JIJUJOSEPH JOSEPH vs. INCOME TAX OFFICER
What did the High Court hold?
The High Court held that once an assessment is completed, there is no prohibition against initiating proceedings for penalty under Section 274 read with Section 270A of the Income Tax Act. The mere fact that an appeal against the assessment order is pending consideration does not serve as a reason to defer the initiation of penalty proceedings. The court reasoned that accepting the petitioner's contention would unnecessarily delay the penalty proceedings, which is not contemplated under the statutory scheme. The court reiterated its reluctance to interfere in tax matters when statutory forums are available, citing the decision in Assistant Commissioner of State Tax v. Commercial Steel Ltd. [2021 (52) G.S.T.L.385]. The court found that the petitioner's case did not fall within the parameters for interference under Article 226 of the Constitution. Therefore, the writ petition was dismissed, leaving the petitioner at liberty to pursue the available statutory remedies.
What were the facts?
The petitioner, Jiju Joseph Joseph, an assessee under the Income Tax Act, challenged a penalty order under Section 270A of the Act, amounting to Rs. 42,24,835/-, for the assessment year 2018-19. The penalty was 50% of the tax on under-reported income. The petitioner filed a writ petition before the High Court of Kerala, bypassing the statutory appellate remedy. The petitioner's contention was that the penalty order was intrinsically linked to the assessment order, which was pending appeal, and therefore, imposing a penalty on an assessment that had not attained finality was without authority. The assessment order was passed on March 26, 2021.
What were the issues?
1. Whether the imposition of penalty under Section 270A of the Income Tax Act, 1961, is vitiated when the assessment order on which it is based is pending appeal, and thus has not attained finality? (Question of law) Assessee's Contention: The penalty imposed is intrinsically connected to the assessment order. Since the assessment order for the assessment year 2018-19 is pending appeal, the imposition of penalty on an assessment that has not yet attained finality is without authority and untenable. Revenue's Contention: The revenue argued that once an assessment is completed, there is no prohibition against initiating penalty proceedings under Section 274 read with Section 270A of the Act. The pendency of an appeal against the assessment order does not preclude the initiation of penalty proceedings. Delaying penalty proceedings would not be in line with the statutory scheme.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
JUDGMENT Petitioner, an assessee under the Income Tax Act (for short, 'the Act), challenges an order issued under Section 270A of the Act imposing penalty of Rs.42,24,835/- being 50% of the tax for the under reported income relating to the assessment year 2018-19. 2. Though statutory remedies are available in the form of appeal against Ext.P7 order of penalty, petitioner has preferred this writ petition on the ground that the penalty imposed upon the petitioner is intrinsically connected with the assessment order and the quantum of tax imposed under the assessment order. According to the petitioner, since the order of assessment issued against the petitioner for the year 2018-19 is pending consideration in appeal, imposition of penalty on an assessment which has not yet attained finality, is without authority.
I have heard the arguments of Adv.Anil D.Nair, the learned counsel for the petitioner as well as Adv.Jose Joseph, the learned Standing Counsel for the Income Tax Department.
WP(C) NO. 21456 OF 2021 3
On a consideration of the submissions made across the bar, it is understood that the order of assessment was passed on 26.03.2021 and the quantum of income for the relevant assessment year has already been assessed. Once the said assessment is completed, there is no prohibition in initiating proceedings for penalty under Section 274 read with Section 270A of the Act. Merely because an appeal against the said assessment order is pending consideration, the same is not a reason to defer initiation of proceedings for penalty under Section 270A of the Act. If the contention of the petitioner is accepted, the same will unnecessarily delay the proceeding under Section 270A of the Act which is not contemplated under the scheme of the statute.
In matters of taxation, this Court would be loath to interfere especially when statutory forums are available to redress the grievance of the assessees. The parameters when interference can be made by this Court under Article 226 has been restated even recently in the decision in Assistant Commissioner of State Tax v. Commercial Steel Ltd. [2021 (52) G.S.T.L.385]. The case of the petitioner does not come within those parameters.
If the petitioner is aggrieved by the order of penalty imposed, statutory remedies are available. The reasons put forth
WP(C) NO. 21456 OF 2021 4 by the petitioner to overcome the statutory remedy of appeal is not tenable. Hence, the writ petition does not merit consideration and is dismissed leaving open the liberty of the petitioner to pursue the statutory remedies available. BECHU KURIAN THOMAS, JUDGE RKM
WP(C) NO. 21456 OF 2021 5
Appendix — schedule of exhibits
More judgments on Section 270A
- Kamleshkumar Somalal Bhatt, Himatnagar vs Income Tax Ofifcer, Ward 1, HimatnagarITA 2130/AHD/2026[2019-20]Status: Disposed21 Oct 2026AY 2019-20
- Haresh Sharma, Ahmedabad vs ITO, Ward 5(3)(1), AhmedabadITA 2125/AHD/2026[2019-2020]Status: Disposed21 Oct 2026AY 2019-2020
- Kkg Associates, Visakhapatnam vs Income Tax Officer, Ward - 2(1)…ITA 345/VIZ/2026[2019-20]Status: Disposed16 Oct 2026AY 2019-20
- Shamsunder Pritesh Malode, Hyderabad vs ACIT, Circle-12(1), HyderabadITA 399/HYD/2026[2020-21]Status: Disposed16 Oct 2026AY 2020-21
- Rama Naidu Gutha, Anantapur vs ITO, Ward -1, AnantapurITA 1895/HYD/2026[2023-24]Status: Disposed16 Oct 2026AY 2023-24
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