KERALA KERA KARSHAKA SAHAKARANA FEDERATION LTD vs. THE DEPUTY / ASSISTANT COMMISSIONER OF INCOME TAX

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WP(C)/29306/2019HC KeralaKLHC01076280201901 November 2019Author: HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala disposed of the writ petition with specific directions. It directed the 2nd respondent (Commissioner of Income Tax (Appeals)) to consider and pass reasoned orders on the petitioner's stay petition (Ext.P2(a)) within two months of receiving a copy of the judgment, after hearing the petitioner. Crucially, the Court ordered that all recovery steps for the amounts confirmed by the assessment order (Ext.P1), including further proceedings pursuant to the Garnishee notice (Ext.P4), shall be kept in abeyance until the 2nd respondent passes an order on the stay petition and communicates it to the petitioner. Furthermore, the petitioner is permitted to operate the bank account mentioned in Ext.P4 during the period the stay granted by the Court is in operation. The petitioner is required to furnish copies of the writ petition and the judgment to the 2nd respondent.

What were the facts?

The petitioner, Kerala Kera Karshaka Sahakarana Federation Ltd., is challenging an assessment order (Ext.P1) under the Income Tax Act. They have filed an appeal (Ext.P2) along with a stay petition (Ext.P2(a)) before the Commissioner of Income Tax (Appeals), the 2nd respondent. Despite the pending appeal and stay petition, the petitioner received a Garnishee notice (Ext.P4) from their bank, indicating that recovery steps are being taken for the amounts confirmed in the assessment order. The petitioner contends that recovery actions are being initiated before their stay petition is considered.

What were the issues?

1. Whether the respondents are proceeding with recovery steps for the amounts confirmed by the assessment order (Ext.P1) prematurely, before the consideration of the petitioner's stay petition (Ext.P2(a)) filed before the 2nd respondent? Assessee's Contention: The petitioner argues that recovery steps, including the Garnishee notice (Ext.P4), are being taken against them even before their stay petition is considered by the appellate authority. They rely on the general principle that recovery should be stayed pending appeal and consideration of stay applications. Revenue's Contention: The judgment does not record any specific contentions made by the revenue. However, the initiation of recovery steps suggests their stance is to proceed with collection of the assessed demand.

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 A.K.JAYASANKARAN NAMBIAR FRIDAY, THE 01ST DAY OF NOVEMBER 2019 / 10TH KARTHIKA, 1941 WP(C).No.29306 OF 2019(K) PETITIONER: KERALA KERA KARSHAKA SAHAKARANA FEDERATION LTD KERA TOWER, KERA FED, KERA WATER WORKS COMPOUND VELLAYAMBALAM, THIRUVANANTHAPURAM-695 03 REPRESENTED BY ITS MANAGING DIRECTOR, SHRI N.RAVI KUMAR. BY ADVS. SRI.T.M.SREEDHARAN (SR.) SMT.NISHA JOHN SRI.V.P.NARAYANAN RESPONDENTS: 1 THE DEPUTY / ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 2(1), AYAKKAR BHAWAN, KOWDIAR P.O., THIRUVANANTHAPURAM-695 003. 2 THE COMMISSIONER OF INCOME TAX (APPEALS) AAYAKAR BHAWAN, KOWDIAR, THIRUVANANTHAPURAM-695 005. 3 THE MANAGER INDIAN OVERSEAS BANK, THYCAUD BRANCH, GEETH TOWER, OPPOSITE W AND C HOSPITAL, THYCAUD, THIRUVANANTHAPURAM-695 014. OTHER PRESENT: SC, CHRISTOPHER ABRAHAM THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 01.11.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.29306 OF 2019 2

JUDGMENT Against Ext.P1 assessment order under the Income Tax Act, the petitioner has preferred Ext.P2 appeal together with Ext. P2(a) stay petition before the 2nd respondent. Ext.P4 is the Garnishee notice received from one of the Banks, where the petitioner maintains its accounts. It is the case of the petitioner that even prior to considering the stay petition, recovery steps are taken by the respondents against the petitioner for recovery of the amounts confirmed by Ext.P1 assessment order.

2.

I have heard the learned counsel appearing for the petitioner and also the learned Government Pleader appearing for the respondents. On a consideration of the facts and circumstances of the case as also the submissions made across the Bar, I dispose the writ petition with the following directions:

1.

The 2nd respondent to consider and pass reasoned orders on Ext. P2(a) stay petition within a period of two months from the date of receipt of a copy of this judgment, after hearing the petitioner.

2.

Recovery steps for recovery of amounts confirmed against the petitioner by Ext.P1 assessment order including further proceedings pursuant to Ext.P4 notice, shall be kept in abeyance till such time as orders are passed by the 2nd respondent as directed above and communicated to the petitioner. It is made clear that during the period when the stay

WP(C).No.29306 OF 2019 3 granted by this Court in operation, the petitioner will be permitted to operate the Bank account mentioned in Ext.P4. 3. The petitioner shall produce a copy of the writ petition together with a copy of this judgment, before the 2nd respondent, for further action. A.K.JAYASANKARAN NAMBIAR JUDGE SJ

WP(C).No.29306 OF 2019 4

Appendix — schedule of exhibits
APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COY OF THE ASSESSMENT ORDER DATED 14.8.2019 PASSED BY THE IST RESPONDENT ALONG WITH DEMAND NOTICE AND COMPUTATION OF INCOME. EXHIBIT P2 TRUE COPY OF MEMORANDUM OF APPEAL DATED 3.9.2019 E-FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. EXHIBIT P2 A TRUE COPY OF THE STAY PETITION DATED 26.8.2019 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. EXHIBIT P3 TRUE COPY OF THE APPLICATION DATED 3.10.2019 SUBMITTED BY THE PETITIONER U/S 200(6) BEFORE THE IST RESPONDENT. EXHIBIT P4 TRUE COPY OF THE GARNISHEE PROCEEDINGS DATED 29.10.2019 ISSUED BY THE IST RESPONDENT TO THE 3RD RESPONDENT BANK. EXHIBIT P5 COPY OF LIST OF THE BRANCHDS OF THE STATE BANK OF INDIA LOCATED IN DIFFERENT PALACES TO WHOM RECOVERY NOTICES ARE COMMUNICATED.

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