M/S. A.M.MOTORS vs. THE ASST. COMMISSIONER OF INCOME TAX

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WP(C)/32920/2015HC KeralaKLHC01078757201529 October 2015Author: HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR4 pages
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What did the High Court hold?

The High Court, considering the facts, circumstances, and the plea of financial hardship, modified the direction in Exhibit P7. The Court directed the petitioner to make a further payment of Rs. 15,00,000/- in addition to the Rs. 14,00,000/- already paid and the Rs. 22,55,650/- due as refund. This payment of Rs. 15,00,000/- is to be made within one month from the receipt of the judgment's copy, as a condition for granting a stay of recovery of the balance amounts pending the appeal's disposal. The 2nd respondent Appellate Authority was directed to pass final orders on the appeal within three months of receiving a copy of the judgment, after hearing the petitioner. The ratio is that a stay order should consider merits and financial hardship, and the court can modify stay conditions to balance interests.

What were the facts?

The petitioner, M/s. A.M. Motors, represented by its Managing Partner, A. Mohammed Iqbal, filed a writ petition challenging an order (Exhibit P7) passed by the 2nd respondent, the Commissioner of Income Tax (Appeals). This order was in relation to a stay application filed along with an appeal against a block period assessment order (1996-97 to 2002-03) passed by the 1st respondent, the Assistant Commissioner of Income Tax. The petitioner's grievance was that the Appellate Authority did not consider the merits of the case and mechanically directed payment of 50% of the outstanding balance, after accounting for a prior payment of Rs. 14,00,000/- and a refund of Rs. 22,55,650/- due for assessment year 2014-15. The petitioner contended this order was vitiated by a non-application of mind.

What were the issues?

1. Whether the Appellate Authority (2nd respondent) erred in passing the stay order (Exhibit P7) without considering the merits of the petitioner's case and the plea of financial hardship, thereby vitiating the order due to a patent non-application of mind? Assessee's Contentions: - The 2nd respondent mechanically directed the petitioner to pay 50% of the balance outstanding amounts without considering the merits of the case. - The order failed to consider the petitioner's financial hardship. - The order is vitiated by a patent non-application of mind. Revenue's Contentions: - Not recorded in the judgment.

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 THURSDAY, THE 29TH DAY OF OCTOBER 2015/7TH KARTHIKA, 1937 WP(C).No. 32920 of 2015 (L) -------------------------------------------- PETITIONER(S) : ------------------------- M/S. A.M.MOTORS, VARANGODE, DOWN HILL P.O., MALAPPURAM- 676 519, REPRESENTED BY ITS MANAGING PARTNER, A.MOHAMMED IQBAL. BY ADVS.SRI.HARISANKAR V. MENON SMT.MEERA V.MENON RESPONDENT(S) : ---------------------------- 1. THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE II (2), TIRUR- 678 101. 2. THE COMMISSIONER OF INCOME TAX (APPEALS), AYAKAR BHAVAN, NORTH BLOCK, KOZHIKODE- 673 001. BY ADV. SRI.K.M.V.PANDALAI, INCOME TAX DEPARTMENT THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 29-10-2015, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Msd. WP(C).No. 32920 of 2015 (L) ------------------------------------------- APPENDIX PETITIONER(S)' EXHIBITS : ----------------------------------------- EXHIBIT P1: COPY OF ASSESSMENT ORDER ISSUED BY THE 1ST RESPONDENT DATED 27.10.2006. EXHIBIT P2: COPY OF ORDER ISSUED BY THE INCOME TAX APPELLATE TRIBUNAL, COCHIN DATED 27.07.2012. EXHIBIT P3: COPY OF ASSESSMENT ORDER ISSUED BY THE 1ST RESPONDENT DATED 31.03.2014. EXHIBIT P4: COPY OF APPEAL FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT DATED 14.04.2014. EXHIBIT P5: COPY OF STAY APPLICATION FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. EXHIBIT P6: COPY OF WRITTEN SUBMISSION FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT DATED 05.10.2015. EXHIBIT P7: COPY OF ORDER ISSUED BY THE 2ND RESPONDENT DATED 09.10.2015. RESPONDENT(S)' EXHIBITS : ------------------------------------------- NIL //TRUE COPY// P.A.TO JUDGE. Msd. A.K.JAYASANKARAN NAMBIAR, J. ------------------------------- W.P.(C).NO.32920 OF 2015 (L) ----------------------------------- Dated this the 29th day of October, 2015

J U D G M E N T The challenge in the writ petition is against Ext.P7 order passed by the 2nd respondent Appellate Authority in a stay application filed along with an appeal against an assessment order for the block period 1996-97 to 2002-03. The grievance of the petitioner against Ext.P7 order is essentially that the 2nd respondent Appellate Authority did not consider the merits of the case and mechanically directed the petitioner to pay 50% of the balance outstanding amounts after taking into account the payment of Rs.14,00,000/- which had been made by the petitioner and the amount of Rs.22,55,650/- that was due to the petitioner by way of refund for the assessment year 2014-15. It is stated that insofar as the 2nd respondent had not considered the merits of the case of the petitioner, coupled with financial hardship, the said order is vitiated by a patent non-application of mind.

2.

I have heard the learned counsel for the petitioner as also the learned Standing counsel for the respondents.

3.

On a consideration of the facts and circumstances of the case as also the submissions made across the bar and taking note of the W.P.(C).No.32920/2015 2 plea of financial hardship urged on behalf of the petitioner, I am of the view that the interests of justice would be served by directing the petitioner to make a further payment of Rs.15,00,000/- over and in addition to the Rs.14,00,000/- that he had already paid and the amount of Rs.22,55,650/- that is admittedly due to him by way of refund. I therefore modify the direction in Ext.P7 order, to the extent of directing the petitioner to effect a payment of Rs.15,00,000/- within a period of one month from the date of receipt of a copy of this judgment as a condition for grant of stay of recovery of the balance amounts confirmed against him by the assessment order, pending disposal of the appeal by the 2nd respondent Appellate Authority. The 2nd respondent Appellate Authority shall also pass final orders in the appeal within a period of three months from the date of receipt of a copy of this judgment, after hearing the petitioner. The petitioner shall also produce a copy of the writ petition along with a copy of this judgment, before the 2nd respondent, for further action. The writ petition is disposed as above. A.K.JAYASANKARAN NAMBIAR JUDGE prp/29/10/15

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