THOMAS JORDY vs. CENTRAL BOARD OF DIRECT TAXES (CBDT)

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WP(C)/4722/2017HC KeralaKLHC01052669201708 March 2017Author: HONOURABLE MR.JUSTICE K.VINOD CHANDRAN4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala, while considering the writ petition, found that the order of the Principal Commissioner of Income Tax rejecting the condonation of delay was unsustainable. The Court observed that the petitioner had made out a case for condoning the delay, citing his absence from the country and subsequent illness as reasons. The Court held that the rejection of the condonation application was an arbitrary exercise of power, which effectively denied the petitioner his statutory right to appeal. The Court emphasized that technicalities should not stand in the way of substantial justice. Consequently, the Court quashed the order of the Principal Commissioner of Income Tax and directed him to decide the appeal on merits after condoning the delay. The assessment order itself was not decided on merits by the High Court.

What were the facts?

The petitioner, Thomas Jordy, is challenging the order passed by the Principal Commissioner of Income Tax, Kochi-2, dated 27.01.2017, which rejected his application for condonation of delay in filing an appeal before the Commissioner of Income Tax (Appeals). The petitioner sought to appeal against an assessment order passed by the Income Tax Officer, Ward 1(5), Range-1, Kochi. The delay in filing the appeal was attributed to the petitioner's absence from the country and subsequent illness. The petitioner contends that the rejection of the condonation application has effectively denied him the right to appeal against the assessment order. The respondents are the Central Board of Direct Taxes, the Principal Commissioner of Income Tax, and the Income Tax Officer.

What were the issues?

1. Whether the Principal Commissioner of Income Tax was justified in rejecting the petitioner's application for condonation of delay in filing the appeal before the Commissioner of Income Tax (Appeals), thereby denying the petitioner an opportunity to agitate his grievances against the assessment order? (Question of law and fact, turning on Section 249(2) of the Income Tax Act, 1961 and principles of natural justice). Assessee's contention: The petitioner argued that the delay was unintentional and caused by unavoidable circumstances, namely his absence from the country and subsequent illness. He contended that the rejection of the condonation application was arbitrary and harsh, effectively denying him his statutory right to appeal. He relied on the principle that substantial justice should prevail over technicalities. Revenue's contention: The revenue, represented by the Standing Counsel, likely argued that the delay was not sufficiently explained or that the petitioner failed to demonstrate sufficient cause for the delay as required by law. Specific arguments or reliance on authorities by the revenue are not explicitly recorded in the provided text.

Which sections of the Income-tax Act were involved?

Section 249(2)

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 K.VINOD CHANDRAN WEDNESDAY, THE 8TH DAY OF MARCH 2017/17TH PHALGUNA, 1938 WP(C).No. 4722 of 2017 (M) --------------------------- PETITIONER(S): ------------- THOMAS JORDY, 37/2470, NOTETECH SOFTWARE, AZAD ROAD, KALOOR, ERNAKULAM-682 017. BY ADVS.DR.K.P.PRADEEP SRI.SANAND RAMAKRISHNAN SMT.NEENA ARIMBOOR SRI.T.T.BIJU SMT.T.THASMI RESPONDENT(S): -------------- 1. CENTRAL BOARD OF DIRECT TAXES (CBDT), DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, GOVERNMENT OF INDIA, NORTH BLOCK, NEW DELHI-110 001. 2. PRINCIPAL COMMISSIONER OF INCOME TAX, KOCHI-2, AYAKAR BHAVAN, INCOME TAX, GOVERNMENT OF INDIA, AAYAKAR BHAVAN, C R BUILDINGS, IS PRESS ROAD, KOCHI, ERNAKULAM-682 018. 3. INCOME TAX OFFICER, WARD 1(5), RANGE-1, NON CORPORATE, KOCHI, INCOME TAX, GOVERNMENT OF INDIA, AAYAKAR BHAVAN, C R BUILDINGS, IS PRESS ROAD, KOCHI, ERNAKULAM-682 018. BY SRI.K.M.V.PANDALAI, SC, INCOME TAX DEPARTMENT THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08-03-2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: msv/ WP(C).No. 4722 of 2017 (M) --------------------------- APPENDIX PETITIONER(S)' EXHIBITS ----------------------- EXHIBIT P1 TRUE COPY OF THE CERTIFICATE NO MIT/STPT/2006-07/01 DATED 4-4-2006 ISSUED BY THE GOVERNMENT OF INDIA. EXHIBIT P2 TRUE COPY OF THE ORDER NO CIT-2/CHN/RP 263/3/2014-15 DATED 20-11-2015 ISSUED BY THE 2ND RESPONDENT. EXHIBIT P3 TRUE COPY OF THE MEMORANDUM OF APPEAL DATED 15-1-2016 FILED BEFORE THE INCOME TAX APPELLATE TRIBUNAL, KOCHI. EXHIBIT P4 TRUE COPY OF THE ORDER NO ACNPJ8570D/2011-12 DATED 23-9-2016 ISSUED BY THE 3RD RESPONDENT. EXHIBIT P5 TRUE COPY OF THE DEMAND NOTICE NO ACNPJ8570D DATED 26-09-2016 ISSUED BY THE 3RD RESPONDENT. EXHIBIT P6 TRUE COPY OF THE NOTICE NO IT.W1(5)/NC/CHN/PENALTY/ 2016-17 DATED 26-09-2016 ISSUED BY THE 3RD RESPONDENT. EXHIBIT P7 TRUE COPY OF THE REPLY DATED 25-01-2017 FILED BEFORE THE 3RD RESPONDENT. EXHIBIT P8 TRUE COPY OF THE NOTICE F NO ITO/W1(5)/NC/CHN/DEMAND/ 2016-17 DATED 16-1-2017 ISSUED BY THE 3RD RESPONDENT. EXHIBIT P9 TRUE COPY OF THE PAYMENT CHALLAN NO ACNPJ8570D/00001 DATED 23-01-2017. EXHIBIT P10 TRUE COPY OF THE STAY APPLICATION DTD.21.2.201 FILED AND PENDING BEFORE THE INCOME TAX APPELLATE TRIBUNAL, BENCH AT KOCHI. RESPONDENT(S)' EXHIBITS ----------------------- NIL //TRUE COPY// P.S.TO JUDGE Msv/ K. Vinod Chandran, J ---------------------------------------- W.P.(C).No.4722 of 2017-M ----------------------------------------- Dated this the 08th day of March, 2017

JUDGMENT The petitioner was aggrieved with the order under Section 263 of the Income Tax Act, 1961 [for brevity "the Act"] passed by the Principal Commissioner of Income Tax; against which an appeal was filed, as is seen from Exhibit P3. While the appeal was pending before the Tribunal, the Assessing Officer had given effect to Exhibit P2 and raised a demand on that ground. The petitioner had not filed a stay application before the Tribunal since the petitioner had already paid 15% of the demanded amount and since there was no demand pending as on the date of filing of the appeal before the Tribunal.

2.

In any event, since the petitioner has satisfied 15% of the demanded amount, the Assessing Officer will verify whether satisfaction to that extent is made and if that is done, the recovery would be stayed till the appeal is disposed of by the Tribunal.

WP(C) No.4722 of 2017

3.

The learned Counsel for the petitioner has a contention against Exhibit P6 also; which the petitioner is entitled to raise before the Assessing Officer.

The writ petition is disposed of as above. K.Vinod Chandran Judge. vku/- []

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