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The High Court admitted the writ petition and directed the respondents to hear and dispose of the petitioner's appeal (Ext.P2) at the earliest. Additionally, a specific direction was issued to the respondents to take up the stay petition (Ext.P3), hear it, and dispose of it within three months. The court also ordered that coercive steps for recovery would remain stayed until the disposal of the stay petition. The judgment focuses on ensuring the timely adjudication of the pending applications before the income tax authorities, rather than deciding the substantive issues of the appeal or stay.
The High Court admitted the writ petition. In view of the limited prayer made by the petitioner, the Court disposed of the writ petition with a direction to the respondents to hear and dispose of Ext.P2 appeal at the earliest. Additionally, the respondents were directed to take up Ext.P3 stay petition and hear and dispose of it within three months. The Court also ordered that coercive steps for recovery shall remain stayed until the disposal of the stay petition. The judgment does not record any specific findings on the merits of the appeal or stay petition, as the disposal was based on the procedural request for expeditious action.
The High Court admitted the writ petition. Recognizing the limited prayer of the petitioner for the disposal of its pending appeal and stay petition, the Court disposed of the writ petition with specific directions. The respondents were directed to hear and dispose of the appeal (Ext.P2) at the earliest. Furthermore, the respondents were directed to take up and dispose of the stay petition (Ext.P3) within three months. As an interim measure, coercive steps for recovery were ordered to remain stayed until the disposal of the stay petition. The Court's reasoning was based on ensuring timely redressal of the assessee's grievances pending before the tax authorities.
The High Court admitted the writ petition. It noted that the petitioner had already filed an appeal (Ext.P3) against the assessment order (Ext.P1) and had also filed stay petitions (Exts.P5 and P7). Consequently, the Court disposed of the writ petition by directing the respondents to hear and dispose of the appeal at the earliest. Furthermore, the respondents were directed to take up and dispose of the stay petitions within three months. The Court also ordered that coercive steps for recovery would be kept in abeyance until the disposal of the stay petitions. No specific finding was made on the merits of the assessment order or the stay petitions.
The High Court admitted the writ petition and directed the respondents to hear and dispose of the appeal (Ext.P2) at the earliest. Furthermore, the respondents were directed to take up the stay petition (Ext.P3) and hear and dispose of it within three months. The Court also ordered that coercive steps for recovery would remain stayed until the disposal of the stay petition. No specific findings on the merits of the appeal or stay petition were made, as the order was based on the limited prayer for expeditious disposal.
The High Court admitted the writ petition and, in view of the limited prayer made by the petitioner, disposed of the petition with specific directions. The court directed the respondents to hear and dispose of Ext.P2 appeal at the earliest. Additionally, there was a further direction for the respondents to take up Ext.P3 stay petition and hear and dispose of the same within three months. The court also ordered that coercive steps for recovery shall remain stayed until the disposal of the stay petition. The judgment does not record any decision on the merits of the appeal or stay petition, as the writ petition was disposed of based on the limited prayer for procedural direction.
The High Court, in view of the limited prayer made by the petitioner, directed the second respondent (National Faceless Appeal Centre) to consider and dispose of Ext.P2 appeal at the earliest. Furthermore, the Court directed the second respondent to take up Ext.P3 stay petition and dispose of the same within three months. The writ petition was disposed of with these directions. No specific findings on the merits of the appeal or stay petition were made as the court was only addressing the procedural aspect of timely disposal.
The High Court directed the 2nd respondent (National Faceless Appeal Centre) to consider and dispose of the petitioner's appeal (Ext.P2) at the earliest. Furthermore, the 2nd respondent was specifically instructed to take up the stay petition (Ext.P3) and pass orders on it within 3 months from the date of the order. The reasoning was based on the limited prayer made by the petitioner in the writ petition. The ratio decidendi is that the High Court can direct appellate authorities to dispose of pending matters expeditiously, especially when a specific timeline is sought and no prejudice is caused to the revenue. The operative direction is to dispose of the appeal and pass orders on the stay petition within the stipulated time. No issue was expressly left undecided.
The High Court, while acknowledging the pendency of appeals and stay applications, found merit in the petitioner's apprehension. The Court directed the second respondent (Commissioner of Income Tax (Appeals)) or the competent authority to consider the stay applications (Exts.P7 to P9) within a period of one month from the date of receipt of a copy of the judgment. This consideration was to be after affording an opportunity of hearing to the petitioner. Crucially, the Court ordered that no recovery steps shall be taken to recover the amounts due under the assessment orders (Exts.P1 to P3) until orders are passed on the stay applications. The principle established is that the appellate authority should consider stay applications expeditiously, and recovery should be deferred until such consideration, to prevent prejudice to the assessee.
The High Court of Kerala, without expressing any opinion on the merits of the petitioner's representation (Ext.P6), directed the 1st respondent (Director General of Income Tax, Investigation Wing) to consider the representation. This consideration must be done with notice to the petitioner and any affected parties. The decision is to be made in accordance with the law within a period of three months from the date of receipt of a copy of the judgment. The court also clarified that the petitioner and any affected parties would be given an opportunity of hearing, either physically or through online mode, before any orders are passed on Ext.P6. The writ petition was disposed of with these directions.
The High Court directed the 3rd respondent (Commissioner of Income Tax (Appeals)) to pass orders, in accordance with law, on either the petitioner's appeal (Ext.P2) or the stay application (Ext.P3), whichever is deemed fit, within six weeks from the date of receipt of a copy of the judgment. Until such orders are passed, all coercive proceedings pursuant to the assessment order (Ext.P1) were to be kept in abeyance. The Court did not decide the merits of the appeal or the stay application but ensured that the petitioner's grievance regarding coercive action during the pendency of his applications would be addressed.
The High Court of Kerala, while considering the writ petition, acknowledged the petitioner's grievance regarding the apprehension of coercive proceedings before their stay petition is decided by the Income Tax Appellate Tribunal. The Court found merit in directing the Tribunal to consider the stay petition expeditiously. Accordingly, the Tribunal was directed to consider and pass orders on the stay petition (Ext.P6) within a period of two months from the date of receipt of a copy of the judgment. Until a decision is taken on the stay petition, all coercive proceedings against the petitioner pursuant to the assessment order (Ext.P4) were ordered to be kept in abeyance. The writ petition was disposed of with these directions.
The High Court of Kerala, considering the submissions of both parties, was of the opinion that the writ petition could be disposed of with a direction. The Court directed the 1st respondent (Additional/Joint/Deputy/Assistant Commissioner of Income Tax, National Faceless Assessment Centre, New Delhi) to consider and pass orders on the stay petition (Ext.P3) within a period of two months from the date of receipt of a copy of the judgment. Furthermore, the Court ordered that all coercive proceedings against the petitioner shall be kept in abeyance until such a decision on the stay petition is taken. The Court did not decide on the merits of the assessment order or the appeal.
The High Court disposed of the writ petition by directing the 1st respondent, the Commissioner of Income Tax (Appeals), to consider and pass orders on the petitioner's appeal (Ext.P2) within a period of six months from the date of receipt of a copy of the judgment. The Court further clarified that all further proceedings pursuant to the assessment order (Ext.P1) shall be kept in abeyance until such time as the appeal is decided. The principle here is that appellate authorities should endeavor to dispose of appeals within a reasonable timeframe, and interim relief can be granted to maintain the status quo pending such disposal.
The High Court of Kerala directed the 3rd respondent, the Commissioner of Income Tax (Appeals), to consider and pass orders on the petitioner's appeal within a period of three months from the date of receipt of a copy of the judgment. Furthermore, the Court ordered that all further proceedings for the recovery of assets, pursuant to the order of assessment (Ext.P1), shall be kept in abeyance until such time as the appeal is disposed of. The Court did not decide on the merits of the appeal or the stay petition itself, but rather on the procedural aspect of ensuring timely disposal.
The High Court, having heard both the petitioner's counsel and the revenue's counsel, was of the view that the writ petition could be disposed of by directing an expeditious consideration of the rectification application. Accordingly, the Court directed the competent respondent authority to consider and pass appropriate orders on the petitioner's rectification application (Ext.P10) as expeditiously as possible, and at any rate, within three months from the date of receipt of a copy of the judgment. Furthermore, the Court ordered that all further proceedings pursuant to the assessment order (Ext.P6), including those initiated for recovery (Ext.P11), shall be kept in abeyance until the rectification application is decided. The principle established is that recovery proceedings should be stayed pending the decision on a rectification application, especially when the application has been pending for a considerable period.
The tribunal decided that income tax should not have been deducted from the gross salary before calculating future prospects and loss of dependency. It also adjusted compensation for funeral expenses, pain and suffering, love and affection, and loss of estate based on Supreme Court precedents.
The High Court held that the financial assistance received before April 1, 1999, should not be reduced from the cost of assets for depreciation purposes, as the amendment to Section 43(1) is prospective. The court also found issues with the revenue's calculation of the subsidy utilization.
The High Court of Kerala, in its writ jurisdiction, disposed of the writ petition with a specific direction. The Court directed the 2nd respondent, the Commissioner of Income Tax (Appeals), to consider and pass orders on the stay petitions (Ext.P3 and Ext.P3(a)) within a period of three months from the date of receipt of a copy of the judgment. Furthermore, the Court ordered that all coercive proceedings against the petitioner shall be kept in abeyance until a decision is taken on the stay petitions. The judgment does not delve into the merits of the assessment orders or the appeals filed by the petitioner. The operative direction is solely to ensure the timely disposal of the stay applications and to provide interim protection against recovery.
The High Court disposed of the writ petition by directing expeditious consideration of the pending matters. The NFAC (3rd respondent) was directed to provide a link to the petitioner within four weeks to upload the stay petition in the pending appeal and thereafter consider the stay petition within three months of its uploading. The petitioner was also advised to approach the help desk for assistance in obtaining the link. Until the NFAC considers the stay petition, all coercive proceedings initiated against the petitioner pursuant to the assessment order (Ext.P5) were to be kept in abeyance. Additionally, the Assistant Commissioner of Income Tax (5th respondent) was directed to consider the rectification petition (Ext.P11) within three months of receiving a copy of the judgment, after granting an opportunity of hearing to the petitioner. The court did not decide on the merits of the assessment or the appeal.
The High Court directed the Commissioner of Income Tax (Appeals) to consider and pass orders on the stay petitions (Ext.P3, Ext.P6, and Ext.P9) within a period of three months from the date of receipt of a copy of the judgment. Until a decision is taken on these stay petitions, all coercive proceedings against the petitioner are to be kept in abeyance. The court disposed of the writ petition with this direction. No specific findings were made on the merits of the assessment orders or the stay petitions themselves, as the primary focus was on procedural direction. The issue of the validity of the assessment orders was expressly left undecided.
The High Court held that the Tribunal's finding of no proper explanation for the delay was incorrect. The Court considered the Managing Partner's police custody as a genuine and bona fide reason for the delay, as his physical movement was curtailed, preventing him from signing the necessary documents. The Court emphasized the Supreme Court's directive for a liberal approach in condoning delays, prioritizing substantial justice over technicalities. Therefore, the High Court condoned the delay of 217 days in filing the appeals before the Tribunal. The Tribunal was directed to pass final orders on the merits of the appeals within three months from the receipt of the judgment. The appeals before the High Court were allowed, setting aside the ITAT's order dismissing the delay petition.
The High Court allowed the writ petition. It directed the 4th respondent, the Sub Registrar, to register any Sale Deed presented by the petitioner bank or the buyer for Item No. 9 in Ext.P1. This registration was to be done after erasing all attachments over the property, enabling the purchaser to deal with it legally. The Court specified that this registration should occur within one week of the document's presentation. Furthermore, the Court granted liberty to the property's purchaser to approach the Tahsildar and Village Officer for the transfer of registry and payment of land tax, which these authorities were directed to process without avoidable delay. The core reasoning was based on the submissions made by both the Government Pleader and the Income Tax Department's counsel, indicating no impediment to the registration of this specific property.
The High Court held that the order passed by the Appellate Tribunal (Ext.P29) fundamentally altered the scenario. The Court agreed with the petitioner that proceedings under Section 179 of the Income Tax Act can only be initiated if there is a tax due from the company. The very basis for issuing Ext.P10 was the existence of a tax liability against the company. However, Ext.P29 effectively effaced this tax liability by setting aside the assessment order to the extent challenged and remanding the remaining issues for reconsideration. Therefore, in the eyes of law, there is no tax due from the company at this juncture, and consequently, no recovery can be initiated from any Director. The Court found that Ext.P10 had no legs to stand in view of Ext.P29. The Court explicitly stated that it had not considered the merits of any findings in Ext.P10, and the contentions raised by both parties against Ext.P10 were left open to be considered at an appropriate future stage if the occasion arises. The operative direction was to set aside Ext.P10.
The High Court of Kerala held that the writ petition is not maintainable in its current form because an assessment order has already been issued. The Court acknowledged the petitioner's submission that an objection was filed and an assessment order was passed. Consequently, the Court reserved the petitioner's liberty to pursue the statutory remedies available against the assessment order. The Court did not decide on the merits of any tax dispute. No issues were expressly left undecided, as the petition was disposed of on procedural grounds.
The High Court held that the order issued under Section 230 of the Income Tax Act, 1961, was liable to be set aside. The Court reasoned that the basis for the restrictive order had been removed. Firstly, the tax liability of the Company was found to have been wiped off by the order of the Appellate Tribunal, and the proceedings were to be considered afresh. As of the current assessment, the Company could not be stated to be liable to pay any tax, thus negating the applicability of Section 179 and any restrictive order against its directors or other persons under Section 230. Secondly, regarding the petitioner's individual liability, both parties conceded that he had cleared the amount based on the modified assessment order. Consequently, both liabilities mentioned in the impugned order (Ext.P20) were no longer in force, making the issuance or continuance of the Section 230 order unwarranted. The Court quashed the order dated 19.07.2018.
The High Court held that the Tribunal's finding of no proper explanation for the delay was incorrect. The Court considered the Managing Partner's police custody as a genuine and bona fide reason for the delay, as his physical movement was curtailed, preventing him from signing the necessary documents. The Court emphasized the Supreme Court's directive for a liberal approach in condoning delays, prioritizing substantial justice over technicalities. Therefore, the High Court condoned the delay of 217 days in filing the appeals before the Tribunal. The Tribunal was directed to pass final orders on the merits of the appeals within three months from the receipt of the judgment. The appeals before the High Court were allowed, setting aside the ITAT's order dismissing the delay petition.
The High Court held that the Tribunal was not correct in dismissing the delay petition. The Court found that the Managing Partner being in police custody, which curtailed his physical movement and ability to sign documents, was a genuine and bonafide reason for the delay. The Court emphasized that laches cannot be attributed to the assessee in such circumstances. Citing the Supreme Court's decision in Esha Bhattacharjee, the Court reiterated that a liberal view should be taken in dealing with delay petitions to decide the lis on merits rather than technicalities. Consequently, the High Court condoned the delay of 217 days and directed the Tribunal to pass final orders on the appeals on merits within three months. The ratio decidendi is that personal liberty restrictions like police custody constitute sufficient cause for condoning delays in filing appeals, and courts should adopt a liberal approach to ensure substantial justice.
The High Court noted that the Tribunal had remitted the issue to the Assessing Officer for fresh consideration without addressing the assessee's contention that the ground for remission was not raised before the first appellate authority. The Court found that the Tribunal ought to have considered this argument. Therefore, the High Court set aside the order of the Tribunal and remitted the matter back to the Tribunal for fresh consideration and disposal. The Tribunal was directed to give opportunities to both the revenue and the assessee to file additional materials and raise additional grounds. The Tribunal was also directed to dispose of the matter within six months from the date of receipt of the certified copy of the judgment. The substantial questions of law were answered as indicated in the judgment. The operative direction was to set aside the Tribunal's order and remand the appeals to the Tribunal for fresh disposal.
The High Court noted that the Tribunal had remitted the issue to the Assessing Officer for fresh consideration without addressing the assessee's contention that the ground for remittance was not raised by the Revenue before the first appellate authority. The Court found that the Tribunal ought to have considered this crucial point. Given the facts and circumstances, the High Court deemed it appropriate to set aside the Tribunal's order and remit the matter back to the Tribunal for fresh consideration and disposal. The substantial questions of law were answered accordingly. The Tribunal was directed to dispose of the appeals afresh, allowing both the revenue and the assessee to file additional materials and raise additional grounds. The Tribunal was instructed to complete this process within six months from the date of receiving the certified copy of the judgment.
The High Court held that the reason provided by the assessee for the delay, namely the Managing Partner being in police custody, is a genuine and bona fide reason. The Court found that laches cannot be attributed to the assessee under these circumstances. The Tribunal's finding that there was no proper explanation for condoning the delay was deemed incorrect. Citing the Supreme Court's decision in Esha Bhattacharjee, the High Court reiterated the need for a liberal approach in dealing with delay petitions to decide the lis on merits rather than technicalities. Consequently, the High Court condoned the delay of 217 days. The Tribunal was directed to pass final orders on the appeals on merits within three months. The issue of the original assessment was not decided on merits by the High Court.
The High Court held that the ratio laid down in CIT v. Malabar and Pioneer Hosiery (P.) Ltd. cannot be applied as a general principle to all instances of letting out commercial assets. The Court found that while the source of income is a test, it is not an absolute proposition for treating rental income as business income. The comprehensive tests laid down in cases like Sultan Brothers Private Ltd. and Universal Plast Ltd. are to be applied. The Court perused the lease agreement dated 24.06.1998 with KSBC and was satisfied that the arrangement was made to adjust the assessee's outstanding liability to KSBC. The Court concluded that the parting of possession of the godown was more as an owner of a business asset, rather than for exploiting a commercial asset in the course of business. Therefore, the Tribunal and the authorities below had correctly rejected the assessee's claim. The question was answered against the assessee and in favour of the Revenue.
The High Court held that while the source of income is a factor, it is not the sole determinant for classifying rental income as business income. The nature of the transaction and the assessee's business activities are crucial.
The High Court held that the ratio laid down in CIT v. Malabar and Pioneer Hosiery (P.) Ltd. cannot be applied as a general principle to all instances of letting out commercial assets. The Court found that while the source of income is a test, it is not an absolute proposition for treating rental income as business income. The comprehensive tests laid down in cases like Sultan Brothers Private Ltd. and Universal Plast Ltd. are to be applied. The Court perused the lease agreement dated 24.06.1998 with KSBC and was satisfied that the arrangement was made to adjust the assessee's outstanding liability to KSBC. The Court concluded that the parting of possession of the godown was more as an owner of a business asset, rather than for exploiting a commercial asset in the course of business. Therefore, the Tribunal and the authorities below had correctly rejected the assessee's claim. The question was answered against the assessee and in favour of the Revenue.
The High Court held that the ratio laid down in Commissioner of Income Tax v. Malabar and Pioneer Hosiery (P.) Ltd. was based on the peculiar facts of that case and cannot be applied universally. The Court clarified that while the source of income is a test, it is not an absolute proposition to treat all rental income from a commercial asset as business income. The comprehensive tests laid down in Sultan Brothers Private Ltd. and Universal Plast Ltd. are to be applied. The Court found that the lease agreement dated 24.06.1998 with KSBC was primarily to adjust the assessee's outstanding liability. The Court concluded that the letting out of the godown was more as an owner of a business asset rather than exploiting a commercial asset for business purposes. Therefore, the Tribunal and the authorities below had correctly disallowed the claim of rental income as business income. The question was answered against the assessee and in favour of the Revenue.
The High Court held that while the source of income is a factor, it is not the sole determinant for classifying rental income as business income. The nature of the transaction and the assessee's business activities are crucial.
The High Court held that updated jurisdictional and personal details in the Income Tax Web Portal are crucial for communication, especially for system-generated notices. While the revenue claimed the petitioner did not update their profile, the court noted that Ext. P2 showed primary and secondary email IDs, and the notices were not served on these. The court found that the petitioner did not receive the notices and thus did not have an opportunity to respond, leading to a violation of natural justice in the issuance of the assessment order (Ext. P6). Citing its own decision in Bhima Jewels, the court set aside the assessment order. The petitioner was directed to submit a response to the notices within two weeks, and the assessing officer was to pass a fresh assessment order within one month thereafter, after hearing the petitioner. The court did not delve into who was at fault for the non-service.
The High Court held that updated jurisdictional and personal details in the Income Tax Web Portal are crucial for communication, especially for system-generated notices. While the revenue argued that the petitioner did not update their profile, the court noted that Ext. P2 showed primary and secondary email IDs. The critical fact was that the notices and assessment order were not served on these registered email IDs. The court found that the petitioner did not receive the notices and therefore lacked an opportunity to respond, constituting a violation of natural justice in the issuance of the assessment order (Ext. P5). Citing its own decision in Bhima Jewels, the court stated that an assessment order passed without hearing the assessee undermines the system. To meet the ends of justice, the court set aside the assessment order (Ext. P5) and directed the petitioner to submit their response to the notices within two weeks. The assessing officer was then directed to consider the response and pass a fresh assessment order within one month after hearing the petitioner. The court did not delve into who was at fault for the non-service of communications.
The Tribunal partly allowed the appeal, giving credit for the Rs. 3,35,700/- disclosed in the sale deed against the cash deposit. The High Court found that the assessee failed to discharge the burden of proof regarding the higher sale consideration.
The High Court held that the retention of seized documents beyond 30 days from the date of the assessment order was illegal. The court found that the department failed to establish that the orders recording reasons for retention and granting approval were communicated to the assessee, which is a mandatory requirement as per the Supreme Court's decision in CIT, West Bengal-III v. Oriental Rubber Works and this Court's decision in Joshi P. Mathew v. Deputy Commissioner of Income Tax. Furthermore, the court ruled that the phrase 'proceedings under this Act' in Section 132(8) refers to statutory proceedings under the Income Tax Act and does not include a Special Leave Petition filed under Article 136 of the Constitution. Since the High Court's judgment in ITA Nos. 819 and 1326 of 2009 (dated January 8, 2010) marked the completion of statutory proceedings, the revenue lost the power to grant further authorization for retaining documents. Consequently, the impugned order (Ext.P13) was quashed, and the respondents were directed to return the seized title deeds within 30 days.
The High Court held that the jurisdiction to levy late fee under Section 234E of the Income Tax Act, 1961, arises only from June 1, 2015, and not earlier. This finding was based on the reasoning that the amendment to Section 200A(1)(c), which enables the computation of such fees, took effect prospectively from June 1, 2015. The Court followed its earlier decision in M/s. Sarala Memorial Hospital v. Union of India and Another, which had considered the statutory provisions and the implications of the amendment. Regarding the revenue's contention on delay, the Court found it unmeritorious because the petitioner's challenge was based on a total lack of jurisdiction to impose the late fee. In cases of alleged lack of jurisdiction, delay cannot be a ground to deny relief. The Court distinguished the precedents cited by the revenue, noting that they dealt with issues other than a total lack of jurisdiction. Consequently, the demands for late fee under Section 234E for the period from 2012-13 till June 1, 2015, were quashed as being legally unsustainable and bereft of authority. The operative direction was to quash the intimations to the extent they demanded late fee for the specified period.
The High Court of Kerala, while considering the writ petition, directed the 3rd respondent, the Commissioner of Income Tax (Appeals), to consider and pass orders on the stay petition (Ext.P3) within a period of two months from the date of receipt of a copy of the judgment. The Court further ordered that all coercive proceedings against the petitioner shall be kept in abeyance until a decision is taken on the stay petition. The writ petition was disposed of with these directions. No specific finding was made on the merits of the assessment order or the appeal itself, as the focus was on the procedural aspect of the stay petition.
The High Court held that the writ petition was premature and the challenge against the notice under Section 148 of the Income Tax Act, 1961, was not required to be entertained at that stage. The Court noted the petitioner's contentions regarding the untenability of the reasons for reopening, the invalidity of the Joint Commissioner's approval, and the bar of limitation. However, it observed that the assessee was alleged to have not filed returns and that approval under Section 151 was obtained. The Court concluded that the petitioner would be at liberty to challenge the assessment proceedings, including all the mentioned contentions, if orders prejudicial to its interest were passed. Therefore, the writ petition was closed, reserving the petitioner's liberty to challenge any subsequent assessment order.
The High Court granted the petitioner's request to withdraw the writ petition. The Court's decision was based solely on the petitioner's submission seeking permission to withdraw with liberty to file a fresh writ petition. Consequently, the writ petition was dismissed as withdrawn. No findings were made on the merits of any underlying tax dispute, and no specific legal principles were established or applied beyond the procedural aspect of allowing a withdrawal. The operative direction was to dismiss the petition as withdrawn.
The High Court of Kerala, in its judgment dated March 18, 2022, allowed the petitioner's request to withdraw the writ petition. The Court granted liberty to the petitioner to file a fresh writ petition. Consequently, the writ petition was dismissed as withdrawn. No decision on the merits of any substantive issue was made, as the petition was disposed of based on the petitioner's request for withdrawal.
The High Court noted that the assessee had filed returns with annexures and claimed TDS adjustment, and it was for the department to verify these details. The Court observed that the Commissioner's powers are co-extensive with the assessing authority. In the peculiar circumstances, the Court found that the assessee should pursue their remedy against the assessment order dated 27.12.2019 (Annexure-H) by filing an appeal before the Commissioner of Income Tax (Appeals) within two months of receiving the judgment. The Court directed that all issues raised in the appeal be examined on merits and disposed of expeditiously, preferably within six months. Pending appeal, recovery of tax pursuant to Annexure-H was stayed. The Court also noted that the Commissioner could independently examine the material relied upon by the assessee or call for a report from the jurisdictional assessing authority.
The High Court held that the circumstances warranted a direction for the appeal to be disposed of in a time-bound manner. The Court noted that over 18 months had elapsed since the petitioner uploaded its written submissions, and the appellate authority had failed to issue a final order. The Court found that the Covid-19 pandemic and subsequent lockdown had altered the situation, and the petitioner had complied with the e-proceedings direction, albeit with a slight delay. Therefore, the interests of justice demanded that recovery proceedings should not be pursued while the appeal was pending. The Court directed the 2nd respondent or the Competent Appellate Authority to consider and dispose of the appeal within three months from the date of receipt of the judgment, after granting an opportunity of hearing to the petitioner. Until then, all coercive proceedings pursuant to Ext.P10 were to be kept in abeyance. No specific issue was left undecided, but the primary focus was on expediting the appeal.
The High Court found that a fresh assessment order (Annexure-H) had been passed after the Tribunal's remand order. Therefore, the assessee was directed to challenge the new assessment order by filing an appeal before the CIT(A).
The High Court followed its common judgment in ITA No. 323/2019 dated 01.11.2021, which dealt with a similar question. In that judgment, it was held that interest income earned by a society falls under the category of "income from other sources." While Section 80P(2)(d) provides for eligible deductions, the income earned from Treasury deposits is not included within the scope of Section 80P(2)(d) and is therefore not entitled to deduction. The High Court answered the substantial questions of law in favour of the Revenue and against the assessee. Consequently, for ITA No. 7/2020, a sum of Rs. 52,01,501/- (interest income earned from Treasury) was directed to be deleted from the deduction claimed by the assessee and added to the income from other sources. For ITA No. 14/2020, a sum of Rs. 28,77,189/- (interest income earned from Treasury) was similarly directed to be deleted from the deduction and added to the income from other sources. The appeals were allowed to this extent.
The High Court of Kerala, while acknowledging the pendency of the appeal and stay petition before the ITAT, found merit in the petitioner's apprehension of coercive proceedings. The Court directed the 4th respondent (Income Tax Appellate Tribunal, Kochi Bench) to consider and pass orders on the stay petition (Ext.P4) within a period of three months from the date of receipt of a copy of the judgment. Furthermore, the Court ordered that all coercive proceedings initiated against the petitioner shall be kept in abeyance until a decision is taken on the stay petition. The writ petition was disposed of with these directions. No specific issue regarding the merits of the assessment order or the stay petition was decided.