Covenant Stones Private Limited V. Commissioner of Income Tax (Appeals) Central Circle, Cochin and Commissioner of Income Tax (Appeals)-3 and Assistant Commissioner of Income Tax Central Circle

WP(C)/40710/2023

AI Insights

Covenant Stones Private Limited, represented by its director Sri. K.C. Ramachandran, filed a writ petition against the conditional stay order issued by the Commissioner of Income Tax (Appeals)-3. The stay order required the company to pay 20% of the total tax demand raised for several assessment years. The petitioner argued that the order did not consider the merits of the case and was passed following a circular. However, the court noted that the assessment orders were based on comprehensive evidence, including retracted statements and digital data, and thus dismissed the petition. The court also extended the deadline for the payment of the first installment to 30.12.2023 and the final installment to 30.06.2024.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 796980 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 19-12-2023
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: SUSIE VARGHESE
• Assessee Lawyers: ANIL GEORGE; G POOTHICOTE ANN MARY
• Keywords: Assessment orders; Conditional stay; Retracted statements; Tax demand; Undisclosed income
• Section: 133A

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH TUESDAY, THE 19TH DAY OF DECEMBER 2023 / 28TH AGRAHAYANA, 1945 WP(C) NO. 40710 OF 2023 PETITIONER/S: COVENANT STONES PRIVATE LIMITED HAVING ITS REGISTERED OFFICE AT SHOP NO. 237(416B), MUKHOLA, VATTIYURKAVU, NETTAYAM P.O, THIRUVANANTHAPURAM, REPRESENTED BY ITS DIRECTOR, SRI. K.C. RAMACHANDRAN, PIN - 695013 BY ADVS. ANIL XAVIER GEORGE G.POOTHICOTE ANN MARY.V.I RESPONDENT/S: 1 COMMISSIONER OF INCOME TAX (APPEALS) CENTRAL CIRCLE, COCHIN, POORNIMA BUILDING, MANORAMA JUNCTION, PANAMPILLY NAGAR, COCHIN, PIN - 682036 2 COMMISSIONER OF INCOME TAX (APPEALS)-3 4TH FLOOR, CENTRAL REVENUE BUILDING, I.S. PRESS ROAD, COCHIN, PIN - 682018 3 ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE, INCOME TAX OFFICE, PUBLIC LIBRARY BUILDING, SHASTRI ROAD, KOTTAYAM, PIN - 686001 OTHER PRESENT: SUSIE B. VARGHESE-SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 19.12.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 40710 OF 2023 2 JUDGMENT Dated this the 19th day of December, 2023 The present writ petition has been filed impugning Ext.P5 order passed by the 2nd respondent. The 2nd respondent has given a conditional stay order in Ext.P5 after considering the facts and circumstances of the case and taking into account the online submissions advanced on behalf of the petitioner. 2.The petitioner has been directed to pay of 20% of the total tax demand raised vide the assessment orders for the assessment years 2014-2015, 2015-2016, 2016-2017, 2017-2018 and 2019-2020. Not only the conditional stay on payment of 20% has been granted but the petitioner has also been given facility of payment of 20% in seven equal installments. The said 20% amount is directed to be paid on or before 25.03.2024. The first installment has been directed to be paid on or before 25.09.2023. The petitioner instead of complying the said conditional stay order has approached this court, impugning the very same conditional stay order in Ext.P5. 3.Learned counsel for the petitioner submits that the 2nd respondent has not considered the merit of the case and following the circular, has passed the order. 4.This court therefore asked the learned counsel for the petitioner to make submissions on the merit of the case. 5.The learned counsel for the petitioner has submitted that the assessment orders after survey under Section 133A of the Income Tax WP(C) NO. 40710 OF 2023 3 Act had been finalized merely on the basis of the statements of the Director and Managing Director who had retracted later on. This submission does not appear to be correct. The assessment order would disclose that not only the statements of the Director and Managing Director were taken into consideration but the other incriminating material including the excel sheets and digital datas maintained in the computers and laptops had also been examined before adding the undisclosed income to the returned income of the petitioner. Therefore, I do not find much substance in the present writ petition that the merit of the assessment orders have not been considered while passing the impugned Ext.P5 order granting conditional stay. In that view of the matter, the present writ petition is dismissed. The petitioner was granted time to pay the first instalment on or before 25.09.2023, the said time is extended to 30.12.2023 and the last and final installment has to be paid on or before 30.06.2024. Needless to say that the observation made herein will not prejudice the appellate authority to consider the case of the petitioner on merit. The writ petition is dismissed accordingly. Sd/- DINESH KUMAR SINGH JUDGE SJ WP(C) NO. 40710 OF 2023 4 APPENDIX OF WP(C) 40710/2023 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 30/09/2021 FOR AY 2014-15 ISSUED BY THE 2ND RESPONDENT, ASSESSING OFFICER Exhibit P1(a) TRUE COPY OF THE ASSESSMENT ORDER DATED 07/12/2021 FOR AY 2015-16 ISSUED BY THE 2ND RESPONDENT, ASSESSING OFFICER Exhibit P1(b) TRUE COPY OF THE ASSESSMENT ORDER DATED 30/09/2021 FOR AY 2016-17 ISSUED BY THE 2ND RESPONDENT, ASSESSING OFFICER Exhibit P1(c) TRUE COPY OF THE ASSESSMENT ORDER DATED 16/11/2021 FOR AY 2017-18 ISSUED BY THE 2ND RESPONDENT, ASSESSING OFFICER Exhibit P1(d) TRUE COPY OF THE ASSESSMENT ORDER DATED 30/09/2021 FOR AY 2018-19 ISSUED BY THE 2ND RESPONDENT, ASSESSING OFFICER Exhibit P1(e) TRUE COPY OF THE ASSESSMENT ORDER DATED 30/09/2021 FOR AY 2019-20, ISSUED BY THE 2ND RESPONDENT, ASSESSING OFFICER Exhibit P2 TRUE COPY OF THE ATTACHMENT ORDER DATED 16/08/2022 FOR RECOVERY OF AMOUNT, ISSUED BY THE 3RD RESPONDENT, ASSESSING OFFICER Exhibit P3 TRUE COPY OF THE CBDT INSTRUCTION NO. 1914 DATED 02/12/1993 Exhibit P4 TRUE COPY OF THE JUDGMENT DATED 21/12/2022 OF THE HIGH COURT OF KERALA IN WP(C) NO. 38390/2022 Exhibit P5 TRUE COPY OF THE ORDER ON STAY PETITION DATED 13/09/2023 BY THE 2ND RESPONDENT Exhibit P6 TRUE COPY OF THE NOTICE OF DEMAND DATED 22/09/2023 OF THE 3RD RESPONDENT Exhibit P7 TRUE COPY OF THE NOTICE DATED 18/04/2023 ISSUED IN THE APPEALS FOR THE ASSESSMENT YEAR 2014-15, ISSUED BY THE 2ND RESPONDENT Exhibit P7(a) TRUE COPY OF THE NOTICE DATED 18/04/2023 ISSUED IN THE APPEALS FOR THE ASSESSMENT YEAR 2015-16, ISSUED BY THE 2ND RESPONDENT Exhibit P7(b) TRUE COPY OF THE NOTICE DATED 18/04/2023 ISSUED IN THE APPEALS FOR THE ASSESSMENT YEAR 2016-17, ISSUED BY THE 2ND RESPONDENT WP(C) NO. 40710 OF 2023 5 Exhibit P7(c) TRUE COPY OF THE NOTICE DATED 18/04/2023 ISSUED IN THE APPEALS FOR THE ASSESSMENT YEAR 2017-18, ISSUED BY THE 2ND RESPONDENT Exhibit P7(d) TRUE COPY OF THE NOTICE DATED 18/04/2023 ISSUED IN THE APPEALS FOR THE ASSESSMENT YEAR 2018-19 ISSUED BY THE 2ND RESPONDENT Exhibit P7(e) TRUE COPY OF THE NOTICE DATED 18/04/2023 ISSUED IN THE APPEALS FOR THE ASSESSMENT YEAR 2019-20, ISSUED BY THE 2ND RESPONDENT Exhibit P8 TRUE COPY OF THE APPEAL NOTE FILED BY THE PETITIONER IN THE APPEALS FOR THE ASSESSMENT YEAR 2014-15 Exhibit P8(a) TRUE COPY OF THE APPEAL NOTE FILED BY THE PETITIONER IN THE APPEALS FOR THE ASSESSMENT YEAR 2015-16 Exhibit P8(b) TRUE COPY OF THE APPEAL NOTE FILED BY THE PETITIONER IN THE APPEALS FOR THE ASSESSMENT YEAR 2016-17 Exhibit P8(c) TRUE COPY OF THE APPEAL NOTE FILED BY THE PETITIONER IN THE APPEALS FOR THE ASSESSMENT YEAR 2017-18 Exhibit P8(d) TRUE COPY OF THE APPEAL NOTE FILED BY THE PETITIONER IN THE APPEALS FOR THE ASSESSMENT YEAR 2018-19 Exhibit P8(e) TRUE COPY OF THE APPEAL NOTE FILED BY THE PETITIONER IN THE APPEALS FOR THE ASSESSMENT YEAR 2019-20 "