PREETHA AJAY vs. ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX

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WP(C)/409/2024HC KeralaKLHC01000837202405 January 2024Bench: HONOURABLE MR. JUSTICE D. K. SINGH4 pages
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What did the High Court hold?

The High Court directed the second respondent (Commissioner of Income Tax (Appeals)) to decide the stay petition (Exhibit P3) expeditiously, preferably within a period of two months. Furthermore, the Court ordered that for a period of two months, the demand pursuant to the assessment order (Exhibit P1) should not be enforced. The Court considered the submissions of both parties, acknowledging the revenue's lack of objection to an early disposal of the stay petition but their opposition to a stay on the demand. The Court's reasoning was based on balancing the need for expeditious resolution of the appeal with the petitioner's grievance regarding recovery proceedings. The ratio decidendi is that in writ petitions seeking expeditious disposal of appeals and stay applications, courts can direct authorities to decide such applications within a stipulated time and grant interim protection against recovery for a limited period, considering the facts and submissions.

What were the facts?

The petitioner, Preetha Ajay, filed a writ petition before the High Court of Kerala seeking a direction to the second respondent, the Commissioner of Income Tax (Appeals), National Faceless Assessment Centre (NFAC), New Delhi, to expeditiously dispose of her appeal (Exhibit P2) and stay application (Exhibit P3). The petitioner had received an assessment order (Exhibit P1) dated March 26, 2022, under Section 147 read with Sections 144 and 144B of the Income Tax Act. The petitioner contended that the appeal and stay application were pending, and recovery proceedings for the demand under the assessment order were being initiated. The petitioner's primary prayer was for the expeditious disposal of the stay application and a stay on the recovery of demand until then.

What were the issues?

1. Whether the Tribunal should be directed to dispose of the stay application expeditiously? (Question of procedure) 2. Whether the recovery of tax due under the assessment order should be stayed pending disposal of the stay application? (Question of mixed law and fact) Assessee's Contentions: - The petitioner argued that her appeal and stay application before the second respondent were pending. - She submitted that the demand arising from the assessment order was being enforced while the stay application was undecided. - The petitioner prayed for an expeditious decision on the stay application and a stay on recovery until such decision. Revenue's Contentions: - The Senior Standing Counsel for the Income Tax Department did not object to a direction for the early disposal of the stay petition. - However, the revenue opposed any direction staying the demand arising from the assessment order. - The revenue pointed out that as per the relevant Office Memorandum, depositing 20% of the assessed tax would result in an automatic stay of further demand.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 144B

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH FRIDAY, THE 5TH DAY OF JANUARY 2024 / 15TH POUSHA, 1945 WP(C) NO. 409 OF 2024 PETITIONER/S: PREETHA AJAY AGED 51 YEARS 5-2, KALPAKA RAJ MAHAL APARTMENTS BTS ROAD, EDAPPALLY, COCHIN KERALA, PIN - 682024 BY ADVS. ANIL D. NAIR TELMA RAJU RESPONDENT/S: 1 ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX INCOME TAX OFFICER NATIONAL FACELESS ASSESSMENT CENTRE, DELHI, PIN - 110001 2 COMMISSIONER OF INCOME TAX (APPEALS), NATIONAL FACELESS ASSESSMENT CENTRE (NFAC), NEW DELHI, PIN - 110001 3 THE INCOME TAX OFFICER CORPORATE WARD 1 (1), KOCHI, PIN - 682018 OTHER PRESENT: JOSE JOSEPH-SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 05.01.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C)No.409 of 2024 2 JUDGMENT Dated this the 5th day of January, 2024 The present writ petition has been filed seeking the following reliefs: i) Issue a writ of mandamus, and such other writ, order or direction, directing the second Respondent to dispose of Exhibit P2 appeal and Exhibit P3 application filed before 2nd Respondent as expeditiously as possible. ii) Pending hearing and final disposal of the writ petition, this Hon’ble Court be pleased to grant stay of recovery of tax due under Exhibit P1 which is now sought to be recovered through Exhibit P4. iii) Issue such other and further reliefs as this Hon’ble Court may deem fit and proper in the interest of justice. 2. The petitioner has suffered Ext.P1 assessment order dated 26.03.2022 under Section 147 read with Section 144 and 144B of the Income Tax Act. Aggrieved by the said assessment order the petitioner has filed appeal before the 2nd respondent along with stay petition in Ext.P2 and P3 respectively. Learned counsel for the petitioner submits that the 2nd respondent has not decided the application for stay and in the meantime, the demand in pursuance to Ext.P1 order is being enforced. It is submitted that the only prayer is that the 2nd respondent be

WP(C)No.409 of 2024 3 directed to decide at least Ext.P2 stay application expeditiously, and till the said application decided, the demand in pursuance to Ext.P1 order may not be enforced. 3. Sri. Jose Joseph, learned Senior Standing Counsel for the Income Tax Department does not have objection for direction for early disposal of the stay petition. However, he submits that no direction should be passed staying the demand in pursuance to Ext.P1 assessment order. He further submits that according to the relevant Office Memorandum, if the petitioner deposits 20% of the assessed tax, there would be an automatic stay of the further demand. 4. I have considered the submissions. In view thereof, I am of the view that the 2nd respondent should decide the stay petition in Ext.P3 expeditiously, preferably within a period of two months and for a period of two months the demand in pursuance to Ext.P1 order should not be enforced. With the aforesaid direction, the present writ petition stands finally disposed of. Sd/- DINESH KUMAR SINGH AP JUDGE

WP(C)No.409 of 2024 4 APPENDIX OF WP(C) 409/2024 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF ASSESSMENT ORDER DATED 26.3.2022 ISSUED BY THE 1ST RESPONDENT Exhibit P2 TRUE COPY OF THE APPEAL MEMORANDUM IN FORM NO.35 ALONG WITH GROUNDS OF APPEAL FILED BEFORE THE 2ND RESPONDENT Exhibit P3 TRUE COPY OF THE PETITION FOR STAY OF DEMAND FILED BEFORE THE 2ND RESPONDENT DATED 19.4.2022 Exhibit P4 TRUE COPY OF NOTICE DATED 29.12.2023 ISSUED BY THE 3RD RESPONDENT

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