NENCO GAS SERVICE V. THE ASSISTANT COMMISSIONER OF INCOME TAX

WP(C)/4585/2021

AI Insights

The case involves M/s Nenco Gas Service, represented by its partner Shri Arun Raj Pillai, challenging the order passed on their stay application by the Commissioner of Income Tax (Appeals), the 2nd respondent. The petitioner argued that the rejection of their stay petition was made without any reasoning, constituting a total non-application of mind. The respondents contended that reasons for the rejection were provided in paragraph 4 of the impugned order. However, the court found that the reasons provided were insufficient and did not address the specifics of the case, leading to the decision to quash the impugned order and remit the matter for a fresh decision.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 753152 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 23-02-2021
• Assessment Year: misc
• Other Referred Cases: W.P. No.5756/2020
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH
• Assessee Lawyers: S HANEEFF; M H ASIF ALI; DIVYA RAVINDRAN
• Keywords: Assessment Order; Non application of mind; Quasi-judicial authority; Stay Application
• Section: 143(3)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE A.M.BADAR TUESDAY, THE 23RD DAY OF FEBRUARY 2021 / 4TH PHALGUNA, 1942 WP(C).No.4585 OF 2021(W) PETITIONER/S: M/S NENCO GAS SERVICE, 15/519 AND 520, NENCO GAS SERVICE, MANNANCHERRY, ALAPUZHA-688 538, REPRESENTED BY ITS PARTNER SHRI. ARUN RAJ PILLAI BY ADVS. SRI.S.MUHAMMED HANEEFF SRI.M.H.ASIF ALI SMT.DIVYA RAVINDRAN RESPONDENT/S: 1 THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOLLAM, AYAKAR BHAVAN, RAILWAY STATION ROAD, KOLLAM-691 001. 2 THE COMMISSIONER OF INCOME TAX (APPEALS), 28/243, “POORNIMA”, PANAMPILLY NAGAR, COCHIN-682 036. SC,IT- SRI. JOSE JOSEPH THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 23.02.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.4585 OF 2021 2 JUDGMENT Dated this the 23rd day of February 2021 Heard both sides as learned Standing Counsel appearing for the respondents has waived service and accepted the notice. 2. Petitioner has challenged the order passed on his stay application by The Commissioner of Income Tax (Appeals), the 2nd respondent herein. Learned Counsel for the petitioner argued that the impugned order rejecting the stay petition is suffering from total non application of mind in as much as it is not disclosing any reason for rejection of request for stay to the assessment order. As against this, learned Counsel appearing for the respondents drew my attention to paragraph 4 of the impugned order and submits that the said paragraph gives reason for the rejection. 3. I have considered the submissions so advanced and perused the relevant exhibits. Paragraph 4 of the WP(C).No.4585 OF 2021 3 impugned order rejecting the stay application reads thus: “4. The submissions made are carefully considered. The orders of the Assessing Officer are perused. The Assessing Officer has passed a speaking order regarding the additions made. There is no judicial precedent squarely applicable to the appellant's case, in respect of the additions made by the Assessing Officer. The appellant has not made out a satisfactory case for grant of stay.” 4. It is trite that the reasons are heart and soul of the order passed by the quasi judicial authority. Perusal of paragraph 4 which is the only paragraph by which the appellate authority has considered the request for grant of stay, does not disclose any reason to the facts of the case. In a mechanical manner, the request for stay made by the petitioner came to be rejected. 5. It is noted that this Court by judgment in W.P. WP(C).No.4585 OF 2021 4 (C).No.5756/2020, had directed the 2nd respondent authority to consider and dispose of the stay application, Ext.P3, as early as possible and preferably within two months from the date of receipt of a copy of the judgment, and till then, the respondents were directed not to take coercive steps for recovery of the amount determined in the order under the appeal, for ten weeks. That is how the impugned order came to be passed by the 2nd respondent. The same cannot be sustained as it is devoid of any reasons for rejecting the request for stay to the assessment order. Therefore, the following order. 6. The Writ Petition is allowed and the impugned order at Ext.P5 rejecting the stay petition filed by the petitioner is quashed and set aside. The matter is remitted to the 2nd respondent for fresh consideration and for deciding the same after hearing the parties and by passing the reasoned order on the said petition. Till disposal of the stay petition, the respondents are directed not to take any coercive WP(C).No.4585 OF 2021 5 steps to recover the amount determined in the assessment order under the appeal. The writ petition is allowed accordingly. Sd/- A.M.BADAR JUDGE uu 23.2.2021 WP(C).No.4585 OF 2021 6 APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 30.12.2019 PASSED BY THE 1ST RESPONDENT FOR AY 2017-18 ALONG WITH DEMAND NOTICE AND COMPUTATION OF INCOME. EXHIBIT P2 TRUE COPY OF THE MEMORANDUM OF APPEAL DATED 01.02.2020 FOR AY 2017-18 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. EXHIBIT P3 TRUE COPY OF THE STAY PETITION DATED 01.02.2020 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR AY 2017-18. EXHIBIT P4 TRUE COPY OF THE JUDGMENT DATED 27.02.2020 IN WPC NO.5756 OF 2020. EXHIBIT P5 TRUE COPY OF THE STAY ORDER FOR THE ASSESSMENT YEAR 2017-18 PASSED IN THE STAY PETITION VIDE ITA NOS.39/KLM/CIT(A)- III/2019-20 DATED 29.01.2021. EXHIBIT P6 TRUE COPY OF THE CIRCULAR DATED 29.02.2016 ISSUED BY CBDT. EXHIBIT P6 A TRUE COPY OF THE CIRCULAR DATED 31.07.2017 ISSUED BY CBDT. "