SRI.P.A.JINAS vs. THE COMMISSIONER OF INCOME TAX

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WP(C)/12872/2014HC KeralaKLHC01058495201422 May 2014Bench: HONOURABLE MR.JUSTICE K.VINOD CHANDRAN4 pages
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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 a period of one month. Coercive proceedings were ordered to be kept in abeyance until orders were passed on these applications. The subsequent proceedings were to be determined based on the outcome of the waiver and stay petitions. The Court did not decide the merits of the appeal or the assessment order itself, focusing solely on the procedural aspect of interdicting coercive steps pending the disposal of the stay and waiver applications. The ratio decidendi is that the appellate authority must consider stay and waiver applications expeditiously to prevent undue hardship to the assessee, and coercive steps should be held in abeyance during this period.

What were the facts?

The petitioner, P.A. Jinas, is aggrieved by the coercive steps initiated based on an Assessment Order (Ext.P1) dated March 28, 2014, passed under Section 143(3) of the Income Tax Act, 1961. Despite filing an appeal (Ext.P2) against this order before the Commissioner of Income Tax (Appeals)-II, the revenue proceeded with coercive measures. The petitioner also filed an application for waiver of pre-deposit (Ext.P5) and a stay petition (Ext.P4) in conjunction with the appeal. The petitioner sought an interim order to interdict coercive steps until the stay application was considered.

What were the issues?

1. Whether coercive steps can be proceeded with on the basis of an assessment order when an appeal has been filed against it, along with applications for waiver of pre-deposit and stay? (Question of law and fact, concerning the procedural implications of filing an appeal and related applications). Assessee's Contention: The petitioner argued that coercive steps should be interdicted until their application for stay is considered, given that an appeal has been filed against the assessment order. Revenue's Contention: The revenue, represented by the Standing Counsel, submitted that when an application for waiver of pre-deposit is made, the primary consideration is the maintainability of the appeal itself. This is because, as per Section 249(4) of the Income Tax Act, 1961, an appeal would stand automatically rejected if no waiver is granted.

Which sections of the Income-tax Act were involved?

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

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. 12872 of 2014 (H) ---------------------------- PETITIONER : ----------------------- P.A.JINAS, NO.6, GALAXY SQUARE,RAJAJI ROAD JUNCTION, M.G.ROAD, KOCHI-682 035.

BY ADV. SRI.SAIBY JOSE KIDANGOOR RESPONDENT(S): ---------------------------- 1. COMMISSIONER OF INCOME TAX (APPEALS)-II, 'KERA BHAVAN', OPP:SRV HIGH SCHOOL, KOCHI-682 011 2. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1(2), C R BUILDING, I S PRESS ROAD, KOCHI-682 018.

R1 & R2 BY 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: sts

WP(C)NO.12872/2014 APPENDIX PETITIONER'S EXHIBITS: P1 COPY OF THE ASSESSMENT ORDER UNDER SECTION 143(3) OF THE I T ACT, 1961 DATED 28/03/14. P1(A) COPY OF THE DEMAND NOTICE UNDER SECTION 156 OF I T ACT, 1961 DATED 28/3/14 P1(B) COPY OF THE NOTICE UNDER SECTION 274 R/W SECTION 271(1) © OF I T ACT, 1961 DATED 28/3/14 P2 COPY OF THE APPEAL DATED 30/04/2014 P3 COPY OF THE PETITIONER'S REPRESENTATION DATED 30/4/2014 P4 COPY OF THE AFFIDAVIT WITH STAY PETITION DATED 15/05/2014 P5 COPY OF THE AFFIDAVIT WITH PETITION FOR WAIVER OF PRE-DEPOSIT DATED 15/05/2014 RESPONDENT'S EXHIBITS: NIL /TRUE COPY/ P.A.TO.JUDGE sts

K. VINOD CHANDRAN, J. ===================== W.P.(C) No.12872 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

W.P.(C) No.12872 of 2014 2 automatically rejected as per Section 249 (4) of the Income 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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