MR. BABY MATHEW V. THE ASSISTANT COMMISSIONER OF INCOME TAX

WP(C)/10625/2012

AI Insights

Mr. Baby Mathew, the petitioner, approached the High Court of Kerala challenging the condition imposed by the Commissioner of Income Tax (Appeals) that required him to pay 50% of the disputed tax demand in ten installments to obtain an interim stay on recovery proceedings. The court had previously directed the appellate authority to consider the stay petition. The appellate authority's decision to impose the 50% payment was contested by the petitioner, citing financial stringency and insufficient funds. The court, after considering the arguments and the financial circumstances presented, decided to reduce the required payment to 33.33% to ease the financial burden on the petitioner while still ensuring some compliance with the tax demand.

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 755934 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 23-05-2012
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income Tax Vs. Mukumdray K Shah (219 ITR 433)
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: SHOBA EAPEN; JOSE JOSEPH
• Assessee Lawyers: RAMESH JOHN
• Keywords: Deemed dividend; Financial stringency; Income tax appeal; Interim Stay
• Section: 2(22)(e)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE P.R.RAMACHANDRA MENON WEDNESDAY, THE 23RD DAY OF MAY 2012/2ND JYAISHTA 1934 WP(C).No. 10625 of 2012 (C) --------------------------- PETITIONER : ------------------ MR. BABY MATHEW, AGED 50 YEARS SOMATHEERAM, CHOWARA P.O., BALARAMAPURAM THIRUVANANTHAPURAM. BY ADV. SRI.RAMESH CHERIAN JOHN RESPONDENTS : ----------------------- 1. THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-1(1) OFFICE OF THE JOINT COMMISSIONER OF INCOME TAX RANGE-I, AAYAKAR BHAVAN, KAWDIAR THIRUVANANTHAPURAM-695 003. 2. THE COMMISSIONER OF INCOME TAX (APPEALS) AAYAKAR BHAVAN, KAWDIAR, THIRUVANANTHAPURAM-695 003. BY GOVT.PLEADER SMT.SHOBA ANNAMMA EAPEN ADV. SRI.JOSE JOSEPH, SC, INCOME TAX THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 23-05-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: AV W.P.(C).NO.10625 OF 2012 APPENDIX PETITIONER'S EXHIBITS : EXT.P1 : COPY OF THE ORDER OF ASSESSMENT DATED 20.12.2009 ALONG WITH INCOME TAX COMPUTATION FORM AND NOTICE OF DEMAND EXT.P2 : COPY OF THE FORM OF APPEAL AND GROUNDS OF APPEAL DATED 18.01.2011 FILED BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), THIRUVANANTHAPURAM EXT.P3 : COPY OF THE APPLICATION FOR STAY DATED 17.02.2011 FILED BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), THIRUVANANTHAPURAM EXT.P4 : COPY OF THE JUDGEMNT OF THIS HON'BLE COURT DATED 14.03.2012 IN W.P.(C)NO.6386/2012 EXT.P5 : COPY OF THE NOTICE DATED 03.04.2012 POSTING EXT.P3 STAY PETITION FOR HEARING EXT.P6 : COPY OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-1, THIRUVANANTHAPURAM DATED 19.04.2012 RESPONDENT'S EXHIBITS : NIL /TRUE COPY/ P.A TO JUDGE AV P.R. RAMACHANDRA MENON J. ~~~~~~~~~~~~~~~~~~~~~~~ W.P(C) No. 10625 of 2012 ~~~~~~~~~~~~~~~~~~~~~~~ Dated, this the 23rd day of May, 2012 JUDGMENT The petitioner is approached this Court being aggrieved of the condition imposed vide Ext. P6 order passed by the second respondent so as to have the benefit of interim stay during the pendency of Ext. P2 appeal. 2. The petitioner had earlier approached this Court by filing W.P.(C) No. 6386 of 2012, challenging the recovery proceedings being pursued against him, notwithstanding pendency of the appeal and stay petition preferred against the relevant assessment order. After considering the position, the said case was disposed of, as per Ext. P4 judgment, directing the appellate authority to consider the petition for stay and pass appropriate orders thereon as specified therein. It was pursuant to the said direction, that the appellate authority considered the petition for stay and passed Ext. P6 order, whereby the petitioner was directed to satisfy 50 % of W.P.(C) No. 10625 of 2012 : 2 : the demand, in 'ten' equal monthly installments, so as to avail the benefit of interim stay. The learned counsel for the petitioner submits that, the only reason given the appellate authority in Ext. P6 is that, the appellant has not been able to make out any case of 'financial stringency' and that the assessing authority had reported that the appellant was having sufficient amount in its bank account. This is opposed by the learned standing counsel for the 'department', with reference to the observations in paragraphs 4,5 and 6 of the very same order, who also refers to the second ground raised in the appeal which reads as follows : 2. The Assistant Commissioner has erred in invoking Section 2 (22) (e) and is including in the total income of Rs. 2,22,65,558/- as deemed dividend. The learned standing counsel submits that the case put forward by the petitioner is not liable to be entertained in view of the ruling reported in Commissioner of Income Tax Vs. Mukumdray K Shah (219 ITR 433). W.P.(C) No. 10625 of 2012 : 3 : 3. After hearing both the sides, this Court finds that, the issue can be finalized only on the basis of actual facts and figures, by passing final orders in the appeal. However, in view of the nature of contentions raised, this Court finds that the condition imposed by the appellate authority, directing the petitioner to remit 50 % of the disputed liability so as to avail the benefit of interim stay is on the higher side. This Court finds it fit and proper in directing the petitioner to remit 1/3rd of the disputed liability for availing the benefit of interim stay. 4. Accordingly, Ext. P6 order is modified and the petitioner is directed to remit 1/3rd of the disputed liability by way of 'six' equal monthly installments, after giving credit to the amount if any, deposited by the petitioner. The first installment as above shall be remitted on before the 10th of June, 2012, followed by similar installments to be effected on or before the 10th of the succeeding months. The benefit of installment is given, taking note of the fact that the appellate W.P.(C) No. 10625 of 2012 : 4 : authority has given such relief, in wider terms. The Writ Petition is disposed of. Sd/- P. R. RAMACHANDRA MENON, (JUDGE) kmd "