K T SAYED MOHAMMED, vs. THE INCOME TAX OFFICER ,

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WP(C)/31473/2022HC KeralaKLHC01066745202203 November 2022Author: HONOURABLE MR. JUSTICE GOPINATH P.5 pages
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What did the High Court hold?

The High Court condoned the delay of 130 days in filing the appeal, considering the petitioner's hospitalization. The 3rd respondent (Commissioner of Income Tax (Appeals)) was directed to consider and pass orders on Ext.P2 appeal on merits, treating it as filed within time, after affording the petitioner an opportunity of being heard. Furthermore, the demands arising from the assessment order (Ext.P1) and the penalty orders (Exts.P3 and P4) were directed to be kept in abeyance until orders were passed on the petitioner's appeal (Ext.P2). The Court did not explicitly decide on the validity of the penalty orders themselves, but rather addressed the procedural aspects and the stay of demands pending the appellate decision. The ratio decidendi is that in cases of demonstrable hardship like hospitalization, courts may condone delays and grant interim relief by staying demands pending appeal, ensuring a fair hearing.

What were the facts?

The petitioner, K T Sayed Mohammed, is challenging an order of assessment (Ext.P1) for assessment year 2017-18. He filed an appeal (Ext.P2) before the Commissioner of Income Tax (Appeals), the 3rd respondent, along with an application for condonation of delay. Subsequently, the petitioner received penalty orders (Exts.P3 and P4) under Sections 271F and 271AAC(1) of the Income Tax Act. The petitioner contended that these penalty orders were passed without his participation due to hospitalization. He also sought to keep the demands arising from the assessment order in abeyance pending the appeal. The Revenue argued that the petitioner was given an opportunity before the penalty orders were passed and that the demands could be kept in abeyance until the appeal against the assessment order was decided.

What were the issues?

1. Whether the delay in filing the appeal against the assessment order (Ext.P1) should be condoned, considering the petitioner's hospitalization. 2. Whether the penalty orders (Exts.P3 and P4) were passed without affording the petitioner an adequate opportunity to be heard, and if so, whether they should be set aside. 3. Whether the demands arising from the assessment order (Ext.P1) and penalty orders (Exts.P3 and P4) should be kept in abeyance pending the disposal of the appeal. Assessee's Contentions: The petitioner argued that the penalty orders were issued without his participation due to hospitalization. He sought to have the delay in filing the appeal condoned and the demands kept in abeyance pending the appeal. The petitioner relied on his hospitalization as a reason for the delay and lack of participation. Revenue's Contentions: The Revenue contended that the petitioner was given an opportunity before the penalty orders were passed and that he cannot now claim a lack of opportunity after failing to appear. They agreed that the demands could be kept in abeyance until the appeal against the assessment order was decided.

Which sections of the Income-tax Act were involved?

Section 271F,Section 271AAC(1)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE GOPINATH P. THUR AY, THE 3RD DAY OF NOVEMBER 2022 / 12TH KARTHIKA, 1944 WP(C) NO. 31473 OF 2022 PETITIONER: 1 K T SAYED MOHAMMED, AGED 68 YEARS NILA PARK ROAD, KAMPALA THECKEMURI HOUSE, SOUTH BAZAR, KUTTIPURAM, MALAPPURAM, PIN - 679571 BY ADVS. V.P.NARAYANAN ALAN PRIYADARSHI DEV RESPONDENTS: 1 THE INCOME TAX OFFICER , WARD 1 & TPS, TIRUR, MALAPPURAM , PIN - 676101 2 THE NATIONAL FACELESS ASSESSMENT CENTRE MAYUR BHAWAN, CONNAUGHT LANE, BARAKHAMBA ROAD, NEW DELHI- REPRESENTED BY THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX, PIN - 110001 3 THE COMMISSIONER OF INCOME TAX (APPEALS) THE NATIONAL FACELESS APPEAL CENTRE, INCOME TAX DEPARTMENTR, MINISTRY OF FINANCE, JAWAHARLAL STADIUM, NEW DELHI, PIN - 110001 BY ADV CHRISTOPHER ABRAHAM, INCOME TAX DEPARTMENT THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 03.11.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

JUDGMENT Dated this the 03rd day of November, 2022 The petitioner suffered Ext.P1 order of assessment under the provisions of the Income Tax Act, 1961 for the assessment year 2017-18. The petitioner has challenged Ext.P1 order of assessment before the First Appellate Authority by filing Ext.P2 appeal before the 3rd respondent along with application for condonation of delay. In the meanwhile, the petitioner has been served with Exts.P3 and P4 orders imposing penalty under Sections 271F and 271AAC(1) of the Income Tax Act.

2.

The learned counsel appearing for the petitioner would submit that the orders imposing penalty were issued without the petitioner being able to participate in the proceedings. It is submitted that though notices were issued by the Officer, the petitioner could not appear and contest the penalty, on account of the fact that the petitioner was hosptialised. He also states that pending consideration of the appeal by the 3rd respondent, demands pursuant to Ext.P1 order of assessment may be kept in abeyance.

3.

The learned Standing Counsel appearing for the respondent Department states that the petitioner was given an opportunity before Ext.P3 and P4 penalty orders were passed. It is submitted that after having failed to appear in the proceedings, the petitioner cannot contend that those orders imposing penalty must be set aside on account of lack of opportunity. It is submitted that since the orders imposing penalty are consequence to Ext.P1 order of assessment, the demands under Exts.P3 and P4 can be kept in abeyance till the appeal against P1 order of assessment is decided by the First Appellate Authority.

4.

The learned counsel for the petitioner states that the petitioner will be satisfied with such an order.

5.

Since it is stated by the learned counsel for the petitioner that delay in filing the appeal is only 130 days and considering the fact that the petitioner was hospitalised for sometime, I am of the opinion that the delay in filing the appeal can be treated as condoned and the 3rd respondent can be directed to dispose of Ext.P2 appeal on merits treating the same as one filed within time. Accordingly, this writ petition is disposed of directing the 3rd respondent to consider and pass orders on Ext.P2 appeal after affording to the petitioner an opportunity of being heard. Till such time as orders are passed on Ext.P2 appeal, the demands pursuant to Ext.P1 order of assessment and Exts.P3 and P4 orders imposing penalty shall be kept in abeyance. GOPINATH P. JUDGE SKP/03-11

Appendix — schedule of exhibits
APPENDIX OF WP(C) 31473/2022 PETITIONER'S EXHIBITS: EXHIBIT-P1 COPY OF THE ASSESSMENT ORDER DATED 23.03.2022 PASSED BY THE 2ND RESPONDENT EXHIBIT-P2 COPY OF MEMORANDUM OF APPEAL FILED BEFORE THE 3RD RESPONDENT EXHIBIT-P3 COPY OF PENALTY ORDER DATED 06.09.2022 UNDER SECTION 271F BY THE 1ST RESPONDENT EXHIBIT-P4 COPY OF THE PENALTY ORDER DATED 09.09.2022 PASSED BY THE 1ST RESPONDENT EXHIBIT-P5 COPY OF THE COVID TEST REPORT DATED 28.01.2022 EXHIBIT-P6 TRUE COPY OF THE MEDICAL CERTIFICATE DATED 29.3.2022 AND TYPED COPY EXHIBIT-P7 COPY OF MEDICAL CERTIFICATE DATED 18.8.2022 RESPONDENTS' EXHIBITS:NIL TRUE COPY P.A.TO JUDGE

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