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

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WP(C)/18687/2014HC KeralaKLHC01064308201421 July 20144 pages
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What did the High Court hold?

The High Court held that it was not convinced that the discretionary power exercised by the appellate authority in directing the payment of Rs. 50,00,000/- (which was approximately 12.5% of the total demand) was liable to be interfered with. The Court found no reason to intervene in the exercise of discretion by the appellate authority. However, to facilitate the petitioner in complying with the condition imposed in the stay order, the Court granted the petitioner two installments for payment: one on August 29, 2014, and the other on September 29, 2014. Until these installments were paid, coercive steps for recovery were to be kept in abeyance. The Court also stipulated that upon default of any installment, the Revenue would be entitled to proceed with recovery. The writ petition was disposed of with these directions.

What were the facts?

The petitioner, Galexy Homes (P) Ltd., filed a writ petition challenging an order passed by the Commissioner of Income Tax (Appeals) – II, concerning the assessment year 2011-12. The petitioner had filed a statutory appeal against an assessment order dated March 28, 2014, passed by the Deputy Commissioner of Income Tax, Circle-1(2). Along with the appeal, the petitioner filed an application for stay and a petition for waiver of pre-deposit. The first appellate authority, while considering the stay application, directed the petitioner to pay Rs. 50,00,000/-. The petitioner had previously approached the High Court for a stay, which was granted with a direction to the appellate authority to decide the stay application. The current writ petition seeks to challenge the order on the stay application.

What were the issues?

1. Whether the discretionary power exercised by the Commissioner of Income Tax (Appeals) in directing a pre-deposit of Rs. 50,00,000/- in the stay application is liable to be interfered with by the High Court in its writ jurisdiction, turning on the principles of judicial review of administrative decisions. The Assessee's contentions: The petitioner is challenging the order of the appellate authority on the stay application. The judgment does not explicitly record the assessee's arguments regarding the merits of the pre-deposit amount or the grounds for challenging the appellate authority's discretion. The Revenue's contentions: The judgment does not explicitly record the Revenue's arguments.

Which sections of the Income-tax Act were involved?

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 MONDAY, THE 21ST DAY OF JULY 2014/30TH ASHADHA, 1936 WP(C).No. 18687 of 2014 (I) ---------------------------- PETITIONER(S): ------------- GALEXY HOMES (P) LTD., GALAXY SQUARE, OPP. ABAD PLAZA, RAJAJI ROAD JUNCTION, M.G.ROAD, KOCHI-682 035, REPRESENTED BY ITS MANAGING DIRECTOR P.A.JINAS.

BY ADVS.SRI.SAIBY JOSE KIDANGOOR SRI.VINOD.V (EDAPPUNATHIL). RESPONDENT(S): -------------- 1. THE COMMISSIONER OF INCOME TAX (APPEALS) – II, KERA BHAVAN, SHVHS ROAD, KOCHI-682 011. 2. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1(2), C.R.BUILDING, I.S.PRESS ROAD, KOCHI – 682 018.

BY SRI.P.K.R.MENON, SENIOR COUNSEL FOR GOVERNMENT OF INDIA (TAXES) BY SRI.JOSE JOSEPH, SC, FOR INCOME TAX. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 21-07-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: rvs/

WP(C).No. 18687 of 2014 (I)

APPENDIX PETITIONER(S)' EXHIBITS : ---------------------- EXHIBIT P1: TRUE COPY OF THE ASSESSMENT ORDER UNDER SECTION 143(3) OF THE IT ACT 1961 DATED 28/03/2014. EXHIBIT P1(A): TRUE COPY OF THE DEMAND NOTICE UNDER SECTION 156 OF IT ACT, 1961 DATED 28/03/2014.

EXHIBIT P(B): TRUE COPY OF THE NOTICE UNDER SECT6ION 274 R/W. SECTION 271(1)(C)OF IT ACT, 1961 DATED 28/03/2014. EXHIBIT P2: TRUE COPY OF APPEAL DATED 30/04/2014. EXHIBIT P3: TRUE COPY OF 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. EXHIBIT P6: TRUE COPY OF THE NOTICE ITA NO.36/R1/CIT(A)-II/14-15 DATED 27/06/2014. EXHIBIT P7: TRUE COPY OF THE ORDER ISSUED BY THE 1ST RESPONDEDNT DATED 11/07/2014. EXHIBIT P8: TRUE COPY OF THE LETTER NO.DCIT/CIR.1(2)/EKM/2014-15 DATED 18/07/2014 ISSUED BY THE 2ND RESPONDENT.

RESPONDENT(S)' EXHIBITS: NIL. /true copy/ P.A.TO JUDGE rvs/

K.Vinod Chandran, J. -------------------------------------- W.P.(C).No.18687 of 2014-I -------------------------------------- Dated this the 21st day of July, 2014 JUDGMENT The challenge made in the present writ petition is, against the order passed in the stay application in the statutory appeal filed by the petitioner. The appeal was filed for the assessment year 2011-12. The petitioner had also come before this Court to obtain a stay when the application for stay ws pending. That was granted, with consequential direction to the appellate authority to consider the stay application. The first appellate authority, on a prima facie consideration, has directed payment of Rs.50,00,000/- [Rupees fifty lakhs only]. 2. This Court finds that the amount directed to be paid was only about 12.5% of the total demand made. In such circumstance, this Court is not convinced that the discretionary power exercised by the appellate authority is liable to be interfered with. However, to enable the petitioner to satisfy the condition imposed in the order passed in the stay application,

WP(C).No.18687 of 2014 - 2 - the petitioner shall be granted two instalments, one on 29.08.2014 and the other on 29.09.2014. Till such time, the coercive steps initiated shall be kept in abeyance. On default of any of the above instalments, the Revenue will be entitled to proceed with the recovery proceedings. The writ petition is disposed of as above. Sd/-

K.Vinod Chandran, Judge vku. ( true copy )

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