M/S.KERALA LIVESTOCK DEVELOPMENT BOARD LIMITED V. THE ASSISTANT COMMISSIONER OF INCOME TAX

WP(C)/2929/2016

AI Insights

The case involves the Kerala Livestock Development Board Limited challenging a conditional stay order (Ext.P4) issued by the Commissioner of Income Tax (Appeals), Thiruvananthapuram, which required the petitioner to pay 25% of the outstanding demand as a condition for staying the recovery of balance amounts confirmed against it in an assessment order for the year 2012-13. The main legal issue was whether the amounts received by the petitioner as grant-in-aid should be treated as capital or revenue receipts for taxation purposes. The court found that the appellate authority did not provide adequate reasoning for the stay condition and had not properly exercised its discretion.

• Counselvise Citation: [2016] 140 COUNSELVISE.COM (IT) 755574 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 29-01-2016
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: K M V PANDALAI
• Assessee Lawyers: SUMATHY DANDAPANI; MILLU DANDAPANI
• Keywords: Assessment Order; Capital Receipts; Conditional stay order; Grant-in-Aid; Revenue Receipts; Taxation
• Section: 143(3)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR FRIDAY, THE 29TH DAY OF JANUARY 2016/9TH MAGHA, 1937 WP(C).No. 2929 of 2016 (M) --------------------------- PETITIONER : ----------------------- M/S. KERALA LIVESTOCK DEVELOPMENT BOARD LIMITED., GOKULAM, PATTOM, THIRUVANANTHAPURAM-695 004, REPRESENTED BY ITS MANAGING DIRECTOR. BY SMT.SUMATHY DANDAPANI,SENIOR ADVOCATE ADV. SRI.MILLU DANDAPANI RESPONDENT(S): ---------------------------- 1. THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE 1 (1), THIRUVANANTHAPURAM, PIN-695 003. 2. THE COMMISSIONER OF INCOME TAX (APPEALS), THIRUVANANTHAPURAM-695 003. R1 & R2 BY SRI.K.M.V.PANDALAI, INCOME TAX DEPARTMENT THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 29-01-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: sts WP(C).No. 2929 of 2016 (M) --------------------------------------- APPENDIX PETITIONER(S)' EXHIBITS ------------------------------------- P1 : TRUE COPY OF ASSESSMENT ORDER DT 26-3-15 ISSUED BY THE 1ST RESPONDENT. P2 : TRUE COPY OF APPEAL DT 23-4-15 FILED BEFORE THE 2ND RESPONDENT. P3 : TRUE COPY OF NOTICE NO.AAACK9533D/CIRL(1)/15-16 DT 1/10/15 ISSUED BY THE 1ST RESPONDENT. P4 : TRUE COPY OF STAY ORDER ITA NO.43/TVM/CIT(A), TVM/2015-16 DT 8-1-16 ISSUED BY THE 2ND RESPONDENT. RESPONDENT(S)' EXHIBITS: NIL ------------------------------------------ /TRUE COPY/ P.A.TO JUDGE sts A.K.JAYASANKARAN NAMBIAR, J. - - - - - - - - - - - - - - - - - - - - - - - - - - W.P.(C) No.2929 of 2016 - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 29th day of January 2016 JUDGMENT The challenge in the writ petition is against Ext.P4 conditional order of stay, passed by the 2nd respondent, in a stay application filed along with an appeal against an order of assessment, under the Income Tax Act, for the assessment year 2012-13. The grievance of the petitioner in the writ petition is essentially that while passing Ext.P4 order, the 2nd respondent appellate authority, did not exercise its discretion validly. 2. I have heard the learned senior counsel Smt.Sumathi Dandapani, for the petitioner and the learned standing counsel for the respondents. 3. On a consideration of the facts and circumstances of the case and the submissions made across the Bar, I find that in Ext.P4 order, the 2nd respondent while noticing the contentions of the petitioner on merits, has not stated any reason as to why the petitioner was required to pay 25% of the outstanding demand W.P.(c).No.2929 of 2016 : 2 : during the pendency of the appeal, and as a condition for the stay of recovery of balance amounts confirmed against the petitioner in the assessment order. The issue involved in the appeal is essentially as to whether amounts received by way of grant-in-aid by the petitioner would be treated as capital receipts or revenue receipts for the purposes of taxation, under the Income Tax Act. There is no discussion in the impugned order as to whether, at least prima facie , it was established that the receipts were revenue in nature, in which event alone it would be liable to tax. I feel that the 2nd respondent appellate authority has not exercised his discretion validly, while deciding the stay petition preferred by the petitioner. The learned senior counsel would submit that, consequent to Ext.P4 order, the petitioner has already paid an amount of Rs.77,00,000/- to the department on 28.01.2016. Taking note of the said submission, I direct that the aforementioned payment already made by the petitioner shall be treated as sufficient compliance with the directions in Ext.P4 order of the 2nd respondent, and the 2nd respondent shall proceed to dispose the appeal after hearing the petitioner, within a period of four months from the date of receipt of a copy of this judgment. The petitioner shall produce a copy of the writ petition along with the copy of this judgment before the 2nd respondent, for W.P.(c).No.2929 of 2016 : 3 : further action. The writ petition is disposed as above. Sd/- A.K.JAYASANKARAN NAMBIAR JUDGE sm/ "