ABDUL JABBAR, V. THE COMMISSIONER OF INCOME TAX(APPEALS),

WP(C)/8969/2019

AI Insights

The case involves Abdul Jabbar, the petitioner, challenging an order of stay (Ext.P4) issued by the Commissioner of Income Tax (Appeals), which required a 40% deposit of the tax demand in two installments as a condition for stay pending appeal. The petitioner argued that this condition was arbitrary and sought to provide immovable property as security instead. The Income Tax Department opposed the writ, emphasizing the reasonableness of the 40% condition and the provision for installment payments. The High Court of Kerala, after considering the arguments, modified the deposit condition from 40% to 30% to ensure justice while maintaining the authority's discretion.

• Counselvise Citation: [2019] 140 COUNSELVISE.COM (IT) 697482 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 14-06-2019
• Assessment Year: misc
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH
• Assessee Lawyers: P B SAHASRANAMAN; T S HARIKUMAR
• Keywords: Appeal; Deposit Condition; Income Tax; Stay order

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI FRIDAY, THE 14TH DAY OF JUNE 2019 / 24TH JYAISHTA, 1941 WP(C).No.8969 of 2019 PETITIONER/S: ABDUL JABBAR, AGED 66 YEARS S/O.ABDULKHADER, DOOR NO.22/306, KOLLIYIL HOUSE, PAY BAZAR, ERIYAD, THRISSUR-680660. BY ADVS. SRI.P.B.SAHASRANAMAN SRI.T.S.HARIKUMAR RESPONDENT/S: 1 THE COMMISSIONER OF INCOME TAX(APPEALS), OFFICE OF THE COMMISSIONER OF INCOME TAX (APPEALS), 3RD FLOOR, AAYKARA BHAVAN, THRISSUR-680001. 2 THE INCOME TAX OFFICER, WARD 2(2), RANGE 2, THRISSUR-680001. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 14.06.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.8969 of 2019 -2- JUDGMENT Heard Sri.P.B.Sahasranaman, the learned counsel for the petitioner and Sri.Jose Joseph, the learned Standing Counsel. 2. Petitioner challenges Ext.P4 order of stay granted by the 1st respondent. The counsel for the petitioner contends that in the peculiar circumstances of this case imposing condition of depositing 40 % of the demand in two equal instalments amounts to arbitrary and illegal exercise of jurisdiction and contrary to the discretion conferred on the 1st respondent. According to him the petitioner has, fairly good chances to succeed in the appeal and therefore to prove the bonafides the petitioner is prepared to give immovable property security for the tax demanded by the 2nd respondent. He prays for setting aside the condition and seeks direction for expeditious disposal of appeal. 3. Sri.Jose Joseph, opposes the writ prayer by contending that the 1st respondent exercised the discretion and granted stay pending appeal. The condition to deposit 40% firstly is not on the higher side and secondly instalments are also granted. According to him, the department doest not accept movable property security in lieu of WP(C).No.8969 of 2019 -3- depositing 40% imposed through Ext.P4 order. He prays for dismissing the writ petition. 4. The submissions made by the counsel are noted and prima facie this Court is of the view that the request of the petitioner to furnish immovable property in compliance with the depositing 40% is untenable and therefore cannot be considered much less a direction could be issued to respondents to receive immovable property security towards compliance with 40% condition imposed in the conditional stay order. The other objection that the 40% condition is also onerous is not fully correct. The appellate authority to the extent required, as it appears from Ext.P4 examined the case and exercised of the discretion. In normal circumstances this Court in exercise of its jurisdiction under Article 226 may not interdict the orders passed by exercising discretion and power of the authority, unless the admissible legal grounds are made out in this behalf. However, in the case on hand, no special reason is assigned for 40% deposit and instead of 20% of demand which is a norm mostly looked at pending appeal. Though this Court shall not be understood as substituting its discretion for the power already exercised in the 1st respondent, to meet the ends of justice and in the circumstances of WP(C).No.8969 of 2019 -4- this case condition of 40% imposed by Ext.P4 is modified as 30%, first instalment payable on or before 15.07.2019 and 2nd instalment payable on or before 15.08.2019. Subject to complying with the condition the petitioner is entitled to enjoy the stay of order under appeal before 1st respondent. The petitioner if commits default of any instalment, it is made clear without reference to court the stay granted by this order and Ext.P4 shall stand vacated. Sd/- S.V.BHATTI JUDGE Ac WP(C).No.8969 of 2019 -5- APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE PHOTOSTAT COPY OF THE ORDER OF ASSESSMENT PASSED BY THE 2ND RESPONDENT AND THE NOTICE OF DEMAND, DATED 23.09.2017. EXHIBIT P2 TRUE PHOTOSTAT COPY OF THE APPEAL PREFERRED BY THE PETITIONER BEFORE THE 1ST RESPONDENT, DATED 12.10.2017. EXHIBIT P3 TRUE PHOTOSTAT COPY OF THE STAY APPLICATION PREFERRED BY THE PETITIONER BEFORE THE 1ST RESPONDENT, DATED 12.10.2017. EXHIBIT P4 TRUE PHOTOCOPY OF THE ORDER OF THE 1ST RESPONDENT IN THE STAY PETITION IN ITA- 141/17-18, DATED 27.02.2019. RESPONDENT'S/S EXHIBITS: NIL //TRUE COPY// Sd/- PA TO JUDGE "