M/S AMALGAM NUTRIENTS AND FEEDS LTD. V. CHIEF COMMISSIONER OF INCOME TAX

WP(C)/24615/2018

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The case involves M/S Amalgam Nutrients and Feeds Ltd. and its directors, who faced recovery proceedings for the assessment year 2006-2007. They claimed to have paid all arrears of tax and interest and filed a compounding application under Section 279(2) of the Income Tax Act. However, before the application could be considered, the Department initiated prosecution proceedings. The petitioners challenged this in the High Court of Kerala, arguing that the compounding application should be considered before any coercive actions are taken by the Department.

• Counselvise Citation: [2018] 140 COUNSELVISE.COM (IT) 755155 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 08-08-2018
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: P K R MENON; JOSE JOSEPH
• Assessee Lawyers: C K KARUNAKARAN; LEKSHMI NAIR
• Keywords: Coercive Proceedings; Compounding application; Income Tax; Recovery proceedings
• Section: 279(2)

Judgement Text

" IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU WEDNESDAY, THE 8TH DAY OF AUGUST 2018 / 17TH SRAVANA, 1940 WP(C).No. 24615 of 2018 PETITIONER(S) 1 M/S AMALGAM NUTRIENTS AND FEEDS LTD., AMALGAM HOUSE, BRISTOW ROAD, WILLINGDON ISLAND, COCHIN - 682 003. 2 KEYA THARAKAN, MANAGING DIRECTOR, AMALGAM NUTRIENTS AND FEEDS LTD., AMALGAM HOUSE, BRISTOW ROAD, WILLINGDON ISLAND, COCHIN - 682 003. 3 A.J.THARAKAN, DIRECTOR, AMALGAM MUTRIENTS AND FEEDS LTD., AMALGAM HOUSE, BRISTOW ROAD, WILLINGDON ISLAND, COCHIN - 682 003. BY ADVS.SRI.C.K.KARUNAKARAN SMT.LEKSHMI P. NAIR RESPONDENT(S): 1. CHIEF COMMISSIONER OF INCOME TAX, INCOME TAX BHAWAN, I.S.PRESS ROAD, ERNAKULAM - 682 018. 2. INCOME TAX OFFICER, CORPORATE WARD-1(1), KOCHI, OFFICE OF THE ADDITIONAL COMMISSIONER OF INCOME TAX CORPORATE RANGE-1, KOCHI, 5TH FLOOR, C.R.BUILDING, I.S.PRESS ROAD, KOCHI - 682 018. R1,R2 BY ADV. SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) R BY SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08-08-2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 24615 of 2018 (B) APPENDIX PETITIONER(S)' EXHIBITS EXHIBIT P1 TRUE COPY OF LETTER DATED 01/02/2017 RECEIVED FROM THE 2ND RESPONDENT. EXHIBIT P2 TRUE COPY OF SCN DATED 08/03/2017. EXHIBIT P3 TRUE COPY OF 1ST PETITIONER'S LETTER DATED 13/03/2017. EXHIBIT P4 TRUE COPY OF 2ND PETITIONER'S LETTER DATED 20/03/2017. EXHIBIT P4(A) TRUE COPY OF 3RD PETITIONER'S LETTER DATED 20/03/2017. EXHIBIT P4(B) TRUE COPY OF 1ST PETITIONER'S LETTER DATED 20/03/2017. EXHIBIT P5 TRUE COPY OF 1ST PETITIONER'S LETTER DATED 04/07/2017. EXHIBIT P6 TRUE COPY OF 1ST PETITIONER'S LETTER DATED 11/08/2017. EXHIBIT P7 TRUE COPY OF 1ST PETITIONER'S LETTER DATED 13/10/2017. EXHIBIT P8 TRUE COPY OF 2ND RESPONDENT'S LETTER DATED 11/10/2017 ENCLOSING THE SUMMONS. EXHIBIT P9 TRUE COPY OF NOTICE OF HEARING DATED 09/01/2018 ISSUED BY THE 1ST RESPONDENT. EXHIBIT P10 TRUE COPY OF 1ST PETITIONER'S LETTER DATED 31/01/2018 TO THE 2ND RESPONDENT ENCLOSING INTEREST PAYMENT CHALLANS. *EXHIBIT P11 TRUE COPY OF 1ST PETITIONER'S COMPOUNDING APPLICATION DATED 27/02/2018 SUBMITTED BEFORE THE 1ST RESPONDENT. (* SUBSTITUTED) EXHIBIT P12 TRUE COPY OF THE COMPLAINT IN CC NO.259/17 ON THE FILES OF THE ACJM (EO) COURT, ERNAKULAM. * EXHIBIT P11 SUBSTITUTED WITH THE DOCUMENT FILED ALONG WITH IA 13447/2018 AS PER ORDER DATED 26.07.2018 IN IA 13447/2018. RESPONDENT'S EXHIBITS: NIL // True copy // PA to Judge das DAMA SESHADRI NAIDU, J. ============================================== W.P.(C). No. 24615 of 2018 (B) ======================================================= Dated this the 8th day of August, 2018 JUDGMENT For the assessment year 2006-2007, the petitioner Company and its directors faced recovery proceedings. The petitioners claim that eventually they have paid the entire arrears of tax and interest. Now they have filed the Ext.P11 compounding application under Section 279 (2) of the Income Tax Act, before the 1st respondent. 2. Complaining that the Department has initiated prosecution proceedings before the 1st respondent could consider the compounding application, the petitioners have filed this writ petition. 3. The petitioners' counsel submits that Section 279 (2) of the Act enables the petitioners to compound the offence, and those proceedings have been pending for about one year. Before the authority could adjudicate it, the -2- W.P.(C). No. 24615 of 2018 (B) Department has initiated coercive proceedings. 4. In response, the learned Standing Counsel submits that there is no substance in the petitioners' contentions. He has nevertheless submitted that the 1st respondent will consider the petitioners' compounding application, subject to its maintainability. 5. I, therefore, dispose of the writ petition holding that the 1st petitioner will consider the Ext.P11 compounding application, subject to its maintainability, expeditiously, in a month's time. At the time of considering that application, the 1st respondent will also give an opportunity of hearing to the petitioners. I may, as well, observe that until the Ext.P11 is considered, the Department will defer coercive steps. Sd/- DAMA SESHADRI NAIDU JUDGE das 8.08.2018 "