MANMADHAN NAIR vs. THE CENTRAL BOARD OF DIRECT TAXES

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WP(C)/38201/2023HC KeralaKLHC01086142202320 November 2023Author: HONOURABLE MR. JUSTICE D. K. SINGH4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the writ petition was not maintainable. The court reasoned that it does not possess parallel jurisdiction to entertain a stay application when the petitioner has not availed the statutory remedy of filing a stay application before the appellate authority itself. The court found no grounds to entertain the writ petition. However, as a direction to ensure timely justice, the Appellate Authority was directed to proceed with the appeal expeditiously and finalize it, preferably within a period of six months, in accordance with the law. The issue of pre-deposit was implicitly left to be decided by the appellate authority in the stay application.

What were the facts?

The petitioner, Manmadhan Nair, filed a writ petition seeking a stay on proceedings related to an income tax demand for his deceased wife, Swarna Manmadhan Nair, for assessment year 2020-21. His wife had declared agricultural income of Rs. 57,45,941/-. The Assessing Officer made an addition of Rs. 57,45,941/- under Section 69A of the Income Tax Act, deeming the assessee unable to explain the source of this receipt, which was shown as agricultural income. The total assessed income was Rs. 62,42,421/-, with tax and penalty imposed. The petitioner, as the legal heir, had filed an appeal (Ext.P10) against this order. The writ petition sought to stay the demand (Exts.P7, P8, P9) until the appeal was disposed of, or alternatively, to direct the Assessing Officer to consider the stay application in the appeal without a 20% pre-deposit.

What were the issues?

1. Whether the High Court can entertain a writ petition to stay tax proceedings and demand when an appeal has already been filed before the appellate authority and a stay application could have been filed therein? (Question of law and procedure) Assessee's Contention: The petitioner sought to stay further proceedings and the demand arising from the assessment orders (Exts.P7, P8, P9) pending the disposal of his appeal (Ext.P10). Alternatively, he prayed for a direction to the Assessing Officer to consider his stay application in the appeal without insisting on the 20% pre-deposit. Revenue's Contention: The judgment does not record any specific contentions from the revenue. However, the court's observation implies that the revenue's position would be that the writ petition is not maintainable and the petitioner should pursue remedies before the appellate authority.

Which sections of the Income-tax Act were involved?

Section 69A

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 MONDAY, THE 20TH DAY OF NOVEMBER 2023 / 29TH KARTHIKA, 1945 WP(C) NO. 38201 OF 2023 PETITIONER/S: MANMADHAN NAIR AGED 73 YEARS S/O.M.R.RAGHAVAN NAIR, SREENANDANAM, WATER AUTHORITY ROAD, KALLARA KADAVU, PATHANAMTHITTA P.O., PATHANAMTHITTA H.Q., PATHANAMTHITTA, PIN - 689645 BY ADVS. P.SATHISAN DONA AUGUSTINE JAVED HAIDER ABHIRAM SUNISH SHIBU B.S BIJU P.PAUL GOPIKA ANIL RESPONDENT/S: 1 THE CENTRAL BOARD OF DIRECT TAXES DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, GOVERNMENT OF INDIA, NORTH BLOCK NEW DELHI- REPRESENTED BY ITS CHAIRMAN, PIN - 110001 2 THE ADDITIONAL COMMISSIONER OF INCOME TAX ASSESSMENT UNIT, INCOME TAX DEPARTMENT, NATIONAL FACELESS ASSESSMENT CENTRE, DELHI ROOM NO. 401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI,, PIN - 110003 3 THE COMMISSIONER OF INCOME TAX (APPEALS) NATIONAL FACELESS APPEAL CENTRE (NFAC), DELHI, ROOM NO.401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI,, PIN - 110003 4 THE ASSESSING OFFICER ASSESSMENT UNIT, INCOME TAX DEPARTMENT NATIONAL FACELESS ASSESSMENT CENTRE, DELHI ROOM NO. 401, 2ND FLOOR, E-RAMP, JAWAHARLAL NEHRU STADIUM, DELHI,, PIN - 110003 THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 20.11.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

JUDGMENT Dated this the 20th day of November, 2023 The present writ petition has been filed under Article 226 of the Constitution of India to stay all further proceedings on Ext.P7 order Ext.P8 and Ext.P9 til the disposal of Ext.P10 appeal filed by the petitioner. Alternatively it has been prayed the direction given to the 4th respondent to consider and dispose of stay application filed by the petitioner in Ext.P10 appeal, without pre-deposit of 20% of disputed tax demand as per Exts.P7, P8 and P9. 2. The petitioner’s wife late Swarna Manmadhan Nair, an assessee under the provisions of the Income Tax Act, filed her return of income for the assessment year 2020-21 on 10.01.2021 declaring the total income of Rs.4,96,480/- and declared agriculture income of Rs.57,45,941/-.

3.

The assessment order was finalised on 13.09.2022, and addition of Rs.57,45,941/- was made under the provisions of Section 69A of the Income Tax Act, as the assessee could not restrain the said receipt of Rs.57,45,941/- which was shown in the return as the income from agriculture. Total assessed income of the assesee was assessed as Rs.62,42,421/- on which tax and penalty were imposed. The petitioner being husband of the assessee as the assessee had died in the meantime, challenged the said order in Ext.P10 appeal. The present writ petition has been filed for staying the demand. This Court fails to understand that how this writ petition is maintainable before this Court. This Court does not exercise the parallel juri iction of the Appellate Authority to entertain the stay application while the petitioner has not chosen to file the stay application in the appeal itself. Thus I find no ground to entertain this writ petition. Therefore, the writ petition is hereby dismissed. However, the Appellate Authority is directed to proceed with the appeal expeditiously and finalise the same, preferably within a period of six months, in accordance with law. DINESH KUMAR SINGH JUDGE AP

Appendix — schedule of exhibits
APPENDIX OF WP(C) 38201/2023 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE DISCHARGE CERTIFICATE NO.18548 ISSUED BY ARMY Exhibit P2 TRUE COPY OF THE SAID SALE AGREEMENT DATED 20.05.2019 Exhibit P3 TRUE COPY OF THE RELEVANT EXTRACT OF THE IT RETURN FILED BY ASSESSE FOR THE YEAR 2020- 21 Exhibit P4 TRUE COPY OF THE SAID NOTICE DATED 29.06.2021 ISSUED BY THE ASSESSING OFFICER Exhibit P5 TRUE COPY OF THE SAID NOTICE DATED 24.11.2021 ISSUED BY THE ASSESSING OFFICER Exhibit P6 TRUE COPY OF THE REPLY DATED 31.03.2022 ISSUED BY THE PETITIONER Exhibit P7 TRUE COPY OF THE ASSESSMENT ORDER OF ASSESSING OFFICER DATED 13.09.2022 Exhibit P8 TRUE COPY OF THE SHOW CAUSE NOTICE ISSUED BY ASSESSING OFFICER DATED 30.12.2022 Exhibit P9 TRUE COPY OF THE NOTICE DATED 11.07.2023 Exhibit P10 TRUE COPY OF THE APPEAL FILED BY THE PETITIONER AS PER FORM NO.35 DATED 29.09.2022 BEFORE THE 3RD RESPONDENT

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