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The High Court held that the issue was covered by its Full Bench decision in Income Tax Appeal No. 201/2013. The Full Bench had answered the question in the affirmative. It held that under Rule 7A of the Rules, 1962, an assessee is entitled to an allowance for the cost of replacement of dead and useless rubber trees in an area not abandoned, subject to Section 10(31) of the Act, 1961. Furthermore, upkeep and maintenance expenses incurred by the assessee until the maturity of rubber trees are revenue expenditures eligible for deduction under Section 37 of the Act, 1961. Consequently, the impugned orders disallowing these claims were set aside. The matters were remitted back to the Assessing Officer for fresh consideration and to pass assessment orders in light of the Full Bench judgment.
The High Court held that the assessee is entitled to an allowance for the cost of replacement of dead and useless rubber trees in an area not abandoned, subject to Section 10(31) of the Act, under Rule 7A(2) of the Rules. Furthermore, the upkeep and maintenance expenses incurred by the assessee until the maturity of rubber trees are revenue expenditures eligible for deduction under Section 37 of the Act. This decision was based on a Full Bench decision of the same Court in Income Tax Appeal No.201/2013 and connected appeals. Consequently, the impugned orders disallowing these claims were set aside. The matters were remitted back to the Assessing Officer for fresh consideration and to pass assessment orders in light of the Full Bench judgment.
The High Court held that the impugned order (Ext.P6) passed by the Commissioner of Income Tax (Appeals) suffers from errors of law and violates the rudimentary principles of natural justice. The Court noted that the notice for final hearing was for June 26, 2023, and the petitioner had indeed produced Ext.P4 and Ext.P5 on that date, a fact not disputed by the respondents. Therefore, the observation in Ext.P6 that no documents were produced or submissions made was factually incorrect. Consequently, Ext.P6 was quashed and set aside. The Court directed the Commissioner of Income Tax (Appeals) to re-consider the appeal (Ext.P2) afresh, taking into account Ext.P4 and Ext.P5, and after affording the petitioner an opportunity of being heard. Until a fresh order is passed, coercive proceedings pursuant to Ext.P1 are deferred.
The High Court held that the Income Tax authorities did not err in rejecting the petitioner's claim for waiver of interest. The Court found that the CBDT Circular dated June 26, 2006, did not provide grounds for waiver in the circumstances presented by the petitioner, specifically where there was a failure to pay advance tax. The reasoning was that the Circular's conditions for waiver were not met. The petitioner's reliance on the Supreme Court judgment in Star India (P) Ltd v. Commissioner of Central Excise, Mumbai was deemed irrelevant as that case did not consider a similar Circular and pertained to the Central Excise Act. Therefore, the writ petition was dismissed.
The High Court directed the second respondent (National Faceless Appeal Centre) to consider and dispose of the petitioner's stay petition (Ext.P3) in accordance with law and as expeditiously as possible, within a period of three months from the date of receipt of a certified copy of the judgment. The court stipulated that the petitioner must be afforded an opportunity of being heard. Furthermore, if the second respondent intended to pass a conditional order of stay, specific reasons for imposing such conditions must be stated. Until an order is passed on the stay petition, all further proceedings pursuant to the assessment order (Ext.P1) and the notice (Ext.P4) were deferred. The court did not decide on the merits of the appeal or the assessment.
The High Court directed the third respondent (ITAT) to consider and dispose of the stay petition (Ext P5) expeditiously, at any rate, within three months from the date of receipt of a certified copy of the judgment, after providing the petitioner an opportunity of being heard. The Court also stipulated that if the ITAT proposes to pass a conditional order of stay, it must provide reasons for the same. Furthermore, until an order is passed on the stay petition, all recovery proceedings pursuant to the assessment order (Ext P1) and demand notice (Ext P2) were deferred. The Court did not decide on the merits of the appeal itself, focusing solely on the procedural aspect of the stay petition.
The High Court acknowledged the pendency of the stay petition (Ext.P4) before the third respondent (Tribunal). Consequently, the Court deemed it appropriate to dispose of the writ petition by issuing specific directions. The Tribunal was directed to consider and dispose of the stay petition expeditiously, within a period of three months from the date of receipt of a certified copy of the judgment. Furthermore, until orders were passed on the stay petition, all further proceedings pursuant to the assessment order (Ext.P1) and the appellate order (Ext.P2) were ordered to be deferred. The High Court did not decide on the merits of the appeal itself, focusing solely on the procedural aspect of expediting the stay petition and providing interim relief.
The High Court of Kerala directed the third respondent to consider and dispose of the petitioner's stay petition (Ext P3) expeditiously, at any rate, within three months from the date of receipt of a certified copy of the judgment, after providing the petitioner an opportunity of being heard. The Court also stipulated that if the third respondent proposed to pass a conditional order of stay, reasons for the same must be stated. Furthermore, until orders were passed on the stay petition, all further recovery proceedings pursuant to the assessment order (Ext P1) and notices (Exts P4 & P6) pertaining to the assessment year 2017-18 were ordered to stand deferred. The Court did not decide on the merits of the appeal itself, focusing solely on the procedural aspect of disposing of the stay petition and deferring recovery.
The High Court held that the petitioner's contention that the issue of reasonable cause under Section 273B of the Income Tax Act, 1961, was not considered by the respondents is unsustainable. The Court found that the respondents had specifically considered the petitioner's explanation and concluded that the reasons provided did not constitute a reasonable cause for the delay of 525 days in submitting the returns. The Court also noted that the penalty imposed was Rs. 100 per day, which is less than the maximum permissible penalty of Rs. 500 per day under Section 271FA. Therefore, the Court was of the opinion that the prayers sought in the writ petition were not liable to be granted. The writ petition was dismissed. The issue of the ITAT's jurisdiction was implicitly not decided on merits as the writ petition was dismissed on the substantive grounds.
The High Court disposed of the writ petition by directing the competent authority to either dispose of the statutory appeal (Ext.P2) or to take up and dispose of the stay petition (Ext.P4) and the application for condonation of delay (Ext.P3). This disposal is to be done after affording the petitioner an opportunity of being heard, and as expeditiously as possible, but not later than three months from the date of receipt of a copy of the judgment. The Court also directed that all recovery action pursuant to the assessment order (Ext.P1) shall stand deferred until the aforementioned exercise is completed and the resultant order is communicated to the petitioner. The Court did not decide on the merits of the assessment order itself.
The High Court dismissed the writ petition. The Court found that the petitioner was granted sufficient opportunity to present his defence. The respondent's statement detailed a sequence of notices issued on 29.6.2021, 9.11.2021, 20.12.2021, and 7.2.2022, which received no response. Partial replies were submitted only to a show cause notice dated 7.3.2022 and a reminder letter dated 18.7.2022. The petitioner finally submitted Ext P2 reply on 23.9.2022, in response to a notice dated 18.8.2022. The Court held that this sequence of events demonstrated that the petitioner had adequate opportunities. Furthermore, the Court noted that under the faceless assessment scheme, the assessee is expected to cooperate within the stipulated timelines for effective assessment completion. Based on an overall appreciation of the rival pleadings, the Court found no error or illegality in the assessment order (Ext P3) warranting interference under Article 226 of the Constitution. The dismissal was without prejudice to the petitioner's right to pursue statutory remedies.
The High Court directed the third respondent (Commissioner of Income Tax (Appeals), National Faceless Appeal Centre) to consider and dispose of the petitioner's stay petition (Ext P3) expeditiously, and at any rate, within three months from the date of receiving a certified copy of the judgment. The petitioner must be afforded an opportunity of being heard. The court also noted that if a conditional order of stay is proposed, the third respondent must provide reasons for it. Furthermore, all further proceedings pursuant to the assessment order (Ext P1) and the notice (Ext P4) are deferred until an order is passed on the stay petition. The court did not decide on the merits of the appeal itself, focusing solely on the procedural aspect of the pending stay petition.
The High Court directed the third respondent (NFAC) to consider and dispose of the stay petition (Ext P6) expeditiously, within three months from the date of receipt of a certified copy of the judgment, after providing the petitioner an opportunity to be heard. The Court also stipulated that if a conditional stay order is proposed, reasons must be provided. Furthermore, until an order is passed on the stay petition, all coercive proceedings pursuant to the assessment order (Ext P2) and demand notice (Ext P3) shall be deferred. The Court noted that the stay petition had been pending since June 23, 2023. No issue was expressly left undecided.
The High Court of Kerala, while considering the pleadings and materials on record, noted that the stay petitions (Exts.P6 and P7) were pending before the third respondent. Consequently, the Court deemed it appropriate to dispose of the writ petition by issuing specific directions. The third respondent was directed to consider and dispose of the stay petitions expeditiously, within three months from the date of receiving a certified copy of the judgment, after providing the petitioner an opportunity to be heard. If a conditional stay order was proposed, the third respondent was to state the reasons for it. Crucially, all further proceedings pursuant to the assessment order (Ext.P1), penalty order (Ext.P3), and the notice threatening enforcement (Ext.P5) were to stand deferred until orders were passed on the stay petitions.
The High Court held that the impugned order (Ext.P6) was passed in breach of the requirements of notice and the passing of a speaking order, as mandated by Section 220(2A) of the Income Tax Act, 1961. The Court found that the petitioner's waiver application, filed in 2013, was scheduled for a hearing for the first time in May 2017, and the request for a short adjournment was rejected due to the deadline imposed by the Finance Act, 2016. The Court noted that the petitioner was not given a proper opportunity to be heard, nor were their specific contentions considered. Consequently, the Court set aside Ext.P6 and directed the appropriate authority to reconsider the waiver application (Ext.P3). The petitioner is to be issued notice, heard, and allowed to produce all supporting materials. The Court explicitly stated it was not going into other contentions raised by the parties, leaving all contentions open for decision in the subsequent proceedings.
The High Court directed the first respondent to consider and dispose of the petitioner's stay petition (Ext P7) and delay condonation petition (Ext P13) expeditiously, within three months from the receipt of a certified copy of the judgment, after providing the petitioner an opportunity to be heard. If the delay is condoned and the stay petition is allowed, the first respondent must simultaneously consider the stay petition. If a conditional stay is proposed, the reasons for it must be stated. Until orders are passed on Exts P7 and P13, all further proceedings pursuant to demand notices Exts P4, P8, P10, and P12 are to be deferred. The court did not decide on the merits of the appeal itself, only on the procedural aspect of expediting the consideration of the stay and delay petitions.
The High Court of Kerala at Ernakulam noted the submission made by the learned Government Pleader representing the State of Kerala. The Government Pleader reported that the issue involved in both OT. Revisions had already been settled through an Amnesty Scheme. Consequently, the Court found that nothing survived for consideration by the High Court. Based on this submission, the Court proceeded to close both Other Tax Revisions as infructuous. No decision was made on the merits of the original dispute, and no specific principle or ratio decidendi was established for future citation. The operative direction was to close the petitions.
The High Court held that the petitioner is entitled to the link to upload their stay petition. The Court reasoned that the petitioner has filed an appeal against the assessment order and wishes to file a stay petition to prevent enforcement proceedings. Given the precedent established in Ext.P9, where a similar direction was issued, the Court found it appropriate to grant the same relief. The Court directed the third respondent to provide the petitioner with the link to upload the stay petition within one week of receiving a certified copy of the judgment. Upon receiving the link, the petitioner must upload the stay petition within a further week. The third respondent is then directed to consider and dispose of the stay petition expeditiously and in accordance with law, after providing the petitioner an opportunity to be heard. Any conditional stay order must be reasoned. Until orders are passed on the stay petition, and provided the petitioner complies with the timelines, further proceedings pursuant to the assessment order and the enforcement notice are deferred.
The High Court held that the demand for late filing fee under Section 234E of the Income Tax Act, 1961, for financial years 2013-14 and 2014-15 is unsustainable in law. The Court relied on its previous judgments, specifically mentioning Sarala Memorial Hospital v. Union of India and another [W.P.(C.) No.37775/2018], which has attained finality. These judgments interpreted Sections 234E and 200A of the Act and declared that the respondents are not empowered to levy late filing fees under Section 234E prior to June 1, 2015. The Court reiterated that the provision is only prospective in nature. Consequently, the intimation (Ext.P1) and the demand notice (Ext.P2) demanding late filing fees for the financial years 2013-14 and 2014-15 were quashed. The respondents were restrained from recovering any late filing fee from the petitioner for these two years. The operative direction was to quash the impugned notices and restrain recovery.
The High Court directed the second respondent (Commissioner of Income Tax (Appeals)) to consider and dispose of the stay petition (Ext.P3) expeditiously, within a period of three months from the date of receipt of a certified copy of the judgment. This consideration must be after affording the petitioner an opportunity of being heard. The Court further stipulated that if the second respondent proposes to pass a conditional order of stay, reasons for the same must be stated. Crucially, until orders are passed on the stay petition, all further proceedings pursuant to the assessment order (Ext.P1) shall stand deferred. The Court did not decide on the merits of the appeal or the stay petition itself, but rather on the procedural aspect of its timely disposal.
The High Court held that the demand for late filing fee under Section 234E of the Income Tax Act, as reflected in Ext.P1 intimation for the financial year 2013-2014, is unsustainable in law. The Court reasoned that this demand pertains to a period prior to 1.6.2015. Following its earlier judgment in Sarala Memorial Hospital v. Union of India, which interpreted Section 234E and Section 200A of the Act, the Court reiterated that the provision for levying late filing fee under Section 234E is only prospective and cannot be applied before 1.6.2015. Therefore, the intimation demanding such a fee for the financial year 2013-2014 is liable to be quashed. The Court allowed the writ petition, quashing Ext.P1 and restraining the respondents from recovering any amount pursuant to it. No issue was expressly left undecided.
The High Court directed the third respondent (Commissioner of Income Tax (Appeals), National Faceless Appeal Centre) to consider and dispose of the stay petitions (Exts P5 and P6) in accordance with law and as expeditiously as possible, at any rate, within three months from the date of receipt of a certified copy of the judgment, after affording the petitioner an opportunity of being heard. The court further stipulated that if the third respondent proposes to pass a conditional order of stay, reasons for the same must be stated. Crucially, until orders are passed on the stay petitions, all further proceedings pursuant to the final order (Ext P1) and the notice (Ext P4) shall stand deferred. The High Court did not decide on the merits of the appeals themselves, focusing solely on the procedural aspect of directing the disposal of the stay petitions.
The High Court held that the petitioner should be provided with a link to enable them to upload the stay petition. The Court noted that the petitioner had already filed an appeal and a delay petition. Consequently, the Court directed the third respondent (National Faceless Appeal Centre) to provide the petitioner with a link to file/upload the stay petition as expeditiously as possible, within one week. Upon receiving the link, the petitioner was to file the stay petition within a further week. The third respondent was then directed to consider and dispose of the stay petition and the delay petition in accordance with law and as expeditiously as possible, within three months of receiving a certified copy of the judgment, after providing the petitioner an opportunity of being heard. The Court also stipulated that any conditional stay order must be reasoned and that all further proceedings pursuant to the assessment order (Ext P1) would be deferred until orders were passed on the stay and delay petitions.
The High Court of Kerala, after considering the pleadings and materials on record, including Exts R1(a) to R1(e), found no justifiable reason to entertain the writ petition. The Court was satisfied that the petitioner was served with notice before the order (Ext P2) was passed by the second respondent (NFAC). Consequently, the Court held that there was no violation of the principles of natural justice as alleged by the petitioner. The Court found no ground to interfere with the order under Article 226 of the Constitution of India. The writ petition was dismissed, without prejudice to the petitioner's right to pursue other remedies in accordance with law.
The High Court directed the third respondent (NFAC) to provide the petitioner with a link to upload the stay petition within one week of receiving a certified copy of the judgment. Upon receiving the link, the petitioner was granted a further period of one week to file/upload the stay petition. If the stay petition was uploaded, the NFAC was directed to consider and dispose of it in accordance with the law, after providing the petitioner an opportunity to be heard. The court also stipulated that if a conditional order was proposed, the reasons for it must be stated. Crucially, until an order was passed on the stay petition, and provided the petitioner complied with the stipulated timelines, all further proceedings pursuant to the assessment order and demand notice were to stand deferred. The court did not leave any issue undecided.
The High Court directed the second respondent, the Commissioner of Income Tax (Appeals), to consider and dispose of the stay petitions (Exts P4 and P6) expeditiously, within three months from the date of receiving a certified copy of the judgment, after providing the petitioner an opportunity to be heard. The Court also stipulated that if a conditional order of stay was proposed, the reasons for it must be stated. Furthermore, until orders were passed on the stay petitions, all further proceedings pursuant to the assessment order (Ext P1), penalty order (Ext P2), and the enforcement notice (Ext P7) were deferred. The High Court did not decide on the merits of the appeals or the assessment/penalty orders themselves, focusing solely on the procedural aspect of the pending stay petitions.
The High Court held that the third respondent's order (Ext.P5) was erroneous and wrong. The Court noted that a Division Bench of the Kerala High Court, in Ext.P7 judgment, had categorically declared that Section 200A(1)(c) of the Income Tax Act, 1961, has no retrospective operation for assessments prior to June 1, 2015. Despite this binding precedent being brought to the notice of the third respondent, as reflected in paragraph 3 of the impugned order, the third respondent failed to follow the ratio decidendi of the High Court's judgment and instead relied on a decision of the Gujarat High Court, which has only persuasive effect. Consequently, the High Court set aside Ext.P5 order and directed the third respondent to reconsider the revision petition (Ext.P4) afresh, after adverting to the judgments in Exts.P6 and P7, and affording the petitioner an opportunity of being heard. All further proceedings pursuant to Ext.P1 notice were deferred until such reconsideration.
The High Court of Kerala directed the third respondent, the National Faceless Appeal Centre, to provide the petitioner with a link to upload the stay petition within one week of receiving a certified copy of the judgment. Upon receiving the link, the petitioner was granted a further period of one week to upload the stay petition. The third respondent was further directed to consider and dispose of the stay petition in accordance with the law, after providing the petitioner an opportunity to be heard. The court also stipulated that if the third respondent proposed to pass any conditional order on the stay petition, reasons must be provided. Crucially, all further proceedings pursuant to the assessment order and demand notice were deferred until an order was passed on the stay petition, provided the petitioner complied with the stipulated timelines. The court found it appropriate to dispose of the writ petition based on the pleadings and materials on record, noting the petitioner had already filed the appeal.
The High Court held that the third respondent's order (Ext.P5) was erroneous and wrong. The Court noted that a Division Bench of the Kerala High Court, in Ext.P7 judgment, had categorically declared that Section 200A(1)(c) of the Act has no retrospective operation for assessments prior to June 1, 2015. Despite this binding precedent being brought to the notice of the third respondent, as reflected in the impugned order, the third respondent failed to follow the ratio decidendi of the High Court and instead relied on a decision of the Gujarat High Court, which has only persuasive value. Consequently, the High Court set aside Ext.P5 order and directed the third respondent to reconsider the revision petition (Ext.P4) afresh, after adverting to the judgments in Exts.P6 and P7, and affording the petitioner an opportunity of being heard. All further proceedings pursuant to Ext.P1 notice were deferred until such reconsideration.
The High Court held that there was substantial compliance with the mandatory provisions of the Act. The Court noted that the petitioner had filed the Audit Report on 24.09.2014, which was even before the filing of the Income Tax Return on 17.11.2014. Although the provision mandates filing the Audit Report along with the Income Tax Return, the Court found that filing it in advance constituted substantial compliance. Consequently, the Court set aside the order of the Commissioner of Income Tax (Ext.P9) and directed the Income Tax Officer to redo the assessment proceedings after considering the Audit Report filed by the petitioner. The ratio decidendi is that substantial compliance with procedural requirements, especially when the report is filed prior to the return, should be accepted to avoid denial of legitimate claims under Sections 11 and 12.
The High Court held that the Tribunal's exercise of discretion in passing a conditional order of stay, requiring a deposit of 30% of the disputed amount, was not wrong and did not warrant interference. The Court found that the Tribunal was right in passing such a conditional order, especially given the concurrent findings of the lower authorities against the petitioner and the non-compliance with a previous oral direction to deposit 30% of the tax. As a measure of indulgence, the Court directed that if the petitioner complies with the conditions in the stay order within one month from the date of the judgment, it would be treated as compliance with the conditions in the Tribunal's order dated 4.5.2023. The Court did not decide the merits of the appeal itself.
The High Court held that the petitioner had been given ample opportunity to produce audited accounts and rectify the defect in its return for assessment year 1997-98. Deficiency letters were issued, and the petitioner sought extensions, but the audited accounts were produced significantly after the last date for filing rectified returns and after the AO had already declared the return invalid. The Court found no patent illegality or irregularity in the orders passed by the original, appellate, or revisional authorities. Consequently, the Court was of the opinion that the petitioner's contentions could not be accepted, and the writ petition was dismissed.
The High Court directed the 4th respondent (Interim Board for Settlement) to consider and dispose of the petitioner's application in accordance with law and as expeditiously as possible, within a period of one month from the date of receipt of a certified copy of the judgment. The Court explicitly stated that it had not expressed any opinion on the merits of the application. The submission made by the learned Standing Counsel for the respondents, that the fourth respondent would consider the question of maintainability as a preliminary issue and take a decision within four weeks, was recorded and formed the basis for the Court's direction. The ratio is that when a statutory authority indicates a timeline for considering an application, the Court can direct the authority to adhere to it while preserving the authority's right to decide on merits.
The High Court directed the third respondent (Interim Board for Settlement) to consider and dispose of the petitioners' application in accordance with law and expeditiously, at any rate, within a period of one month from the date of receipt of a certified copy of the judgment. The Court explicitly stated that it had not expressed any opinion on the merits of the application. The submission made by the learned Standing Counsel for the respondents, that the IBS would consider the maintainability as a preliminary issue and take a decision within four weeks, was recorded. The operative direction is to dispose of the application expeditiously.
The High Court of Kerala directed the second respondent (Commissioner of Income Tax (Appeals)) to consider and dispose of the petitioner's stay petition (Ext.P3) expeditiously, and at any rate, within a period of three months from the date of receipt of a certified copy of the judgment. The petitioner was to be afforded an opportunity of being heard. The Court also stipulated that if a conditional order of stay was proposed, the reasons for it must be stated. Furthermore, all coercive proceedings pursuant to the assessment order (Ext.P1) were to be deferred until orders were passed on the stay petition. The Court did not decide on the merits of the appeal itself, focusing solely on the procedural aspect of expediting the stay petition and deferring coercive action.
The High Court directed the 2nd respondent (Commissioner of Income Tax (Appeals)) to consider and dispose of the petitioner's delay petition (Ext.P3) and stay petition (Ext.P4) in accordance with law and as expeditiously as possible, at any rate, within a period of three months from the date of receipt of a certified copy of the judgment. The petitioner was to be afforded an opportunity of being heard. The Court also noted that if the 2nd respondent intended to pass a conditional stay order, reasons for the same must be stated. Crucially, until orders were passed on the delay and stay petitions, all further proceedings pursuant to the assessment order (Ext.P1) were to stand deferred. The Court did not decide on the merits of the assessment order itself, focusing solely on the procedural aspect of the pending applications.
The High Court directed the 2nd respondent (Commissioner of Income Tax (Appeals)) to consider and dispose of the stay petition (Ext.P3) expeditiously, within a period of three months from the date of receipt of a certified copy of the judgment, after affording the petitioner an opportunity of being heard. The Court also stipulated that if any conditional order of stay is proposed, the reasons for it must be stated. Furthermore, until orders are passed on the stay petition, all further proceedings pursuant to the assessment order (Ext.P1) shall stand deferred. The Court did not decide on the merits of the appeal itself, focusing solely on the procedural aspect of the pending stay petition.
The High Court granted the leave sought by the petitioner to withdraw the writ petition. The court held that the withdrawal would be without prejudice to the right of the petitioner to file a fresh writ petition on the same cause of action. Consequently, the writ petition was dismissed as withdrawn. The specific merits of any underlying tax dispute were not adjudicated upon, as the matter was disposed of on the petitioner's request for withdrawal. No other issues were expressly left undecided.
The High Court found no reason to interfere with the Tribunal's remand order. However, it clarified that during the re-assessment, the assessing authority must examine whether there was an actual variation in the physical stock of goods before assuming turnover suppression based on valuation. To facilitate this, the Court deleted the Tribunal's findings in paragraph 9 of its order, which upheld the stock variation detected for 14.5% items. The assessing authority is directed to re-do the assessment, considering the assessee's explanations and making specific findings on the nature of entries, as per the Tribunal's direction, modified by the High Court's clarification on physical stock verification. The revision petition was disposed of by answering question No.2 in favour of the assessee and against the revenue, and questions Nos.1 and 3 in favour of the revenue and against the assessee. The specific questions numbered 1 and 3 were not explicitly detailed in the provided text.
The High Court of Kerala directed the 2nd respondent, the Commissioner of Income Tax (Appeals), to consider and dispose of the petitioner's stay petition (Ext.P3) in accordance with law and as expeditiously as possible, within a period of three months from the date of receipt of a certified copy of the judgment, after affording the petitioner an opportunity of being heard. The Court also noted that if a conditional order of stay is proposed, reasons must be stated. Crucially, until orders are passed on the stay petition, all further proceedings pursuant to the demand notice (Ext.P1) and the subsequent communications (Exts.P4 and P6) were ordered to stand deferred. The Court did not decide the merits of the appeal itself.
The High Court held that the petitioner has a further right of appeal to challenge the order of the Commissioner of Income Tax (Appeals) before the Income Tax Appellate Tribunal, as provided under the Income Tax Act. Therefore, the High Court was of the view that it was not appropriate to interfere with the assessment order (Ext.P1) and the appellate order (Ext.P2) by invoking the powers under Article 226 of the Constitution of India. The writ petition was dismissed on the grounds that an alternative statutory remedy was available. The dismissal was made without prejudice to the petitioner's right to pursue his remedies in accordance with law.
The High Court held that the assessment order (Ext.P1) and all consequential orders, including demand notices (Exts.P2-P8), were liable to be set aside due to the want of proper notice and hearing, which constituted a clear violation of the principles of natural justice. The Court took note of the unambiguous admission by the 2nd respondent in its counter affidavit regarding the erroneous email address used and the need for setting aside the assessment order. Consequently, the Court allowed the writ petition. The operative directions included setting aside the assessment order and demand notices, directing the petitioner to register his correct email ID within two weeks, directing the respondents to send fresh show cause notices to the petitioner's correct email ID upon registration, and allowing the petitioner two weeks to submit a reply. The respondents were directed to finalize the proceedings after receiving the reply and affording the petitioner a hearing. Coercive proceedings were deferred until final orders were passed.
The High Court held that the petitioner was not granted a reasonable and fair opportunity for submitting their reply and being heard. The Court found that the respondents acted in undue haste and in violation of the basic tenets of fair play, reasonableness, and natural justice. The Court noted the discrepancy in the date of assessment completion as stated in the rejection of the grievance petition versus the actual date the assessment order was passed. Consequently, the Court set aside the assessment order (Ext P6) and reopened the show cause notice (Ext P1). The petitioner was granted 10 days to submit their reply, and the respondents were directed to open their web portal for this purpose. The respondents are to consider the reply and dispose of the show cause notice within three months, affording the petitioner an opportunity of being heard. Coercive proceedings against the petitioner were deferred until then. The Court exercised its plenary powers under Article 226 of the Constitution of India, notwithstanding the availability of an alternative statutory remedy.
The High Court disposed of the writ petition by issuing specific directions to the second respondent (National Faceless Appeal Centre). The Court directed the second respondent to consider and dispose of the delay petition (Ext.P3) and the stay petition (Ext.P4) in accordance with law and as expeditiously as possible, within a period of three months from the date of receipt of a certified copy of the judgment, after affording the petitioner an opportunity of being heard. The Court also stipulated that if the second respondent proposed to pass a conditional order of stay, reasons for the same must be stated. Crucially, until orders were passed on Exts.P3 and P4, all further proceedings pursuant to the assessment order (Ext.P1) were directed to stand deferred. No issue was expressly left undecided.
The High Court of Kerala directed the second respondent, the Commissioner of Income Tax (Appeals), to consider and dispose of the stay petition (Ext.P4) expeditiously, at any rate, within three months from the date of receipt of a certified copy of the judgment. The petitioner was to be afforded an opportunity of being heard. The Court also stipulated that if a conditional order of stay was proposed, the second respondent must state the reasons for it. The direction to consider the stay petition would not prevent the second respondent from considering the appeal (Ext.P3) itself. Crucially, all further proceedings pursuant to Exts.P1 and P5 were deferred until an order was passed on the stay petition (Ext.P4). The Court did not decide on the merits of the assessment or the appeal.
The High Court directed the second respondent (Commissioner of Income Tax (Appeals)) to consider and dispose of the stay petition (Ext P3) expeditiously, at any rate, within three months from the date of receipt of a certified copy of the judgment, after affording the petitioner an opportunity of being heard. The Court also stipulated that if a conditional order of stay is proposed, reasons must be provided. Crucially, until orders are passed on the stay petition, all further proceedings pursuant to the assessment order (Ext P1) and the enforcement letter (Ext P5) are to be deferred. The Court did not decide on the merits of the appeal itself, focusing solely on the procedural aspect of the pending stay petition.
The High Court dismissed the writ petition. Regarding the issue of limitation, the Court noted that the petitioners had repeatedly approached the Court to defer recovery and had made offers to pay the outstanding amounts. Crucially, the Court referred to its previous judgment in W.P.(C).No.17879 of 2009 (Ext.P6), which had already considered and disallowed the challenge on the ground of limitation, stating that the pleadings and prayers in that writ petition remained unamended. The Court found that the right to challenge the sale on the grounds of limitation had been foreclosed. The Court also observed that the petitioners failed to demonstrate bonafides by not making alternative arrangements like a bank guarantee. Concerning the validity of the attachment, the Court highlighted Rule 51 of the Second Schedule, which states that attachment relates back to the date of service of the notice to pay arrears. Since the second gift deed was dated 28.08.1980 and the demand notice for the property was issued on 03.07.1980, the attachment was deemed to have taken effect prior to the gift. The Court held that a third party creating rights in property subject to attachment cannot claim protection under Section 41 of the Transfer of Property Act. The judgment in Commissioner of Income Tax v. Siva Traders was distinguished as it pertained to an erstwhile Act and different facts. The Court concluded that the writ petition was devoid of merits.
The High Court directed the second respondent (ITAT) to consider and dispose of the stay petition (Ext P4) expeditiously, within a period of three months from the date of receipt of a certified copy of the judgment, after providing the petitioner an opportunity to be heard. The Court also stipulated that if a conditional order of stay is proposed, reasons must be provided. Furthermore, all further proceedings pursuant to the assessment order (Ext P1) were deferred until an order was passed on the stay petition. The appeal itself was not decided on merits.
The High Court directed respondents 2/3 to consider and dispose of the stay petition (Ext P3) expeditiously and in accordance with law, within three months of receiving a certified copy of the judgment, after affording the petitioner an opportunity of being heard. The Court also stipulated that if a conditional order of stay was proposed, reasons must be provided. Crucially, the Court ordered that until orders were passed on the stay petition, all further proceedings pursuant to the assessment order (Ext P1) would stand deferred. The primary principle applied is the expeditious disposal of pending statutory remedies and the grant of interim relief to maintain the status quo pending such disposal.
The High Court of Kerala, while considering the writ petition, noted that Ext P6 order was passed on 23.1.2023. The Court acknowledged the revenue's submission that the refund process was underway, with communication to the relevant authority and a reminder issued. Given the delay and the existence of a specific order determining the refund amount, the Court deemed it appropriate to direct the second respondent (Commissioner of Income Tax (IT)) to refund the amount covered by Ext P6 to the petitioner. The direction was to process the refund in accordance with law and as expeditiously as possible, at any rate, within a period of one month from the date of receipt of a certified copy of the judgment. The principle established is that once an income tax refund is determined by a valid order, the tax authorities have a duty to process and disburse it promptly, and courts can intervene to ensure compliance.