KUNDARA COMMUNICATIONS LLP, vs. THE INCOME TAX OFFICER,

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WP(C)/6283/2020HC KeralaKLHC01016648202003 March 2020Author: HONOURABLE MR. JUSTICE AMIT RAWAL5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court, without expressing any opinion on the merits of the case, disposed of the writ petition with a direction to the 2nd respondent (The Commissioner of Income Tax (Appeals)) to take up the petitioner's application for interim stay (Ext.P3) and decide it in accordance with law after providing an opportunity of hearing to the petitioner. The petitioner was granted liberty to file a response to Ext.P4 and the court's order. The notice under Section 221 of the Income Tax Act was directed to be kept pending until the disposal of the stay application. The entire exercise for the disposal of the stay petition was to be undertaken within 15 days from the date of the order, with the petitioner directed to appear before the 2nd respondent on 06.03.2020. The 15-day period would commence from that date.

What were the facts?

The petitioner, Kundara Communications LLP, is aggrieved by the assessment order dated 11.12.2019. They filed an appeal and a stay application (Exts.P2 and P3) against this order. Subsequently, they received a notice dated 26.02.2020 from the Income Tax department indicating contemplation of penalty under Section 221 of the Income Tax Act. The petitioner's grievance is that their interim stay application has not been taken up by the officer, and coercive measures, including penalty proceedings, are being threatened. The Income Tax counsel stated that the appellate court would consider the stay application if a timeframe was fixed.

What were the issues?

1. Whether the Income Tax Officer should be directed to consider the petitioner's interim stay application (Ext.P3) expeditiously, and if so, what is the appropriate timeframe for such consideration? (Mixed question of law and fact, concerning procedural fairness and the powers of the appellate authority under the Income Tax Act). Assessee's Contention: The petitioner argued that their interim application for stay has not been processed, and in the meantime, coercive measures for non-payment of the assessed amount, including penalty proceedings under Section 221, are being initiated. They sought to keep these coercive measures in abeyance. Revenue's Contention: The Income Tax counsel submitted that the appellate court would take up the application for stay if a specific time frame was fixed for its disposal.

Which sections of the Income-tax Act were involved?

Section 221

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE AMIT RAWAL TUESDAY, THE 03RD DAY OF MARCH 2020 / 13TH PHALGUNA, 1941 WP(C).No.6283 OF 2020(I) PETITIONER/S: KUNDARA COMMUNICATIONS LLP, 713, AMBILI BUILDINGS, HOSPITAL JN, KUNDARA, KOLLAM DISTRICT, PIN-691 501, REPRESENTED BY ITS MANAGING PARTNER SHIBU P. BY ADVS. SRI.S.ANIL KUMAR (TRIVANDRUM) SRI.M.RAJAGOPAL SHRI.RAHUL A. RESPONDENT/S: 1 THE INCOME TAX OFFICER, WARD-2, INCOME TAX OFFICE, AAYAKAR BHAVAN, NEAR KARBALA JN., RAILWAY STATION ROAD, KOLLAM, PIN-691 001. 2 THE COMMISSIONER OF INCOME TAX (APPEALS) KOWDIAR, THIRUVANANTHAPURAM-695 003. BY SRI CHRISTOPHER ABRAHAM SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 03.03.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C).No.6283 OF 2020 2 JUDGMENT Dated this the 3rd day of March 2020 Grievance of the petitioner in the present case is that against the order of assessment

dated

11.12.

2019,

the petitioner preferred an appeal and stay as Exts.P2 and P3. The stay application was submitted post receipt of notice dated 26.02.2020, whereby, the Income Tax department has contemplated to impose a penalty as envisaged under Section 221 of the Income Tax Act.

2.

Learned counsel for the petitioner further submits that, the predicament of the petitioner is that, the interim application has not been taken up by the officer. In the meantime, coercive measures for non payment of the amount including the penalty proceedings may be kept in abeyance in this situation.

3.

Learned counsel for Income Tax

WP(C).No.6283 OF 2020 3 submits that the appellate court would take up the application for stay in case any time frame is fixed.

4.

Having heard learned counsel for the parties, I have not expressed anything on the merits and the writ petition is disposed of with a direction to the 2nd respondent to take up Ext.P3 application for interim stay and decide the same in accordance with law after affording an opportunity of hearing to the petitioner. Petitioner is also granted liberty to file a response to Ext.P4 as well as the order of this court, keeping the notice under 221 pending till the disposal of the stay application. Let the entire exercise for disposal of the petition shall be undertaken within 15 days therefrom. The petitioner shall appear before the 2nd respondent on 06.03.2020. 15 days will be taken from such period.

WP(C).No.6283 OF 2020 4 The writ petition stands disposed of. AMIT RAWAL JUDGE uu 03.03.2020

WP(C).No.6283 OF 2020 5

Appendix — schedule of exhibits
APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 COPY OF ASSESSMENT ORDER DATED 11.12.2019 ISSUED BY THE IST RESPONDENT FOR THE YEAR 2017-18. EXHIBIT P2 COPY OF APPEAL MEMORANDUM AGAINST EXT.P1 FILED BEFORE THE 2ND RESPONDENT. EXHIBIT P3 COPY OF STAY PETITION DATED 28.2.2020 FILED BEFORE THE IST RESPONDENT. EXHIBIT P4 COPY OF NOTICE DATED 26.2.2020 ISSUED BY THE IST RESPONDENT.

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