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441 orders · Page 9 of 9
The High Court did not decide the merits of the case. Instead, it noted that the petitioner had already preferred an appeal before the Commissioner of Income Tax (Appeals) and that this appeal was pending. Therefore, the High Court deemed it appropriate to dispose of the writ petition by directing the Appellate Authority to consider the appeal in a time-bound manner. The Court directed the 2nd respondent (Commissioner of Income Tax (Appeals)) to consider and pass appropriate orders on the petitioner's appeal (Ext.P2) as expeditiously as possible. Furthermore, the Court ordered that no coercive steps shall be initiated against the petitioner pursuant to the assessment order (Ext.P1) until the disposal of the appeal. No issue was expressly left undecided, as the Court's action was procedural.
The High Court disposed of the writ petition by directing the 3rd respondent (The Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre) to consider the applications for condonation of delay and stay petitions filed by the petitioner in relation to the appeals against assessment and penalty orders for the assessment years 2012-13, 2014-15, 2017-18, and 2018-19. This consideration is to be done within three months of receiving a certified copy of the judgment, after affording the petitioner an opportunity of hearing. Crucially, any steps for recovery of amounts due under the challenged orders are to remain suspended until orders are passed on these applications. The appellate authority is to consider the stay petitions on merits only if the delay in filing the appeals is condoned. No specific finding was made on the merits of the appeals themselves.
The High Court held that the petitioner's audit report in Form No. 10B for assessment year 2018-19 was uploaded on 31.03.2021, which falls within the period specified by Circular No. 16 of 2022. This circular authorizes the Principal Chief Commissioners/Chief Commissioners of Income-tax to admit applications for condonation of delay under Section 119(2) of the Act, provided the delay is up to three years and the applicant was prevented by reasonable cause. The court found that the reasons stated by the petitioner for the delay qualified for condonation under the said circular. Consequently, the impugned order (Ext.P18) was quashed. The application for condonation of delay (Ext.P13) was directed to be reconsidered in light of Circular No. 16 of 2022 and the court's observations. Any demand for assessment year 2018-19 was to be kept in abeyance until reconsideration, with fresh orders to be passed within three months.
The High Court held that no grounds were made out to interfere with the impugned orders under Article 226 of the Constitution of India. The Court found no violation of the principles of natural justice, stating that the petitioner's failure to respond to notices, even if due to illness, did not by itself render the proceedings violative of natural justice. The Court agreed with the revenue that the petitioner had an effective alternative remedy by way of appeal against the orders of assessment, rectification, and penalty. Therefore, the Court saw no reason to exercise its writ jurisdiction. However, recognizing that the provisions for appeal do not prescribe a maximum period for condonation of delay, the Court directed that if the petitioner files appeals along with applications for condonation of delay before the National Faceless Appeal Centre within two weeks from the date of the judgment, the delay shall be condoned, and the appeals shall be considered on merits. The judgment clarified that failure to file the appeals within the stipulated time would result in the petitioner losing the benefit of this order.
The High Court held that the issues raised in these writ petitions are covered by the Supreme Court's judgment in Union of India & Anr. v. M/s. Ganpati Dealcom Pvt.Ltd. (2022 LiveLaw (SC) 700). Based on this precedent, the Court declared that Section 3(2) of the unamended 1988 Act and Section 3(2) of the 2016 Act are unconstitutional. It was also held that the in rem forfeiture provision under Section 5 of the unamended Act of 1988 was unconstitutional. The Court found that the 2016 Amendment Act prescribed substantive provisions and that its in rem forfeiture provision, being punitive, could only be applied prospectively. Consequently, authorities cannot initiate or continue criminal prosecution or confiscation proceedings for transactions entered into before 25.10.2016, and all such proceedings shall stand quashed. The Court noted that issues concerning the constitutionality of independent forfeiture proceedings under the 2016 Act on other grounds were left open. The amended provisions of the Prohibition of Benami Property Transactions Act, 1988, will apply only if the transactions were entered into on or after 25.10.2016.
The High Court held that the issues raised in these writ petitions are covered by the Supreme Court's judgment in Union of India & Anr. v. M/s. Ganpati Dealcom Pvt.Ltd. (2022 LiveLaw (SC) 700). Based on this precedent, the Court declared that Section 3(2) of the unamended 1988 Act and Section 3(2) of the 2016 Act are unconstitutional. It was also held that the in rem forfeiture provision under Section 5 of the unamended Act of 1988 was unconstitutional. The Court found that the 2016 Amendment Act prescribed substantive provisions and that its in rem forfeiture provision, being punitive, could only be applied prospectively. Consequently, authorities cannot initiate or continue criminal prosecution or confiscation proceedings for transactions entered into before 25.10.2016, and all such proceedings shall stand quashed. The Court noted that issues concerning the constitutionality of independent forfeiture proceedings under the 2016 Act on other grounds were left open. The amended provisions of the Prohibition of Benami Property Transactions Act, 1988, will apply only if the transactions were entered into on or after 25.10.2016.
The High Court held that the issues raised in these writ petitions are covered by the Supreme Court's judgment in Union of India & Anr. v. M/s. Ganpati Dealcom Pvt.Ltd. (2022 LiveLaw (SC) 700). Based on this precedent, the Court declared that Section 3(2) of the unamended 1988 Act and Section 3(2) of the 2016 Act are unconstitutional. It was also held that the in rem forfeiture provision under Section 5 of the unamended Act of 1988 was unconstitutional. The Court found that the 2016 Amendment Act prescribed substantive provisions and that its in rem forfeiture provision, being punitive, could only be applied prospectively. Consequently, authorities cannot initiate or continue criminal prosecution or confiscation proceedings for transactions entered into before 25.10.2016, and all such proceedings shall stand quashed. The Court noted that issues concerning the constitutionality of independent forfeiture proceedings under the 2016 Act on other grounds were left open. The amended provisions of the Prohibition of Benami Property Transactions Act, 1988, will apply only if the transactions were entered into on or after 25.10.2016.
The High Court held that the issues raised in these writ petitions are covered by the Supreme Court's judgment in Union of India & Anr. v. M/s. Ganpati Dealcom Pvt.Ltd. (2022 LiveLaw (SC) 700). Based on this precedent, the Court declared that Section 3(2) of the unamended 1988 Act and Section 3(2) of the 2016 Act are unconstitutional. It was also held that the in rem forfeiture provision under Section 5 of the unamended Act of 1988 was unconstitutional. The Court found that the 2016 Amendment Act prescribed substantive provisions and that its in rem forfeiture provision, being punitive, could only be applied prospectively. Consequently, authorities cannot initiate or continue criminal prosecution or confiscation proceedings for transactions entered into before 25.10.2016, and all such proceedings shall stand quashed. The Court noted that issues concerning the constitutionality of independent forfeiture proceedings under the 2016 Act on other grounds were left open. The amended provisions of the Prohibition of Benami Property Transactions Act, 1988, will apply only if the transactions were entered into on or after 25.10.2016.
The High Court held that the issues raised in these writ petitions are covered by the Supreme Court's judgment in Union of India & Anr. v. M/s. Ganpati Dealcom Pvt.Ltd. (2022 LiveLaw (SC) 700). Based on this precedent, the Court declared that Section 3(2) of the unamended 1988 Act and Section 3(2) of the 2016 Act are unconstitutional. It was also held that the in rem forfeiture provision under Section 5 of the unamended Act of 1988 was unconstitutional. The Court found that the 2016 Amendment Act prescribed substantive provisions and that its in rem forfeiture provision, being punitive, could only be applied prospectively. Consequently, authorities cannot initiate or continue criminal prosecution or confiscation proceedings for transactions entered into before 25.10.2016, and all such proceedings shall stand quashed. The Court noted that issues concerning the constitutionality of independent forfeiture proceedings under the 2016 Act on other grounds were left open. The amended provisions of the Prohibition of Benami Property Transactions Act, 1988, will apply only if the transactions were entered into on or after 25.10.2016.
The High Court held that the issues raised in these writ petitions are covered by the Supreme Court's judgment in Union of India & Anr. v. M/s. Ganpati Dealcom Pvt.Ltd. (2022 LiveLaw (SC) 700). Based on this precedent, the Court declared that Section 3(2) of the unamended 1988 Act and Section 3(2) of the 2016 Act are unconstitutional. It was also held that the in rem forfeiture provision under Section 5 of the unamended Act of 1988 was unconstitutional. The Court found that the 2016 Amendment Act prescribed substantive provisions and that its in rem forfeiture provision, being punitive, could only be applied prospectively. Consequently, authorities cannot initiate or continue criminal prosecution or confiscation proceedings for transactions entered into before 25.10.2016, and all such proceedings shall stand quashed. The Court noted that issues concerning the constitutionality of independent forfeiture proceedings under the 2016 Act on other grounds were left open. The amended provisions of the Prohibition of Benami Property Transactions Act, 1988, will apply only if the transactions were entered into on or after 25.10.2016.
The High Court held that the issues raised in these writ petitions are covered by the Supreme Court's judgment in Union of India & Anr. v. M/s. Ganpati Dealcom Pvt.Ltd.; 2022 LiveLaw (SC) 700. Based on this judgment, the Court declared that Section 3(2) of the unamended 1988 Act and Section 3(2) of the 2016 Act are unconstitutional. Furthermore, the 'in rem' forfeiture provision under Section 5 of the unamended Act of 1988 was declared unconstitutional. The Court also held that the 2016 Amendment Act prescribed substantive provisions and that the 'in rem' forfeiture provision under Section 5 of the 2016 Act, being punitive, can only be applied prospectively. Consequently, concerned authorities cannot initiate or continue criminal prosecution or confiscation proceedings for transactions entered into prior to the coming into force of the 2016 Act (25.10.2016). All such proceedings initiated prior to this date shall stand quashed. The Court explicitly left open for adjudication in appropriate proceedings any questions concerning the constitutionality of independent forfeiture proceedings under the 2016 Amendment Act on other grounds.
The High Court held that the issues raised in these writ petitions are covered by the judgment of the Supreme Court in Union of India & Anr. v. M/s. Ganpati Dealcom Pvt.Ltd.; 2022 LiveLaw (SC) 700. Following the Supreme Court's decision, the High Court declared that Section 3(2) of the unamended 1988 Act and Section 3(2) of the 2016 Act are unconstitutional. It was also held that the in rem forfeiture provision under Section 5 of the unamended Act of 1988 was unconstitutional. The Court found that the 2016 Amendment Act prescribed substantive provisions and that the in rem forfeiture provision under Section 5 of the 2016 Act, being punitive, can only be applied prospectively. Consequently, authorities cannot initiate or continue criminal prosecution or confiscation proceedings for transactions entered into prior to October 25, 2016. All such proceedings initiated for pre-2016 transactions shall stand quashed. The Court also noted that questions concerning the constitutionality of independent forfeiture proceedings under the 2016 Act on other grounds were left open for adjudication in appropriate proceedings. The amended provisions of the Prohibition of Benami Property Transactions Act, 1988, will apply only if the transactions were entered into on or after October 25, 2016.
The High Court held that the issues raised in these writ petitions are covered by the Supreme Court's judgment in Union of India & Anr. v. M/s. Ganpati Dealcom Pvt.Ltd.; 2022 LiveLaw (SC) 700. Based on this judgment, the Court declared that Section 3(2) of the unamended 1988 Act and Section 3(2) of the 2016 Act are unconstitutional. Furthermore, the 'in rem' forfeiture provision under Section 5 of the unamended Act of 1988 was declared unconstitutional. The Court also held that the 2016 Amendment Act prescribed substantive provisions and that the 'in rem' forfeiture provision under Section 5 of the 2016 Act, being punitive, can only be applied prospectively. Consequently, concerned authorities cannot initiate or continue criminal prosecution or confiscation proceedings for transactions entered into prior to the coming into force of the 2016 Act (25.10.2016). All such proceedings initiated prior to this date shall stand quashed. The Court explicitly left open for adjudication in appropriate proceedings any questions concerning the constitutionality of independent forfeiture proceedings under the 2016 Amendment Act on other grounds.
The High Court held that the issues raised in these writ petitions are covered by the Supreme Court's judgment in Union of India & Anr. v. M/s. Ganpati Dealcom Pvt.Ltd. (2022 LiveLaw (SC) 700). Based on this precedent, the Court declared that Section 3(2) of the unamended 1988 Act and Section 3(2) of the 2016 Act are unconstitutional. It was also held that the in rem forfeiture provision under Section 5 of the unamended Act of 1988 was unconstitutional. The Court found that the 2016 Amendment Act prescribed substantive provisions and that its in rem forfeiture provision, being punitive, could only be applied prospectively. Consequently, authorities cannot initiate or continue criminal prosecution or confiscation proceedings for transactions entered into before 25.10.2016, and all such proceedings shall stand quashed. The Court noted that issues concerning the constitutionality of independent forfeiture proceedings under the 2016 Act on other grounds were left open. The amended provisions of the Prohibition of Benami Property Transactions Act, 1988, will apply only if the transactions were entered into on or after 25.10.2016.
The High Court, upon being informed by the assessee's counsel that the appeals were not being pressed, granted the request for withdrawal. Consequently, the appeals were dismissed.
The High Court of Kerala, comprising Justices S.V. Bhatti and Basant Balaji, considered the submission made by the appellants' counsel. Based on the instructions received from the assessee, the appellants indicated that they did not intend to press their appeals and requested the liberty to withdraw them. The Court accepted this submission. Therefore, the High Court dismissed all the Income Tax Appeals (ITA Nos. 41, 44, 42, and 43 of 2020) as withdrawn. No decision was made on the merits of the appeals or the underlying tax disputes. The operative direction was solely to dismiss the appeals as withdrawn.
The High Court, upon being informed by the assessee's counsel that the appeals were not being pressed, granted the request for withdrawal. Consequently, the appeals were dismissed.
The High Court, upon being informed by the assessee's counsel that the appeals were not being pressed, granted the request for withdrawal. Consequently, the appeals were dismissed.
The High Court of Kerala did not decide the merits of the case. Instead, it disposed of the writ petition by directing the 1st respondent, the Commissioner of Income Tax (Appeals), to consider and pass appropriate orders on the petitioner's pending appeal (Ext.P3) expeditiously, within a period of 2 months from the date of receipt of a copy of the judgment. The Court also ordered that no coercive steps shall be initiated against the petitioner pursuant to the assessment order (Ext.P1) until the disposal of the appeal. The principle that can be cited from this judgment is the High Court's power to direct expeditious disposal of pending appeals and to grant interim protection against coercive steps.
The High Court heard the assessee's counsel, Adv. Ramesh Cherian John. Based on instructions received from the assessee, the appellant (Dr. R.P. Patel) did not press the appeal and sought liberty to withdraw the appeal and the writ petitions. Consequently, the High Court dismissed both the Income Tax Appeal and the Writ Petitions as withdrawn. No decision was made on the merits of the case. The operative direction was to dismiss the matters as withdrawn.
The assessee, through their counsel, informed the court that they do not wish to press the appeal and petitions. They sought permission to withdraw them.
The High Court held that the order of assessment (Ext.P12) was issued in violation of the principles of natural justice. The court noted that subsequent notices (Exts.P8 and P10) were sent to an email address different from the one to which earlier notices (Exts.P3 and P4) were sent, and to which the petitioner had duly responded. This discrepancy, coupled with the petitioner's assertion that their correct email address was updated on the portal (supported by Ext.P1), led the court to conclude that the petitioner was deprived of an opportunity to participate in the proceedings. Consequently, the court allowed the writ petition, set aside the order of assessment, and directed the National Faceless Assessment Centre to pass fresh orders after issuing notices to the petitioner's correct email addresses: simon@geofin.co.in and support@geofin.co.in.
The High Court of Kerala did not decide the merits of the assessment order or the applicability of the Supreme Court's judgment in Mavilayi Service Co-operative Bank Ltd. Instead, the Court acknowledged that the petitioner had already filed an appeal (Ext.P3) before the Income Tax Appellate Tribunal (1st respondent) and that this appeal was pending. The Court deemed it appropriate to dispose of the writ petition by directing the Tribunal to consider and pass appropriate orders on the pending appeal expeditiously. The Tribunal was directed to dispose of the appeal within a period of 2 months from the date of receipt of a copy of the judgment. Furthermore, the Court ordered that no coercive steps would be initiated against the petitioner pursuant to the assessment order (Ext.P1) until the disposal of the appeal. The issue of whether the petitioner satisfied the ingredients of a Primary Agricultural Credit Society and the consequential deduction under Section 80P was therefore left to be decided by the Tribunal.
The High Court did not decide the merits of the appeal. Instead, it directed the 1st respondent, the National Faceless Appeal Centre, to consider and pass appropriate orders on the petitioner's pending appeal (Ext.P3) expeditiously, within a period of 2 months from the date of receipt of a copy of the judgment. The Court also ordered that no coercive steps shall be initiated against the petitioner pursuant to the assessment order (Ext.P1) and another related document (Ext.P2) until the disposal of the appeal. The core reasoning for this decision was the pendency of the appeal before the appropriate appellate authority, making the writ petition premature for a decision on the merits of the assessment.
The High Court of Kerala did not decide the merits of the case. Instead, it directed the Appellate Authority (2nd respondent, CIT(A)) to consider and pass appropriate orders on the appeal (Ext.P3) expeditiously. The Court found it fit to dispose of the writ petition by directing the appellate authority to hear the pending appeal. The reasoning was that the appeal was already preferred and was pending consideration. The operative direction was to dispose of the appeal in a time-bound manner. Additionally, the Court ordered that no coercive steps shall be initiated against the petitioner pursuant to the assessment order (Ext.P1) and demand notice (Ext.P2) until the disposal of the appeal. No issue was expressly left undecided, as the Court chose to direct the appellate authority to decide the substantive issues.
The High Court allowed the Income Tax Appeals and remitted the matters to the Assessing Officer for fresh disposal. The Court noted that a previous appeal (ITA No. 250/2019) concerning a common order of the ITAT for AY 2010-11 had been allowed and remanded. The operative portion of that earlier judgment indicated that the issue of whether lease rental income should be treated as business income or income from other sources needed reconsideration in light of the surrender of the lease in 2017, due to the assessee's failure to commence manufacturing activity. The High Court found that the current appeals raised similar questions and that the impugned orders of the Tribunal, Appellate Authority, and Assessing Officer should be set aside to the extent covered by the earlier judgment dated 23.07.2021. The matters were therefore remitted to the Assessing Officer for fresh consideration in accordance with law, keeping in perspective the judgment dated 23.07.2021. The questions were answered in favour of the Revenue for statistical purposes.
The High Court allowed the writ petition. The Court agreed with the submissions made by the petitioner and the fair submission by the respondent-Department. The Court was in full agreement with the view taken in W.P.(C.) No.1259 of 2022. The Court held that the levy of fees under Section 234E of the Income Tax Act for periods prior to June 1, 2015, is not legally sustainable due to the prospective nature of the provision. The intimations (Exts.P1, P2, and P3) demanding fees under Section 234E for the period from 2012-13 to 2014-15 were quashed to the extent they demanded such fees. The ratio decidendi is that the jurisdiction to levy late fees under Section 234E arises only from June 1, 2015, and not for any earlier period. The operative direction was to quash the impugned demand notices.
The High Court, in its judgment dated 23.07.2021, had previously allowed the Revenue's appeal (ITA No. 250/2019) against a common order of the Tribunal and remanded the matter to the Assessing Officer for fresh consideration. The High Court noted that the surrender of the lease in 2017, due to the assessee not commencing any activity on the leased land, necessitated a reconsideration of whether the rental income was business income or income from other sources. The Court found that neither the Assessing Officer nor the appellate authorities had the benefit of appreciating the assessee's claim in light of this development. Consequently, the High Court set aside the Tribunal's order and remitted the case to the Assessing Officer for a fresh consideration of all issues, including ancillary matters like disallowance of professional charges, interest charges, and the value of shares gifted to the CEO. The questions were answered in favour of the Revenue for statistical purposes.
The High Court held that the petitioner's submission was well-founded. It referred to the Supreme Court's judgment in Union of India v. M/s.Ganapati Dealcom Pvt.Ltd, which considered whether the Prohibition of Benami Property Transaction Act, 1988, as amended by the Benami Transactions (Prohibition) Amendment Act, 2016, had prospective effect. The Apex Court had held that Section 3 read with Section 2(a) and Section 5 of the 1988 Act were overly broad, disproportionately harsh, and operated without adequate safeguards, rendering them unconstitutional from inception. Consequently, Section 3(2) of the Amendment Act was declared unconstitutional. Based on this precedent, the High Court found that since Section 3(2) of the Act had been declared unconstitutional, the Ext.P6 series notices and further proceedings thereon were liable to be quashed. The Court did not leave any issue undecided.
The High Court held that the appeal was not legally and validly presented due to the non-payment of court fees. Consequently, the appeal was returned to the appellant's counsel.
The High Court of Kerala disposed of the writ petition by directing the 2nd respondent (National Faceless Appeal Centre) to consider and pass orders on the stay petition (Ext.P3) filed in the appeal (Ext.P2) after providing an opportunity of hearing to the petitioner, without undue delay. Crucially, the court held that until such time as orders are passed on the stay petition, any steps for recovery of amounts due under the assessment order (Ext.P1) shall be kept in abeyance. The principle derived is that appellate authorities should expedite decisions on stay petitions, and recovery should be deferred pending such decisions to protect the assessee's interests.
The High Court of Kerala, considering the limited relief sought, disposed of the writ petitions. It directed the appellate authority to consider and dispose of the stay petitions filed by the petitioner against the order of assessment and the order imposing penalty without delay. Crucially, the Court ordered that until orders are passed on these stay petitions, any steps for recovery of amounts due under the assessment order and the penalty order for the assessment year 2018-19 shall be kept in abeyance. The ratio decidendi is that in the interim period before a decision on stay applications by the appellate authority, coercive recovery measures should be suspended to protect the assessee's interests.
The High Court disposed of the Writ Petition by directing that if the petitioner files a stay petition in her pending appeal before the National Faceless Appeal Centre within two weeks from the date of the order, any demand pursuant to the penalty order (Ext. P4) shall be kept in abeyance until orders are passed on such stay petition. The Court also provided a procedural recourse: if the petitioner faces difficulty in uploading the stay petition, she can approach the jurisdictional assessing officer, who will ensure its forwarding to the National Faceless Appeal Centre. The Court did not decide on the merits of the penalty itself, but provided a procedural mechanism to address the apprehension of recovery.
The High Court disposed of the writ petition by directing the petitioner to file copies of the appeals already filed, along with applications for condonation of delay and stay, before the Jurisdictional Appellate Authority (The Commissioner of Income Tax (Appeals), Panampilly Nagar, Ernakulam) within two weeks. The Court held that the Jurisdictional Appellate Authority shall consider these appeals as if they were filed on the date they were originally filed before the National Faceless Appeals Centre. The Authority was directed to consider the applications for condonation of delay and stay after providing the petitioner an opportunity to be heard. Until a decision is passed on these applications, any demand arising from the assessment orders (Exts.P2 to P4) and steps for penalty imposition shall be kept in abeyance. The judgment clarifies that the Jurisdictional Appellate Authority needs to consider the appeals and stay applications on merits only if it decides to condone the delay.
The High Court held that the impugned assessment order (Ext.P7) passed under the old PAN for assessment year 2017-2018 is to be set aside. The Court found that the petitioner's contention regarding the inability to cancel the old PAN due to password issues was to be rejected, as the petitioner had continued to use the old PAN for banking transactions even after obtaining a new one and filing returns under it. The Court acknowledged that the mistake lay with the petitioner for not deactivating the old PAN and not intimating banks about the new PAN, leading to the old PAN being used for reporting transactions, including during the demonetization period. Consequently, the Court allowed the respondent department to initiate reassessment proceedings for assessment year 2017-2018 by issuing a notice under Section 148 of the Income Tax Act, using the petitioner's new PAN. The petitioner was precluded from contending that these reassessment proceedings are barred by limitation, given the circumstances, including the demonetization period and the petitioner's own fault. The Court directed that the reassessment proceedings should be initiated under the new PAN.
The High Court of Kerala, considering the facts and circumstances and the limited nature of the relief sought, disposed of the writ petition. The Court directed the 2nd respondent (Commissioner of Income Tax (Appeals)) to consider and pass orders on the stay application (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. Furthermore, the Court ordered that any demand pursuant to the assessment order (Ext.P1) shall be kept in abeyance until orders are passed on the stay application. The ratio decidendi is that appellate authorities should consider stay applications expeditiously, and interim relief can be granted by keeping recovery in abeyance pending the decision on the stay application, especially when the relief sought is limited and the matter is urgent.
The High Court dismissed the writ petition. Regarding the first issue, the Court rejected the argument that tax could not be deducted at source because the income was not received by the minor. The Court noted that if the income were taxed only after the minor attained majority, the financial burden would be huge, and it would be practically impossible to get credit for TDS. The Court also found that the financial hardship to the 1st petitioner was not as projected, considering the availability of TDS credit and threshold exemption. On the second issue, the Court distinguished the Supreme Court judgment in M.R. Doshi, stating that it was based on Section 64(1)(v) where deferment was beyond minority, whereas Section 64(1A) applies to income for immediate or deferred benefit of a minor child. The Court found that the interest income was for the deferred benefit of the minor. The Court also rejected the reliance on Kapoor Chand, as it was based on different provisions. On the third issue, the Court upheld the constitutional validity of Section 64(1A), agreeing with the Madras High Court in K.M Vijayan and others v Union of India and others, stating that the provision did not violate fundamental rights, legislative competence, basic structure doctrine, or suffer from manifest arbitrariness. The Court also found Section 145 irrelevant as a minor does not regularly employ a system of accounting. The Court concluded that the impugned orders were not perverse or contrary to law.
The Tribunal found merit in the assessee's contention regarding the duplication of miscellaneous income from the banquet hall. It directed the Assessing Authority to verify the quantum of miscellaneous income and, if found to be part of the banquet hall income for which tax was duly paid, to delete the same. This was considered a remand for assessment upon verification. Regarding the second issue, the Tribunal held that the Kerala Tax of Luxuries Act, 1976, does not empower the Assessing Authority to make fictional bifurcation of banquet hall income by applying Rule 3C, especially after the omission of Section 4(2B) of the Act by the Kerala Finance Act, 2006, rendering Rule 3C inoperative from 01.07.2006. The Tribunal relied on its previous order in TA Nos. 70 & 71/2014. The High Court agreed with the Tribunal's findings on both issues, finding the direction for verification correct and the ground regarding Rule 3C untenable, leading to the dismissal of the petition.
The High Court held that there were no extraordinary circumstances justifying the consideration of the correctness of the order of assessment (Ext.P2) in a writ petition under Article 226 of the Constitution of India. The Court found considerable merit in the respondent-Department's contention that the petitioner possesses an effective alternative remedy by filing an appeal before the National Faceless Appeal Centre. Consequently, the writ petition was disposed of with a direction. If the petitioner files an appeal against Ext.P2 along with a stay application within two weeks of receiving a certified copy of the judgment, all demands pursuant to Ext.P2 will be kept in abeyance until the National Faceless Appeal Centre decides the stay petition. The National Faceless Appeal Centre is to decide the stay petition after hearing the petitioner. The benefit of this judgment is contingent upon the petitioner filing the appeal and stay petition within the stipulated time.
The High Court disposed of the writ petition by directing that if the petitioner files a stay petition within two weeks from the date of the order, seeking a stay of the demands arising from Ext.P1 assessment order, those demands shall be kept in abeyance until a decision is taken on the stay petition. The Court also provided a procedural safeguard: if the petitioner encounters difficulties filing the stay petition before the National Faceless Appeal Centre, he is permitted to file it before the jurisdictional assessing authority. This authority is directed to facilitate the uploading of the stay petition for consideration by the National Faceless Appeal Centre. The stay petition is to be considered and disposed of without undue delay after affording the petitioner an opportunity of hearing. The Court did not decide on the merits of the assessment or the appeal.
The High Court disposed of the writ petition by directing the petitioner to file a statutory appeal against the assessment order within two weeks, along with an application for condonation of delay. The Court further directed the First Appellate Authority to condone the delay and consider the appeal on its merits. Recognizing that similar cases involving Section 80P benefits are pending, the Court ordered that any demand arising from the assessment order be kept in abeyance until a decision is taken on the petitioner's stay application, which is to be filed along with the appeal. The Court did not decide the merits of the Section 80P claim itself.