Dated This The 01[St] Day Of March, 2023 v. C.velukutty

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE T.R.RAVI WEDNESDAY, THE 1 DAY OF MARCH 2023 / 10TH PHALGUNA, 1944WP(C) NO. 6385 OF 2023 PETITIONER: RADHAKRISHNAN NAIR MADHAVAN NAIRAGED 63 YEARS FLAT NO.1A2, FOUR SQUARE MANOR HOLY FAITH BUILDING, OPP. ENGINEERING COLLEGE THRIKKAKKARA, ERNAKULAM, PIN - 682021BY ADV PREETHA S.NAIR RESPONDENTS: 1PRINCIPAL COMMISSIONER OF INCOME TAXREVENUE BUILDING, I.S.PRESS ROAD, KOCHI ., PIN - 6820182THE INCOME TAX OFFICERNATIONAL FACELESS ASSESSMENT CENTRE, DELHI,, PIN - 1100023THE INCOME TAX OFFICERNON-CORPORATE WARD -1(1),KOCHI,, PIN - 6820184THE COMMISSIONER OF INCOME TAX (APPEALS)NATIONAL FACELESS APPEAL CENTRE, (NFAC), DELHI, PIN – 110002. SRI. CHRISTOPHER ABRAHAM, SC. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON01.03.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: T.R. RAVI, J. -------------------------------------------- W.P.(C) No.6385 of 2023 -------------------------------------------- Dated this the 01[st] day of March, 2023 JUDGMENT Against Ext.P1 assessment order, the petitioner has preferredan appeal as Ext.P2. The petitioner has also preferred a stayapplication before the Assessment Officer on which the petitioner hasbeen directed to pay 20% of the demand. The petitioner hasapproached this Court seeking direction to the Appellate Authority toconsider and pass orders on the appeal without insisting on thepayment as directed by the Assessment Officer. The petitioner is yetto file an application for stay before the Appellate Authority. Thecontention of the petitioner is that against a returned income ofRs.6,93,940/-, the 2[nd] respondent has completed the assessmentproceedings by fixing the total income at Rs.4,94,18,803/-. Thecounsel for the petitioner submits that a high pitched income fixed inan assessment on best judgment which necessarily involves a certainamount of guess work. The petitioner has relied on the decision ofthe Hon’ble Supreme Court in State of Kerala V. C.Velukutty WP(C) NO. 6385 OF 2023 reported in1966 (60) ITR 239 (SC)] to submit that the power toconduct a best judgment assessment does not mean that a capriciousassessment can be done and guidelines have also been put in placeregarding the manner in which a best of judgment assessment shouldbe made. Reliance is also placed on the decision of the Division Benchof the Delhi High Court in Taneja Developers & InfrastructureLtd., V. Assistant Commissioner of Income Tax & Ors. reportedin [2009 (222) CTR 521 (Delhi)], to submit that an assessment attwice the amount of the returned income would amount to beingsubstantially higher or high pitched. The court in that case wasconsidering a case where an assessment was made at 350 times thereturned income. After referring to several other cases, the Courtnoticed that even a figure of 8 times and 74 times have beenclassified as unreasonably high pitched and therefore the case beforethe court which has 350 times also falls under the samenomenclature. 2.In the case on hand, the returned income was onlyRs.6,93,940/- and the amount which has been arrived at isRs.4,94,18,803/-. It is almost 71 times and going by the yardstickfollowed by the Division Bench of the Delhi High Court, it definitely comes under the nomenclature of high pitched. It is in the abovecircumstances the learned counsel for the petitioner submits that it isa case where the Appellate Authority should be directed to hear theappeal and dispose it of without insisting on payment. The counselfor the Department submitted that the appeal can be directed to bedisposed of but however, it may be on the basis of a condition onpayment of a portion of the tax. 2.In the case on hand, the returned income was onlyRs.6,93,940/- and the amount which has been arrived at isRs.4,94,18,803/-. It is almost 71 times and going by the yardstickfollowed by the Division Bench of the Delhi High Court, it definitely comes under the nomenclature of high pitched. It is in the abovecircumstances the learned counsel for the petitioner submits that it isa case where the Appellate Authority should be directed to hear theappeal and dispose it of without insisting on payment. The counselfor the Department submitted that the appeal can be directed to bedisposed of but however, it may be on the basis of a condition onpayment of a portion of the tax. 3.I have considered the contentions on either side. It is seenthat the appeal had been preferred in April, 2022. It will be onerousto burden the petitioner with a condition of paying a portion of a taxin a case which necessarily has to be categorised under the highpitched category going by the decisions referred to above,particularly since the appeal has been pending for almost ninemonths. 4.In the result, the writ petition is disposed of directing thepetitioner to approach the concerned Assessing Authority for openingthe portal for preferring a stay application and a stay applicationshall be preferred within two weeks from today. The AppellateAuthority shall take up the stay application along with the appeal andconsider the appeal itself and pass orders unless the Appellate WP(C) NO. 6385 OF 2023 Authority is of the opinion that the workload will not permit such acourse of action. In such a situation, the Appellate Authority shallconsider the stay application with particular reference to thedecisions referred above and pass appropriate orders. All coercivesteps shall be kept in abeyance till a decision as directed above istaken by the Appellate Authority. The writ petition is disposed of as above. mpm Sd/-T.R.RAVI JUDGE WP(C) NO. 6385 OF 2023 APPENDIX OF WP(C) 6385/2023 PETITIONER EXHIBITS Exhibit P1A TRUE COPY OF THE ASSESSMENT ORDER ALONG WITH DEMAND NOTICE DATED 30-03-2022 Exhibit P2:A TRUE COPY OF THE FORM NO.35 DATED 30-04-2022Exhibit P3A TRUE COPY OF THE STAY APPLICATION DATED 05-05-2022 Exhibit P4A TRUE COPY OF THE ORDER OF THE 3RD RESPONDENT DATED 19-12-2022