THE COMMISSIONER OF INCOME TAX, vs. M/S.KOSHY'S ELECTRONICS LTD,

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ITA/1484/2009HC KeralaKLHC01026245200912 October 2018Bench: HONOURABLE MR.JUSTICE K.VINOD CHANDRAN,HONOURABLE MR. JUSTICE ASHOK MENON6 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala disposed of the writ petition by directing the 2nd respondent (Commissioner of Income Tax (Appeals)) to consider the petitioner's stay petition (Ext.P8) expeditiously, within three months of receiving a copy of the judgment, after affording a hearing. The Court stipulated that if a conditional interim order or stay is proposed, the 2nd respondent must provide reasons. Crucially, until orders are passed on the stay petition, all further proceedings pursuant to the assessment order (Ext.P3), penalty notice (Ext.P4), and demand notice (Ext.P7) are to be kept in abeyance. The 2nd respondent was also permitted to dispose of the appeal itself within the same three-month period. The issue of the validity of the assessment order itself was not decided on merits in this writ petition.

What were the facts?

The petitioner, Kolamakkal Joseph Biju, a farmer, failed to file his Income Tax return for Assessment Year 2018-19 within the stipulated time. The Income Tax Officer (3rd respondent) issued a notice under Section 148A(b) of the Income Tax Act, 1961, concerning remittances into a loan account held by the petitioner and his brother. The petitioner responded by filing a Return of Income (Ext.P2). However, the National Faceless Assessment Centre (1st respondent) completed an assessment (Ext.P3) without considering this return. Subsequently, notices for penalty under Section 274 read with Section 271AAC(1) (Ext.P4) and for non-payment of demand under Section 221(1) (Ext.P7) were issued. The petitioner has filed an appeal against the assessment order (Ext.P3) before the Commissioner of Income Tax (Appeals) (2nd respondent) and a stay petition (Ext.P8). The petitioner's grievance is that coercive proceedings are being initiated while the appeal and stay petition are pending.

What were the issues?

1. Whether the 1st respondent erred in completing the assessment under Section 147/144 of the Income Tax Act, 1961, without considering the Return of Income filed by the petitioner in response to the notice under Section 148A(b)? Assessee's Contention: The petitioner argues that the 1st respondent mechanically completed the assessment without considering the Return of Income (Ext.P2) filed in response to the notice under Section 148A(b). The petitioner also contends that coercive proceedings are being taken despite a pending appeal and stay petition. Revenue's Contention: The judgment does not record specific contentions from the revenue regarding the merits of the assessment or penalty. The revenue's counsel appeared and was heard.

Which sections of the Income-tax Act were involved?

Section 148A,Section 274,Section 271AAC(1),Section 221(1)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE MURALI PURUSHOTHAMAN WEDNESDAY, THE 5TH DAY OF JUNE 2024 / 15TH JYAISHTA, 1946 WP(C) NO. 19822 OF 2024 PETITIONER/S: KOLAMAKKAL JOSEPH BIJU , AGED 54, KOLAMAKKAL HOUSE, KAMANNA P O; MANATHAVADI, WAYANAD DISTRICT, PIN - 670645 BY ADV TOMSON T.EMMANUEL RESPONDENTS: 1 ASSESSMENT UNIT/TECHNICAL UNIT/REVIEW UNIT , NATIONAL FACELESS ASSESSMENT CENTRE, INCOME TAX DEPARTMENT,MINISTRY OF FINANCE, NORTH BLOCK, NEW DELHI, REPRESENTED BY ADDITIONAL/JOINT/DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX/INCOME TAX OFFICER, PIN - 110001 2 COMMISSIONER OF INCOME TAX (APPEALS) , INCOME TAX DEPARTMENT, NATIONAL FACELESS APPEAL CENTER, NORTH BLOCK, DELHI, PIN - 110001 3 INCOME TAX OFFICER , INCOME TAX DEPARTMENT, WARD-1, KALPETTA, VAYANAD DISTRICT, PIN - 673122 BY ADVS. P.G.JAYASHANKAR -SC G.KEERTHIVAS - SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 05.06.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

2 WPC 19822/2024 JUDGMENT The petitioner is a farmer and an assessee under the Income Tax Act, 1961. He states that he could not file his return within the stipulated time, declaring the income under exemption for assessment year 2018-19. Accordingly the 3rd respondent issued Ext.P1 notice under clause (b) of Section 148 A of Income Tax Act considering the remittance made into the loan account maintained by the petitioner and his brother in the South Indian Bank. In response to Ext.P1 notice, the petitioner filed Ext.P2 Return of Income. However, without considering Ext.P2, the 1st respondent mechanically completed Ext.P3 assessment under National Faceless Assessment Centre. The petitioner was also issued Ext.P4 notice proposing penalty under Section

3 WPC 19822/2024 274 read with Section 271 AAC(1). Later, the petitioner was issued with Ext.P7 notice under Section 221(1) of the Act for nonpayment of Ext.P3 demand. The petitioner states that, against Ext.P3, the petitioner has preferred Ext.P5 appeal before the 2nd respondent. The petitioner has filed Ext.P8 stay petition. The grievance of the petitioner is that pending Ext.P5 appeal and Ext.P4 stay petition, the 3rd respondent is taking coercive proceedings pursuant to Ext.P3 and P7. 2. Heard the learned counsel for the petitioner and the learned Standing Counsel for the respondents. In the facts and circumstances of the case and taking note of the fact that Ext.P5 statutory appeal is pending consideration before the 2nd respondent, this writ petition is disposed of with a direction to the 2nd respondent to consider Ext.P8 stay petition in accordance with law, as expeditiously as possible, at any rate, within a period of three months from the date of receipt of a

4 WPC 19822/2024 copy of this judgment after affording an opportunity of hearing to the petitioner. If the 2nd respondent proposes to pass any conditional interim order /stay he shall state reasons for the same. Until such time orders are passed on Ext.P8 stay petition, all further proceedings pursuant to Ext.P3, P4 & P7 shall be kept in abeyance. It will be open to the 2nd respondent to dispose of the appeal itself within the aforesaid period. Sd/- MURALI PURUSHOTHAMAN JUDGE al/-.

5 WPC 19822/2024 APPENDIX OF WP(C) 19822/2024 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF NOTICE DATED 23.03.2022 UNDER CLAUSE (B) OF SEC.148A OF IT ACT ISSUED BY 3RD RESPONDENT FOR AY:2018- 19 Exhibit P2 TRUE COPY OF STATEMENT OF INCOME AND INDIAN

INCOME

TAX

RETURN ACKNOWLEDGEMENT IN ITR-2 DATED 29.03.2023 SUBMITTED BY THE PETITIONER FOR AY: 2018-19. Exhibit P3 TRUE COPY OF ASSESSMENT ORDER DATED 17.03.2024

COMPLETED

1ST RESPONDENT FOR AY:2018-19 ISSUED U/S.147 READ WITH SEC.144B OF IT ACT. Exhibit P4 TRUE COPY OF SHOW CAUSE NOTICE DATED 17.03.2024 ISSUED IN PROPOSING TO IMPOSE PENALTY U/S.271AAC(1) OF IT ACT FOR AY: 2018-19, ISSUED TO PETITIONER, ALONG WITH EXT-P3 ORDER BY 1ST RESPONDENT. Exhibit P5 TRUE COPY OF APPEAL IN FORM NO.35 DATED 16.04.2024 SUBMITTED AGAINST EXT-P2 ASSESSMENT ORDER BEFORE 2ND RESPONDENT,

ISSUED

WITH ACKNOWLEDGEMENT RECEIPT. Exhibit P6 TRUE COPY OF REPLY DATED 22.04.2024 SUBMITTED BEFORE 1ST RESPONDENT, AGAINST EXT-P4 SHOW CAUSE NOTICE. Exhibit P7 TRUE COPY OF NOTICE DATED 06.05.2024 U/S.221(1) OF THE IT ACT, ISSUED BY 3RD RESPONDENT, PURSUANT TO P3 DEMAND. Exhibit P8 TRUE COPY OF STAY PETITION DATED 15.05.2024, SUBMITTED BEFORE 3RD RESPONDENT, PURSUANT TO EXT P3 DEMAND AND EXT-P7 NOTICE. Exhibit P9 TRUE COPY OF JUDGMENT DATED

6 WPC 19822/2024 29.05.2023 IN WP© NO.16452 OF 2023 PASSED BY THIS HON'BLE COURT, ON SIMILAR SET OF FACT.

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