Wa/661/2024 Of Covenant Stones Private Limited v. Commissioner Of Income Tax (Appeals)

IN THE HIGH COURT OF KERALA AT ERNAKULAMPRESENT THE HONOURABLE DR. JUSTICE A.K.JAYASANKARAN NAMBIAR& THE HONOURABLE MR. JUSTICE SYAM KUMAR V.M.TUESDAY, THE 21 DAY OF MAY 2024 / 31ST VAISAKHA, 1946WA NO. 661 OF 2024 AGAINST THE ORDER/JUDGMENT DATED IN WP(C) NO.40710 OF 2023 OF HIGH COURT OF KERALA APPELLANT COVENANT STONES PRIVATE LIMITEDHAVING ITS REGISTERED OFFICE AT SHOP NO. 237(416B), MUKHOLA, VATTIYURKAVU, NETTAYAM P.O, THIRUVANANTHAPURAM, REPRESENTED BY ITS GENERAL MANAGER SUDHEER. V, PIN - 695013BY ADVS.ASWIN GOPAKUMARANWIN GOPAKUMARADITYA VENUGOPALANMAHESH CHANDRANSARANYA BABUANGITA T. MENONABHISHEK S. 237(416B), MUKHOLA, VATTIYURKAVU, NETTAYAM P.O, RESPONDENTS 1COMMISSIONER OF INCOME TAX (APPEALS)CENTRAL CIRCLE, COCHIN, POORNIMA BUILDING, MANORAMA JUNCTION, PANAMPILLY NAGAR, COCHIN, PIN – 682036 CENTRAL CIRCLE, COCHIN, POORNIMA BUILDING, 2COMMISSIONER OF INCOME TAX (APPEALS)-34TH FLOOR, CENTRAL REVENUE BUILDING, I.S. PRESS ROAD, COCHIN, PIN – 682018 W.A.No.661 of 2024 3ASSISTANT COMMISSIONER OF INCOME TAXCENTRAL CIRCLE, INCOME TAX OFFICE, PUBLIC LIBRARY BUILDING, SHASTRI ROAD, KOTTAYAM, PIN – 686001CENTRAL CIRCLE, INCOME TAX OFFICE, PUBLIC LIBRARY BUILDING, SHASTRI ROAD, KOTTAYAM, PIN – 686001 BY ADV NAVANEETH.N.NATH THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON21.05.2024, THE COURT ON THE SAME DAY DELIVERED THEFOLLOWING: J U D G M E N T============ Dated this the 21[st] day of May, 2024 Dr. A.K.Jayasankaran Nambiar, J. This writ appeal has been preferred impugning thejudgment dated 19.12.2023 of a learned Single Judge inW.P(C) No.40710 of 2023. 2. Briefly stated the facts necessary for disposal of thiswrit appeal are that the appellant had approached this Courtthrough the writ petition aforementioned impugning theconditional stay order passed by the 1[st] respondent-AppellateAuthority, whereby the appellant was directed to pay 20% ofthe total tax demand raised in the assessment orders for theassessment years 2014-2015, 2015-2016, 2016-2017, 2017-2018 and 2019-2020 under the Income Tax Act, 1961.Although various contentions were raised in the writ petition impugning the conditional stay order passed by the 1[st]respondent-Appellate Authority, the learned Single Judgefound that there was no warrant for interfering with theconditional order of stay passed by the 1[st] respondent,especially since the 1[st] respondent had directed payment ofonly 20% of the total demand raised for the variousassessment years and had also given the appellant a facility ofpayment of that 20% in seven equal instalments. 3.The learned Single therefore, dismissed the writpetition and granted the appellant time to pay the firstinstalment on or before 30.12.2023 by extending the time limitgranted by the 1[st] respondent (25.09.2023). The appellant wasalso directed to ensure that the last instalment of the seveninstalments granted was paid on or before 30.06.2024. 4. In the appeal before us, it is the submission ofSri. Aswin Gopakumar, the learned counsel for the appellantthat the learned Single Judge ought to have interfered with theconditional order of stay passed by the 1[st] respondent more sowhen the conditional stay order did not furnish reasons for the direction to pay 20% of the disputed demand pending disposalof the appeals. It is also his case that the appellant is in direfinancial straits and hence, the direction to pay 20% of thedemand pending disposal of the appeal would cause greatprejudice to the appellant. 5. We have also heard Sri.Navaneeth N Nath, thelearned Standing Counsel for the Income Tax Department. 4. In the appeal before us, it is the submission ofSri. Aswin Gopakumar, the learned counsel for the appellantthat the learned Single Judge ought to have interfered with theconditional order of stay passed by the 1[st] respondent more sowhen the conditional stay order did not furnish reasons for the direction to pay 20% of the disputed demand pending disposalof the appeals. It is also his case that the appellant is in direfinancial straits and hence, the direction to pay 20% of thedemand pending disposal of the appeal would cause greatprejudice to the appellant. 5. We have also heard Sri.Navaneeth N Nath, thelearned Standing Counsel for the Income Tax Department. 6. On a consideration of the rival submissions, we areof the view that in as much as the 1[st] respondent-AppellateAuthority has directed the appellant to pay only 20% of thetotal tax demand raised for the various assessment years andhad also granted instalments to effect the said payment of 20%of the said tax amount, the non interference with the saidorder by the learned Single Judge does not appear to us to beunreasonable. It is also significant that the appellant did notprefer this writ appeal for a good four months after thedirection of the learned Single Judge, and the writ appeal waspreferred only after the respondents initiated recoveryproceedings for non compliance with the directions of the 1[st] respondent in Ext.P5 order, as aforementioned by the learnedSingle Judge in the impugned judgment. 7. That said, we take note of the submission of thelearned counsel for the appellant that the appellant is facingfinancial difficulties, more so when the company has ceased tofunction with effect from 01.04.2018. Taking note of the saidsubmission of the learned counsel for the appellant, we feelthat in the interests of justice, the appellant can be grantedsome time to discharge the liability of 20% of the total taxdemand for the various assessment years as directed by the 1[st]respondent in Ext.P5 order that was impugned in the writpetition. 8. Accordingly, the impugned judgment of the learnedSingle Judge, as also the direction in Ext.P5 order that wasimpugned in the writ petition, are modified to the limitedextent of permitting the appellant herein todischarge theliability of payment of 20% of the total tax demand as directedby the 1[st] respondent in Ext.P5 order, in seven equalsuccessive monthly instalments commencing from 15.06.2024. It is made clear that if the appellant commits default in anysingle instalment, he will lose the benefit of this judgment, asalso the benefit of the stay order granted by the 1[st]respondent-Appellate Authority, and the entire amount of taxand interest confirmed against the appellant by the assesmentorders in question will then become immediately payable. The writ appeal is disposed as above. Sd/- DR. A.K.JAYASANKARAN NAMBIAR JUDGE Sd/- SYAM KUMAR V.M. JUDGE smm APPENDIX OF WA 661/2024 PETITIONER ANNEXURES ANNEXURE A1 COPY OF THE DEMAND NOTICE BEARING NO.DIN ITBA/COM/F/17/2024- 25/1064355284(1) DATED 25/04/2024 ANNEXURE A2 COPY OF THE COUNTERFOILS EVIDENCING PAYMENTS MADE BY THE APPLICANT HEREIN FOR ASSESSMENT YEARS FROM 2014-15 TO 2019-20 Annexure A3 Annexure A4 A TRUE COPY OF THE NOTICE BEARING DINNO. ITBA/COM/F/17/2024-25/1064913451(1)DATED 16.05.2024 ISSUED BY THE TAXRECOVERY OFFICER TO THE MANAGER OFSTATE BANK OF INDIA, MARINE DRIVEBRANCH, KOCHI A TRUE COPY OF THE EMAIL ISSUED BY THEBANK MANAGER, FEDERAL BANK VEMBAYAMBRANCH TO THE APPELLANT DATED16.05.2024