GRAND JEWELLERS, vs. THE ASSISTANT COMMISSIONER OF INCOME TAX,

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WP(C)/10214/2020HC KeralaKLHC01026468202025 May 2020Author: HONOURABLE MR. JUSTICE AMIT RAWAL4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court, without commenting on the merits of the case, disposed of the writ petition with a direction to the Commissioner of Income Tax (Appeals) (2nd respondent) to decide the stay application (Ext.P3) expeditiously, within one month from the date of receipt of a copy of the judgment. This decision was to be made after affording the petitioner an opportunity of hearing, in accordance with law. The Court also ordered that the operation of Ext.P4 (presumably the demand notice) be kept in abeyance until the adjudication of the stay application. The interim direction was explicitly stated to be operative only until the stay application was decided. The ratio decidendi is that procedural delays in adjudicating stay applications, especially when demand notices are issued, can be addressed by the High Court in its writ jurisdiction to ensure timely relief and prevent undue hardship to the assessee.

What were the facts?

The petitioner, Grand Jewellers, a partnership firm, filed an appeal against an assessment order (Ext.P1) and a stay application (Ext.P3) before the Commissioner of Income Tax (Appeals). During the pendency of the appeal, the petitioner received a notice of demand under Section 156 of the Income Tax Act from the Assistant Commissioner of Income Tax. The petitioner's grievance was that their stay application had not been adjudicated. Consequently, the petitioner invoked the extraordinary writ jurisdiction of the High Court under Article 226 of the Constitution of India.

What were the issues?

1. Whether the High Court, in its writ jurisdiction, should direct the Commissioner of Income Tax (Appeals) to adjudicate the pending stay application filed by the assessee. (Question of mixed law and fact, concerning the procedural fairness and timely disposal of statutory remedies). Assessee's Contention: The petitioner argued that the issuance of a demand notice while their stay application was pending and undecided created a predicament, necessitating the intervention of the High Court. The petitioner relied on the principle of ensuring that statutory remedies are not rendered nugatory due to procedural delays. Revenue's Contention: The Standing Counsel for the Income Tax Department submitted that there would be no objection to the Commissioner of Income Tax (Appeals) adjudicating the stay application if an appropriate direction was issued by the Court.

Which sections of the Income-tax Act were involved?

Section 156

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 AMIT RAWAL MONDAY, THE 25TH DAY OF MAY, 2020/4TH JYAISHTA, 1942 W.P(C).NO.10214 OF 2020 PETITIONER GRAND JEWELLERS, 348/V P ADINJARAYIL BUILDINGS, M.C.ROAD, KOOTHATTUKULAM P.O, ERNAKULAM BY ADVOCATE SMT.LATHA RESPONDENTS: 1. THE ASSISTANT COMMISSIONER OF INCOME TAX, THE OFFICE OF THE ASSISSTANT COMMISSIONER OF INCOME TAX, CIRCLE – 1, ALUVA, ERNAKULAM – 560037. 2. COMMISSIONER OF INCOME TAX (APPEALS), OFFICE OF THE CIT (APPEALS), ERNAKULAM 682 002. BY STANDING COUNSEL ADVOCATE SHRI. CHRISTOPHER ABRAHAM THIS WRIT PETITION HAVING COME UP FOR ADMISSION ON 25.05.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C).No.10214/20 2

JUDGMENT Petitioner, a partnership firm preferred an appeal against the assessment order Ext.P1, accompanied by a stay application Ext.P3. The grievance of the petitioner is that, during the pendency of the appeal, notice of demand under Section 156 of the Income Tax Act was issued by the 1st respondent. The predicament of the petitioner is writ large as there is no adjudication on the stay application. It is in these circumstances the extra ordinary writ juri iction of this Court under Article 226 has been preferred.

2.

Issue notice before admission. Sri.Christopher Abraham, learned Standing Counsel appearing for the Income Tax Department submits that there would not be an aversion to the Commissioner of Income Tax Appeal, in case an appropriate direction is issued for the adjudication of the stay application.

3.

Having heard the learned counsel for the parties and appraised the paper book and without commenting on the merits of the matter, I dispose of this writ petition with a direction to the 2nd respondent to take a call on the application Ext.P3 preferred against the assessment order as expeditiously as possible, within a period of one month from the date of receipt of a copy of this judgment, after affording an opportunity of hearing to the petitioner in accordance with law. Till such time, operation of Ext.P4 is ordered to be kept in abeyance. It is made clear that the interim direction shall be operative only till the adjudication of the stay application. With the aforementioned direction, this writ petition is disposed of. AMIT RAWAL JUDGE jm/

Appendix — schedule of exhibits
APPENDIX PETITIONERS’ EXHIBITS: EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER NO.ITBA/AST/S/143(3)/2019- 2020/1022254176(1) ISSUED U/S. 143(3) OF THE INCOME TAX ACT 1961, DATED 13/12/2019 ISSUED BY THE FIRST RESPONDENT TO THE PETITIONER FOR THE ASSESSMENT YEAR 2017-2018. EXHIBIT P2 THE TRUE COPY OF THE APPEAL IN FORM NO.35 ALONG WITH GROUNDS OF APPEAL FILED BY THE PETITIONER BEFORE THE SECOND RESPONDENT AGAINST THE EXT.P1 ORDER. EXHIBIT P3 THE TRUE COPY OF STAY PETITION FILED BY THE PETITIONER IN THE P2 APPEALS. EXHIBIT P4 THE TRUE COPY OF THE NOTICE OF DEMAND UNDER SECTION 156 OF INCOME TAX ACT 1961 DATED 13/12/2019 ISSUED BY THE FIRST RESPONDENT TO THE PETITIONER.

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