JAYARAJ vs. INCOME-TAX OFFICER

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WP(C)/25107/2014HC KeralaKLHC01070727201426 September 2014Bench: HONOURABLE MR.JUSTICE P.R.RAMACHANDRA MENON5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Kerala directed the Commissioner of Income-Tax (Appeals) to pass appropriate orders on the petitioner's delay condonation petition and stay petition expeditiously, within one month from the date of receipt of the judgment. Crucially, the Court ordered that coercive proceedings pursuant to the notices issued under Section 226(3) of the Income Tax Act, 1961, shall be kept in abeyance until such time as the appellate authority passes its orders on the stay petition. The petitioner was directed to furnish a copy of the judgment to the appellate authority. The Court disposed of the writ petition with these directions.

What were the facts?

The petitioner, H. Jayaraj, is aggrieved by the assessment order dated April 29, 2014, passed by the Income-Tax Officer (ITO), Ward 1(4), Trivandrum, for the assessment year 2012-2013. He has filed an appeal before the Commissioner of Income-Tax (Appeals)-I, Trivandrum, along with a delay condonation petition and a stay petition. Despite the pendency of these appeals, the respondents initiated coercive recovery steps, as evidenced by notices under Section 226(3) of the Income Tax Act, 1961, issued to various banks. These notices resulted in the deduction of Rs. 2,83,201.60 from the petitioner's bank account. The petitioner seeks intervention from the High Court to halt these coercive proceedings.

What were the issues?

1. Whether the coercive recovery proceedings initiated by the respondents are valid and appropriate given the pendency of the petitioner's appeal and stay petition before the appellate authority? The petitioner's argument is that the respondents are proceeding with coercive steps without regard to the pending appeal and stay petition before the Commissioner of Income-Tax (Appeals). The petitioner contends that these actions are premature and unjust, as they seek to recover the disputed tax amount while the appeal is yet to be decided. The petitioner relies on the principle that coercive measures should be stayed when a genuine appeal and a request for stay are pending. The respondents' arguments are not explicitly recorded in the judgment. However, their actions of issuing recovery notices suggest they believe they are entitled to proceed with recovery.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 156,Section 226(3)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE P.R.RAMACHANDRA MENON FRIDAY, THE 26TH DAY OF SEPTEMBER 2014/4TH ASWINA, 1936 WP(C).No.25107 of 2014 (K) ------------------------------------- PETITIONER: -------------------- H.JAYARAJ,11JF NIVAS,VADAKKEVEETTIL,THEKKUTHAI POZHIYOOR,TRIVANDRUM - 695 525., BY ADVS.SRI.S.ARUN RAJ SRI.P.DANIEL RESPONDENTS: ------------------------- 1. INCOME-TAX OFFICER,WARD 1(4), AAYAKAR BHAVAN, KAUDIAR,TRIVANDRUM - 695003. 2. THE COMMISSIONER OF INCOME TAX (APPEALS)-I AAYAKAR BHAVAN,KAUDIAR,TRIVANDRUM - 695003. 3. COMMISSIONER OF INCOME TAX,AAYAKAR BHAVAN, KAUDIAR,TRIVANDRUM - 695003. R1 TO R3 BY SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 26-09-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: pk

WP(C).No.25107 of 2014 (K) --------------------------------------- APPENDIX PETITIONERS EXHIBITS ------------------------------------- EXHIBIT P1:TRUE COPY OF THE ASSESSMENT ORDER DATED 29.04.2014 U/S 143(3) OF THE ACT AND THE DEMAND NOTICE ISSUED U/S.156 . EXHIBIT P2:TRUE COPY OF THE FIRST STATIONARY APPEAL FILED BEFORE THE COMMISSIONER OF INCOME-TAX(APPEALS-I), TRIVANDRUM ON 21.07.2014. EXHIBIT P3:A TRUE COPY OF THE NOTICE U/S226(3) DATED 24.07.2014 ISSUED TO THE MANAGER, ING VYSYA BANK, POOVAR BRANCH, THIRUVANANTHAPURAM. EXHIBIT P3(a) : A TRUE COPY OF THE NOTICE U/S226(3) DATED 24.07.2014 ISSUED TO THE MANAGER SBT, POZHIYOOR BRANCH, THIRUVANANTHAPURAM. EXHIBIT P3(b) : A TRUE COPY OF THE NOTICE U/S226(3) DATED 24.07.2014 ISSUED TO THE MANAGER THIRUVANANTHAPURAM DISTRICT CO-OPERATIVE BANK, UCHAKKADA BRANCH, THIRUVANANTHAPURAM. EXHIBIT P3(c) : A TRUE COPY OF THE NOTICE U/S226(3) DATED 22.08.2014 ISSUED TO THE MANAGER FEDERAL BANK, POOVAR BRANCH, THIRUVANANTHAPURAM. EXHIBIT P3(d) : A TRUE COPY OF THE NOTICE U/S226(3) DATED 24.07.2014 ISSUED TO THE MANAGER HDFC, PMG BRANCH, THIRUVANANTHAPURAM. EXHIBIT P4:TRUE COPY OF THE LETTER DATED 22.08.2014 ISSUED BY THE BRANCH MANAGER, ING VYSYA BANK, POOVAR BRANCH, THIRUVANANTHAPURAM SHOWING DEDUCTION OF RS.2,83,201.60 FROM THE PETITIONER'S BANK ACCOUNT AND HAS SUBMITTED A DEMAND DRAFT TO THE INCOME TAX OFFICER FOR THE SAID AMOUNT. EXHIBIT P5:TRUE COPY OF THE STAY PETITION FILED BEFORE THE 2ND RESPONDENT ON 22.09.2014 RESPONDENTS EXHIBITS: NIL --------------------------------------- //TRUE COPY// P.S. TO JUDGE pk

P.R. RAMACHANDRA MENON, J. --------------------------------------- W.P.(C) No.25107 of 2014 --------------------------------------- Dated this the 26th day of September, 2014. JUDGMENT Being aggrieved of Ext.P1 assessment order passed by the first respondent in respect of the assessment year 2012-2013, the petitioner has already preferred Ext.P2 appeal along with petition to condone the delay and Ext.P5 petition for stay, which are pending consideration before the second respondent. The grievance of the petitioner is that, without any regard to the pendency of the above proceedings, the respondents are proceeding with coercive steps, as borne by Ext.P3 series notices, which hence are sought to be intercepted by this Court. 2. Heard the learned Government Pleader as well. 3. Considering the facts and circumstances, the second respondent is directed to pass appropriate orders on petition to condone the delay and Ext. P3 petition for stay, in accordance with law, as expeditiously as possible, at any rate, within 'one month' from the date of receipt of a copy of this judgment. Coercive proceedings pursuant to Ext.P3 series notices shall be

W.P.C.No.25107 of 2014 2 kept in abeyance till such time. Petitioner shall produce a copy of this judgment, along with copy of the writ petition, before the second respondent, for further steps. The Writ Petition is disposed of.

P.R. RAMACHANDRA MENON, JUDGE sp

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