M/ S SREEVALSAM JEWELLERS vs. ASSISTANT COMMISSIONER OF INCOME TAX

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WP(C)/31272/2022HC KeralaKLHC01066325202220 October 2022Bench: HONOURABLE MR. JUSTICE GOPINATH P.4 pages
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What did the High Court hold?

The High Court of Kerala disposed of the Writ Petition. The Court permitted the petitioner to pay the balance of the amounts due under the order of assessment in six equal monthly installments. The first installment was to be paid on or before November 30, 2022, and subsequent installments were to be paid on or before the 30th day of each succeeding month. The petitioner was also made liable to pay such interest as may be demanded by the department on the outstanding amounts. The Court did not explicitly decide on the sufficiency of the petitioner's compliance with Section 220(3) but granted relief based on the overall circumstances, including the partial payment made.

What were the facts?

The petitioner, M/s Sreevalsam Jewellers, was assessed to Income Tax for Assessment Year 2018-2019 for a sum of Rs. 1,08,53,047/-. This assessment was completed under Section 147 of the Income Tax Act. The petitioner approached the High Court of Kerala seeking time to pay the outstanding demand. The Revenue contended that no relief could be granted as no application for time to pay was made under Section 220(3) of the Income Tax Act. The petitioner argued that a petition filed before the Recovery Officer, with a copy to the assessing officer, should be considered sufficient compliance. The petitioner had already remitted Rs. 10,00,000/- pursuant to an interim order.

What were the issues?

1. Whether the petitioner is entitled to time for payment of the assessed tax demand, despite not making a formal application under Section 220(3) of the Income Tax Act? Assessee's contention: The petitioner argued that filing a petition before the Recovery Officer, with a copy to the assessing officer, should be treated as sufficient compliance with Section 220(3) of the Income Tax Act. They also highlighted the partial payment already made. Revenue's contention: The Revenue contended that under the provisions of the Income Tax Act, the assessing officer can grant time for payment only upon an application made as provided in Section 220(3), and since no such application was made, the petitioner is not entitled to any relief.

Which sections of the Income-tax Act were involved?

Section 147,Section 220(3)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE GOPINATH P. THURSDAY, THE 20TH DAY OF OCTOBER 2022 / 28TH ASWINA, 1944 WP(C) NO. 31272 OF 2022 PETITIONER: M/ S SREEVALSAM JEWELLERS GROUND FLOOR SREE VALSOM BUILDING ,MC ROAD, PANDALAM, PATHANAMTHITTA KERALA, PIN – 689 501. REPRESENTED BY ITS MANAGING PARTNER -VARUN RAJ BY ADVS. S.MUHAMMED HANEEFF DIVYA RAVINDRAN M.H.ASIF ALI RESPONDENTS: 1 ASSISTANT COMMISSIONER OF INCOME TAX CENTER CIRCLE, AAYAKAR BHAVAN, KARBALA JUNCTION, KOLLAM, PIN – 691 001. 2 THE TAX RECOVERY OFFICER (CENTRAL) KANDAMKULATHY TOWERS OPP. MAHARAJA'S COLLEGE GROUND M.G ROAD, KOCHI, PIN – 682 011. 3 THE PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) KANDAMKULATHY TOWERS OPP. MAHARAJA'S COLLEGE GROUND M.G ROAD, KOCHI-682011, PIN – 682 011. OTHER PRESENT: ADV. JOSE JOSEPH (SC) THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 20.10.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

W.P.(C)No.31272/2022 2 JUDGMENT The petitioner has approached this Court seeking a limited relief. The petitioner has been assessed to Income Tax for the assessment year 2018-2019, for a sum of Rs.1,08,53,047/- (One Crore Eight Lakhs Fifty Three Thousand and Forty Seven Rupees Only). The assessment was completed under Section 147 of the Income Tax Act. The petitioner only prays for some time to pay off the amounts due under the order of assessment. 2. The learned Standing Counsel appearing for the respondent department would submit that under the provisions of the Income Tax Act, the assessing officer can grant time for payment by an application is made as provided in Section 220(3) and since no such application has been made, the petitioner is not entitled to any relief. 3. The learned counsel appearing for the petitioner submits that the petitioner has filed a petition before the Recovery Officer with a copy to the assessing officer and this should be treated as sufficient compliance of the provisions of Section 220(3) of the Income Tax Act. It is also

W.P.(C)No.31272/2022 3 pointed out that pursuant to the interim order dated 30-09-2022, the petitioner has already remitted a sum of Rs.10,00,000/-( Rupees Ten Lakhs Only). 4. Having heard the learned counsel appearing for the petitioner and the learned Standing Counsel appearing for the respondent department, this Writ Petition is disposed of permitting the petitioner to pay the balance of the amounts due under Ext.P1 order of assessment in six equal monthly installments commencing from 30-11-2022. The first installment shall be paid on or before 30-11-2022 and the subsequent installments which shall be paid on or before the 30th day of the succeeding months. The petitioner will also be liable to pay such interest as may be demanded by the department on the amounts due from the petitioner. The writ petition is disposed of as above.

Sd/- GOPINATH P. JUDGE ats

W.P.(C)No.31272/2022 4 APPENDIX OF WP(C) 31272/2022 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE ASSESSMENT ORDER ALONG WITH DEMAND NOTICE DATED 24.03.2022 PASSED UNDER SECTION 147 OF THE ACT BY THE 1ST RESPONDENT Exhibit P2 TRUE COPY OF THE NOTICE ISSUED BY THE 1ST RESPONDENT DATED 19.7.2022, INITIATING REVENUE RECOVERY PROCEEDINGS ExhibitP3 TRUE COPY OF THE LETTER DATED 26.09.2022, SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR A.Y.2018-19

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