Wp(C)/33406/2009 Of Mrs.nishi Jahangir v. The Income Tax Officer

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN MONDAY, THE 23RD NOVEMBER 2009 / 2ND AGRAHAYANA 1931 WP(C).No. 33406 of 2009(U) -------------------------- PETITIONER(S): --------------- MRS.NISHI JEHANGIR, W/O.N.JEHANGIR, MACKAR MANZIL, ALUVA-683 101. BY ADV. SRI.T.M.SREEDHARAN SMT.C.K.SHERIN SRI.V.P.NARAYANAN RESPONDENT(S): --------------- 1. THE INCOME TAX OFFICER, WARD-4, ALUVA. 2. THE COMMISSIONER OF INCOME TAX (APPEALS) II, SAN JUAN TOWERS, COCHIN-18. BY ADV. SRI. JOSE JOSEPH, S.C. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 23/11/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: S. Siri Jagan, J. =-=-=-=-=-=-=-=--=-=-=-=-=-=-=-=-=-= W. P (C) No. 33406 of 2009 =-=-=-=-=-=-=-=-=--=-=-=-=-=-=-=-=-= The petitioner is an assessee under the Income-tax Act. She isalso a share holder in a private Company. The Company advancedlarge amounts to the petitioner. Originally, the petitioner wasassessed to income tax for the year 2005-2006 without taking intoaccount this advance. Later on, the assessment was revised in view ofSection 2(22)(e) of the Income-tax Act, wherein, it is stipulatedthat any payment by a Company, not being a Public Limited Company,by way of loan or advance to a share holder who holds more than 10%share shall be deemed to be dividend income. Accordingly, by Ext.P1 order, the assessment of petitioner's income was revised addingthe amounts received by her from the Company as dividend incomeand the petitioner was directed to pay an amount of Rs. 17,26,897/- astax due. Against the same, the petitioner filed Ext. P2 appeal beforethe Commissioner of Income-tax (Appeals). Although the petitionerhas filed Ext. P3 petition before the assessing officer requesting theassessing officer to treat the petitioner as not in default, the saidrequest has been rejected. It is under the above circumstances thepetitioner has approached this Court seeking the following reliefs: “(i)To call for the records of the case leading to the issue ofExt. P4 notice u/s. 226(3) and to quash the same by the issue of awrit of certiorari or other appropriate writ, order or direction; (ii)To stay the operation of Ext. P4 garnishee notice issued u/s.226(3) of the Act dated 26.10.2009, pending disposal of the W.P(C). (iii)To issue a writ of mandamus or any other appropriateorder, writ or direction directing the 1[st] respondent to refrain fromrecovering any amount pursuant to the asst. order Ext. P1.” 2. I have heard the learned standing counsel for the Income-tax W.P.C. No. 33406/09 -: 2 :- Department also. 3. The appeal has been filed as early as on 28-1-2009. Ofcourse, the petitioner can expect that the same be disposed of withina reasonable time. It has not happened so far. Therefore, I aminclined to pass some orders regarding recovery of the disputed tax.But, that cannot be without any conditions. I am of opinion that as acondition for stay, the petitioner should pay at least 50% of theamount demanded. Accordingly, this writ petition is disposed of withthe following directions: The 2[nd] respondent shall consider and pass orders on Ext. P2appeal as expeditiously as possible. In the meantime, coerciverecovery proceedings for recovery of the disputed tax shall be kept inabeyance on condition that the petitioner pays 50% of the disputedtax in two instalments payable on or before 30-11-2009 and 31-12-2009. S. Siri Jagan, Judge.