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The High Court held that the impugned assessment orders dated March 23, 2022, were vitiated because the petitioner was not afforded an adequate opportunity to file his responses/replies. The Court noted that it was admitted that the petitioner was not communicated any order declining his requests for time until March 24, 2022, to file his replies. Therefore, the assessment orders were set aside. The petitioner was granted a period of fifteen days from the date of the order to file his response to the show cause notices/pre-assessment notices dated March 4, 2022/March 17, 2022. The Court clarified that no further opportunity would be granted. If the petitioner filed the replies as directed, fresh assessment orders would be passed in accordance with the law. The ratio decidendi is that failure to communicate the rejection of a request for time to respond to notices, leading to non-filing of a response and subsequent ex-parte assessment, violates natural justice.
The High Court held that the impugned assessment orders dated March 23, 2022, were vitiated because the petitioner was not afforded an adequate opportunity to file his responses/replies. The Court noted that it was admitted that the petitioner was not communicated any order declining his requests for time until March 24, 2022, to file his replies. Therefore, the assessment orders were set aside. The petitioner was granted a period of fifteen days from the date of the order to file his response to the show cause notices/pre-assessment notices dated March 4, 2022/March 17, 2022. The Court clarified that no further opportunity would be granted. If the petitioner filed the replies as directed, fresh assessment orders would be passed in accordance with the law. The ratio decidendi is that failure to communicate the rejection of a request for time to respond to notices, leading to non-filing of a response and subsequent ex-parte assessment, violates natural justice.
The High Court of Kerala disposed of the writ petition with a specific direction. The Court acknowledged the submissions made by the learned Standing Counsel for the Income Tax Department, who stated that the CBDT had commenced the process of deciding the petitioner's application and that a decision would be taken expeditiously. Therefore, the Court directed the second respondent (The Chairman, Central Board of Direct Taxes) to take a decision on the petitioner's application (Ext.P5) as expeditiously as possible, preferably within a period of four months from the date of the order. The Court did not delve into the merits of the exemption claim itself but focused on ensuring a timely decision by the authorities. No specific issue was left undecided, as the court's action was procedural.
The High Court did not decide the merits of the assessment order or the appeal. Instead, it disposed of the writ petition by issuing a direction to the first respondent (Commissioner of Income Tax (Appeals)) to consider and pass an appropriate order, in accordance with law, on the condonation of delay application and the stay petition. This order was to be passed preferably within a period of two months from the date of the judgment. The court did not issue a writ of certiorari to quash the assessment order, nor did it grant a stay on recovery proceedings directly. The primary relief granted was a direction for expeditious disposal of the pending applications before the appellate authority.
The High Court held that the submission of the petitioner was not tenable. The court reasoned that for the purpose of reopening an assessment, it is the estimation of the assessing authority regarding the escaped income that is considered, not the final assessment order. The assessing authority had estimated the escaped income to be over Rs. 50,00,000/-, which met the threshold provided under Section 149 of the Act, thereby granting jurisdiction to reopen the assessment. Consequently, the court found no substance in the writ petition and dismissed it. The court also directed the assessing authority to consider the petitioner's rectification application expeditiously and noted that the petitioner could still challenge the assessment order before the appellate authority, without prejudice to the observations made in the judgment.
The High Court found substance in the submissions of the revenue. It noted that Section 144B prescribes a detailed procedure for faceless assessment proceedings, including the process for uploading responses to show cause notices and requesting online hearings. The Court observed that the petitioner did not follow the prescribed procedure by failing to submit the reply on or before the due date (09.09.2022) and by not clicking the 'seek video conferencing' button available against the show cause notice. The petitioner's failure to comply with the provisions of Section 144B to avail the facility of personal hearing through video conferencing meant that no personal hearing was granted. Consequently, the Court held that there was no violation of the principles of natural justice and found no substance in the writ petition. The Court dismissed the writ petition but granted the petitioner liberty to file an appeal against the assessment order if advised.
The High Court held that the assessing authority's finding that no objection was filed against the draft assessment order was palpably wrong and against the record. The Court reasoned that it was an unreasonable expectation for the assessee to presume the need to file objections with the assessing authority when the notice explicitly directed them to be filed with the DRP. The Court noted that the objection was indeed filed with the DRP and was available on the web portal. The assessing authority's approach was deemed overly technical. Since the DRP had already considered the objections and issued directions (Exhibit P-4), the assessment order was vitiated by incorrect findings. The Court set aside the assessment order and remanded the matter back to the assessing authority to consider the DRP's directions and pass a fresh assessment order.
The High Court found substance in the revenue's submission and dismissed the writ petition. The Court held that the amount collected from NRI students as capitation fee is not a voluntary contribution but is collected as quid pro quo for admission. Therefore, it is not eligible for exemption under Section 11(1)(a) of the Income Tax Act, 1961. The Court reasoned that the re-opening of assessment was based on a valid audit objection and not merely a change of opinion. The petitioner was granted fifteen days to file its return of income based on the notice under Section 148. The assessing authority was directed to proceed with the finalization of the assessment order in accordance with law, without being prejudiced by any observations made in the judgment. Any pending interlocutory applications were also dismissed.
The High Court held that the assessment orders for assessment years 2013-14 and 2014-15 were vitiated because the assessing authority proceeded with the assessment as if no replies were filed by the petitioner to the show cause notices dated March 23, 2022. Despite the petitioner claiming to have filed replies on March 28, 2022, and placing printouts from the e-filing website as evidence, the assessing authority made additions based on the absence of such replies. The Court found this procedural lapse to be significant. Consequently, the assessment orders were set aside. The matter was remanded back to the assessing authority to pass fresh assessment orders after considering the petitioner's replies filed on March 28, 2022, and affording the petitioner an opportunity of hearing through video conferencing. The assessing authority was directed to provide the necessary link and password for the hearing.
The High Court observed that since the petitioner had deposited 20% of the demand, there would be an automatic stay of recovery. Furthermore, the respondents' counsel conceded that the attachment orders were not surviving as their validity of sixty days from the date of assessment orders had expired. Consequently, the Court found that nothing survived in the writ petition. It was explicitly stated that no order of attachment was surviving in respect of the petitioner's properties, including bank deposits, pursuant to the impugned orders. The writ petition was disposed of with these observations.
The High Court observed that the petitioner had deposited 20% of the assessed tax demand, which, in terms of the Office Memorandum F.No.404/72/93-ITCC dated 31.7.2017, should result in an automatic stay of further recovery. Consequently, there was no reason to continue the attachment on the petitioner's property. Furthermore, the revenue's counsel conceded that the attachment orders were no longer valid as their 60-day period had expired. Therefore, the Court held that no order of attachment was surviving in respect of the petitioner's properties, including bank deposits, pursuant to the impugned orders. The writ petition was disposed of with these observations.
The High Court held that the addition of loan amounts from 5 specific persons (Basatin Antony, George K C, Rosamma Mathew, Lisha K Thayim, and Suji Jospeh) to the petitioner's income under Section 68 of the Income Tax Act, 1961, was not in accordance with law and vitiated the assessment order to that extent. The Court noted that while the initial show cause notice mentioned 22 persons, the assessment order referred to 28 persons. Crucially, the petitioner was not put on notice regarding the transactions with these 5 individuals, thus denying them an opportunity to respond. The Court found this to be a violation of the principle of natural justice. Consequently, the writ petition was disposed of, and the matter was remanded back to the assessing authority to pass a fresh assessment order. The petitioner was directed to provide a response and supporting documents specifically for the loans from these 5 individuals, with an opportunity to upload their explanation only for these transactions. No recovery would be effected until the fresh assessment order is passed.
The High Court held that there were no grounds to take a different view from its previous decision in W.P.(C) No. 19592 of 2021. The Court stated it would not interfere with the proceedings pursuant to the show cause notices issued to the petitioner. The Court found that the notices issued to the petitioner were neither without jurisdiction nor in violation of any express provision of law. Consequently, the writ petition was deemed not maintainable and was dismissed.
The High Court held that there was no error of law or jurisdiction in the impugned orders passed under Section 148A of the IT Act. The Court noted that the petitioner had not been granted registration under Section 10(23C)(vi) of the IT Act to claim exemption from income tax, yet it had proceeded to claim such exemption. Consequently, the Court found no grounds to interfere with the impugned orders. Regarding the petitioner's argument about the delay in decision on its registration application, the Court observed that the writ petition was filed after an unexplained delay and laches. However, the petitioner was granted liberty to apply afresh under the appropriate provisions, which would be considered in accordance with the law. The writ petition was dismissed.
The High Court held that the submission of the petitioner that the notice dated March 31, 2021, was beyond the period of limitation of 6 years has no substance. The Court reasoned that for the assessment year 2014-15, the 6-year limitation period would expire on March 31, 2021. Since the notice was issued on March 31, 2021, it was well within the prescribed time limit. Therefore, the writ petition was dismissed. The ratio decidendi is that a notice issued on the last day of the limitation period is considered within time. No other issues were decided.
The High Court disposed of the writ petition, granting the petitioner liberty to file its return and submit all requisite documents in response to the notice dated 09.01.2024 within a period of six weeks from the date of the order (i.e., by 16.02.2024). The court reasoned that this extension would serve as a last chance for the petitioner to comply. The court explicitly stated that failing to meet this deadline would result in the revenue proceeding to finalize the assessment under Section 144 of the Income Tax Act. No specific finding was made on the merits of the unexplained income, as the matter was disposed of procedurally.
The High Court noted the submission made by the Special Government Pleader for the respondents that the taxes deducted under Section 194 of the Income Tax Act and the General Sales Tax Act have been refunded to the petitioner. The counsel for the petitioner accepted this statement. Consequently, the Court found that nothing further survived in the writ petition. The petition was accordingly closed. No specific finding was made on the entitlement to interest, as the core issue of refund was stated to be resolved.
The High Court held that the assessment order dated March 29, 2022, was passed in violation of the principles of natural justice. The Court found that the petitioner's request for a video conference hearing on March 23, 2022, was evident from the screenshot of the Income Tax Department's website (Ext.P12) and could not be disputed. Since no opportunity of being heard was provided despite the request, the impugned order was set aside. The matter was remitted back to the second respondent to provide the petitioner an opportunity of hearing through video conferencing and then pass a fresh assessment order in accordance with the law. The Court did not leave any issue undecided.
The High Court found substance in the writ petition, acknowledging the admission by respondents 6 and 7 that a mistake was committed in reflecting the entire hospital salary as the petitioner's income in Form 26AS. Consequently, the Court disposed of the writ petition with a direction that no coercive measures would be taken against the petitioner pursuant to Ext. P22 (presumably related to recovery or enforcement) until a decision is taken in the appeals filed by the petitioner. The Court also noted that the petitioner could file appeals against the rejection of his rectification applications if he was advised to do so. The primary issue of the maintainability of rectification applications when appeals are pending was implicitly addressed by the Court's intervention based on the admitted mistake, rather than strictly adhering to the rejection ground.
The High Court dismissed the writ petition. The Court found no grounds to entertain the petition. The reasoning was based on the assessing authority's view that the petitioner, a co-operative society, could not claim deductions under Section 80P for assessment years 2018-19 and 2019-20 without first filing returns of income under Section 139(1) of the Income Tax Act, 1961. The Court noted that the petitioner had subsequently filed returns under Section 148 for the relevant assessment years, and final orders were pending. The principle derived is that compliance with the procedural requirement of filing returns under Section 139(1) is a prerequisite for claiming deductions like Section 80P, and the writ petition was premature as final orders were yet to be passed. No issue was expressly left undecided.
The High Court disposed of the writ petition with liberty to the petitioner to file an appeal against the assessment order dated March 20, 2023, using the old PAN card (AAABM2623H). The Court directed that if such an appeal is filed, it shall be proceeded with in accordance with the law. The petitioner was also instructed to register on the e-filing portal using the old PAN (AAABM2623H). The reasoning was based on the Revenue's submission that both PANs were active and the old PAN remained active due to pending proceedings, thus enabling the petitioner to file an appeal. The Court did not decide on the merits of the assessment itself, but rather on the procedural ability to file an appeal.
The High Court held that the order passed under Section 148A(d) was not merely based on a change of opinion, considering the facts and circumstances. The Court noted that the AO had formed an opinion that income chargeable to tax had escaped assessment for AY 2015-2016 after considering the reply submitted by the petitioner. The Court declined to interrupt the proceedings at this stage, directing the petitioner to file a reply to the notice under Section 148. The Court relied on the judgment in Anshul Jain v. Principal Commissioner of Income Tax, which held that the High Court should not interfere at the stage where proceedings have not yet been concluded by statutory authorities, and that the correctness of an order under Section 148A(d) cannot be challenged on factual premises if statutory remedies are available. The Court stated that if the assessment order is finalized, the petitioner would have a remedy to file an appeal. Therefore, the writ petition was dismissed, but the petitioner was granted 30 days to file their reply/return to the notice under Section 148, after which the AO was to proceed with the finalization of the assessment in accordance with law.
The High Court held that the issue concerning the upgradation of pay scales for Income Tax Inspectors and Officers had been substantially resolved by the judgments of the Bombay High Court and the Calcutta High Court, and the subsequent Government of India order dated September 22, 2023. The Court directed the Union Government to extend the benefit of its order dated September 22, 2023, to all applicants. While acknowledging the Union Government's right to constitute an Anomaly Committee to verify individual cases if warranted, the Court stipulated that the entire process should be completed within three months. The operative direction was to dispose of the original petitions in line with this decision, granting the benefits as outlined.
The High Court held that it should not entertain a writ petition against an appellate order when a statutory remedy of appeal to the Income Tax Appellate Tribunal is available. The Court reasoned that Article 226 of the Constitution is a public law remedy and not an appellate power to review orders passed by assessing or appellate authorities under the Income Tax Act. Therefore, the writ petition was disposed of with liberty to the petitioner to approach the Income Tax Appellate Tribunal if he so advised. The Court explicitly did not decide on the merits of the assessment or appellate orders, as it declined to exercise its discretionary writ jurisdiction.
The High Court held that there is a statutory appeal provided under the Income Tax Act against an assessment order passed by the assessing authority. The Court found no ground to exercise its jurisdiction under Article 226 of the Constitution of India as a public law remedy to act as an appellate authority. If particular evidence was not considered regarding the income or expenditure of the assessee, the assessee has the liberty to file an appeal or a revision against the impugned assessment order. A writ petition was deemed not to be the appropriate remedy. Consequently, the writ petition was disposed of with liberty to the petitioner to approach the appropriate authority against the impugned assessment order if advised.
The High Court held that the assessing authority had not committed any error of law or jurisdiction in passing the impugned order under Section 148A(d). The Court noted that the petitioner, a religious institution registered under Section 12AA, accepted and repaid a significant sum of Rs. 1,87,69,000/- in cash. The petitioner failed to provide a satisfactory explanation for these cash transactions or confirm their reflection in audited financials. The Court found that the acceptance and repayment of loans in cash were in clear violation of Section 12AA and that the assessing authority rightly formed the opinion that income chargeable to tax to the tune of Rs. 1,87,69,000/- had escaped assessment for assessment year 2016-17. The petitioner was directed to file a return in response to the notice under Section 148, and the assessing authority was to finalize the assessment after hearing the petitioner. The Court found no ground to interfere with the impugned order.
The High Court held that a statutory appeal is provided under the Income Tax Act against the impugned order passed by the assessing authority. The Court noted that a similar writ petition filed by the petitioner for the same assessment year, challenging the assessment order, had already been dismissed. Therefore, the High Court found no ground to entertain the present writ petition. The Court disposed of the writ petition with liberty granted to the petitioner to approach the appropriate authority against the impugned order if advised. The principle is that writ petitions are generally not entertained when alternative statutory remedies are available and have not been exhausted.
The High Court held that there was a violation of the principles of natural justice. The Court agreed with the petitioner's counsel that in the absence of a specified date for submission of the response to the show cause notice dated February 23, 2023, the petitioner had a bona fide belief that their request for adjournment to March 17, 2023, was accepted. Since the impugned order (Ext.P6) was passed on March 14, 2023, prior to the believed deadline, the order was considered bad in law and liable to be set aside. The Court allowed the writ petition, set aside the impugned order, and remanded the matter back to the assessing authority. The assessing authority was directed to open the link for the petitioner to upload their response. If the petitioner failed to upload the response within the prescribed time, the assessing authority could pass a fresh order. If the petitioner filed the response, the assessing authority was to consider it and provide an online opportunity of hearing before finalizing the assessment.
The High Court of Kerala, presided over by Justice Gopinath P., held that the writ petitions filed by the petitioners should be dismissed as not pressed. This decision was based on the submission made by the learned counsel for the petitioners. The court explicitly stated that the dismissal was without prejudice to the rights of the petitioners, leaving open all contentions and reserving the right to file fresh writ petitions if so advised. No findings were made on the merits of the original claims or disputes that led to the filing of these writ petitions. The operative direction was to dismiss the petitions.
The High Court held that the petitioner had indeed filed an objection on June 30, 2023, but it was in the wrong form (Form 34BC instead of Form 35A). The Court found that the petitioner ought to have been given an opportunity to cure this defect, which was curable. Since this opportunity was not provided, the Dispute Resolution Panel and the Assessing Officer committed an error of law and violated the principles of natural justice. Consequently, the writ petition was allowed. The petitioner was permitted to file the objection dated June 30, 2023, in the correct form (Form 35A) within two weeks. The DRP was directed to consider this objection and pass an order after hearing the petitioner. Thereafter, the AO was to finalize the assessment for the assessment years 2013-14 and 2014-15.
The High Court found that there appeared to have been a violation of the principles of natural justice to some extent. Consequently, the writ petitions were allowed, and the impugned ex-parte appellate orders were set aside. The cases were remitted back to the Commissioner of Income Tax (Appeals) for a fresh decision. The petitioner was directed to appear before the Appellate Authority on 18.01.2024 and deposit 10% of the total assessed tax across all five assessment orders. The remaining demand was to be kept in abeyance until the appeals were decided. The court clarified that failure to deposit the 10% tax or appear on the specified date would result in no further opportunity being granted, and the demand as per the assessment orders would be enforced.
The High Court found that there appeared to have been a violation of the principles of natural justice to some extent. Consequently, the writ petitions were allowed, and the impugned ex-parte appellate orders were set aside. The cases were remitted back to the Commissioner of Income Tax (Appeals) for a fresh decision. The petitioner was directed to appear before the Appellate Authority on 18.01.2024 and deposit 10% of the total assessed tax across all five assessment orders. The remaining demand was to be kept in abeyance until the appeals were decided. The court clarified that failure to deposit the 10% tax or appear on the specified date would result in no further opportunity being granted, and the demand as per the assessment orders would be enforced.
The High Court held that there appeared to be a violation of the principles of natural justice because the petitioner was not provided with a fresh link and password to make online submissions before the impugned order was passed. Consequently, the writ petition was allowed, and the impugned order dated March 25, 2022, was set aside. The matter was remitted back to the respondent with a direction to provide a fresh link to the petitioner for making online submissions in respect of the penalty proceedings. The court stipulated that if the petitioner failed to join and make submissions after being provided with the fresh link and password, no further opportunity would be granted. The judgment did not expressly leave any issue undecided.
The High Court held that the assessment order, Ext.P14, was issued in clear violation of the mandatory procedure stipulated in Section 144B of the Income Tax Act, 1961. The court noted that while notices under Sections 143(2) and 142 were issued, no draft assessment order was prepared as contemplated by Section 144B, nor was a copy of any such draft order provided to the petitioner. The court found this to be a violation of the statutory provisions and the principles of natural justice, as the assessee was not afforded the opportunity to respond to a draft proposal or request a personal hearing in case of prejudicial variations. Citing precedents from the Supreme Court and its own bench, the court set aside Ext.P14. The respondents were directed to issue fresh assessment orders after strictly complying with the procedure laid down in Section 144B. All proceedings undertaken pursuant to Ext.P14 were ordered to be dropped.
The High Court found that there appeared to have been a violation of the principles of natural justice to some extent. Consequently, the writ petitions were allowed, and the impugned appellate orders were set aside. The cases were remitted back to the Commissioner of Income Tax (Appeals) for a fresh decision. The petitioner was directed to appear before the Appellate Authority on 18.01.2024. As a condition for this relief, the petitioner was required to deposit 10% of the total assessed tax across all five assessment orders. The remaining demand would be kept in abeyance until the appeals were decided. The court clarified that failure to deposit the 10% tax or appear on the specified date would result in no further opportunity being granted and the demand as per the assessment orders would be enforced.
The High Court of Kerala, in a decision delivered on May 29, 2024, ordered that the writ petitions be dismissed as not pressed. The court explicitly stated that all contentions are left open, and the petitioners reserve the right to file a writ petition again if they are so advised. No specific findings were made on the merits of the original challenges presented in the writ petitions, as the dismissal was based on the petitioners' request to withdraw their petitions.
The High Court held that while the petitioner filed an objection on 30.06.2023, it was in Form 34BC instead of the prescribed Form 35A. The Court found that the petitioner ought to have been given an opportunity to cure this curable defect, which was not provided. The failure to grant this opportunity by the Dispute Resolution Panel and the Assessing Officer was considered an error of law and a violation of the principles of natural justice. Consequently, the writ petition was allowed. The petitioner was permitted to file the objection dated 30.06.2023 in the correct form (Form 35A) within two weeks. The Dispute Resolution Panel was directed to consider this objection and pass an order after hearing the petitioner. Thereafter, the assessing authority was to finalize the assessment for AYs 2013-14 and 2014-15.
The High Court held that it would not exercise parallel jurisdiction with the appellate authority for granting an interim order as prayed for by the petitioner. Consequently, the writ petition was disposed of with a direction to the 3rd respondent (the appellate authority) to consider and pass appropriate orders, in accordance with law, on the stay petition (Ext.P3) expeditiously, preferably within a period of two months. The principle established is that writ courts should generally refrain from interfering with the appellate process by granting interim relief that the appellate authority itself is empowered to grant, thereby avoiding parallel proceedings. The High Court's role was limited to ensuring the expeditious disposal of the pending application before the appellate authority.
The High Court held that the petitioner has a statutory remedy of appeal against the assessment and penalty orders under the Income Tax Act, 1961. Therefore, the Court found no ground to interfere with the assessment order or the penalty order directly through a writ petition. The writ petition challenging these orders was dismissed. However, considering the petitioner's prayer for the disposal of his rectification petition (Exhibit P-6) filed under Section 254 of the IT Act, 1961, the Court issued a direction to the respondents (1st and 2nd respondents) to consider and pass an appropriate order on the said petition expeditiously, preferably within a period of two months. The ratio decidendi is that statutory remedies must be exhausted before approaching the High Court under its writ jurisdiction, but procedural applications filed within the statutory framework can be directed to be considered.
The High Court held that it does not exercise parallel jurisdiction with the appellate authority. Since the petitioner's appeals and applications for condoning delay and stay are pending before the Commissioner of Income Tax (Appeals), and the petitioner is unwilling to deposit even 20% of the assessed tax, the Court would not grant an interim stay on the demand. The writ petition was disposed of with a direction to the Commissioner of Income Tax (Appeals) to consider and pass appropriate orders on the petitioner's applications for condoning delay and stay petitions expeditiously, preferably within two months. The Court explicitly stated that no interim relief was granted to the petitioner.
The High Court of Kerala directed the Income Tax Appellate Tribunal (ITAT) to consider and pass orders on the petitioner's applications for condoning the delay and the stay petition expeditiously. The Court did not delve into the merits of the tax dispute itself, which remains pending before the ITAT. The operative direction is for the ITAT to process the interlocutory applications filed by the petitioner. The Court specified that the orders should preferably be passed within a period of two months. The core principle here is the High Court's supervisory jurisdiction over quasi-judicial bodies to ensure timely disposal of pending applications, especially when recovery proceedings are threatened. The issue of whether the interest income on deposits is eligible for deduction under Section 80P was not decided by the High Court, as it was awaiting adjudication by the ITAT.
The High Court disposed of the writ petitions with a direction to the Income Tax Appellate Tribunal (ITAT) to consider and pass orders on the petitioner's applications for condoning the delay and for a stay expeditiously, preferably within a period of two months. The court did not decide on the merits of the underlying tax dispute concerning the Section 80P deduction or the disallowance of interest income on deposits. The primary focus was on the procedural aspect of the pending applications before the ITAT. The ratio decidendi is that where an assessee faces potential recovery actions while their procedural applications (delay condonation, stay) are pending before the appellate authority, the appellate authority should be directed to decide these applications promptly.
The High Court directed the Income Tax Appellate Tribunal (3rd respondent) to consider and pass orders on the petitioner's applications for condoning the delay and the stay petition expeditiously, preferably within a period of two months. The Court did not decide on the merits of the appeal or the underlying tax dispute regarding Section 80P or the interest income. The operative direction is solely to expedite the procedural steps before the ITAT. The core issues of the allowability of Section 80P deduction and the treatment of interest income remain to be decided by the ITAT.
The High Court of Kerala directed the Income Tax Appellate Tribunal (ITAT) to consider and pass orders on the petitioner's applications for condoning the delay and the stay petition expeditiously. The Court did not delve into the merits of the tax dispute itself, which remains pending before the ITAT. The operative direction is for the ITAT to process the interlocutory applications filed by the petitioner. The Court specified that the orders should preferably be passed within a period of two months. The core principle here is the High Court's supervisory jurisdiction over quasi-judicial bodies to ensure timely disposal of pending applications, especially when recovery proceedings are threatened. The issue of whether the interest income on deposits is eligible for deduction under Section 80P was not decided by the High Court, as it was awaiting adjudication by the ITAT.
The High Court held that the phrase 'provide an opportunity of being heard to the assessee' in Section 148A(b) of the Income Tax Act implies an opportunity for a personal hearing. The Court noted that in the present case, no such personal hearing was granted to the petitioner before the impugned order under Section 148A(d) was passed. Therefore, the Court allowed the writ petition, set aside the impugned order and notice, and remitted the matter back to the assessing authority. The petitioner was directed to appear before the ITO on or before January 15, 2024, with relevant records for a personal hearing. The assessing authority is to pass a fresh order under Section 148A(d) after considering the petitioner's submissions. The Court clarified that no further opportunity would be granted if the petitioner fails to appear on the specified date.
The counsel for the Official Liquidator submitted that since the Income Tax Department may not be able to take any coercive steps against the Liquidator for the realization of the claim for interest, there is no necessity to continue with the application. Consequently, the High Court closed the Company Application. The closure was made without prejudice to the right of the Official Liquidator to move the Court again if found necessary. The specific issues raised in the application, including the validity of the assessment order, request for personal hearing, consideration of the return, exemption from interest, and penalty proceedings, were not decided on merits due to the withdrawal of the necessity to pursue the application by the Official Liquidator.
The High Court directed the second respondent (Commissioner of Income Tax (Appeals)) to decide the stay petition (Exhibit P3) expeditiously, preferably within a period of two months. Furthermore, the Court ordered that for a period of two months, the demand pursuant to the assessment order (Exhibit P1) should not be enforced. The Court considered the submissions of both parties, acknowledging the revenue's lack of objection to an early disposal of the stay petition but their opposition to a stay on the demand. The Court's reasoning was based on balancing the need for expeditious resolution of the appeal with the petitioner's grievance regarding recovery proceedings. The ratio decidendi is that in writ petitions seeking expeditious disposal of appeals and stay applications, courts can direct authorities to decide such applications within a stipulated time and grant interim protection against recovery for a limited period, considering the facts and submissions.
The High Court disposed of the writ petition based on the statement filed by the respondents. The respondents conceded that provisional attachment orders are valid only for a limited period, as stipulated under Section 222(2)(b) of the Income Tax Act, with provisions for extension up to two years or sixty days from the assessment order, whichever is later. They further stated that upon expiry of this period, the attachment order automatically becomes void ab initio. In the petitioner's case, the last attachment was made on 30.12.2019, valid for six months, and consequently became void ab initio thereafter. Therefore, the respondents submitted that the provisional attachments made were null and void as of the date of their statement. The Court explicitly noted that there was no attachment on the properties of the petitioner prevailing at that time, rendering the writ petition infructuous.
The High Court disposed of the writ petition by directing the 1st respondent (Commissioner of Income Tax (Appeals) - 1) to finalize the appeals (Exts. P8 to P14) expeditiously, preferably within a period of four months. The Court also directed that for a period of four months, no coercive measures would be taken against the petitioner to enforce the demand arising from the assessment orders (Exts. P1 to P7). The Court did not decide on the merits of the appeals themselves but addressed the procedural delay and the need for timely disposal and a temporary stay on recovery.
The High Court directed the Commissioner of Income Tax (Appeals) to consider and pass necessary orders on the petitioner's application for condoning the delay and the stay application expeditiously, preferably within two months. The demand arising from the assessment order (Exhibit P1) was ordered to remain stayed until a decision was made on the condonation of delay and stay petitions. This stay was made conditional upon the petitioner depositing 15% of the total demand within one week from the date of the order. The High Court disposed of the writ petition with these directions. The court did not decide on the merits of the assessment order or the appeal itself, focusing instead on facilitating the expeditious disposal of the pending applications before the appellate authority.