M/S.UNIBIKES, vs. THE INCOME TAX OFFICER,

WP(C)/12859/2022HC KeralaKLHC01025993202207 April 2022Author: HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS4 pages

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What did the High Court hold?

The High Court, having heard both the petitioner's counsel and the revenue's counsel, was of the view that the writ petition could be disposed of by directing an expeditious consideration of the rectification application. Accordingly, the Court directed the competent respondent authority to consider and pass appropriate orders on the petitioner's rectification application (Ext.P10) as expeditiously as possible, and at any rate, within three months from the date of receipt of a copy of the judgment. Furthermore, the Court ordered that all further proceedings pursuant to the assessment order (Ext.P6), including those initiated for recovery (Ext.P11), shall be kept in abeyance until the rectification application is decided. The principle established is that recovery proceedings should be stayed pending the decision on a rectification application, especially when the application has been pending for a considerable period.

What were the facts?

The petitioner, M/s. Unibikes, represented by its Managing Partner, filed a writ petition before the High Court of Kerala. The petition challenged an order of assessment dated March 27, 2022, issued under Section 157A of the Income Tax Act, 1961, for the assessment year 2017-2018. The petitioner had previously filed a rectification application (Ext.P10) before the second respondent, which had been pending for approximately one year. Despite the pending rectification, recovery proceedings were initiated against the petitioner. The petitioner sought expeditious consideration of the rectification application.

What were the issues?

1. Whether the High Court should direct expeditious consideration of the petitioner's rectification application pending before the respondent authorities, given the initiation of recovery proceedings while the application remained undecided. (Question of law and fact, concerning the procedural fairness and the impact of pending rectification on recovery actions). Assessee's Contentions: The petitioner argued that their rectification application had been pending for nearly a year and that recovery proceedings were initiated despite this. They sought an order for the expeditious disposal of the rectification application. Revenue's Contentions: The judgment records that the learned Standing Counsel for Income Tax, Sri. Christopher Abraham, was heard. No specific arguments from the revenue are recorded beyond their participation in the proceedings.

Which sections of the Income-tax Act were involved?

157A

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

WP(C) NO. 12859 OF 2022 1 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS THURSDAY, THE 7TH DAY OF APRIL 2022 / 17TH CHAITHRA, 1944 WP(C) NO. 12859 OF 2022 PETITIONER: M/S.UNIBIKES, CHOLAKKAL TOWER, KIZHAKKETHALA DOWN HILL, MALAPPURAM-676 519, REPRESENTED BY ITS MANAGING PARTNER, KUNHAHAMEDKUTTY K.M. BY ADVS. HARISANKAR V. MENON MEERA V.MENON RESPONDENTS: 1 THE INCOME TAX OFFICER, WARD 1 & TPS, TIRUR-676 101, MALAPPURAM DISTRICT. 2 THE ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/ INCOME TAX OFFICER, NATIONAL FACELESS ASSESSMENT CENTRE, DELHI-100 001. BY SRI.CHRISTOPHER ABRAHAM, SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 07.04.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 12859 OF 2022 2 BECHU KURIAN THOMAS, J. ----------------------------------------- W.P.(C) No.12859 of 2022 ---------------------------------------- Dated this the 7th day of April, 2022

JUDGMENT Aggrieved by Ext.P6 order of assessment dated 27-03-2022 issued under Section 157A of the Income Tax Act, 1961, for the assessment year 2017-2018, petitioner has preferred Ext.P10 rectification application before the 2nd respondent.

The grievance of the petitioner is that, though the rectification application has been pending consideration for almost one year, respondents have now initiated recovery proceedings against the petitioner.

Having regard to the contentions raised by Sri.Harisankar.V Menon, the learned counsel for the petitioner as well as Sri.Christopher Abraham, the learned Standing counsel for Income Tax, I am of the view that this writ petition itself can be disposed of directing an expeditious consideration of the rectification application.

Accordingly, there will be a direction to the competent amongst the WP(C) NO. 12859 OF 2022 3 respondents to consider and pass appropriate orders on Ext.P10 rectification application, as expeditiously as possible, at any rate, within a period of three months from the date of receipt of a copy of this judgment.

Till then, all further proceedings pursuant to Ext.P6 including those initiated against the petitioner by Ext.P11, shall be kept in abeyance. The writ petition is disposed of. BECHU KURIAN THOMAS JUDGE amk

WP(C) NO. 12859 OF 2022 4

Appendix — schedule of exhibits

APPENDIX OF WP(C) 12859/2022 PETITIONER'S EXHIBITS : Exhibit P1 COPY OF NOTICE ISSUED BY THE 2ND RESPONDENT. Exhibit P2 COPY OF NOTICE ISSUED BY THE 2ND RESPONDENT. Exhibit P3 COPY OF REPLY FILED BY THE PETITIONER. Exhibit P4 COPY SHOW CAUSE NOTICE ISSUED BY THE 2ND RESPONDENT. Exhibit P5 COPY OF REPLY FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. Exhibit P6 COPY OF ASSESSMENT ORDER ISSUED BY THE 2ND RESPONDENT. Exhibit P7 COPY OF CONFIRMATION STATEMENT FROM AXIS BANK. Exhibit P8 COPY OF CONFIRMATION STATEMENT FROM HDFC BANK. Exhibit P9 COPY OF CONFIRMATION STATEMENT FROM ICICI BANK. Exhibit P10 COPY OF APPLICATION FILED BY THE PETITIONER. Exhibit P11 COPY OF NOTICE ISSUED BY THE 2ND RESPONDENT. RESPONDENTS EXHIBITS : NIL TRUE COPY

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