M/S. NETWORK SYSTEMS & TECHNOLOGIES PVT. LTD. V. THE ASSISTANT COMMISSIONER OF INCOME TAX

WP(C)/5199/2013

AI Insights

The case involves M/s. Network Systems & Technologies Pvt. Ltd., the petitioner, who challenged the recovery proceedings initiated by the Income Tax Department following an assessment order for the year 2007-08. The petitioner had initially filed a stay petition along with an appeal against the assessment order, which was partially granted by the appellate authority under the condition of remitting 50% of the assessed amount. The dispute arose when the petitioner was asked to remit the remaining 50% despite the ongoing appeal. The court's decision was based on the principle that the petitioner should not be compelled to pay the remaining amount while the appeal was still pending.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 755856 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 25-02-2013
• Assessment Year: misc
• Other Referred Cases: WPC No. 4184/2012
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH
• Assessee Lawyers: T M SREEDHARAN; V P NARAYANAN; BOBY SEKHAR; DIVYA RAVINDRAN
• Keywords: Appeal Pending; Income tax assessment; Recovery proceedings; Stay Petition
• Section: 221(1)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE ANTONY DOMINIC MONDAY, THE 25TH DAY OF FEBRUARY 2013/6TH PHALGUNA 1934 WP(C).No. 5199 of 2013 (Y) ------------------------- PETITIONER(S): -------------------------- M/S. NETWORK SYSTEMS & TECHNOLOGIES PVT. LTD., A-3, PERIYAR, TECHNOPARK, KARYAVATTOM POST, THIRUVANANTHAPURAM - 695 581, REPRESENTED BY ITS MANAGING DIRECTOR SHRI.N.JEHANGIR. BY SRI.T.M.SREEDHARAN,SENIOR ADVOCATE BY ADVS. SRI.V.P.NARAYANAN SMT.BOBY M.SEKHAR SMT.DIVYA RAVINDRAN RESPONDENT(S): ---------------------------- 1. THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 1(1), AYAKKAR BHAVAN, KAWADIAR, THIRUVANANTHAPURAM - 695 003. 2. THE COMMISSIONER OF INCOME TAX (APPEALS), AYAKKAR BHAVAN, KAWADIAR THIRUVANANTHAPURAM - 695 003. BY ADV. SRI.JOSE JOSEPH, SC, INCOME TAX THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 25-02-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Kss WPC.NO.5199/2013 Y APPENDIX PETITIONER'S EXHIBITS: EXT.P1: TRUE COPY OF THE ASSESSMENT ORDER DATED 28/12/2010 ISSUED BY THE 1ST RESPONDENT. EXT.P2: TRUE COPY OF THE RECTIFICATION APPLICATION DATED 28/01/2011 FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT. EXT.P3:TRUE COPY OF THE ORDER DATED 30/9/2011 ISSUED BY THE 1ST RESPONDENT. EXT.P4:TRUE COPY OF THE MEMORANDUM OF APPEAL FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT ON 28/10/2011. EXT.P5: TRUE COPY OF the STAY PETITION FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT ON 28/10/2011. EXT.P6:TRUE COPY OF the APPLICATION FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT ON 10/11/2011. EXT.P7: TRUE COPY OF THE ORDER NO.AAACN74/19B CIR.1(1)/TVM DATED 31/01/2012 ISSUED BY THE 1ST RESPONDENT. EXT.P8:TRUE COPY OF JUDGMENT DATED 21/2/2012 IN WPC NO.4184/2012 OF THIS HON'BLE COURT. EXT.P9: TRUE COPY OF STAY ORDER DATED 2/4/2012 PASSED BY THE SECOND RESPONDENT. EXT.P10: TRUE COPY OF CHALAN RECEIPT DATED 7/4/2012. EXT.P10(A): TRUE COPY OF CHALAN RECEIPT DATED 21/5/2012. EXT.P10(B): TRUE COPY OF CHALAN RECEIPT DATED 14/6/2012. EXT.P10(C): TRUE COPY OF CHALAN RECEIPT DATED 18/7/2012. EXT.P11: TRUE COPY OF SHOW CAUSE NOTICE ISSUED U/S.221(1) DATED 6/2/2013 PASSED BY THE FIRST RESPONDENT. EXT.P12: TRUE COPY OF STAY PETITION DATED 8/2/2013 SUBMITTED BY THE PETITIONER BEFORE THE SECOND RESPONDENT. EXT.P13: TRUE COPY OF REPLY SUBMITTED BY THE PETITIONER BEFORE THE FIRST RESPONDENT DATED 8/2/2013. RESPONDENTS' EXHIBITS: N I L /TRUE COPY/ P.A.TO JUDGE Kss ANTONY DOMINIC, J - - - - - - - - - - - - - - - - - W.P.(C).5199/2013 - - - - - - - - - - - Dated this the 25th day of February, 2013 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - JUDGMENT Heard the learned senior counsel for the petitioner and the learned Standing Counsel appearing for the respondents. 2. Assessment under the Income Tax Act for the assessment year 2007-08 was completed against the petitioner as per Ext.P1. That was challenged by filing Ext.P4 appeal along with Ext.P5 stay petition before the 2nd respondent. When recovery proceedings were initiated during the pendency of Exts.P4 and P5, petitioner filed W.P.(C).4184/12. That writ petition was disposed of by Ext.P8 judgment directing the 2nd respondent to pass orders on the stay petition and to keep the recovery proceedings in abeyance in the meanwhile. Accordingly, Ext.P9 order was passed by the appellate authority granting stay on condition that the petitioner remits 50% of the amount due in five equated monthly instalments. The amount as ordered, has been remitted by the petitioner. However, by Ext.P11, petitioner has been called upon to remit the balance 50%. Case of the petitioner is that they having already W.P.(C).5199/13 2 remitted 50% and since the appeal is still pending, they should not be called upon to remit the balance 50%. 3. Paragraph 9 of Ext.P9 order reads thus:- “In view of the aforesaid directions, the appellant will not be treated as assessee in default in respect of balance 50% of the demand till 31st August, 2012 or till the disposal of the appeal whichever is earlier. If the appellant fails to pay the demand as stipulated above, then the Assessing Officer may initiate appropriate steps for recovery as per law.” 4. A reading of the above shows that the stay ordered by the appellate authority remained in force only till 31st August 2012 and it is apparently on the basis of the aforesaid direction in Ext.P9 oder that the recovery proceedings are now initiated. However, since the petitioner has already remitted 50% and since the appeal is still pending consideration of the 2nd respondent, I see no reason why the petitioner should be compelled to pay any more amount, pending disposal of the appeal. Therefore, I dispose of this writ petition directing that the proceedings for recovery of the balance amount due from the W.P.(C).5199/13 3 petitioner under Ext.P1 assessment order, will be kept in abeyance, pending disposal of Ext.P4 appeal. Sd/- ANTONY DOMINIC, JUDGE mrcs /true copy/ sd/- P.A. To Judge "