M.BRIJESH V. THE INCOME TAX OFFICER,

WP(C)/11700/2019

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The petitioner, M. Brijesh, challenged the Income Tax Department's action of recovering Rs.39,35,313 from his savings account for unpaid tax liabilities for the assessment years 2011-2012 and 2012-2013. The petitioner had previously been granted a stay on recovery by paying a portion of the tax demands, which he defaulted on. Despite a prior court order directing the Income Tax Officer to consider an extension for payment, recovery actions were initiated before compliance with the order. The court considered the petitioner's financial hardship and partial compliance with the payment directives, leading to the conditional re-crediting of funds and a directive for expedited appellate proceedings.

• Counselvise Citation: [2019] 140 COUNSELVISE.COM (IT) 768816 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 10-10-2019
• Assessment Year: misc
• Other Referred Cases: W.P(C) No.10147 of 2019
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: P K MENON; JOSE JOSEPH; GEORGE THOMAS; AMAL GEORGE; M SASINDRAN
• Assessee Lawyers: HARISANKAR MENON; MEERA MENON; K KRISHNA
• Keywords: Financial hardship; Income Tax; Recovery; Stay Application; Tax liability
• Section: 220(2)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR THURSDAY, THE 10TH DAY OF OCTOBER 2019 / 18TH ASWINA, 1941 WP(C).No.11700 OF 2019(J) PETITIONER: M.BRIJESH AGED 44 YEARS S/O.RAMANKUTTY GUPTHAN, PROPRIETOR, M/S.GEETHAM SWEETS, 30/167, BIG BAZAR, PALAKKAD. BY ADVS. SRI.HARISANKAR V. MENON SMT.MEERA V.MENON SMT.K.KRISHNA RESPONDENTS: 1 THE INCOME TAX OFFICER, WARD-1, PALAKKAD- 678014. 2 THE COMMISSIONER OF INCOME TAX (APPEALS), 3RD FLOOR, AAYAKAR BAHVAN, THRISSUR- 680001. 3 UCO BANK, MARKET ROAD, PALAKKAD- 678001, REPRESENTED BY ITS BRANCH MANAGER. 4 STATE BANK OF INDIA, MARKET ROAD, PALAKKAD- 678001, REPRESENTED BY ITS BRANCH MANAGER. 5 INDIAN BANK, KANDATH COMPLEX, PALAKKAD- 678001, REPRESENTED BY ITS BRANCH MANAGER. 6 PALAKKAD DISTRICT CO-OPERATIVE BANK LTD., SREEKRISHNAPURAM BRANCH, PALAKKAD DISTRICT, PIN- 679513, REPRESENTED BY ITS MANAGER. R1-2 BY ADV. SRI.P.K.RAVINDRANATHA MENON (SR.) R1-2 BY SRI.JOSE JOSEPH, SC, FOR INCOME TAX R4 BY ADV. SRI.GEORGE THOMAS (MEVADA)(SR.) R4 BY SRI.AMAL GEORGE, SC, SBI R6 BY SRI.M.SASINDRAN, SC, PALAKKAD DIST.CO.OP.BANK W.P(C) No.11700/19 2 THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 10.10.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P(C) No.11700/19 3 JUDGMENT The petitioner has approached this Court aggrieved by the action of the respondent Income Tax Department in recovering an amount of Rs.39,35,313/- from the savings account of the petitioner towards a tax liability confirmed against the petitioner for the assessment years 2011-2012 and 2012-2013 under the Income Tax Act. The facts in the Writ Petition would reveal that against the assessments for the said years, the petitioner had preferred appeals before the 2nd respondent Appellate Authority. In the stay application that was filed along with Appeal, for the assessment year 2011-2012 the Appellate Authority directed the petitioner to pay 15% of the confirmed demand by an order dated 29.12.2016. The said amount of Rs.8,47,278/- had to be paid by the petitioner in three monthly instalments. As against this, the petitioner could effect a payment of only Rs.6,14,860/- leaving a balance of Rs.2,32,418/- as defaulted. Similarly, for the assessment year 2012-2013 by an order dated 11.01.2018 passed by the Assessing Authority, in an application under Section 220(2) of the Income Tax Act, the petitioner was required to pay an amount of Rs.12,98,710/- within six months from the date of the order. As against this, the petitioner paid an amount of Rs.6,75,000/- leaving a balance of Rs.6,22,091/- as defaulted. On finding that the petitioner had not complied with the conditions for stay against recovery,, the respondent Income Tax Authority proceeded to recover the entire tax demand confirmed against the petitioner from its Bank account. It is the said action of the Department that is impugned in these proceedings. 2. I have heard Sri.Harisankar V . Menon, the learned counsel for the petitioner and Sri.Jose Joseph, the learned Standing Counsel for the Income Tax Department. W.P(C) No.11700/19 4 3. On a consideration of the facts and circumstances of the case and the submissions made across the Bar, I find that it is not in dispute that as against the orders passed by the Appellate Authority/Assessing Authority, the petitioner defaulted in an amount of Rs.8,54,509/-. It would normally follow, as a consequence, that on the default committed by the petitioner, he would lose the benefit of the stay order granted by the authority and the entire confirmed tax demand would become payable to the Department. I note however, that the petitioner had approached this Court through W .P (C) No.10147 of 2019 and this Court had disposed the Writ Petition by Ext.P5 judgment, wherein a direction was given to the 1st respondent to consider the request of the petitioner for extension of time to comply with the order dated 11.01.2018 of the 1st respondent. It is submitted across the Bar that even before the contents of the judgment could be communicated to the 1st respondent, the 1st respondent had already taken steps to recover the entire confirmed tax demands from the petitioner for both the assessment years. Taking note of the plea of financial hardship urged by the learned counsel for the petitioner, and the fact that, had the petitioner effectively complied with the directions of the first Appellate Authority as also the assessing authority, he would have been obliged to pay only an amount of Rs.8,54,509/- which he did not, I deem it appropriate to dispose the Writ Petition with the following directions: i. If the petitioner pays an amount of Rs.15,00,000/- in lieu of the balance Rs.8,54,509/- that he was required to pay out of the amounts ordered by the Assessing Authority/Appellate Authority, as condition for the grant of stay of recovery of balance amount confirmed against him by the assessment orders, then the W.P(C) No.11700/19 5 respondents shall promptly, and at any rate within two weeks from today, re-credit the balance amount from the amounts already recovered from the petitioner, to the respective Bank account. In other words, the respondents shall retain an amount of Rs.15,00,000/- from the amount of Rs.39,35,313/- recovered by them from the account of the petitioner, and re-credit the balance amount of Rs.24,35,313/- to the petitioner's savings account maintained with the 4th respondent Bank, within two weeks from today. ii. The 2nd respondent Appellate Authority shall thereafter proceed to hear the petitioner and pass final orders in the Appeals preferred by the petitioner for the assessment years 2011-2012 and 2012-2013 respectively, within an outer time limit of six months from the date of receipt of a copy of this judgment. iii. It is made clear that on the respondents appropriating the amount permitted to be appropriated by this judgment, they shall refrain from initiating coercive steps for recovery of any further amounts that were confirmed against the petitioner by the assessment orders for the aforementioned assessment years, till such time as orders are passed by the Appellate Authority in the appeals aforementioned and the said appellate orders are communicated to the petitioner. Sd/- A.K.JAYASANKARAN NAMBIAR JUDGE okb //True copy// P .S. to Judge W.P(C) No.11700/19 6 APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 COPY OF ASSESSMENT ORDER ISSUED BY THE 1ST RESPONDENT FOR THE YEAR 2011-12 DATED 29.12.2016. EXHIBIT P1 A COPY OF ASSESSMENT ORDER ISSUED BY THE 1ST RESPONDENT FOR THE YEAR 2012-13 DATED 30.12.2017. EXHIBIT P2 COPY OF ORDER ISSUED BY THE 2ND RESPONDENT DATED 13.12.2017. EXHIBIT P2 A COPY OF ORDER ISSUED BY THE 1ST RESPONDENT DATED 11.01.2018. EXHIBIT P3 COPY OF LETTER SUBMITTED BY THE PETITIONER BEFORE THE 1ST RESPONDENT DATED 06.02.2019. EXHIBIT P4 COPY OF NOTICE ISSUED BY THE 1ST RESPONDENT TO THE 3RD RESPONDENT BANK DATED 30.03.2019. EXHIBIT P5 COPY OF JUDGMENT IN W.P(C)NO.10147/2019 OF THIS HON'BLE COURT DATED 02.04.2019. EXHIBIT P5 A COPY OF JUDGMENT IN W.P(C)NO.10207/2019 OF THIS HON'BLE COURT DATED 02.04.2019. EXHIBIT P6 COPY OF LETTER SUBMITTED BY THE PETITIONER BEFORE THE 1ST RESPONDENT DATED 05.04.2019. "