6) DATED 19-2-2018 PASSED BY THE 1ST RESPONDENT EXHIBIT P4 TRUE COPY OF THE ORDER NO. CIT(A)- III/ITA-14/STAY PETITION/2018-19 DATED 28-02-2019 ISSUED BY THE 2ND RESPONDENT.

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