Wp(C)/8414/2020 Of Praveen Sidharthan Pillai v. The Income Tax Officer Ward -Iii

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE AMIT RAWAL WEDNESDAY, THE 18TH DAY OF MARCH 2020 / 28TH PHALGUNA, 1941 WP(C).No.8414 OF 2020(B) PETITIONER/S: PRAVEEN SIDHARTHAN PILLAI,AGED 48 YEARS VRINDAVANAM, THODIYOOR NORTH, KARUNAGAPPALLY, KOLLAM DISTRICT, KERALA, PIN -690 523. BY ADV. SRI.BOBBY JOHN RESPONDENT/S: 1THE INCOME TAX OFFICER WARD -III,ALAPPUZHA, ARATTUKULANGARA COMPLEX, ADJACENT TO ALAPPUZHA MEDICAL COLLEGE, A.N.PURAM, ALAPPUZHA, KERALA, PIN-688 011.ALAPPUZHA, ARATTUKULANGARA COMPLEX, ADJACENT TO ALAPPUZHA MEDICAL COLLEGE, A.N.PURAM, ALAPPUZHA, KERALA, PIN-688 011. 2THE COMMISSIONER OF INCOME TAX (APPEALS),KOTTAYAM, 1ST FLOOR, PUBLIC LIBRARY BUILDING, KOTTAYAM, PIN - 686 001.KOTTAYAM, 1ST FLOOR, PUBLIC LIBRARY BUILDING, KOTTAYAM, PIN - 686 001. 3THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX,KERALA, CENTRAL REVENUE BUILDING, I.S.PRESS ROAD, ERNAKULAM, PIN - 682 018.KERALA, CENTRAL REVENUE BUILDING, I.S.PRESS ROAD, ERNAKULAM, PIN - 682 018. 4THE UNION OF INDIA,REPRESENTED BY ITS SECRETARY TO GOVERNMENT, FINANCE DEPARTMENT, RAJPATH MARG, CENTRAL SECRETARIAT, NEW DELHI, PIN- 110 001.REPRESENTED BY ITS SECRETARY TO GOVERNMENT, FINANCE DEPARTMENT, RAJPATH MARG, CENTRAL SECRETARIAT, NEW DELHI, PIN- 110 001. REPRESENTED BY ITS SECRETARY TO GOVERNMENT, FINANCE OTHER PRESENT: SRI JOSE JOSEPH SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON18.03.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.8414 OF 2020 JUDGMENT Dated this the 18th day of March 2020 The petitioner, on account of having beenengaged in business of commission and brokerage isan assessee of income tax. For the assessment year2017-18, declared his total income of Rs.3,78,980/-.The aforementioned return was selected for scrutinyand the petitioner was served with notice underSection 143(2) and 142(1) in the light of CASSobservations. The petitioner furnished relevantdocuments in response to the aforementioned notices,however, the 1[st] respondent rejected the explanationsand evidences and passed an assessment order, dated28.12.2019 creating an exorbitant demand ofRs.67,00,030/- vide Ext.P1. 2.The learned counsel appearing on behalf ofthe petitioner submits against the aforementionedorder, demand order in Ext.P3 and penalty notice The learned counsel appearing on behalf of WP(C).No.8414 OF 2020 Ext.P4 under Sec.274 read with Sec.270A were alsoissued. As per the remedies available under incometax Act, the petitioner preferred statutory first appealvide Ext.P5 against the assessment order before theCommissioner of Income Tax (Appeals) dated27.01.2020 Ext.P5 along with a stay application dated13.02.2020. Since the provisions of the Income Taxalso enables the petitioner to seek the demand of theassessment as per the provisions of Section 220(6) ofthe Income Tax Act, an application in this regard wasalso preferred before the Income Tax Officer/Assessingofficer, which resulted into order impugned Ext.P7dated 06.03.2020. He submits that the order sans anyreason and despite the demand has been stayedsubject to the condition of deposit of 20% of thedemanded amount, which is reflected from the noticedated 06.03.2020 Ext.P8. The counsel for thepetitioner further submits, though the Act providesavailment of remedies as noticed above, since the Commissioner Income Tax (Appeals) is taking up the appeals year-wise i.e as per the seniority, the stayapplication filed along with it are also not taken out ofturn. It is in that circumstances, the remedy ofSec.220(6) of the Income Tax Act, 1961 was availed. Commissioner Income Tax (Appeals) is taking up the appeals year-wise i.e as per the seniority, the stayapplication filed along with it are also not taken out ofturn. It is in that circumstances, the remedy ofSec.220(6) of the Income Tax Act, 1961 was availed. 3.Issue notice before admission. Mr. JoseJoseph, the learned standing counsel accepts notice onthe behalf of the respondents and submits that thepetitioner has invited an order and therefore he cannotseek interim stay. In view of the circular of 2017, he isrequired to deposit 20% of the demanded amount, inorder to proceed with the stay and protect himselffrom the liability of depositing the entire amountincluding the penalty. 4. Having heard counsels for the parties and apprised the papers, I am of the view that, this courtwhile dealing in such matters, have come across manywrit petitions preferred by the assessees, seekingintervention of this court under Art.226 for issue for WP(C).No.8414 OF 2020 direction and taking up applications for interim stayfiled along with pending appeals. Even this court wasapprised that the Appellate Authority are taking up theappeals, considering the predicament of suchassessees including the petitioner, the directionshaving been issued, for consideration of at leastinterim application and by keeping coercive measuresin abeyance. 5.In the instant case appeal filed has not beentaken up rather the interim application, in suchcircumstances availed the remedy under Sec.220(6)1961 Act, which resulted into impugned order Ext.P7, Iam of the view that, the order prima facie do notreflect any application of mind except reference to thecontentions. The officers who are competent to passorders, are enjoined obligations to pass reasonedorders, which, according to the affected party, may notbe sustainable in accordance with law. But suchorders, if are passed in routine, cannot escape from WP(C).No.8414 OF 2020 the judicial scrutiny of this court. Be that as it may, inorder to prevent further mis-carriage of justice and inthe interest of justice, I deem it appropriate issuingdirections to the 2[nd] respondent to take a call on theapplication for interim stay in support of the appealExt.P5 and take a decision thereon after affording anopportunity of hearing to the petitioner in accordancewith law, un-influenced by the findings referred toExt.P7. Until such time the demand as raised Ext.P8 isordered to be kept in abeyance. Let this exercise betaken within 45 days from the date of receipt ofcertified copy of this judgment. It is made clear thatthe interim stay shall be only till the adjudication ofthe interim application and not beyond. The writpetition in the above mentioned directions standsdisposed of. AMIT RAWALJUDGE WP(C).No.8414 OF 2020 APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1TRUE COPY OF THE ASSESSMENT ORDER DATED 28/12/2019 PASSED BY THE 1ST RESPONDENT U/S.143(3) OF THE ACT.28/12/2019 PASSED BY THE 1ST RESPONDENT U/S.143(3) OF THE ACT. EXHIBIT P2TRUE COPY OF THE DEMAND NOTICE DATED 28/12/2019 PURSUANT TO EXT.P1 ASSESSMENT ORDER, ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER.28/12/2019 PURSUANT TO EXT.P1 ASSESSMENT ORDER, ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER. EXHIBIT P3TRUE COPY OF THE PENALTY NOTICE U/S 274 READ WITH SEC. 270A OF THE ACT, ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER.READ WITH SEC. 270A OF THE ACT, ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER. EXHIBIT P4TRUE COPY OF THE PENALTY NOTICE SEC. 274 READ WITH SEC. 271AAC(1) OF THE ACT, ISSUEDBY THE 1ST RESPONDENT TO THE PETITIONER.READ WITH SEC. 271AAC(1) OF THE ACT, ISSUEDBY THE 1ST RESPONDENT TO THE PETITIONER. EXHIBIT P5TRUE COPY OF THE FIRST APPEAL DATED 27/01/2020, FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT.27/01/2020, FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. EXHIBIT P3TRUE COPY OF THE PENALTY NOTICE U/S 274 READ WITH SEC. 270A OF THE ACT, ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER.READ WITH SEC. 270A OF THE ACT, ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER. EXHIBIT P4TRUE COPY OF THE PENALTY NOTICE SEC. 274 READ WITH SEC. 271AAC(1) OF THE ACT, ISSUEDBY THE 1ST RESPONDENT TO THE PETITIONER.READ WITH SEC. 271AAC(1) OF THE ACT, ISSUEDBY THE 1ST RESPONDENT TO THE PETITIONER. EXHIBIT P5TRUE COPY OF THE FIRST APPEAL DATED 27/01/2020, FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT.27/01/2020, FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. EXHIBIT P6TRUE COPY OF THE STAY PETITION DATED 13/02/2020 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT.13/02/2020 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. EXHIBIT P7TRUE COPY OF THE ORDER U/S.220(6) OF THE ACT, DATED 06/03/2020 PASSED BY THE 1ST RESPONDENT.ACT, DATED 06/03/2020 PASSED BY THE 1ST RESPONDENT. EXHIBIT P8TRUE COPY OF THE NOTICE DATED 06/03/2020 ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER.ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER.