KOZHIKODE DAYA HOSPITALS PRIVATE LTD., vs. THE INCOME TAX OFFICER (TDS),

WP(C)/26166/2021HC KeralaKLHC01065914202124 June 2022Author: HONOURABLE MR. JUSTICE GOPINATH P.4 pages

AI SummaryRemanded

What did the High Court hold?

The High Court held that the petitioner did not have a valid cause of action to challenge the penalty order (Ext.P6) directly before the High Court under Article 226 of the Constitution of India, as no jurisdictional issue was raised. The Court also found no merit in the petitioner's contentions relating to natural justice. Consequently, the writ petition was disposed of by permitting the petitioner to approach the appellate authority with an appeal against Ext.P6. The period during which the writ petition was pending before the High Court was to be excluded for computing the period of limitation for filing the appeal, provided the appeal was filed along with a stay petition within ten days of receiving a certified copy of the judgment. If an appeal and stay petition were filed, coercive steps to enforce the demand arising from Ext.P6 were to be kept in abeyance until a decision on the stay petition.

What were the facts?

The petitioner, Kozhikode Daya Hospitals Private Ltd., approached the High Court of Kerala aggrieved by Ext.P6, an order imposing penalty. The petitioner contended that Ext.P6 was issued without considering their reply and that it should not have been issued while the assessment order, which led to the penalty, was under appeal. The Department argued that the penalty order was issued after providing an opportunity to the petitioner and that the petitioner could not challenge the penalty order directly before the High Court under Article 226 of the Constitution of India, as no jurisdictional issue was raised. The assessment year(s) and the specific amount in dispute are not recorded in the judgment. The procedural history involves the petitioner filing a writ petition challenging the penalty order.

What were the issues?

1. Whether the penalty order (Ext.P6) was issued without considering the petitioner's reply, thus violating principles of natural justice? 2. Whether the penalty order (Ext.P6) should have been issued when the underlying assessment order was under appeal? 3. Whether the petitioner has a valid cause of action to challenge the penalty order (Ext.P6) directly before the High Court under Article 226 of the Constitution of India? Assessee's Contentions: - The penalty order (Ext.P6) was issued without considering the reply submitted by the petitioner. - The penalty order should not have been issued while the assessment order giving rise to the penalty was under appeal before the appellate authority. Revenue's Contentions: - The penalty order was issued after providing an opportunity to the petitioner. - The petitioner cannot challenge the penalty order directly before the High Court under Article 226 of the Constitution of India as no jurisdictional issue is pointed out.

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. FRIDAY, THE 24TH DAY OF JUNE 2022 / 3RD ASHADHA, 1944 WP(C) NO. 26166 OF 2021 PETITIONER: KOZHIKODE DAYA HOSPITALS PRIVATE LTD., V-302 AND 303, SHORNUR ROAD, NEAR VIYYUR BRIDGE, THRISSUR-680 022, REPRESENTED BY ITS MANAGING DIRECTOR, K.P. AHAMMED KOYA. BY ADVS. HARISANKAR V. MENON MEERA V.MENON R.SREEJITH K.KRISHNA RESPONDENTS: 1 THE INCOME TAX OFFICER (TDS), AAYAKAR BHAVAN, SAKTHAN THAMPURAN NAGAR, THRISSUR-680 001. 2 THE JOINT COMMISSIONER OF INCOME TAX (TDS), TDS RANGE, C.R. BUILDINGS, I.S.PRESS ROAD, KOCHI 18. BY ADV CHRISTOPHER ABRAHAM THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 24.06.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C)No.26166/2021 2

JUDGMENT The petitioner has approached this Court being aggrieved by Ext.P6 order imposing penalty. Primarily, it is the contention of the petitioner, that Ext.P6 was issued without considering the reply submitted by the petitioner. It is also pointed out that Ext.P6 order should not have been issued when the assessment order which gives rise to the order of penalty is under appeal before the appellate authority.

The learned counsel for the Department points out that the order imposing penalty was issued after giving opportunity to the petitioner. It is submitted that, at any rate, the petitioner cannot challenge Ext.P6 directly before this Court under Article 226 of the Constitution of India.

Having heard the learned counsel for the petitioner and the learned Standing Counsel appearing for the Income Tax Department, I am of the view that there is merit in the contention taken by the learned counsel appearing for the Income Tax Department that the petitioner has no cause of action to challenge Ext.P6 order of penalty directly before this Court under Article 226 of the Constitution of India as no juri ictional issue is pointed out. I am also not able to find in favour of the petitioner on any issue relating to natural justice. Therefore, this writ petition will stand disposed of permitting the petitioner to approach the appellate authority with an appeal against Ext.P6 order of penalty. The period during which this writ petition was pending before this Court namely from 22.11.2021 till today (24.6.2022) shall be excluded for the purpose of computing the period of limitation for filing the appeal, provided the appeal is filed along with a stay petition within a period of ten days from the date of receipt of a certified copy of this judgment. If the petitioner files an appeal along with the stay petition as above, any coercive steps to enforce the demand arising out of Ext.P6 order of penalty shall be kept in abeyance till a decision is taken on the stay petition to be filed by the petitioner. GOPINATH P. JUDGE acd

Appendix — schedule of exhibits

APPENDIX OF WP(C) 26166/2021 PETITIONER EXHIBITS Exhibit P1 COPY OF ORDER ISSUED BY THE 1ST RESPONDENT FOR THE YEAR 2015-16. Exhibit P2 COPY OF APPEAL FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. Exhibit P3 COPY OF NOTICE ISSUED BY THE 1ST RESPONDENT. Exhibit P3(a) COPY OF NOTICE ISSUED BY THE 2ND RESPONDENT. Exhibit P4 COPY OF LETTER FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. Exhibit P5 COPY OF E-MAIL FILED BY THE PETITIONER'S CHARTERED ACCOUNTANT. Exhibit P6 COPY OF ORDER ISSUED BY THE 2ND RESPONDENT.

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