NEERATTIPARAMBIL MOHAMED vs. THE INCOME TAX OFFICER

WP(C)/14702/2020HC KeralaKLHC01037290202021 July 2020Author: HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR3 pages

AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala, while disposing of the writ petition, directed the 2nd respondent (Commissioner of Income Tax (Appeals)) to consider and pass orders on the stay petition (Ext.P5) within four months from the date of receipt of a copy of the judgment. It was clarified that recovery steps pursuant to the assessment order (Ext.P1) would be kept in abeyance until orders were passed on the stay petition and communicated to the petitioner. Consequently, the order of the 1st respondent (Ext.P3) directing payment of 20% of the outstanding dues was quashed. The petitioner was directed to produce a copy of the judgment and the writ petition before the 2nd respondent for further action. The core principle applied is that recovery proceedings should be stayed pending the disposal of a stay petition by the appellate authority.

What were the facts?

The petitioner, Neerattiparamibil Mohamed, represented by his wife and Power of Attorney Holder, Sameena Mohamed K.A., challenged an assessment order (Ext.P1) passed under the Income Tax Act. He filed an appeal (Ext.P4) and a stay petition (Ext.P5) before the Commissioner of Income Tax (Appeals) (2nd respondent). Meanwhile, the Income Tax Officer (1st respondent) issued an order (Ext.P3) directing payment of 20% of the outstanding dues pending the appeal. The petitioner contended that this direction was premature as his stay petition was still pending before the appellate authority.

What were the issues?

1. Whether the Income Tax Officer was justified in directing the payment of 20% of the outstanding dues (under Ext.P3) when a stay petition (Ext.P5) was pending before the Commissioner of Income Tax (Appeals) against the assessment order (Ext.P1)? Assessee's contention: The petitioner argued that the direction to pay 20% of the disputed amount by the 1st respondent was premature and ought not to have been issued while his stay petition was pending before the 2nd respondent. No specific authorities or precedents were mentioned in the judgment for this contention. Revenue's contention: The judgment records the appearance of the learned Standing Counsel for the respondents but does not detail any specific arguments made by the revenue.

Which sections of the Income-tax Act were involved?

None explicitly mentioned

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 A.K.JAYASANKARAN NAMBIAR TUESDAY, THE 21ST DAY OF JULY 2020 / 30TH ASHADHA, 1942 WP(C).No.14702 OF 2020(K) PETITIONER/S: NEERATTIPARAMBIL MOHAMED NPM MANZIL, 5TH FLOOR, EDATHARA P.O., PALAKKAD, REPRESENTED BY WIFE AND POWER OF ATTORNEY HOLDER, SAMEENA MOHAMED K.A. BY ADV. SRI.N.MURALEEDHARAN NAIR RESPONDENT/S: 1 THE INCOME TAX OFFICER WARD 1(1), AAYAKAR BHAVAN, SAKTHAN THAMPURAM NAGAR, THRISSUR - 680 001. 2 THE COMMISSIONER OF INCOME TAX (APPEALS) INCOME TAX DEPARTMENT, THRISSUR- 680 001. OTHER PRESENT: SC- SRI.JOSE JOSEPH THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 21.07.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.14702 OF 2020(K) 2

JUDGMENT Against Ext.P1 assessment order under the Income Tax Act, the petitioner has preferred Ext.P4 appeal and Ext.P5 stay petition before the 2nd respondent. In the meanwhile, he approached the 1st respondent and the 1st respondent, by Ext.P3 order, directed payment of 20% of the outstanding dues, pending consideration of the appeal. It is the case of the petitioner that inasmuch as Exts.P5 is pending before the 2nd respondent, there ought not to have been a direction to the petitioner to pay 20% of the disputed amount even before the stay petition was considered by the appellate authority.

I have heard the learned counsel for the petitioner as also Sri.Jose Joseph, the learned Standing Counsel for the respondents. On a consideration of the facts and circumstances of the case and the submissions made across the Bar, I dispose the writ petition with a direction to the 2nd respondent to consider and pass orders on Ext.P5 stay petition within four months from the date of receipt of a copy of this judgment. It is made clear that till such time as orders are passed by the 2nd respondent as directed, and the orders communicated to the petitioner, recovery steps pursuant to Ext.P1 assessment order shall be kept in abeyance. Further, in view of the directions given in this judgment, Ext.P3 order of the 1st respondent shall stand quashed. The petitioner shall produce a copy of this judgment together with a copy of the writ petition before the 2nd respondent for further action. A.K.JAYASANKARAN NAMBIAR JUDGE WP(C).No.14702 OF 2020(K) 3

Appendix — schedule of exhibits

APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER PASSED BY 1ST RESPONDENT FOR THE YEAR 2017-18 DATED 30/12/2019. EXHIBIT P2 TRUE COPY OF THE DEMAND NOTICE DATED 30/12/2019. EXHIBIT P3 TRUE COPY OF THE STAY ORDER PASSED BY 1ST RESPONDENT DATED 14/02/2020. EXHIBIT P4 TRUE COPY OF THE APPEAL FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT DATED 30/01/2020. EXHIBIT P5 TRUE COPY OF THE STAY PETITION FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT DATED 13/02/2020.

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