MANGATT PALLIMALIL KUNHIMOHAMED vs. INCOME TAX OFFICER WARD 1 & TPS TIRUR

WP(C)/13328/2022HC KeralaKLHC01026818202204 July 2022Author: HONOURABLE MR. JUSTICE GOPINATH P.6 pages

AI SummaryRemanded

What did the High Court hold?

The High Court disposed of the writ petition by directing the additional 4th respondent, the National Faceless Appeal Centre (NFAC), to dispose of the stay petition (Ext.P25) filed along with the appeal (Ext.P19). The Court ordered that until orders were passed on the stay petition, any demand arising from the assessment order (Ext.P16) would be kept in abeyance. The reasoning was based on the submissions of both parties, acknowledging the pendency of the statutory appeal and stay application. The Court effectively deferred the adjudication of the merits of the assessment order to the appellate process, prioritizing the expeditious disposal of the stay application and providing interim relief by halting recovery.

What were the facts?

The petitioner, Mangatt Pallimalil Kunhimohamed, filed a writ petition before the High Court of Kerala challenging an assessment order (Ext.P16) which raised a significant demand. The petitioner informed the Court that he had already filed a statutory appeal (Ext.P19) against the assessment order and had also submitted his notes of argument. He requested the Court to direct the Appellate Authority to pass final orders on the appeal and to keep recovery steps in abeyance pending the appeal's decision. The Standing Counsel for the respondent acknowledged the large demand and agreed that recovery proceedings could be kept in abeyance until a decision was made on the petitioner's stay application filed along with the appeal.

What were the issues?

1. Whether the High Court should entertain a writ petition challenging an assessment order when a statutory appeal has already been filed by the petitioner? (Question of law and fact, concerning the availability of alternative remedies). Assessee's Contention: The petitioner argued that the writ petition should be disposed of by directing the Appellate Authority to decide the pending appeal and stay petition, as a favorable decision on the appeal would likely erase the entire demand. The petitioner relied on the fact that the appeal and stay petition were already filed and progressing. Revenue's Contention: The revenue, through the Standing Counsel, did not dispute the filing of the appeal or the stay petition. They submitted that recovery proceedings could be kept in abeyance until the stay application was decided by the Appellate Authority.

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE GOPINATH P. MONDAY, THE 4TH DAY OF JULY 2022 / 13TH ASHADHA, 1944 WP(C) NO. 13328 OF 2022 PETITIONER/S: MANGATT PALLIMALIL KUNHIMOHAMED AGED 60 YEARS MANGATT PALLIMALIL HOUSE, AREEKKAD POST THALKADATHU MALAPPURAM - 676103 BY ADVS. M.P.SHAMEEM AHAMED AKHIL PHILIP MANITHOTTIYIL RESPONDENT/S: 1 INCOME TAX OFFICER WARD 1 & TPS, TIRUR INCOME TAX OFFICE NO. 20/1240, TARIIFF BAZAR, TOWN HALL ROAD, TIRUR KERALA - 676101 2 THE NATIONAL FACELESS ASSESSMENT CENTRE MAYUR BHAWAN, CONNAUGHT LANE, BARAKHAMBA, NEW DELHI, PIN-110001, REPRESENTED BY THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX(NAFAC). 3 UNION OF INDIA REPRESENTED BY THE SECRETARY, DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, GOVERNMENT OF INDIA, NORTH BLOCK, NEW DELHI, PIN- 110001. 4 *ADDL. R4:- THE NATIONAL FACELESS APPEAL CENTRE (NFAC), INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, C- BLOCK, 4TH FLOOR, S.P.M CIVIC CENTER, NEW DELHI - 110001 5 *ADDL. R5:- THE PRINCIPAL COMMISSIONER OF INCOME TAX, KOZHIKODE AYAKAR BHAVAN, MANANCHIRA, KOZHIKODE 673001 (*IMPLEADED AS ADDITIONAL 4TH AND 5TH RESPONDENTS AS PER ORDER DATED 04.7.2022 IN I.A. NO.2 OF 2022 IN W.P.(C).NO.13328 OF 2022) W.P(C).13328/22 2 BY ADV M.P.SHAMEEM AHAMED OTHER PRESENT: ADV. CHRISTOPHER ABRAHAM (SC) THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 04.07.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P(C).13328/22 3

JUDGMENT Petitioner has approached this Court being aggrieved by Ext.P16 order of assessment.

When this matter is taken up for consideration today, the learned counsel for the petitioner refers to the documents produced along with I.A. No.1 of 2022 and states that the petitioner has already filed an appeal (Ext.P19) against the order of assessment. He states that the appeal has already been taken up for consideration and the petitioner has already filed his notes of argument, as can be seen from Ext.P21. It is submitted that if the appeal is decided, the entire demand is likely to be erased and the writ petition may be disposed of directing the Appellate Authority to pass final orders on the appeal filed by the petitioner. It is prayed that pending final orders on the appeal, any recovery steps against the petitioner may be kept in abeyance.

The learned Standing Counsel appearing for the respondent would submit that through Ext.P16 assessment order there is a huge demand raised against the petitioner. It is submitted that recovery proceedings can be kept in abeyance till a decision is taken on the stay application filed by the petitioner along with Ext.P19 statutory appeal. It is pointed out that the petitioner has already filed a stay petition, as is evident from Ext.P25. Having regard to the submissions made by both sides, the writ petition is disposed of directing the additional 4th respondent (National Faceless Appeal Centre) to dispose of Ext.P25 stay petition filed along with Ext.P19 appeal. Till such time as orders are passed on Ext.P25 stay petition, any demand pursuant to Ext.P16 order of assessment shall be kept in abeyance. The writ petition is disposed of as above. GOPINATH P. JUDGE okb/4.7.22 //// P.S. to Judge

Appendix — schedule of exhibits

APPENDIX OF WP(C) 13328/2022 PETITIONER EXHIBITS Exhibit P1 COPY OF THE ACKNOWLEDGEMENT FOR FILING THE INCOME TAX RETURNS FOR THE ASSESSMENT YEAR 2017-18 Exhibit P2 COPY OF THE NOTICE DATED 31.03.2021 Exhibit P3 COPY OF THE NOTICE DATED 15.11.2021 ISSUED BY THE FIRST RESPONDENT Exhibit P4 COPY OF THE NOTICE DATED 7.01.2022 Exhibit P5 COPY OF THE LETTER DATED 17.02.2022 UPLOADED BY THE PETITIONER SEEKING TIME TO FILE RESPONSE Exhibit P6 COPY OF THE NOTICE DATED 24.02.2022 Exhibit P7 COPY OF THE REPLY DATED 25.02.2022 ALONG WITH THE E-PROCEEDINGS ACKNOWLEDGEMENT Exhibit P8 COPY OF THE SHOW CAUSE NOTICE DATED 29/03/2022 ALONG WITH THE DRAFT ASSESSMENT ORDER Exhibit P9 COPY OF THE REPLY DATED 30.03.2022 FILED BY THE PETITIONER ALONG WITH E-PROCEEDINGS ACKNOWLEDGEMENT Exhibit P10 COPY OF THE AUDITED BALANCE SHEET AND PROFIT & LOSS ACCOUNT OF THE FIRM "EDAPPAYIL FLOORINGS" Exhibit P11 COPY OF THE RELEVANT PAGES OF THE BANK STATEMENT FOR THE ACCOUNT NO. 215202000011310 OF THE FIRM "EDAPPAYIL FLOORINGS" SHOWING THE CLOSING BALANCE ON 31.03.2022 Exhibit P12 COPY OF THE RELEVANT PAGES OF THE BANK STATEMENT FOR THE ACCOUNT NO. 21525500000246 OF THE FIRM "EDAPPAYIL FLOORINGS" SHOWING THE CLOSING BALANCE ON 31.03.2022 Exhibit P13 COPY OF THE CONFIRMATION LETTER DATED 30.03.22 FROM AXIS BANK Exhibit P14 COPY OF THE CONFIRMATION LETTER DATED 31.03.2022 GIVEN BY THE SOUTH INDIAN BANK Exhibit P15 A COPY OF THE E PROCEEDINGS ACKNOWLEDGEMENT NO 512248191300322 FOR UPLOADING THE CASH SALES AND LEDGER Exhibit P16 A COPY OF THE ASSESSMENT ORDER DATED 31/03/2022 PASSED BY THE 2ND RESPONDENT Exhibit P17 COPY OF THE NOTICE OF DEMAND UNDER SECTION 156 PASSED BY THE 2ND RESPONDENT DEMANDING AN AMOUNT OF INR 27,30,63,484 FROM THE PETITIONER FOR THE ASSESSMENT YEAR 2017-18 Exhibit P18 COPY OF THE INTERIM ORDER DATED 1.12.2021 IN WP 27299/2021 W.P(C).13328/22 6 Exhibit P19 COPY OF THE APPEAL FILED IN FORM NO.35 BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), NATIONAL APPEAL SCHEME Exhibit P20 COPY OF NOTICE DATED 24.5.2022 ISSUED U/S 250 OF THE INCOME TAX ACT BY THE NATIONAL FACELESS APPEAL CENTRE Exhibit P21 COPY OF THE ARGUMENT NOTE FILED BY THE PETITIONER Exhibit P22 COPY OF THE ACKNOWLEDGEMENTS GENERATED ON THE INCOME TAX PORTAL FOR FILING OF THE WRITTEN SUBMISSIONS AND ANNEXURE Exhibit P23 COPY OF THE APPLICATION FILED UNDER SEC. 220(6) BEFORE THE PRINCIPAL COMMISSIONER OF INCOME TAX, KOZHIKODE Exhibit P24 COPY OF THE NOTICE DATED 30.5.2022 ISSUED BY THE 1ST RESPONDENT UNDER SEC. 221(1) OF THE INCOME TAX ACT 1961 Exhibit P25 COPY OF THE APPLICATION FOR STAY FILED BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), NATIONAL FACELESS APPEAL SCHEME ALONG WITH ACKNOWLEDGEMENT

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