INFRA HOUSING (P) LTD., V. THE DEPUTY COMMISSIONER OF INCOME TAX,

WP(C)/24663/2024

AI Insights

The case involves Infra Housing (P) Ltd., which did not file a return of income for the assessment year 2015-2016, leading to assessment proceedings under Section 148 of the Income Tax Act, 1961. The proceedings concluded with a demand for Rs.54,75,42,720 and penalties imposed through a series of orders. The petitioner contested the high assessment, which was significantly higher than the returned income of Rs.19,67,077, and filed appeals against the assessment and penalty orders, seeking condonation of delay and stay on the demands. The court referenced a similar case (WP(C)No.6385/2023) to support the petitioner's request for suspension of recovery proceedings pending the appeal's outcome.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 747079 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 26-07-2024
• Assessment Year: misc
• Other Referred Cases: WP(C)No.6385/2023, WP(C) No. 17085 of 2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: SRI CYRIAC TOM JR SC IT DEPT; SRI JOSE JOSEPH SR SC IT DEPT
• Assessee Lawyers: K S HARIHARAN NAIR ADVOCATE; SREE HARIDEV G REMADEVI ADVOCATE; HARIMA HARIHARAN ADVOCATE; RAJATH R NATH ADVOCATE; DHEERAJ SASIDHARAN ADVOCATE
• Keywords: Assessment; Condonation of delay; High-pitched assessment; Income Tax; Rectification; Stay Application
• Section: 148; 271(1)(c); 271(1)(b); 271B; 271F

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE GOPINATH P. FRIDAY, THE 26TH DAY OF JULY 2024 / 4TH SRAVANA, 1946 WP(C) NO. 24663 OF 2024 PETITIONER: INFRA HOUSING (P) LTD., 1ST FLOOR, CLS BUILDING, OPP. MAHARAJA'S COLLEGE, ERNAKULAM, KOCHI REPRESENTED BY ITS DIRECTOR SRI. GEORGE E. GEORGE, PIN – 682 011. BY ADVS. K.S.HARIHARAN NAIR SREE HARIDEV G.REMADEVI HARIMA HARIHARAN RAJATH R NATH DHEERAJ SASIDHARAN RESPONDENTS: 1 THE DEPUTY COMMISSIONER OF INCOME TAX, DCIT, CORPORATE CIR 1 (1), CENTRAL REVENUE BUILDING, I.S. PRESS ROAD, KOCHI, PIN – 682 018. 2 ASSESSMENT UNIT, REPRESENTED BY PRINCIPAL CHIEF COMMISSIONER, INCOME TAX DEPARTMENT, NATIONAL E-ASSESSMENT CENTRE, MAYUR BHAWAN, CONNAUGHT LANE, NEW DELHI, PIN – 110 001. 3 THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX, CENTRAL REVENUE BUILDING, I.S. PRESS ROAD, KOCHI, PIN – 682 018. BY ADVS. SRI. CYRIAC TOM (Jr.SC- IT DEPT) SRI. JOSE JOSEPH(SR.SC- IT DEPT) THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 26.07.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 24663 OF 2024 2 JUDGMENT The petitioner is an assessee under the Income Tax Act, 1961 (hereinafter referred to as the ‘1961 Act’). For the assessment year 2015-2016 the petitioner did not file any return of income. Assessment proceedings were commenced against the petitioner, including an allegation that there was escapement of income of sums exceeding Rs.50,00,000/-. Proceedings were concluded under Section 148 of the 1961 Act, and by Ext.P3 order dated 22-03-2024, the assessment proceedings have been completed raising a demand for a sum of Rs.54,75,42,720/-. Penalties have also been imposed on the petitioner by Ext.P5 series of orders. The petitioner filed an application for rectification of Ext.P3 order, which is stated to be pending. 2. The learned counsel appearing for the petitioner would submit, relying on the judgment of this Court in WP(C)No.6385/2023, that the returned income for the assessment year 2015-2016 was Rs.19,67,077/- and the income assessed in Ext.P3 is approximately Rs.54 Crores. It is submitted that in the judgment in W.P(C)No.6385/2023 this WP(C) NO. 24663 OF 2024 3 Court held as follows: “2. In the case on hand, the returned income was only Rs.6,93,940/- and the amount which has been arrived at is Rs.4,94,18,803/-. It is almost 71 times and going by the yardstick followed by the Division Bench of the Delhi High Court, it definitely comes under the nomenclature of high pitched. It is in the above circumstances the learned counsel for the petitioner submits that it is a case where the Appellate Authority should be directed to hear the appeal and dispose it of without insisting on payment. The counsel for the Department submitted that the appeal can be directed to be disposed of but however, it may be on the basis of a condition on payment of a portion of the tax. 3. I have considered the contentions on either side. It is seen that the appeal had been preferred in April, 2022. It will be onerous to burden the petitioner with a condition of paying a portion of a tax in a case which necessarily has to be categorised under the high pitched category going by the decisions referred to above, particularly since the appeal has been pending for almost nine months. 4. In the result, the writ petition is disposed of directing the petitioner to approach the concerned Assessing Authority for opening the portal for preferring a stay application and a stay application shall be preferred within two weeks from today. The Appellate Authority shall take up the stay application along with the appeal and consider the appeal itself and pass orders unless the Appellate Authority is of the opinion that the workload will not permit such a course of action. In such a situation, the Appellate Authority shall consider the stay application with WP(C) NO. 24663 OF 2024 4 particular reference to the decisions referred above and pass appropriate orders. All coercive steps shall be kept in abeyance till a decision as directed above is taken by the Appellate Authority”. The learned counsel appearing for the petitioner would submit that the petitioner has now filed Ext.P7 appeal along with Ext.P7(a) application for condonation of delay and Ext.P7(b) application for stay against Ext.P3 order of assessment and Exts.P8, P9, P10 and P11 appeals against orders imposing penalties together with applications for condonation of delay and for stay. It is prayed that the Appellate Authority may be directed to consider and dispose of the appeals in accordance with the law and till such time the demands in Ext.P3 order of assessment and Ext.P5 series of penalty orders may be kept in abeyance. 3. The learned Standing Counsel appearing for the Income Tax Department would submit that the Appellate Authority can be directed to consider and pass orders on the applications for condonation of delay and on the applications for stay and till such time that orders are passed (after affording an opportunity of hearing to the petitioner) the WP(C) NO. 24663 OF 2024 5 demands in Ext.P3 order of assessment and Ext.P5 series of orders imposing penalty can be kept in abeyance. 4. Having heard the learned counsel appearing for the petitioner and the learned Standing Counsel appearing for the Income Tax Department and having regard to the judgment of this Court in W.P(C)No.6385/2023 and considering the fact that against a returned income of Rs.19,67,077, the income of the petitioner has been assessed at approximately Rs.54 Crores, I am of the view that the principles laid down by this Court in the judgment in W.P(C)No.6385/2023 are to be followed in this case as well. 5. Accordingly, the writ petition will stand disposed of directing the Appellate Authority before whom Exts.P7, P8, P9, P10 and P11 appeals have been filed to consider and pass orders on the appeals and on the applications for condonation of delay after affording an opportunity of hearing to the petitioner. It is made clear that the Appellate Authority needs to pass orders on the merits of Exts.P7, P8, P9, P10 and P11 appeals only if the Appellate Authority decides to condone the delay in filing the appeals. Till such time as orders are passed, WP(C) NO. 24663 OF 2024 6 any proceedings for recovery of any amount assessed as due under Ext.P3 and for the recovery of amounts imposed as penalty under Ext.P5 series of orders shall remain suspended. I make it clear that I have not expressed any opinion on the merits of the petitioner’s case and it will be open to the Appellate Authority to consider the applications filed by the petitioner for condonation of delay as also the appeals in accordance with the law. The Appellate Authority shall endeavour to pass orders as directed above within a period of three months from the date of receipt of a copy of this judgment. Writ petition is disposed of as above. Sd/- GOPINATH P. JUDGE ats WP(C) NO. 24663 OF 2024 7 APPENDIX OF WP(C) 24663/2024 PETITIONER’S EXHIBITS Exhibit P1 TRUE COPY OF THE SHOW-CAUSE NOTICE DATED 01-03-2024 ISSUED BY THE 2ND RESPONDENT FOR THE AY 2015-16. Exhibit P2 TRUE COPY OF REPLY DATED 06-03-2024 ALONG WITH DOCUMENTS SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. Exhibit P2(a) THE SCREENSHOT OF THE EXT. P2 REPLY FILED BY THE PETITIONER IN THE INCOME TAX WEB PORTAL. Exhibit P3 TRUE COPY OF THE ASSESSMENT ORDER DATED 22-03-2024 FOR THE AY 2015-16 ALONG WITH THE DEMAND NOTICE ISSUED BY THE 2ND RESPONDENT. Exhibit P4 TRUE COPY OF THE RECTIFICATION PETITION DATED 18-06-2024 FILED BY THE PETITIONER AGAINST THE EXT. P3 ASSESSMENT ORDER PASSED BY THE 2ND RESPONDENT FOR AY 2015-16 ALONG WITH THE ANNEXURES. Exhibit P5 TRUE COPY OF THE PENALTY ORDER DATED 27-05-2024 ISSUED BY THE 2ND RESPONDENT UNDER SECTION 271B OF THE ACT. Exhibit P5(a) TRUE COPY OF THE PENALTY ORDER DATED 27-05-2024 ISSUED BY THE 2ND RESPONDENT UNDER SECTION 271F OF THE ACT. Exhibit P5(b) TRUE COPY OF THE PENALTY ORDER DATED 30-05-2024 ISSUED BY THE 2ND RESPONDENT UNDER SECTION 271(1)(B) OF THE ACT. WP(C) NO. 24663 OF 2024 8 Exhibit P5(c) TRUE COPY OF THE PENALTY ORDER DATED 30-05-2024 ISSUED BY THE 2ND RESPONDENT UNDER SECTION 271(1)(C) OF THE ACT. Exhibit P6 TRUE COPY OF THE JUDGMENT DATED 07-06-2024 OF THE HON'BLE HIGH COURT OF KERALA IN THE CASE OF MR. MAMMED KOMBAN VS. THE NATIONAL FACELESS ASSESSMENT CENTER (WP(C) NO. 17085 OF 2022). Exhibit P7 TRUE COPY OF THE APPEAL MEMORANDUM DATED 16-07-2024 FILED BY THE PETITIONER AGAINST EXT.P3 BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), NATIONAL FACELESS ASSESSMENT CENTRE, NEW DELHI. Exhibit P7(a) TRUE COPY OF THE DELAY CONDONATION PETITION DATED 16-07-2024 FILED BY THE PETITIONER IN EXT.P7 APPEAL. Exhibit P7(b) TRUE COPY OF THE STAY PETITION DATED 16-07-2024 FILED BY THE PETITIONER IN EXT. P7 APPEAL. Exhibit P8 TRUE COPY OF THE APPEAL MEMORANDUM DATED 16-07-2024 FILED BY THE PETITIONER AGAINST EXT.P5 BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), NATIONAL FACELESS ASSESSMENT CENTRE, NEW DELHI, PIN-110 001. Exhibit P8(a) TRUE COPY OF THE DELAY CONDONATION PETITION DATED 16-07-2024 FILED BY THE PETITIONER IN EXT.P8 APPEAL. Exhibit P8(b) TRUE COPY OF THE STAY PETITION DATED 16-07-2024 FILED BY THE PETITIONER IN EXT. P8 APPEAL. Exhibit P9 TRUE COPY OF THE APPEAL MEMORANDUM DATED 16-07-2024 FILED BY THE PETITIONER AGAINST EXT.P5(A) BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), NATIONAL FACELESS ASSESSMENT CENTRE, NEW DELHI, PIN-110 001. WP(C) NO. 24663 OF 2024 9 Exhibit P9(a) TRUE COPY OF THE DELAY CONDONATION PETITION DATED 16-07-2024 FILED BY THE PETITIONER IN EXT.P9 APPEAL. Exhibit P9(b) TRUE COPY OF THE STAY PETITION DATED 16-07-2024 FILED BY THE PETITIONER IN EXT. P9 APPEAL. Exhibit P10 TRUE COPY OF THE APPEAL MEMORANDUM DATED 16-07-2024 FILED BY THE PETITIONER AGAINST EXT.P5(B) BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), NATIONAL FACELESS ASSESSMENT CENTRE, NEW DELHI, PIN-110 001. Exhibit P10(a) TRUE COPY OF THE DELAY CONDONATION PETITION DATED 16-07-2024 FILED BY THE PETITIONER IN EXT.P10 APPEAL. Exhibit P10(b) TRUE COPY OF THE STAY PETITION DATED 16-07-2024 FILED BY THE PETITIONER IN EXT. P10 APPEAL. Exhibit P11 TRUE COPY OF THE APPEAL MEMORANDUM DATED 16-07-2024 FILED BY THE PETITIONER AGAINST EXT.P5(C) BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), NATIONAL FACELESS ASSESSMENT CENTRE, NEW DELHI, PIN-110 001 Exhibit P11(a) TRUE COPY OF THE DELAY CONDONATION PETITION DATED 16-07-2024 FILED BY THE PETITIONER IN EXT.P11 APPEAL. Exhibit P11(b) TRUE COPY OF THE STAY PETITION DATED 16-07-2024 FILED BY THE PETITIONER IN EXT. P11 APPEAL. "