Wp(C)/37823/2023 Of M/S. Sunny Silks v. Assistant Commissioner Of Income Tax

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH WEDNESDAY, THE 15 DAY OF NOVEMBER 2023 / 24TH KARTHIKA, 1945WP(C) NO. 37823 OF 2023 PETITIONER/S: M/S. SUNNY SILKS XXVIII/ 616A, CONVENT ROAD, CHALAKUDY P.O, THRISSUR DISTRICT . REPRESENTED BY PARTNER REENA DAVIS, W/O. SUNNY P.C, AGED 43 YEARS, PANJIKARAN HOUSE, MUPLIYAM POST, THRISSUR DISTRICT, PIN - 680307 BY ADVS. K.J.ABRAHAM NIKHIL JOHN; ARAVINDAKSHAN K.R. AKHIL SHAJI RESPONDENT/S: 1 ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 2(1), AAYAKAR BHAVAN, INCOME TAX OFFICE, SHAKTHANTHAMPURAN NAGAR, THRISSUR DISTRICT, PIN - 680001 CIRCLE 2(1), AAYAKAR BHAVAN, INCOME TAX OFFICE, SHAKTHANTHAMPURAN NAGAR, THRISSUR DISTRICT, PIN - 680001 2 COMMISSIONER OF INCOME TAX (APPEALS) NATIONAL FACELESS APPEAL CENTRE (NFAC), INCOME TAX DEPARTMENT, NEW DELHI, PIN - 110001 NATIONAL FACELESS APPEAL CENTRE (NFAC), INCOME TAX DEPARTMENT, NEW DELHI, PIN - 110001 3 DEPUTY COMMISSIONER OF INCOME TAX DCIT CIRCLE 1(1), & TPS, AAYAKAR BHAVAN, INCOME TAX OFFICE, SHAKTHANTHAMPURAN NAGAR, THRISSUR DISTRICT, PIN - 680001 THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 15.11.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C) No.37823/2023 -2- J U D G M E N T The present writ petition under Article 226 of the Constitution of India has been filed seeking the following reliefs: “i. issue a WRIT OF CERTIORARI or any other appropriate writ, order or direction under Article 226 of the Constitution of India, quashing Exhibit P11 non-speaking stay order passed by the 3[rd] respondent as illegal, arbitrary and against the principle of natural justice, or pass such further or other orders as may deem fit and proper in the circumstances of this case, and render justice; ii. to issue a writ of mandamus or other appropriate writ, direction or order to stay collection disputed tax in Exhibit P4 assessment order and demand notice till the order in Exhibit P5 appeal communicated to the petitioner; iii. to grant such other reliefs as this Hon'ble court may deem fit and proper; and iv. allow this Writ Petition with cost.” 2. The petitioner had approached this Court earlier, filing W.P.(C) No.27111/2023 impugning the assessment order, W.P.(C) No.37823/2023 -3- against which the petitioner had preferred an appeal before the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC). The petitioner had also moved an application for staying the demand issued in pursuance of the assessment order. This Court disposed of the said writ petition with the following directions: “(i) The third respondent is directed to consider and dispose of Ext P5 stay petition, in accordance with law and as expeditiously as possible, at any rate within a period of three months from the date of receipt of a certified copy of this judgment, after affording the petitioner an opportunity of being heard. (ii) Needless to mention, if the third respondent proposes to pass a conditional order of stay, he shall state reasons for the same. (iii) Until such time orders are passed on Ext P5 stay petition, all further proceedings pursuant to Exts P1 & P4 shall stand deferred.” 2.1 In compliance with the directions issued by this Court vide judgment dated 17.08.2023 passed in W.P.(C) W.P.(C) No.37823/2023 No.27111/2023, the 3[rd] respondent has decided the application for stay vide impugned order in Ext.P11. The said order would read as under: “Your stay petition is considered. The addition u/s 145A is seen to be done based on judicial pronouncements and therefore the merit in the addition can be considered only at the time of disposal of appeal. In view of the fact that the addition is disputed in appeal, you are hereby allowed to pay 20% of the demand upon which balance will be stayed. (iii) Until such time orders are passed on Ext P5 stay petition, all further proceedings pursuant to Exts P1 & P4 shall stand deferred.” 2.1 In compliance with the directions issued by this Court vide judgment dated 17.08.2023 passed in W.P.(C) W.P.(C) No.37823/2023 No.27111/2023, the 3[rd] respondent has decided the application for stay vide impugned order in Ext.P11. The said order would read as under: “Your stay petition is considered. The addition u/s 145A is seen to be done based on judicial pronouncements and therefore the merit in the addition can be considered only at the time of disposal of appeal. In view of the fact that the addition is disputed in appeal, you are hereby allowed to pay 20% of the demand upon which balance will be stayed. The next point of addition relates to addition in the Capital account of the partner. On verification of the records, it is seen that this specific issue was raised during the course of assessment and there was failure on your part to furnish supporting evidences which led to the addition being made. The merit in the addition can be considered only at the time of disposal of appeal. In view of the fact that the addition is disputed in appeal, you are hereby allowed to pay 20% of the demand upon which balance will be stayed. In the event you require installment facility for payment of 20% of the demand, you may approach this office on 15-11-2023. It may also be noted that in the event 20% of the disputed demand is not paid by 15-11-2023 or request for installment facility is not made by 15-11-2023, it will be deemed that you are an assessee in default.” 2.2 The impugned order passed by the 3[rd] respondent does not suffer from any jurisdictional error, and also, it does not violate the principles of natural justice. The view taken by the 3[rd] respondent in the impugned order that the question of addition under Section 145A of the Income Tax Act 1961 is to be considered at the time of disposal of the appeal is perfectly as per the settled law. In respect of the second issue raised by the assessee/petitioner regarding the addition to the capital account of the partner, the 3[rd] respondent has examined the records and held that this specific issue was raised during the course of the assessment, and the assessee failed to furnish supporting evidence in respect of the said issue. It is further said that the merit in the addition can only be considered at the time of disposal of the appeal. W.P.(C) No.37823/2023 2.3 Considering the aforesaid, the petitioner has been directed to pay 20% of the demand upon which the balance would be stayed. The petitioner has also been granted an instalment facility for payment of 20% of the demand, for which the petitioner could have approached the 3[rd]respondent on or before 15.11.2023. It is also said that if 20% of the disputed demand could not be paid by 15.11.2023 or the request for an instalment facility is not made by 15.11.2023, the assessment/petitioner would be considered an assessee in default. 3. Considering the fact that the Appellate Authority has passed the order after considering the merit and after giving an opportunity of hearing to the petitioner, this Court cannot interfere with the said order as this Court is not sitting in appeal against the order passed by the 3[rd] respondent. The present writ petition has no force and merit, which is hereby dismissed. The instalment facility for which the petitioner has W.P.(C) No.37823/2023 -7- been directed to approach the 3[rd] respondent by 15.11.2023 is extended to 16.11.2023 on the request of the learned Counsel for the petitioner. Sd/- DINESH KUMAR SINGHJUDGE jjj APPENDIX OF WP(C) 37823/2023 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE NOTICE NO: ITBA/AST/S/143(2)/2018-19/1012427185(1) DATED 21.09.2018 U/S.143(2) OF THE INCOME TAX ACT, 1961 ISSUED BY THE 1ST RESPONDENT ITBA/AST/S/143(2)/2018-19/1012427185(1) DATED 21.09.2018 U/S.143(2) OF THE INCOME TAX ACT, 1961 ISSUED BY THE 1ST RESPONDENT W.P.(C) No.37823/2023 -7- been directed to approach the 3[rd] respondent by 15.11.2023 is extended to 16.11.2023 on the request of the learned Counsel for the petitioner. Sd/- DINESH KUMAR SINGHJUDGE jjj APPENDIX OF WP(C) 37823/2023 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE NOTICE NO: ITBA/AST/S/143(2)/2018-19/1012427185(1) DATED 21.09.2018 U/S.143(2) OF THE INCOME TAX ACT, 1961 ISSUED BY THE 1ST RESPONDENT ITBA/AST/S/143(2)/2018-19/1012427185(1) DATED 21.09.2018 U/S.143(2) OF THE INCOME TAX ACT, 1961 ISSUED BY THE 1ST RESPONDENT Exhibit P2 TRUE COPY OF THE NOTICE NO:ITBA/AST/F/142(1)/2019-20/1015987498(1) U/S.142(1) OF THE IT ACT, 1961 DATED 14.05.2019 ISSUED BY THE 1ST RESPONDENT NO:ITBA/AST/F/142(1)/2019-20/1015987498(1) U/S.142(1) OF THE IT ACT, 1961 DATED 14.05.2019 ISSUED BY THE 1ST RESPONDENT Exhibit P3 TRUE COPY OF THE NOTICE NO: ITBA/AST/F/142(1) 2019-20/1019169366(1) DATED 21.10.2019 U/S.142(1) OF THE IT ACT ISSUED BY THE 1ST RESPONDENT 2019-20/1019169366(1) DATED 21.10.2019 U/S.142(1) OF THE IT ACT ISSUED BY THE 1ST RESPONDENT Exhibit P4 TRUE COPY OF THE ASSESSMENT ORDER NO: ITBA/AST/S/143(3) /2019-20/1022570891(1) AND DEMAND NOTICE DATED 18.12.2019 ISSUED BY THE 1ST RESPONDENT ITBA/AST/S/143(3) /2019-20/1022570891(1) AND DEMAND NOTICE DATED 18.12.2019 ISSUED BY THE 1ST RESPONDENT Exhibit P5 TRUE COPY OF THE APPEAL MEMORANDUM IN FORM NO.35 DATED 17.01.2020 SUBMITTED BY THE PETITIONER NO.35 DATED 17.01.2020 SUBMITTED BY THE PETITIONER Exhibit P6 TRUE COPY OF THE STAY APPLICATION WITH AFFIDAVIT DATED 10.08.2023 SUBMITTED BEFORE THE 3RD RESPONDENT BY THE PETITIONER AFFIDAVIT DATED 10.08.2023 SUBMITTED BEFORE THE 3RD RESPONDENT BY THE PETITIONER Exhibit P7 TRUE COPY OF THE JUDGMENT OF THIS HON'BLE COURT IN WP(C) NO-27111 OF 2023 DATED 17.08.2023 COURT IN WP(C) NO-27111 OF 2023 DATED 17.08.2023 Exhibit P8 TRUE COPY OF THE POSTING NOTICE NO: ITBA/NFAC/F/APL_1/2023-24/1056297190(1) DATED 20.09.2023 ISSUED BY THE 2ND RESPONDENT TO HEAR EXHIBIT P5 APPEAL ITBA/NFAC/F/APL_1/2023-24/1056297190(1) DATED 20.09.2023 ISSUED BY THE 2ND RESPONDENT TO HEAR EXHIBIT P5 APPEAL Exhibit P9 TRUE COPY OF THE E-PROCEEDINGS RESPONSE ACKNOWLEDGEMENT NO-323178671270923 DATED ACKNOWLEDGEMENT NO-323178671270923 DATED Exhibit P 10 Exhibit P11 27.09.2023 ISSUED THROUGH ONLINE PORTAL TO THE PETITIONER TRUE COPY OF ARGUMENT NOTE DATED 06.11.2023 SUBMITTED BY THE PETITIONER BEFORE THE 3RD RESPONDENT TRUE COPY OF STAY ORDER NO: ITBA/COM/F/17/2023-24/1057783071(1) DATED 08.11.2023 PASSED BY THE 3RD RESPONDENT