GALEXY HOMES (P) LTD. vs. THE COMMISSIONER OF INCOME TAX (APPEALS)-II

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WP(C)/12871/2014HC KeralaKLHC01058494201422 May 2014Bench: HONOURABLE MR.JUSTICE K.VINOD CHANDRAN4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court directed that the application for stay and the application for waiver of pre-deposit be considered together within one month. Coercive proceedings were ordered to be kept in abeyance until orders were passed on these applications. The future course of action would be determined by the decisions on the waiver of pre-deposit and stay petitions. The Court did not decide on the merits of the appeal or the underlying tax dispute, but rather on the procedural aspect of granting interim relief pending the disposal of the applications before the appellate authority. The operative direction was to consider the applications expeditiously and stay coercive steps in the interim.

What were the facts?

The petitioner, Galexy Homes (P) Ltd., is aggrieved by the coercive steps initiated based on an Assessment Order dated March 28, 2014, despite having filed an appeal. The petitioner filed an appeal against the Assessment Order and also submitted applications for waiver of pre-deposit and for a stay of the Assessment Order. The petitioner sought an interim order to prevent coercive steps until their stay application was considered. The revenue's counsel pointed out that the maintainability of the appeal is considered first when a waiver of pre-deposit is sought, as the appeal would be automatically rejected if no waiver is granted, as per Section 249(4) of the Income Tax Act, 1961.

What were the issues?

1. Whether the coercive steps initiated based on the Assessment Order should be interdicted pending consideration of the stay and waiver of pre-deposit applications? (Question of procedure and interim relief) The assessee argued that coercive steps should be stopped until their applications for stay and waiver of pre-deposit are decided. The revenue contended that the maintainability of the appeal, particularly in light of the waiver of pre-deposit application, is a prerequisite for considering the stay, citing Section 249(4) of the Income Tax Act, 1961, which states that an appeal would be automatically rejected if no waiver is granted.

Which sections of the Income-tax Act were involved?

Section 249(4),Section 143(3),Section 156,Section 271(1)(c),Section 274

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN THURSDAY, THE 22ND DAY OF MAY 2014/1ST JYAISHTA, 1936 WP(C).No. 12871 of 2014 (H) ---------------------------- PETITIONER: -------------------------- GALEXY HOMES (P) LTD., GALAXY SQUARE, OPP. ABAD PLAZA, RAJAJI RAOD JUNCTION, M.G ROAD, KOCHI - 682 035, REPRESENTED BY ITS MANAGING DIRECTOR P.A.JINAS. BY ADV. SRI.SAIBY JOSE KIDANGOOR RESPONDENTS: ---------------------------- 1. THE COMMISSIONER OF INCOME TAX (APPEALS)-II, KERA BHAVAN, SRVHS ROAD, KOCHI - 682 011. 2. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 1 (2), C.R. BUILDING, I.S PRESS ROAD, KOCHI 682 018. BY ADV. SRI.JOSE JOSEPH, SC, INCOME TAX THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 22-05-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Kss

WP(C).No. 12871 of 2014 (H) ----------------------------------------- APPENDIX PETITIONER(S)' EXHIBITS: --------------------------------------- EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER UNDER SECTION 143(3) OF THE IT ACT 1961DATED 28-03-2014. EXHIBIT P1(A) TRUE COPY OF THE DEMAND NOTICE UNDER SECTION 156 OF IT ACT, 1961 DATED 28-03-2014. EXHIBIT P1(B) TRUE COPY OF THE NOTICE UNDER SECTION 274 R/W SECTION 271(1) (C) OF IT ACT, 1961 DATED 28-03-2014. EXHIBIT P2 TRUE COPY OF THE APPEAL DATED 30-04-2014. EXHIBIT P3 TRUE COPY OF THE PETITIONER'S REPRESENTATION DATED 30-04-2014. EXHIBIT P4 TRUE COPY OF THE AFFIDAVIT WITH STAY PETITION DATED 15-05-2014. EXHIBIT P5 TRUE COPY OF THE PETITION FOR WAIVER OF PRE- DEPOSIT DATED 15-05-2014. RESPONDENT(S)' EXHIBITS: ----------------------------------------- N I L /TRUE COPY/ P.A.TO JUDGE Kss

K. VINOD CHANDRAN, J. ===================== W.P.(C) No. 12871 of 2014 ====================== Dated this the 22nd day of May, 2014 J U D G M E N T The petitioner is aggrieved with the coercive steps proceeded with on the basis of Ext.P1 Assessment Order, despite having filed an appeal against the said order. The petitioner has moved Ext.P2 appeal against Ext.P1 Assessment Order and has also filed two applications one for waiver of pre-deposit being Ext.P5 and another for stay of the Assessment Order being Ext.P4. The petitioner prays that the coercive steps may be interdicted till the stay application is considered. 2. I have heard the learned Standing Counsel for Government of India (Taxes), who submits that in fact when an application for waiver of pre-deposit is made, the issue first to be considered is the maintainability of the appeal, since on no waiver being granted, the appeal would stand automatically rejected as per Section 249 (4) of the Income

W.P.(C) No. 12871 of 2014 2 Tax Act, 1961. 3. In such circumstance, it is directed that, the application for stay as also the application for waiver of pre-deposit be considered together within a period of one month and the coercive proceedings be kept in abeyance till orders are passed. The further proceedings shall depend on the orders passed in the application for waiver of pre-deposit as also the stay petition. The Writ Petition stands disposed of. Sd/-

K. VINOD CHANDRAN, JUDGE SB // TRUE COPY // P.A TO JUDGE.

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