M/S NENCO GAS SERVICE vs. THE ASSISTANT COMMISSIONER OF INCOME TAX

WP(C)/5756/2020HC KeralaKLHC01015239202027 February 2020Author: HONOURABLE MR.JUSTICE S.V.BHATTI4 pages

AI SummaryPartly Allowed

What did the High Court hold?

The High Court held that a case was made out for issuing necessary directions to the 2nd respondent (appellate authority) to dispose of the stay petition (Ext.P3). The Court directed the appellate authority to consider and dispose of the stay application as early as possible, preferably within two months from the date of receipt of a copy of the judgment. Additionally, the respondents were directed not to take coercive steps or recover the amount determined in the orders under appeal for ten weeks from the date of the judgment. The Court found the limited prayer and grounds sufficient to dispose of the writ petition with these directions.

What were the facts?

The petitioner, M/s Nenco Gas Service, filed an appeal (Ext.P2) against an assessment order (Ext.P1) under the Income Tax Act, 1961. Along with the appeal, a stay petition (Ext.P3) was filed. The petitioner approached the High Court of Kerala seeking a direction to the appellate authority (2nd respondent, The Commissioner of Income Tax (Appeals)) to consider and dispose of the stay petition expeditiously. The petitioner argued that the delay in deciding the stay petition could lead to recovery proceedings by the assessing officer, rendering the statutory appeal ineffective. The High Court perused the documents and found a case for issuing directions.

What were the issues?

1. Whether the High Court should issue a direction to the appellate authority to expeditiously consider and dispose of the stay petition filed by the assessee pending appeal? (Question of procedure/mixed law and fact) Assessee's Contentions: - Mere filing of an appeal or pendency of an appeal does not automatically grant a stay. - Delay in disposing of the stay petition allows the assessing officer to initiate recovery proceedings, which could render the appeal academic or ineffective. - The law mandates expeditious disposal of stay petitions to protect the interest of the appellant pending appeal. Revenue's Contentions: - No specific contentions recorded for the revenue in this regard.

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 THURSDAY, THE 27TH DAY OF FEBRUARY 2020 / 8TH PHALGUNA, 1941 WP(C).No.5756 OF 2020(T) PETITIONER/S: M/S NENCO GAS SERVICE 15/519 AND 520 NENCO GAS SERVICE, MANNANCHERRY, ALAPUZHA-688 538, REPRESENTED BY ITS MANAGING PARTNER SHRI.ARUN RAJ PILLAI. BY ADVS. SRI.S.MUHAMMED HANEEFF SRI.M.H.ASIF ALI RESPONDENT/S: 1 THE ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE , KOLLAM, AYAKAR BHAVAN, RAILWAY STATION ROAD, KOLLAM-691 001. 2 THE COMMISSIONER OF INCOME TAX (APPEALS) 28/243, POORNIMA, PANAMPILLY NAGAR, COCHIN-682 036. SC JOSE JOSEPH THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 27.02.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.5756 OF 2020(T) 2 JUDGMENT Dated this the 27th day of February 2020 The petitioner filed appeal in Ext.P2 aggrieved by the order of assessment in Ext.P1 made under Income Tax Act, 1961. 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 and disposing of Ext.P3 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 order on stay petition WP(C).No.5756 OF 2020(T) 3 is passed expeditiously. Hence the writ petition. 3. Perused Exts.P1, P2, and P3. Prima facie I am satisfied that a case is made out for issuing necessary directions to 2nd respondent to dispose of 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 application as early as possible, preferably within two months 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. S.V.BHATTI JUDGE JS

WP(C).No.5756 OF 2020(T) 4 APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1OF THE ASSESSMENT ORDER DATED 30.12.2019 PASSED BY THE 1ST RESPONDENT FOR AY-2017-18 ALONG WITH DEMAND NOTICE & COMPUTATION OF INCOME EXHIBIT P2OF THE MEMORANDUM OF APPEAL DATED 1.2.2020 FOR AY-2017-18 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT EXHIBIT P3OF THE STAY PETITION DATED 1.2.2020 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR AY-2017-18

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