KEERTHI AGRO MILLS vs. THE ASSISTANT COMMISSIONER OF INCOME TAX

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WP(C)/21462/2013HC KeralaKLHC01064653201330 August 2013Author: HONOURABLE MR.JUSTICE V.CHITAMBARESH3 pages
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What did the High Court hold?

The High Court directed the second respondent (Commissioner of Income-Tax (Appeals)) to consider the stay petitions (Exhibits P5 and P5(a)) filed by the petitioner within a period of two months, after issuing notice to the petitioner. The Court further ordered that coercive steps pursuant to the demand notice (Exhibit P6) shall be put on hold until orders are passed on the stay petitions. The petitioner was directed to provide a copy of the writ petition and the judgment to the second respondent for compliance. The High Court did not decide the merits of the assessment orders or the stay petitions themselves, but rather facilitated their timely consideration. No issue was expressly left undecided.

What were the facts?

The petitioner, Keerthi Agro Mills (P) Ltd., filed appeals (Exhibits P3 and P4) against assessment orders (Exhibits P1 and P2) for Assessment Years 2009-10 and 2010-11. These appeals were accompanied by stay petitions (Exhibits P5 and P5(a)) seeking to halt the recovery of disputed tax. The petitioner is aggrieved by a demand notice (Exhibit P6) issued by the Assessing Officer (1st Respondent) while these appeals and stay petitions were pending before the Commissioner of Income-Tax (Appeals) (2nd Respondent). The writ petition was filed before the High Court of Kerala challenging the demand notice issued during the pendency of appeals and stay petitions.

What were the issues?

1. Whether the High Court should intervene by issuing a direction for the consideration of stay petitions filed before the Commissioner of Income-Tax (Appeals) when a demand notice has been issued during the pendency of such appeals and stay petitions. The petitioner contends that the demand notice (Exhibit P6) issued during the pendency of their appeals and stay petitions before the 2nd Respondent is causing prejudice. The revenue has not recorded any specific arguments on this procedural aspect in the judgment. The core issue is the procedural propriety of issuing a demand notice while stay petitions are pending and the appropriate forum for relief.

Which sections of the Income-tax Act were involved?

Section 156

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IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE V.CHITAMBARESH FRIDAY, THE 30TH DAY OF AUGUST 2013/8TH BHADRA, 1935 WP(C).No. 21462 of 2013 (G) ---------------------------- PETITIONER(S): -------------------------- KEERTHI AGRO MILLS (P) LTD. MATTOOR, KALADY, ERNAKULAM KERALA-683574, REPRESENTED BY ITS MANAGING DIRECTOR JOHNSON VARGHESE. BY ADVS.SRI.KMV.PANDALAI SMT.S.HEMALATHA RESPONDENT(S): ---------------------------- 1. THE ASSISTANT COMMISSIONER OF INCOME -TAX CIRCLE-1(2), C.R.BUILDINGS, I.S.PRESS ROAD ERNAKULAM, KOCHI-682018. 2. THE COMMISSIONER OF INCOME-TAX (APPEALS)-II KERA BAHVAN, KOCHI-682016. BY SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 30-08-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C).No. 21462 of 2013 (G) APPENDIX PETITIONER(S)' EXHIBITS EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 30-11-2011 PASSED BY THE ASSESSING OFFICER FOR THE ASSESSMENT YEAR 2009-10. EXHIBIT P2 TRUE COPY OF THE ASSESSMENT ORDER DATED 28-3-2013 PASSED BY THE ASSESSING OFFICER FOR THE ASSESSMENT YEAR 2010-11. EXHIBIT P2(A) - TRUE COPY OF THE DEMAND NOTICE U/S 156 DATED 28-3-2013 ISSUED BY THE ASSESSING OFFICER FOR THE ASSESSMENT YEAR 2010-11. EXHIBIT P3 TRUE COPY OF THE APPEAL FILED BEFORE THE 2ND RESPONDENT FOR THE ASSESSMENT YEAR 2009-10. EXHIBIT P4 TRUE COPY OF THE APPEAL FILED BEFORE THE 2ND RESPONDENT FOR THE ASSESMENT YEAR 2010-11. EXHIBIT P5 TRUE COPY OF THE STAY PETITION DATED 12-1-2012 FILED BEFORE THE 2ND RESPONDENT FOR THE ASSESSMENT YEAR 2009-10. EXHIBIT P5(A) - TRUE COPY OF THE STAY PETITION DATED 14-5-2013 FILED BEFORE THE 2ND RESPONDENT FOR THE ASSESSMENT YEAR 2010-11. EXHIBIT P6 TRUE COPY OF THE NOTICE DATED 14-08-2013 ISSUED BY THE 1ST RESPONDENT. RESPONDENT(S)' EXHIBITS : NIL /TRUE COPY/ P.A. TO JUDGE.

V. CHITAMBARESH, J -------------------------------- WP(C) NO. 21462 OF 2013 ------------------------------------ Dated this the 30th day of August, 2013 JUDGMENT The petitioner has filed Ext.P3 and P4 appeals against Exts.P1 and P2 orders of assessment under the Income Tax Act. The appeals are accompanied by Exts.P5 and P5(a) petitions for stay of recovery of the disputed tax. The petitioner is aggrieved by Ext.P6 demand notice issued during the pendency of the appeals and the petitions for stay. 2. I direct the second respondent to consider Exts.P5 and P5(a) petitions with notice to the petitioner within a period of two months. The coercive steps pursuant to Ext.P6 notice shall be put on hold till orders are passed on Exts.P5 and P5(a) petitions as directed above. The petitioner shall produce a copy of the Writ Petition with the judgment before the second respondent for compliance. The Writ Petition is disposed of. V. CHITAMBARESH

JUDGE ncd

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