J.K.ENTERPRISES vs. THE ASSISTANT COMMISSIONER OF INCOME TAX

WP(C)/5534/2020HC KeralaKLHC01014762202026 February 2020Author: HONOURABLE MR.JUSTICE S.V.BHATTI4 pages

AI SummaryPartly Allowed

What did the High Court hold?

The High Court, finding a prima facie case, directed the appellate authority (2nd respondent) to consider and dispose of the stay petition (Ext.P3) as early as possible, preferably within eight weeks from the date of receipt of the judgment. Additionally, the Court directed the respondents not to take coercive steps or recover the amount determined in the orders under appeal for ten weeks from the date of the order. Garnishee orders issued (Ext.P4 series) were also stayed for ten weeks. The Court did not decide on the merits of the appeal or the stay petition itself, but rather on the procedural aspect of its expeditious disposal and interim protection.

What were the facts?

The petitioner, J.K. Enterprises, filed a writ petition before the High Court of Kerala seeking a direction to the appellate authority (Commissioner of Income Tax (Appeals)) to expeditiously consider and dispose of their stay petition. The petitioner had filed an appeal against an assessment order passed under Section 143(3) of the Income Tax Act. The petitioner contended that the delay in deciding the stay petition was leading to recovery proceedings by the assessing officer, which could render the statutory appeal ineffective. The petitioner sought protection against coercive recovery steps pending the disposal of the appeal.

What were the issues?

1. Whether the High Court should issue a direction to the appellate authority to dispose of the stay petition expeditiously, considering the potential for recovery proceedings to render the appeal ineffective? (Question of law and fact, concerning the procedural fairness and effectiveness of statutory remedies). Assessee's Contentions: - Mere filing of an appeal or pendency of a stay petition does not grant a stay. - Delay in considering the stay petition allows the assessing officer to initiate recovery, making the appeal academic or ineffective. - Orders on stay petitions are typically passed expeditiously to protect the appellant's interest pending appeal. Revenue's Contentions: - Not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 143(3)

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 S.V.BHATTI WEDNESDAY, THE 26TH DAY OF FEBRUARY 2020 / 7TH PHALGUNA, 1941 WP(C).No.5534 OF 2020(N) PETITIONER/S: J.K.ENTERPRISES X-15-1299, SREE JANARDHANA COMPLEX, RESIDENCY ROAD, KOLLAM-691001, REPRESENTED BY ITS PARTNER, JAYAKUMAR. J BY ADVS. SRI.HARISANKAR V. MENON SMT.MEERA V.MENON SMT.K.KRISHNA RESPONDENTS: 1 THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-1, KOLLAM-691001 2 THE COMMISSIONER OF INCOME TAX(APPEALS), THIRUVANANTHAPURAM-695003 3 THE MANAGER INDIAN OVERSEAS BANK, MUSLIAR BUILDINGS, CHINNAKKADA POST, KOLLAM-691001 4 THE MANAGER BANK OF BARODA, KOLAM BRANCH, PARAMESHWARAM PILLAI BUILDING, MAIN ROAD, KOLLAM POST, KOLLAM-691001 5 THE MANAGER STATE BANK OF INDIA, KOLLAM MAIN, NEAR RAILWAY STATION, KOLLAM POST, KOLLAM-691001 SRI. C A KUMAR., SRI. SUNIL SHANKER., SRI. SC CHRISTOPHER ABRAHAM. SMT. R REMA THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 26.02.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: 2 WP(C).No.5534 OF 2020(N) JUDGMENT Dated this the 26th day of February 2020 The petitioner filed appeal in Ext.P2 aggrieved by the orders of assessment in Ext.P1 made under Section 143(3) of the Income Tax Act. The petitioner has filed the appeal with Ext.P3 stay petition. The petitioner prays for appropriate direction to the appellate authority to consider and dispose of Ext.P3 expeditiously. 2. The case of petitioner is that either the mere filing of appeal or pendency of appeal does not amount to granting stay by the appellate authority. The delay in considering Ext.P3 stay petition results in the assessing officer taking steps for recovering the tax amount which is under challenge in Ext.P2. The assessing officer, if is successful in his effort the statutory appeal would become either academic or ineffective. It is further contended by the petitioner that in the manner the law provides for protecting the interest of appellant pending appeal, the orders on stay petition are passed expeditiously. Hence the writ petition. 3. Perused Exts. P1, P2 and P3. Prima facie I am satisfied 3 WP(C).No.5534 OF 2020(N) that a case is made out for issuing necessary directions to the 2nd respondent to dispose of the stay petition in Ext.P3. Having regard to the limited prayer and the grounds referred to above, this Court is satisfied that the writ petition can be disposed

of by this order: (a) The appellate authority/2nd respondent considers and disposes of Ext.P3 stay petition as early as possible, preferably within eight weeks from the date of receipt of copy of this judgment. (b) The respondents are directed not to take coercive steps or recover the amount determined in the orders under appeal for ten weeks from today. (c) Garnishee orders issued in Ext.P4 series are stayed for ten weeks. S.V.BHATTI JUDGE hmh

4 WP(C).No.5534 OF 2020(N) APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 COPY OF ASSESSMENT ORDER ISSUED BY THE 1ST RESPONDENT FOR THE YEAR 2017-18 EXHIBIT P2 COPY OF APPEAL FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT 2017-18 EXHIBIT P3 COPY OF STAY PETITION FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT EXHIBIT P4 COPY OF NOTICE ISSUED BY THE 3RD RESPONDENT BANK EXHIBIT P4(A) COPY OF NOTICE ISSUED BY THE 4TH RESPONDENT BANK EXHIBIT P4(B) COPY OF NOTICE ISSUED BY THE 5TH RESPONDENT BANK RESPONDENT'S/S EXHIBITS:NIL

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