ANTONY SUNNY V. THE JOINT COMMISSIONER OF INCOME TAX

WP(C)/13364/2017

AI Insights

The case involves Antony Sunny, the petitioner, who challenged the order of the Assessing Officer requiring a 15% deposit of the disputed tax demand as a condition for considering his stay petition. The petitioner argued that this requirement was contrary to the Central Board of Direct Taxes (CBDT) Circular Ext.P5, which stipulates that a stay should be granted on payment of 15% of the disputed demand until the first appeal is considered. The court found that the Assessing Officer's insistence on the deposit contradicted the Circular's intent and directed the matter to be reconsidered by the Appellate Authority, granting an interim stay on the demand.

• Counselvise Citation: [2017] 140 COUNSELVISE.COM (IT) 755439 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 12-04-2017
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH
• Assessee Lawyers: K SRIKUMAR; K CHANDRAN; P AJITHKUMAR; P THOMAS; S MANSOOR
• Keywords: Assessing Officer; CBDT Circular; Disputed Demand; Income Tax; Stay Petition
• Section: 271D; 271E

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN WEDNESDAY, THE 12TH DAY OF APRIL 2017/22ND CHAITHRA, 1939 WP(C).No. 13364 of 2017 (U) ---------------------------- PETITIONER: ----------- ANTONY SUNNY, VELLARA HOUSE, CONVENT ROAD, VADAKKEKAD, NHAMANGHAT P.O., THRISSUR 679 563. BY ADVS.SRI.K.SRIKUMAR (SR.) SRI.K.MANOJ CHANDRAN SRI.P.R.AJITHKUMAR SRI.P.V.THOMAS SRI.S.A.MANSOOR (PATTANAM) RESPONDENTS: ------------ 1. THE JOINT COMMISSIONER OF INCOME TAX, RANGE -1, THRISSUR, DEPARTMENT OF INCOME TAXES AAYAKAR BHAVAN, SAKTHAN THAMPURAN NAGAR, THRISSUR 680 001. 2. THE COMMISSIONER OF INCOME TAX (APPEALS) 3RD FLOOR, AAYAKAR BHAVAN, THRISSUR 680 001. BY SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 12-04-2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 13364 of 2017 (U) APPENDIX PETITIONER'S EXHIBITS P1 TRUE COPY OF THE PROPOSAL NOTICE DATED 01.11.2016 ISSUED U/S.271D OF THE INCOME TAX ACT P1A TRUE COPY OF THE PROPOSAL NOTICE DATED 01.11.2016 ISSUED U/S.271E OF THE INCOME TAX ACT P2: TRUE COPY OF THE PENALTY ORDER DATED 16.12.2016 P3: TRUE COPY OF THE PENALTY ORDER DATED 16.12.2016 PASSED U/S.271E OF THE INCOME TAX ACT P4: TRUE COPY OF THE APPEAL DATED 27.02.2017 P5: TRUE COPY OF THE OFFICE MEMORANDUM F.NO.404/72/ITCC DATED 29.02.2016 P6: TRUE COPY OF THE STAY PETITION DATED 01.03.2017 P7: TRUE COPY OF THE LETTER NO.JCIT/R.1/TCR/STAY/2016-17 DATED 31.03.2017 //TRUE COPY// P.A. TO JUDGE JJJ K. VINOD CHANDRAN, J. ------------------------------------------ W.P.(C) No. 13364 of 2017 (U) ------------------------------------------ Dated: 12th April, 2017 J U D G M E N T The petitioner is aggrieved with the order passed at Ext.P7 by the Assessing Officer. 2. Ext.P7 order has been rejected on the ground that 15% of the disputed demand has to be paid so as to enable consideration of the stay petition. The stay petition was filed by the petitioner, as per Ext.P5 Circular of the Central Board of Direct Taxes (CBDT). The petitioner also has a contention that the petitioner had moved an appeal and a stay petition simultaneously. The Appellate Authority directed the petitioner to approach the Assessing Officer, under Ext.P5, and hence the stay petition was withdrawn. The petitioner had moved the Assessing Officer, who had W.P.(C) No. 13364/2017 -2- directed deposit of 15% of the demand to consider the stay petition. 3. The direction of the Assessing Officer is against Ext.P5 Circular. The intention of the CBDT was to streamline the process of grant of stay and standardize the quantum of lump sum payment pending appeal. The measure was designed also to avoid hardship to tax payers from whom high proportion of the disputed amounts are demanded, pending appeal. In fact, the direction in the Circular was to consider stay of the outstanding demand on payment of 15% of the disputed demand, till the first appeal is considered. The intention is for the Assessing Officer to look into the nature of the demand and grant a stay on payment of 15% or otherwise reduce the condition; unless the case comes under Clause 4(B) of the Circular. If 15% is directed to be paid, then there is no reason why the W.P.(C) No. 13364/2017 -3- Assessing Officer should then consider the application for stay, since, as per the Circular, there should be a stay till the disposal of the appeal. 4. In any event, since an appeal has been filed and the Assessing Officer has been acting against the specific provisions of the Circular, this Court is of the opinion that the Appellate Authority itself should consider the stay application. Ext.P7 would stand set aside. The petitioner shall move a fresh petition for stay before the Appellate Authority and the Appellate Authority shall consider the same. The petitioner shall move the stay application within three weeks from today. Till orders are passed in that application, there shall be an interim stay of the demand. The writ petition is disposed of. Sd/- K.VINOD CHANDRAN, JUDGE jjj 12/4/17 "