KERALA POLICE HOUSING AND CONSTRUCTION CORPORATION LIMITED V. ASSISTANT COMMISSIONER OF INCOME TAX

WP(C)/25547/2014

AI Insights

The case involves the Kerala Police Housing and Construction Corporation Limited, which is engaged in construction work for police personnel and other government employees. The corporation's funds were assessed as income, leading to a demand for tax. The corporation appealed against the assessment and filed a stay petition, which was partially granted by the Commissioner of Income Tax (Appeals), requiring a 50% payment of the demand for interim stay. Dissatisfied, the corporation approached the High Court of Kerala, which found the appellate authority's decision lacking in reasoning and set it aside, directing a re-evaluation of the stay application.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 755725 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 01-10-2014
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH
• Assessee Lawyers: C K GOVINDAN
• Keywords: Appeal; Assessment Order; Demand notice; Income Tax; Stay Petition
• Section: 143(3)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE P.R.RAMACHANDRA MENON WEDNESDAY, THE 1ST DAY OF OCTOBER 2014/9TH ASWINA, 1936 WP(C).No. 25547 of 2014 (P) -------------------------------------- PETITIONER(S): ----------------------- KERALA POLICE HOUSING AND CONSTRUCTION CORPORATION LIMITED, CHANSEKHARAN NAIR STADIUM, VIKAS BHAWAN P.O., PALAYAM, TRIVANDRUM - 695 033, REPRESENTED BY ITS ALEXANDER JACOB, I.P.S. BY ADV. SRI.C.K.GOVINDAN RESPONDENT(S): ------------------------- 1. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1(1) THIRUVANANTHAPURAM - 695 003. 2. COMMISSIONER OF INCOME TAX (APPEALS), THIRUVANANTHAPURAM - 695 003. 3. COMMISSIONER OF INCOME TAX, THIRUVANANTHAPURAM - 695 003. BY SRI.JOSE JOSEPH, SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 01-10-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: msv/ WP(C).No. 25547 of 2014 (P) --------------------------------------- APPENDIX PETITIONER(S)' EXHIBITS ------------------------------------- EXT. P1: TRUE COPY OF THE ASSESSMENT ORDER DATED 21/3/2013 ISSUED BY THE 1ST RESPONDENT FOR THE ASSESSMENT YEAR 2010-2011. EXT. P2: TRUE COPY OF THE DEMAND NOTICE 18/6/13 ISSUED BY THE 1ST RESPONDENT EXT. P3: TRUE COPY OF THE APPEAL DATED 6/4/13 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT EXT. P4: TRUE COPY OF THE STAY PETITION DATED 27/6/2013 FILED BY THE PETITIONER BEFORE 2ND RESPONDENT. EXT. P5: TRUE COPY OF THE ORDER IN STAY PETITION DATED 20/8/2014 ISSUED BY THE 2ND RESPONDENT IN APPEAL. EXT. P6: TRUE COPY OF THE DEMAND NOTICE DATED 01/09/2014 ISSUED BY THE FIRST RESPONDENT. RESPONDENT(S)' EXHIBITS ---------------------------------------- NIL /TRUE COPY/ P.S. TO JUDGE msv/ P.R. RAMACHANDRA MENON, J. .............................................................................. W.P.(C)No.25547 OF 2014 ......................................................................... Dated this the 1st October, 2014 J U D G M E N T The petitioner, who is an assessee under the Income Tax Act, is stated as engaged in the construction work for police personnel and employees of other Government Departments. The funds for meeting the organisational requirement is stated as pumped in from different sources and the same is being utilised for meeting the construction work. The amount lying in the deposit of the petitioner was reckoned as income and the liability was finalised as per Ext.P1 assessment order for the year 2010- 11 followed by Ext.P2 demand notice. The petitioner availed statutory remedy by way of Ext.P3 appeal along with Ext.P4 stay petition before the second respondent/Commissioner of Income Tax (Appeals). After considering the I.A. for stay, the second respondent passed Ext.P5 order directing the petitioner to satisfy 50% of the liability/demand so as to avail the benefit of interim stay followed by Ext.P6 demand notice issued by the first respondent /Asst. Commissioner of Income Tax, which made the petitioner to approach this Court by filing this writ petition. 2. Heard the learned Standing Counsel for the Department, who however sought for further time to get W.P.(C)No.25547 OF 2014 2 instruction with regard to merits. 3. On going through the pleadings and proceedings, particularly the contents of Ext.P5 order, this Court does not find it necessary to get any instruction with regard to the merits as this Court does not propose to go into the merits of the case. The only question that requires to be considered is whether there was proper application of mind on the part of the appellate authority while passing Ext.P5 order imposing the condition. After referring to the case set up by the petitioner the appellate authority on the very next moment jumped to the conclusion to have mulcted with liability to the extent of 50% of the total demand. The observation as given in paragraph '3' of Ext.P5 reads as follows: “I have considered the request of the appellant's representative bearing in mind the basis on which additions were made and also the CBDT's instruction No.1914 of 1993 on stay for the collection of demand and inclined to consider the request just to grant stay for the 50% of the demand raised as nothing on the grounds of appeal could be said at this stage without hearing the appeal and examining thoroughly the issues on which W.P.(C)No.25547 OF 2014 3 additions were made. Thus, it is ordered that the appellant shall pay 50% of the demand raised in 6 equal monthly installment starting from 1st September 2014 and this would be worked out by the Assessing Officer.” 4. This Court finds that absolutely no reason is given by the appellate authority for imposing the condition and as such this Court finds that this matter requires to be reconsidered by the second respondent/appellate authority. Accordingly, Ext.P5 is set aside and the second respondent is directed to re-consider Ext.P4 application for interim stay in accordance with law, by passing a speaking order, after hearing the petitioner, which shall be done at the earliest , at any rate within one month from the date of receipt of a copy of the judgment. Coercive proceedings shall be kept in abeyance till such time. The petitioner shall produce a copy of the judgment along with a copy of the writ petition before the second respondent . The writ petition is disposed of. P.R.RAMACHANDRA MENON JUDGE lk "