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The High Court held that the order passed under Section 148A(d) of the Income Tax Act, 1961, was not without jurisdiction. The Court stated that it could not assume the powers of the assessing authority or the appellate authority if the impugned order and notice were within the powers conferred upon those authorities. Given the limited scope of judicial review in quasi-judicial proceedings under the Act, the Court found the writ petition to be not maintainable. The petitioner was granted fifteen days to file her response to the notice under Section 148 and to file her income tax return. The Assessing Officer was permitted to proceed with the finalization of the assessment if the petitioner failed to comply.
The High Court allowed the petitioner's request to withdraw the writ petition. The court noted that the petitioner's counsel had filed a withdrawal memo dated November 6, 2023. Consequently, the writ petition was dismissed as withdrawn. The court granted the petitioner the liberty to seek appropriate remedies available to him under the statute. Any pending interlocutory applications in the writ petition were also dismissed as a consequence of the main petition being withdrawn.
The High Court held that Section 119(2)(b) of the Income Tax Act, 1961, empowers the Board (and its delegated authorities) to admit an application or claim after the expiry of the specified period and deal with it on merits. However, when considering an application for condonation of delay in filing a return or claim, the authority is only required to consider the merits of the application for condonation of delay, not the merits of the underlying claim itself. The Court relied on its previous decision in Daisy v. The Principal Commissioner of Income Tax. Consequently, the impugned order was found unsustainable and was set aside. The matter was remitted back to the Principal Commissioner of Income Tax to pass fresh orders on the petitioner's application for condonation of delay, without going into the merits of the claim.
The High Court held that there was a violation of the principles of natural justice. The Court found that the appellant had filed written submissions before the Commissioner of Income Tax (Appeals) and participated in a hearing. However, the order passed by the National Faceless Appeal Centre (NFAC) did not reflect the receipt of these written submissions, and the appellant contended that no further notices were served. The Court reasoned that since the appellant had submitted written objections and participated in a hearing, not considering these submissions and passing an order without a proper opportunity of being heard constituted a breach of natural justice. Therefore, the Court set aside the order of the NFAC and directed the NFAC to consider the appeal afresh, affording the appellant an opportunity of being heard. The stay granted originally was directed to continue until the disposal of the appeal. The issue of the assessment itself was not decided on merits.
The High Court held that Section 119(2)(b) of the Income Tax Act, 1961, empowers the Board (and delegated authorities) to admit applications or claims after the expiry of the specified period and deal with them on merits. However, a Division Bench of the same Court in Daisy v. The Principal Commissioner of Income Tax had opined that the delegated power under Section 119(2)(b) and Circular No. 9/2015 does not authorize the Principal Commissioner to consider the merits of the refund application itself. Instead, the focus should be solely on the merits of the application for condonation of delay. Consequently, the impugned orders were found unsustainable and were set aside. The matter was remitted back to the Principal Commissioner of Income Tax to pass fresh orders on the applications for condonation of delay, explicitly stating that the Principal Commissioner should not go into the merits of the petitioner's claims.
The High Court held that the writ petition had no merit. The Court found that the impugned assessment order was not without jurisdiction nor did it involve a violation of any statutory provision. The assessment proceedings were completed for escaped income, and the petitioner's failure to respond to statutory notices under Sections 148 and 142(1) of the Income Tax Act, 1961, justified the assessment. The Court noted that the petitioner had the option to file an appeal against the assessment order. Therefore, the writ petition was dismissed. The operative direction was to dismiss the writ petition, with liberty to the petitioner to file an appeal against the assessment order.
The High Court held that the finding of the Deputy Commissioner of Income Tax that the addition under Section 145A of the IT Act is to be considered at the time of disposal of the appeal is perfectly valid. The merit of the addition can only be considered during the appeal proceedings. Therefore, the impugned order imposing conditions for granting relief under Section 220(6) of the IT Act does not suffer from any jurisdictional error. The appellant has already challenged the assessment order in appeal and can move a stay application before the Appellate Authority. The High Court found no illegality in the impugned judgment. However, it directed that if the appellant files a stay application before the 2nd respondent (Appellate Authority), the Appellate Authority shall consider and dispose of either the stay application or the appeal itself within three weeks of receiving the application, after hearing the appellant. The appeal was disposed of with these directions.
The High Court held that Section 133(6) of the Income Tax Act, 1961, does not require notices for confirming sales to be issued with the knowledge of the assessee. The Court noted that while notices under Section 133(6) were sent to the hospitals, no response was received. Crucially, the petitioner did not file the sale confirmation letters before the assessing authority, and these documents were obtained only after the assessment order was issued. Therefore, the assessment order could not be faulted for not considering evidence collected by the assessee post-assessment. The Court found no jurisdictional error or violation of natural justice, as the petitioner was put on notice and assessment proceedings were completed. The Court declined to examine the merits of the assessment order. The petitioner was granted liberty to file an appeal under Section 246A of the Act before the appellate authority within fifteen days, with a direction for the appellate authority to consider the appeal on merits without regard to limitation. No coercive steps were to be taken against the petitioner for fifteen days.
The High Court upheld the decision of the learned Single Judge and dismissed the writ appeal. The court found no reason to assume that the appellant was prejudiced by the non-endorsement of the DI Number on the satisfaction note, especially since the DI Number was clearly mentioned in the covering letter that accompanied the satisfaction note. The court reasoned that the appellant had received the satisfaction note along with the covering letter, which contained the necessary DI Number. Therefore, it could not be said that the Assessing Authority had deviated from the provisions of the relevant Circular or acted without jurisdiction. The court also noted that the argument regarding the DI Number could be considered by the Appellate Authority under the statute, leaving open the appellant's statutory remedies. The appeal was dismissed as devoid of merit.
The Court held that the assessment order dated 22.4.2021 was within the extended limitation period. Notifications S.O.966(E) dated 27.2.2021 and another dated 27.4.2021, issued by the CBDT under Section 3(1) of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, extended the limitation for assessments under Section 153 of the IT Act up to 30.4.2021 and subsequently till 30.6.2021. As the assessment order was passed on 22.4.2021, it fell within the extended period. Regarding the second issue, the Court found substantial compliance with the principles of natural justice. The petitioner had been issued eight notices under Section 142(1) and two show cause notices under Section 144, none of which were responded to. The petitioner did not seek an extension of time to reply to the show cause notices. Therefore, the petitioner could not claim a violation of natural justice by not being afforded sufficient opportunity. The writ petition was dismissed.
The High Court held that the writ petitions are not maintainable. Firstly, the petitioner had withdrawn its appeals before the CIT(A) on its own volition to pursue writ petitions, without any liberty or direction from the High Court to do so. The Court noted that the petitioner could have challenged the assessment orders on merits but chose to pursue technical issues. Secondly, the Court rejected the petitioner's contention regarding the non-issuance of a notice under Section 143(2). The Court found that the petitioner was issued a notice (Annexure-R(a)) and participated in the proceedings for re-opening of assessment, as evidenced by the assessing officer's order sheet. The Court held that the non-mentioning of Section 143(2) in the notice would not invalidate it, as the substance of the notice was a notice of hearing. The Court applied Sections 292B and 292BB of the Act, stating that participation in proceedings pursuant to a notice prevents challenging assessment orders on technical grounds like non-mentioning of a specific provision. The judgment in Hotel Blue Moon was distinguished. The Court directed the appeals filed before the CIT(A) to be restored and allowed the petitioner to refile copies within fifteen days, with the CIT(A) to decide them on merits without considering limitation.
The High Court held that the writ petitions were not maintainable. Firstly, the petitioner had withdrawn its appeals before the CIT(A) on its own volition, not pursuant to any liberty granted by the court to do so in order to pursue these writ petitions. The court noted that the petitioner could have challenged the assessment orders on merits but chose to approach the High Court based on technical issues. Secondly, regarding the issue of notice under Section 143(2), the court found no substance in the petitioner's contention. The petitioner was issued a notice (Annexure-R(a)) and participated in the proceedings for re-opening of assessment. The court held that even if the notice did not explicitly mention Section 143(2), it would not invalidate the proceedings, as the substance of the notice was a notice of hearing. The court invoked Sections 292B and 292BB of the Act, stating that participation in proceedings after receiving notice validates the assessment orders, and they cannot be challenged on technical grounds like non-mentioning of a specific provision. The judgment in *Hotel Blue Moon* was distinguished as it involved non-service of notice, unlike the present case where notice was served and the assessee participated. The court dismissed the writ petitions but directed the restoration of the appeals before the CIT(A), allowing the petitioner to file copies of earlier appeals within fifteen days and directing the CIT(A) to decide them on merits without being influenced by any observations made in the writ petition judgment.
The High Court held that the impugned orders were issued in violation of the procedure prescribed under Section 250 of the Income Tax Act. The Court noted that after the petitioner filed her written submissions and responded to show cause notices, no fresh notice fixing the date and place of hearing was issued to her. The Court found it incumbent upon the Commissioner (Appeals) to issue such a notice as per Section 250. Consequently, the writ petition was allowed, and the impugned orders were set aside. The matter was remanded back to the respondent for passing a fresh order in accordance with the law. The petitioner was directed to appear on 04.12.2023, and no further notice of hearing would be issued to her. She was permitted to take additional grounds if advised, and the respondent was to decide the appeals afresh after hearing her. No other opportunities for filing documents or evidence would be given.
The High Court held that the writ petition was not maintainable. The court reasoned that it does not possess parallel jurisdiction to entertain a stay application when the petitioner has not availed the statutory remedy of filing a stay application before the appellate authority itself. The court found no grounds to entertain the writ petition. However, as a direction to ensure timely justice, the Appellate Authority was directed to proceed with the appeal expeditiously and finalize it, preferably within a period of six months, in accordance with the law. The issue of pre-deposit was implicitly left to be decided by the appellate authority in the stay application.
The High Court held that the writ petition had become infructuous. This decision was based solely on the submission made by the learned counsel for the petitioner. Consequently, the writ petition was dismissed as having become infructuous. Any interim order that might have been in place was also vacated. The Court did not delve into the merits of the case or any substantive legal questions that might have been raised. The ratio decidendi is that a writ petition, upon becoming infructuous, should be dismissed as such, irrespective of its original grounds.
The High Court disposed of the writ petition by directing the petitioner to file an application before the Department for the supply of copies of relevant documents within ten days. Upon receiving such an application, the Department was directed to supply the copies of relevant documents and pen drives to the petitioner within fifteen days from the date of receipt of the application, on a charge basis. This was to enable the petitioner to file a proper reply to Ext.P4 notice. The petitioner was then granted four weeks from the date of receipt of these documents to file his reply. Further proceedings concerning Ext.P4 notice were to commence after the expiry of these four weeks. The Court clarified that if the petitioner failed to file the application or the reply within the stipulated periods, the Department could proceed with the notice in Ext.P4 as per law. It was also made clear that if the petitioner filed his reply within four weeks of receiving the documents, the final assessment order would not be challenged by the petitioner on the ground of limitation. Proceedings pursuant to Ext.P4 notice were kept in abeyance to facilitate these steps.
The High Court disposed of the writ appeals by making its interim orders dated November 8, 2023, and November 14, 2023, absolute. The court directed the Income Tax Appellate Tribunal (ITAT), Cochin Bench, to consider the appeals or stay applications filed by the appellant on November 24, 2023, or any adjourned date, after hearing the appellant. A stay of recovery of amounts confirmed against the appellant was granted pending the disposal of the stay applications/appeals by the Tribunal. The appellant was also directed to retain the re-credited amounts as fixed deposits in the bank pending the Tribunal's orders. The judgment does not record any issue left undecided.
The High Court of Kerala allowed the writ petition. The Court noted the petitioner's submission that no opportunity of being heard was provided before the order under Section 148A(d) was passed for re-opening the assessment for Assessment Year 2016-17. The Revenue's counsel could not provide instructions to the contrary. Consequently, the Court set aside the impugned order. The matter was remitted back to the respondent (Income Tax Officer) to pass fresh orders in accordance with the law after giving notice of hearing to the petitioner. The petitioner was directed to appear before the Assessing Officer on 01.12.2023 to make his submissions. The Court did not decide on the merits of the re-opening of assessment itself, but focused on the procedural lapse.
The High Court held that when a writ court relegates an assessee to an alternate statutory remedy, it is incumbent upon the court to protect the assessee from recovery proceedings pending the disposal of their applications by the appellate authority. The Court found that the learned Single Judge should have granted a stay of recovery to ensure the effectiveness of the appellate process. Accordingly, the High Court modified the impugned judgment of the learned Single Judge. The modification clarified that pending the disposal of the delay condonation application, stay application, or appeal (whichever is earlier) by the appellate authority, recovery proceedings against the appellant for the amounts confirmed by the assessment order shall be kept in abeyance. The rest of the directions in the impugned judgment were not interfered with.
The High Court held that the impugned stay order (Exhibit P11) does not suffer from any jurisdictional error and does not violate the principles of natural justice. The Court found the 3rd respondent's view that the addition under Section 145A is to be considered at the time of appeal disposal to be in accordance with settled law. Regarding the addition to the partner's capital account, the Court noted that the 3rd respondent examined the records and found that the assessee failed to furnish supporting evidence during the assessment. The Court also acknowledged that the merit of this addition would be considered during the appeal. Consequently, the Court found no merit in the writ petition and dismissed it. The instalment facility for payment of 20% of the demand, initially directed to be approached by 15.11.2023, was extended to 16.11.2023.
The High Court of Kerala disposed of the writ petition by directing the 3rd respondent (Commissioner Income Tax (Appeals), National Faceless Appeal Center) to take up the stay petition (Ext.P4) and pass appropriate orders within a period of one month. The Court further ordered that Ext.P5, the demand notice, would stand stayed until such time as the stay petition is decided. The judgment does not provide a decision on the merits of the appeal or the stay petition itself, but rather directs the authority to expedite the decision on the stay application.
The High Court held that the petitioner's submission regarding non-receipt of notice for the appeal hearing before the Commissioner of Income Tax (Appeals) lacks substance. The Court noted that the Department's system is automated, with notices being uploaded to the portal and also sent via email and SMS alerts to the details provided by the assessee. Consequently, the Court found no merit in the petitioner's argument that he did not receive intimation. The writ petition was dismissed. However, the Court granted the petitioner liberty to file an appeal before the Income Tax Appellate Tribunal (ITAT) within three weeks, directing the ITAT to consider the appeal expeditiously without raising the issue of limitation.
The High Court held that it had no reason to disbelieve the finding of fact recorded in the impugned order by the Appellate Authority, which stated that the petitioner did not respond to five notices issued to them and did not file any written submissions. The Court found no substance in the petitioner's contention that they did not receive any notices. Consequently, the writ petition was dismissed. The operative direction was the dismissal of the writ petition.
The tribunal held that since the petitioner admitted to not paying the tax undertaken through Form 20H, the authorities were justified in confirming the demand for the tax amounts. The court found no reason to interfere with the Tribunal's order.
The High Court held that it would not like to exercise its writ jurisdiction parallelly when the appellate authority is seized of the matter. Therefore, instead of deciding the merits of the case, the Court directed the 2nd respondent (National Faceless Appeal Centre, Delhi) to decide the appeal pending before it in accordance with the law within a period of two months. If a final decision on the appeal is not possible within two months, the stay application is to be decided within the same period. The writ petition is disposed of with these directions, and no coercive proceedings are to be initiated against the petitioner until a decision is taken on the stay application. The Court did not decide the merits of the appeal or the stay petition.
The High Court held that since the learned Single Judge had directed the appellant to pursue the alternate remedy before the statutory authority, it was incumbent upon the learned Judge to protect the appellant from recovery proceedings pending the disposal of the application by the respondent appellate authority. Accordingly, the High Court modified the impugned judgment of the learned Single Judge to the extent that pending the disposal of the stay application or appeal, whichever is earlier, by the appellate authority, the recovery proceedings against the appellant for the amounts confirmed by the assessment order shall be kept in abeyance. The rest of the directions in the impugned judgment were not interfered with.
The High Court held that the order passed by the 2nd respondent (Commissioner of Income Tax (Appeals)) in Exhibit P-8 was in violation of the principles of natural justice. The Court noted that the petitioner had specifically requested a personal hearing through video conferencing in response to the communication from the 2nd respondent. However, this opportunity was not afforded to the petitioner, and the appeal was finalized. Consequently, the impugned order (Exhibit P-8) was set aside. The matter was remanded back to the file of the 2nd respondent to decide the appeal afresh after providing the petitioner with an opportunity of hearing. The 2nd respondent was directed to send a communication to the petitioner intimating the date and time for personal hearing. It was clarified that if the petitioner fails to avail this opportunity, no further opportunities would be granted, and the 2nd respondent would be free to pass an order in accordance with the law. The writ petition was allowed with these directions.
The High Court considered the submission made by the learned counsel for the petitioner. The court noted that the petitioner wished to withdraw the writ petition with liberty to file a fresh petition. Consequently, the High Court dismissed the writ petition as withdrawn, granting the petitioner the liberty to file a fresh petition. No findings were made on the merits of any underlying tax dispute, as the case was disposed of on procedural grounds based on the petitioner's request.
The High Court of Kerala did not comment on the merits of the assessment order. Instead, it directed the 2nd respondent (National Faceless Appellate Authority) to consider and pass an appropriate order on the petitioner's stay application (Exhibit-P5) expeditiously, preferably within two months. For a period of two months from the date of the order, no recovery proceedings pursuant to the impugned assessment order were to be enforced against the petitioner. The writ petition was disposed of with these directions. No specific finding was made on the legality of the assessment order itself, as the focus was on the procedural aspect of the stay application and appeal disposal.
The High Court held that the doctrine of mutuality applies to members' clubs in the context of indirect tax legislation, including the KTL Act. The Court found that the absence of two distinct persons in a transaction between a club and its members (a supplier and a recipient) makes it a supply to oneself, which cannot be taxed. The Court distinguished previous judgments of the Kerala High Court that had held the doctrine of mutuality to be inapplicable under the KTL Act, stating that those judgments did not correctly reflect the law in light of the Supreme Court's decision in Calcutta Club Ltd. The Court affirmed that the principle of mutuality insulates the club from luxury tax on charges collected from its members, except for any liability under Section 4(2A) of the KTL Act, which the petitioner had already paid. Consequently, the orders of the Tribunal were set aside, and the matters were remitted back to the Assessing Authority for fresh assessment, excluding turnover covered by the mutuality principle.
The High Court held that the doctrine of mutuality applies to members' clubs in the context of indirect tax legislation, including the KTL Act. The Court found that the absence of two distinct persons in a transaction between a club and its members (a supplier and a recipient) makes it a supply to oneself, which cannot be taxed. The Court distinguished previous judgments of the Kerala High Court that had held the doctrine of mutuality to be inapplicable under the KTL Act, stating that those judgments did not correctly reflect the law in light of the Supreme Court's decision in Calcutta Club Ltd. The Court affirmed that the principle of mutuality insulates the club from luxury tax on charges collected from its members, except for any liability under Section 4(2A) of the KTL Act, which the petitioner had already paid. Consequently, the orders of the Tribunal were set aside, and the matters were remitted back to the Assessing Authority for fresh assessment, excluding turnover covered by the mutuality principle.
The High Court held that the petitioners' contention that the proceedings are liable to be set aside because they were initiated in the name of a deceased assessee without fresh notices to the legal heirs is rejected. The Court noted that the order under Section 148A(d) explicitly mentioned that the assessment was required to be reopened under Section 147 and that proceedings under Section 148 would continue in the hands of the legal heirs. Crucially, the notice under Section 148, dated 10.4.2023, was issued in the names of both the deceased Sri. Naringaparambil Bhaskaran and the first petitioner, who is his legal heir. Since the first petitioner had participated in the proceedings by filing a reply to the show cause notice and was heard, the petitioners cannot claim ignorance or that the proceedings were exclusively against a dead person. The Court found no grounds to entertain the writ petition. However, granting further time, the petitioners were directed to file their return within 30 days from the date of the order, and the assessing authority was to consider it in accordance with law. The writ petition was disposed of with these directions.
The High Court held that the doctrine of mutuality applies to members' clubs in the context of indirect tax legislation, including the KTL Act. The Court found that the absence of two distinct persons in a transaction between a club and its members (a supplier and a recipient) makes it a supply to oneself, which cannot be taxed. The Court distinguished previous judgments of the Kerala High Court that had held the doctrine of mutuality to be inapplicable under the KTL Act, stating that those judgments did not correctly reflect the law in light of the Supreme Court's decision in Calcutta Club Ltd. The Court affirmed that the principle of mutuality insulates the club from luxury tax on charges collected from its members, except for any liability under Section 4(2A) of the KTL Act, which the petitioner had already paid. Consequently, the orders of the Tribunal were set aside, and the matters were remitted back to the Assessing Authority for fresh assessment, excluding turnover covered by the mutuality principle.
The High Court modified the judgment of the learned Single Judge. While upholding the direction to consider the stay petitions, the High Court clarified that pending the disposal of the stay petitions or the appeals (whichever is earlier) by the appellate authority, the recovery proceedings against the appellant for the amounts confirmed by the assessment orders (Ext.P1 series) shall be kept in abeyance. The Court reasoned that since the learned Single Judge had relegated the appellant to the alternate remedy before the statutory authority, it was incumbent upon the Judge to protect the appellant from recovery proceedings during the pendency of those petitions. The rest of the directions in the impugned judgment were not interfered with. The ratio is that when an assessee is pursuing statutory remedies like appeals and stay petitions, and recovery is imminent, the High Court can grant a stay on recovery pending the disposal of those remedies to protect the assessee's interests.
The High Court held that the doctrine of mutuality applies to members' clubs in the context of indirect tax legislation, including the KTL Act. The Court found that the absence of two distinct persons in a transaction between a club and its members (a supplier and a recipient) makes it a supply to oneself, which cannot be taxed. The Court distinguished previous judgments of the Kerala High Court that had held the doctrine of mutuality to be inapplicable under the KTL Act, stating that those judgments did not correctly reflect the law in light of the Supreme Court's decision in Calcutta Club Ltd. The Court affirmed that the principle of mutuality insulates the club from luxury tax on charges collected from its members, except for any liability under Section 4(2A) of the KTL Act, which the petitioner had already paid. Consequently, the orders of the Tribunal were set aside, and the matters were remitted back to the Assessing Authority for fresh assessment, excluding turnover covered by the mutuality principle.
The High Court allowed the writ petition and set aside the impugned assessment order (Ext.P8). The Court accepted the respondent's submission that due to the limitations of the Faceless Assessment Scheme, it was difficult to provide the assessee with copies of statements recorded under Section 131 and afford an opportunity for cross-examination. The Court noted that current CBDT guidelines mandate centralization of cases involving survey and search operations for physical assessment. Consequently, the Court directed that the petitioner's case be centralized with the jurisdictional Central Circle, Thrissur, for a fresh assessment in accordance with law. The Court clarified that the petitioner would not be able to raise objections regarding limitation for finalizing the assessment. The petitioner was granted liberty to pursue further remedies if aggrieved by the fresh assessment order. Any pending interlocutory applications were dismissed.
The High Court of Kerala, while disposing of the writ petition, did not decide the merits of the assessment order. Instead, it permitted the petitioner to file a rectification application before the assessing authority. The Court directed the assessing authority to consider the rectification application and take into account the certificate (Ext.P8) issued by SBI, Tuensang Branch, Nagaland, dated May 4, 2023. This certificate confirms that the RTGS transfer of Rs. 1,08,90,000/- from Mr. Chingmak Chang on December 21 and 22, 2017, was received in RBL Bank at Surat and not in any of the petitioner's bank accounts. The Court also ordered that no recovery shall be effected pursuant to the impugned assessment order until the rectification application is finally decided. The principle here is that procedural fairness and consideration of crucial evidence should be afforded, even if it means allowing for rectification of apparent errors.
The High Court found substance in the petitioner's submission. It was not disputed that the petitioner had filed the return on time, although it was initially in the incorrect form and was later revised. The Court reasoned that when a return is filed on time, there is no justification for levying a penalty or interest. Therefore, the impugned order (Ext.P6) levying late fee and interest was set aside. The operative direction was to set aside the impugned order. No issue was expressly left undecided.
The High Court directed the first respondent, the Commissioner of Income Tax (Appeals), to decide the appeal expeditiously, preferably within a period of two months, in accordance with law. If the appeal could not be disposed of within that period, the petition for interim relief/stay was to be decided within the same two-month period, in accordance with law. The Court did not decide the merits of the appeal itself but ensured its timely disposal. The ratio of the decision is that when an appeal and stay petition are pending before an appellate authority, and a writ petition is filed seeking expeditious disposal and a stay, the High Court can direct the appellate authority to decide the matter within a stipulated timeframe. The operative direction was to decide the appeal and/or stay petition expeditiously.
The High Court of Kerala disposed of the writ petitions. The decision was based on a communication dated October 18, 2023, from the office of the Assistant Commissioner of Income Tax (Benami Prohibition Unit). This communication stated that the provisional attachment made in respect of the properties of the petitioners, under Section 24(4)(b)(i) of the Prohibition of Benami Property Transactions Act, 1988, had been lifted. In view of this development, the Court found that nothing survived in the writ petitions. Consequently, the petitions were disposed of, and any pending interlocutory applications were dismissed. The Court did not delve into the merits of the attachment or the underlying Benami proceedings.
The High Court disposed of the writ petition with a direction to the additional third respondent, the Central Board of Direct Taxes (CBDT), to consider the petitioner's application filed under Section 119(2)(b) of the Income Tax Act, 1961, within a period of two months. The Court further directed that if the application was not on record, the petitioner would be intimated to file a fresh one. The petitioner was also to be afforded an opportunity of hearing through virtual mode before the CBDT takes a final decision on the application. The Court did not decide on the merits of accepting the revised return or quashing any orders, as the matter was directed to the CBDT for consideration under the specified section.
The High Court held that it cannot entertain the writ petition to stay the demand as prayed by the petitioner, because appeals are pending before the 2nd respondent (Commissioner of Income Tax (Appeals)) and no interim order has been passed by that authority. The court reasoned that the procedural remedy of appeal is available and should be pursued. Therefore, the writ petition is disposed of with a direction to the 2nd respondent to consider and decide the appeal (Ext.P2) and the stay application (Ext.P3) expeditiously within a period of two months. If the appeal cannot be decided within this timeframe, at least the stay application must be decided within the same period. The court did not decide on the merits of the appeal or the stay application.
The High Court of Kerala, considering the facts and circumstances, disposed of the writ petition with a direction to the second respondent. The court directed the second respondent to provide a link to the petitioner for uploading their stay petition within seven days. Following this, the petitioner was granted two days to upload the stay petition. The court further directed that if the stay application was filed as directed, it should be considered by the concerned authority expeditiously, preferably within one month. For a period of one month from the date of the order, no coercive steps were to be taken against the petitioner pursuant to the assessment order (Exhibit P2) and the rectification order (Exhibit P7). The court did not decide on the merits of the stay petition itself, but rather on the procedural issue of providing access to file it.
The High Court held that the phrase 'opportunity of being heard' in Section 148A(b) of the Income Tax Act, 1961, must be construed as an opportunity for personal hearing. The Court found no substance in the Revenue's submission that filing a reply to a show cause notice suffices as an opportunity of being heard. It was admitted that no personal hearing was granted to the petitioner before passing the order (Ext.P5) and issuing the notice (Ext.P6). Consequently, the Court found the order and notice unsustainable and set them aside. The petitioner was directed to appear before the respondent on or before October 27, 2023, with relevant documents for a personal hearing. The assessing officer was directed to pass a fresh order after considering the submissions and then proceed with the matter. The Court clarified that no further opportunity would be granted if the petitioner failed to appear on the specified date.
The High Court dismissed the writ petition, holding that the impugned notices and assessment orders were not without jurisdiction. The court found that the satisfaction notes recorded by the Assessing Authority, placed on record, indicated that the authority had examined the documents and recorded satisfaction for issuing notices under Section 153C. Regarding the DIN number, the court noted that the satisfaction note is a document kept in the file and is not required to be provided to the assessee unless demanded. When the satisfaction notes were provided to the petitioner, the communication (Ext.P18) bore a DIN number. The court distinguished the cited Bombay High Court judgment in Ashok Commercial Enterprises, stating it was not applicable because the circular regarding DIN was related to communications issued on or after October 1, 2019, and the satisfaction note itself does not require a DIN. The court advised the petitioner to avail the remedy of appeal against the assessment orders if advised.
The High Court disposed of the writ petition by directing the petitioner to file a fresh stay application before the appellate authority within one week. The appellate authority was instructed to consider this application on its merits. Crucially, the appellate authority was directed to take into account Office Memorandums issued by the Central Board of Direct Taxes (Ext.P5 to Ext.P7) and the Supreme Court's decision in Principal Commissioner of Income Tax-5 & Others Vs. LG Electronics India Private Limited. The Supreme Court judgment clarified that administrative circulars do not fetter quasi-judicial authorities and that it is open for authorities to grant deposit orders of a lesser amount than 20% pending appeal, based on the facts of individual cases. The operative direction is for the appellate authority to consider the stay application in light of these precedents and circulars.
The High Court disposed of the writ petition by directing the petitioner to file a fresh stay application before the appellate authority within one week. The appellate authority was instructed to consider this application on its merits. This consideration must include Exts.P5 to P7, which are Office Memorandums/instructions issued by the Central Board of Direct Taxes. Furthermore, the appellate authority must take into account the Supreme Court's judgment in Principal Commissioner of Income Tax-5 & Others Vs. LG Electronics India Private Limited [(2018) 18 SCC 447]. This judgment clarifies that administrative circulars do not fetter quasi-judicial authorities and that it is open to authorities to grant deposit orders of a lesser amount than 20% pending appeal, based on the facts of individual cases. The operative direction is for the petitioner to approach the appellate authority, which will then decide the stay application.
The High Court of Kerala, considering that the petitioner was facing a demand notice and that his delay and stay petitions were pending, directed the 2nd respondent to decide the delay petition. If the delay is condoned, the 2nd respondent is further directed to dispose of the stay petition within a period of two months. The Court issued this direction to ensure that the petitioner's grievances regarding the appeal and stay are addressed before the demand is enforced. The writ petition was disposed of with these directions.
The High Court directed the second respondent, the Commissioner of Income Tax (Appeals), to consider and decide the stay application (Ext.P3) expeditiously within a period of two months. Furthermore, for a period of two months, recovery proceedings in pursuance to the penalty order (Ext.P1) shall not be carried out against the petitioner. The court did not decide on the merits of the appeal or the stay application itself, but rather on the procedural aspect of ensuring a timely decision on the stay application and providing interim relief during that period.
The High Court disposed of the writ petition with a liberty to the petitioner to approach the jurisdictional Commissioner of Income Tax with an application for condoning the delay in filing the return within 15 days from the date of the order. The Court directed the jurisdictional Commissioner to decide this application expeditiously and in accordance with the law, after providing the petitioner an opportunity of being heard. The Court noted that Section 139(4) allows filing of belated returns and Section 139(8A) permits updated returns, while Section 119(2)(b) empowers the Commissioner to condone delays. The Revenue Department did not object to this course of action. No specific amount in dispute was mentioned, and the court did not decide on the merits of the return itself, but rather on the procedural aspect of filing it.