Wp(C)/22924/2014 Of Thyaparambil Skaria James v. The Income Tax Officer

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE P.R.RAMACHANDRA MENON WEDNESDAY, THE 24TH DAY OF SEPTEMBER 2014/2ND ASWINA, 1936 WP(C).No. 22924 of 2014 (M) ---------------------------- PETITIONER(S) :--------------------- THYAPARAMBIL SKARIA JAMES,PALLATHARA HOUSE, NELLIKAMON P.O., RANNI,PATHANAMTHITTA. BY ADV. SRI.RAMESH CHERIAN JOHN AMV : 2 : WP(C).No. 22924 of 2014 (M) --------------------------------------- APPENDIX PETITIONER(S)' EXHIBITS: ------------------------------------- EXHIBIT P1 : COPY OF THE LETTER DTD.22-2-2014. EXHIBIT P1A : COPY OF THE LETTER DTD.22-2-2014. EXHIBIT P2 : COPY OF THE ORDER OF ASSESSMENT DTD.28-3-2014. EXHIBIT P3 : COPY OF THE FORM OF APPEAL AND STATEMENT OF FACTS AND GROUNDS OF APPEAL DTD.24-4-2014. EXHIBIT P4 :COPY OF THE APPLICATION OF STAY DTD.20-5-2014. EXHIBIT P5 : COPY OF THE JUDGMENT DTD.1-7-2014 IN WPC 16615/2014. EXHIBIT P6 : COPY OF THE WRITTEN SUBMISSION DTD.31-7-2014. EXHIBIT P7 : COPY OF THE ORDER DTD.1-8-2014. EXHIBIT P8 : COPY OF THE LETTER DTD.7-8-14. EXHIBIT P9 : COPY OF THE CHALLAN RECEIPT DTD.9-8-14. RESPONDENT(S)' EXHIBITS:NIL --------------------------------------- /TRUE COPY/ AMV P.A.TO JUDGE P.R.RAMACHANDRA MENON, J.--------------------------------------- W.P.(C) No. 22924 of 2014 (M) ---------------------------------------- Dated this the 24[th ]day of September, 2014 JUDGMENT The correctness and sustainability of the conditionimposed by the appellate authority, vide Ext.P7 orderdated 01.08.2014, so as to avail the benefit of interim stayduring the pendency of the appeal, is the subject matter ofconsideration in this writ petition. 2.The case of the petitioner was sought to be finalised as per Ext.P2 order dated 28.03.2014. The petitionerpreferred Ext.P3 appeal along with Ext.P4 petition for stay.In view of the apprehending coercive steps, the petitionerapproached this Court by filing W.P.(C) No.16615 of 2014,which was disposed of directing the Interlocutoryapplication to be considered within the specified time. Itwas accordingly that the matter was considered andExt.P7 order came to be passed on 01.08.2014 directingthe petitioner to satisfy 50% of the liability by way of 'six' W.P.(C) No. 22924 of 2014 (M) equal monthly installments, which made the petitionerto approach this Court by filing this writ petition. 3.The learned counsel for the petitioner submits that,exorbitant addition has been made to the income of thepetitioner merely with reference to the amountdeposited in the Bank account of the petitioner. Theamount returned by the petitioner was nearly`2,50,000/- whereas the amount reckoned for thepurpose of tax liability is nearly `22,50,000/- which isvirtually 795% of the returned income. It is stated thatthe source of income was sought to be explained byproducing copy of the relevant deed before theassessing authority with reference to the sale of arubber plantation which belonged to the petitioner,brother and other co-owners and entire deposit wasmade in to the account of the petitioner so as topurchase some other property. Due to some or otherreasons, it is stated that the property could not bepurchased and hence the deposit was being renewed W.P.(C) No. 22924 of 2014 (M) from time to time. The version put forward by thepetitioner was totally rejected by the assessing officerand this in turn is under challenge before the appellateauthority. The only reason stated by the appellateauthority for passing Ext.P7 order directing the conditionto be satisfied to an extent of 50% is that, if the appealis ultimately dismissed, the petitioner cannot have anybenefit of stay. W.P.(C) No. 22924 of 2014 (M) from time to time. The version put forward by thepetitioner was totally rejected by the assessing officerand this in turn is under challenge before the appellateauthority. The only reason stated by the appellateauthority for passing Ext.P7 order directing the conditionto be satisfied to an extent of 50% is that, if the appealis ultimately dismissed, the petitioner cannot have anybenefit of stay. 4.Heard the learned Standing counsel appearing for thedepartment as well, who submits that the assessingauthority has properly discussed the facts and figuresparticularly with regard to the extent of share thepetitioner is having, which is around Rs.11,00,000/- andthat alone. In spite of the attempt made to explain thesource with reference to the funds stated as provided bythe other co-owners, the fact remains that the sale waseffected years back and the amount was put into theaccount of the petitioner and the same was beingrenewed from time to time. It is also stated that the W.P.(C) No. 22924 of 2014 (M) 4 proceedings finalised by the assessing authority areperfectly within the four walls of the law and notassailable. It was after considering the said factualposition that, the appellate authority sought to impose acondition and that sufficient time has been given to thepetitioner, by granting six months' time by way ofinstalments to meet the liability. The relevant portion ofthe order particularly paragraph 3 of Ext.P7 reads asfollows: “3. I have carefully considered the requestof the representative bearing in mind theHon'ble Courts decisions, the CBDT'sInstructions including the InstructionNo.1914 of 1993 on stay for the collectionof demand and also the basis on whichadditions were made but considering thesecond part of the Hon'ble Supreme Court'sdecision which the representative hasquoted, I am of the view that the additionmade under section 68 still should gothrough the test of appeal and in the eventof confirming the addition the AssessingOfficer had made, then the assesseecannot have justifiable case for the stay tobe granted. However, considering theHon'ble Kerala High Court's decisionmentioned supra and also the CBDT'sInstruction No.1914, it is ordered that theappellant shall pay 50% of the demandraised in six equal monthly installmentsstarting from 11.8.2014 and this would beworked out by the Assessing Officer.” W.P.(C) No. 22924 of 2014 (M) 5.After hearing both the sides, this Court finds that thereasoning given by the appellate authority with regardto the fate of the probable appeal and eligibility of thepetitioner for stay, does not appear to be correct orlogical. The purpose of granting an interim order is tosubserve the main relief. It is not to be confused withreference to the further cause of action, once the appealis finalised; unless the merit of the case is discussed andthe eligibility is held otherwise. Since no such meritdiscussion is there in Ext.P7, this Court finds that theimposition of liability to an extent of 50% for the timebeing, is rather onerous. 6.During the course of hearing, the learned counsel forthe petitioner submits that the petitioner has alreadysatisfied the first two instalments. In the saidcircumstance, this Court finds it fit and proper to havethe extent of liability to be satisfied as a condition toavail the benefit of interim stay, as 25%, instead of 50%.This being the position, the petitioner has to satisfy the W.P.(C) No. 22924 of 2014 (M) third instalment as well, upon which, he will continue toenjoy the benefit of interim stay till finalisation of theappeal. The petitioner shall produce a copy of thisjudgment along with a copy of this writ petition beforethe respondents for further steps. The Writ Petition is disposed of as above. AMV/29/09/ Sd/- P.R.RAMACHANDRA MENON, JUDGE