DR.V.K.JAYAKUMAR vs. THE INCOME TAX APPELLATE TRIBUNAL, COCHI

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WP(C)/36254/2007HC KeralaKLHC01074923200707 December 2007Author: HONOURABLE MR.JUSTICE ANTONY DOMINIC3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the ITAT's order (Ext.P7) vacating the stay had lost its basis because the judgment of the ITAT, Mumbai Bench, relied upon by the ITAT, had been reversed by the Bombay High Court in Narang Overseas P. Ltd v. Income Tax Appellate Tribunal and others [2007 295 ITR 22(Bom)]. Consequently, the High Court set aside Ext.P7. The Tribunal was directed to re-consider the petitioner's stay application (Ext.P4) and pass appropriate orders expeditiously, within four weeks. Further proceedings pursuant to Ext.P8 were deferred in the interim. The principle is that an order based on a judicial precedent that is subsequently overturned loses its validity.

What were the facts?

The petitioner, Dr. V.K. Jayakumar, challenged an order (Ext.P7) passed by the Income Tax Appellate Tribunal (ITAT), Cochin Bench. This order vacated a stay previously granted to the petitioner. The ITAT's decision to vacate the stay was based on Section 254(2A) of the Income Tax Act and a judgment of the ITAT, Mumbai Bench, in the case of Narang Overseas Private Ltd. However, the petitioner brought to the High Court's notice that the Bombay High Court had reversed the ITAT's decision in Narang Overseas P. Ltd v. Income Tax Appellate Tribunal and others [2007 295 ITR 22(Bom)]. The High Court noted that Ext.P7 order had lost its basis due to this reversal.

What were the issues?

1. Whether the ITAT's order vacating the stay, based on Section 254(2A) of the Income Tax Act and the Narang Overseas Private Ltd. judgment, was legally sustainable? Assessee's Contention: The assessee argued that the ITAT's order (Ext.P7) was based on a precedent (Narang Overseas Private Ltd. ITAT judgment) which had subsequently been reversed by the Bombay High Court in Narang Overseas P. Ltd v. Income Tax Appellate Tribunal and others [2007 295 ITR 22(Bom)]. Therefore, the basis of the ITAT's order was lost. Revenue's Contention: The judgment does not record any specific contentions made by the revenue in response to the assessee's arguments.

Which sections of the Income-tax Act were involved?

Section 254(2A)

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 ANTONY DOMINIC FRIDAY, THE 7TH DECEMBER 2007 / 16TH AGRAHAYANA 1929 WP(C).No. 36254 of 2007(N) -------------------------- PETITIONER: --------------- DR. V.K.JAYAKUMAR, SABARIGIRI HOSPITAL, ANCHAL, KOLLAM DISTRICT. BY ADV. SRI.R.RAMADAS RESPONDENTS: ----------------- 1. THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BEACH, COCHIN. 2. THE COMMISSIONER OF INCOME TAX(APPEALS), KOCHI. 3. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, MANNANIYYA COMPLEX, ANDAMUKKOM, KOLLAM. 4. THE TAX RECOVERY OFFICER, OFFICE OF THE ADDITIONAL COMMISSIONER OF INCOME TAX, KARBALA JUNCTION, RAILWAY STATION ROAD, KOLLAM. BY SRI.GEORGE K.GEORGE, SC FOR I.T. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 07/12/2007, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ANTONY DOMINIC, J. =============== W.P.(C) NO. 36254 OF 2007 N ===================== Dated this the 7th day of December, 2007

J U D G M E N T Ext.P7 order of the 1st respondent is under challenge.

2.

By this order, the stay petitions filed by the petitioner, in which an order of stay was passed, has been vacated in the light of the provisions contained in Section 254(2A) of the Income Tax Act. For this purpose, the Tribunal has relied on the judgment of the Income Tax Appellate Tribunal, Mumbai in the case of Narang Overseas Private Ltd. However, it is now brought to my notice that the very order of the Bombay Bench of the Tribunal relied on by the 1st respondent has been reversed by the Bombay High Court in the judgment reported in Narang Overseas P. Ltd v. Income Tax Appellate Tribunal and others [2007 295 ITR 22(Bom)].

3.

In the light of the aforesaid judgment of the Bombay High Court, Ext.P7 order has lost its very basis and hence it deserves to be set aside and I do so. Tribunal shall re-consider Ext.P4 application filed by the petitioner for stay and pass

WPC 36254/07 :2 : appropriate orders thereon, as expeditiously as possible, at any rate within four weeks of receipt of a copy of this judgment. In the meantime, further proceedings pursuant to Ext.P8 will stand deferred. Writ petition is disposed of as above. ANTONY DOMINIC, JUDGE. Rp

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