PRAVEEN SIDHARTHAN PILLAI, V. THE INCOME TAX OFFICER WARD -III,

WP(C)/8414/2020

AI Insights

The case involves Praveen Sidharthan Pillai, a businessman engaged in commission and brokerage, who faced an exorbitant tax demand from the Income Tax Officer for the assessment year 2017-18. The petitioner contested the assessment order and subsequent demands and penalties through various statutory appeals and applications, including a stay application under Section 220(6) of the Income Tax Act. The High Court of Kerala intervened to ensure that the petitioner's interim stay application was considered promptly and that the demand was held in abeyance during the appeal process.

• Counselvise Citation: [2020] 140 COUNSELVISE.COM (IT) 753585 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 18-03-2020
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH
• Assessee Lawyers: BOBBY JOHN
• Keywords: Assessment Order; Demand notice; Income Tax; Interim Stay; Penalty notice; Stay Application
• Section: 142(1); 143(2); 274; 270A; 271AAC(1); 220(6)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE AMIT RAWAL WEDNESDAY, THE 18TH DAY OF MARCH 2020 / 28TH PHALGUNA, 1941 WP(C).No.8414 OF 2020(B) PETITIONER/S: PRAVEEN SIDHARTHAN PILLAI, AGED 48 YEARS VRINDAVANAM, THODIYOOR NORTH, KARUNAGAPPALLY, KOLLAM DISTRICT, KERALA, PIN -690 523. BY ADV. SRI.BOBBY JOHN RESPONDENT/S: 1 THE INCOME TAX OFFICER WARD -III, ALAPPUZHA, ARATTUKULANGARA COMPLEX, ADJACENT TO ALAPPUZHA MEDICAL COLLEGE, A.N.PURAM, ALAPPUZHA, KERALA, PIN-688 011. 2 THE COMMISSIONER OF INCOME TAX (APPEALS), KOTTAYAM, 1ST FLOOR, PUBLIC LIBRARY BUILDING, KOTTAYAM, PIN - 686 001. 3 THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX, KERALA, CENTRAL REVENUE BUILDING, I.S.PRESS ROAD, ERNAKULAM, PIN - 682 018. 4 THE UNION OF INDIA, REPRESENTED BY ITS SECRETARY TO GOVERNMENT, FINANCE DEPARTMENT, RAJPATH MARG, CENTRAL SECRETARIAT, NEW DELHI, PIN- 110 001. OTHER PRESENT: SRI JOSE JOSEPH SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 18.03.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: 2 WP(C).No.8414 OF 2020 JUDGMENT Dated this the 18th day of March 2020 The petitioner, on account of having been engaged in business of commission and brokerage is an assessee of income tax. For the assessment year 2017-18, declared his total income of Rs.3,78,980/-. The aforementioned return was selected for scrutiny and the petitioner was served with notice under Section 143(2) and 142(1) in the light of CASS observations. The petitioner furnished relevant documents in response to the aforementioned notices, however, the 1st respondent rejected the explanations and evidences and passed an assessment order, dated 28.12.2019 creating an exorbitant demand of Rs.67,00,030/- vide Ext.P1. 2. The learned counsel appearing on behalf of the petitioner submits against the aforementioned order, demand order in Ext.P3 and penalty notice 3 WP(C).No.8414 OF 2020 Ext.P4 under Sec.274 read with Sec.270A were also issued. As per the remedies available under income tax Act, the petitioner preferred statutory first appeal vide Ext.P5 against the assessment order before the Commissioner of Income Tax (Appeals) dated 27.01.2020 Ext.P5 along with a stay application dated 13.02.2020. Since the provisions of the Income Tax also enables the petitioner to seek the demand of the assessment as per the provisions of Section 220(6) of the Income Tax Act, an application in this regard was also preferred before the Income Tax Officer/Assessing officer, which resulted into order impugned Ext.P7 dated 06.03.2020. He submits that the order sans any reason and despite the demand has been stayed subject to the condition of deposit of 20% of the demanded amount, which is reflected from the notice dated 06.03.2020 Ext.P8. The counsel for the petitioner further submits, though the Act provides availment of remedies as noticed above, since the 4 WP(C).No.8414 OF 2020 Commissioner Income Tax (Appeals) is taking up the appeals year-wise i.e as per the seniority, the stay application filed along with it are also not taken out of turn. It is in that circumstances, the remedy of Sec.220(6) of the Income Tax Act, 1961 was availed. 3. Issue notice before admission. Mr. Jose Joseph, the learned standing counsel accepts notice on the behalf of the respondents and submits that the petitioner has invited an order and therefore he cannot seek interim stay. In view of the circular of 2017, he is required to deposit 20% of the demanded amount, in order to proceed with the stay and protect himself from the liability of depositing the entire amount including the penalty. 4. Having heard counsels for the parties and apprised the papers, I am of the view that, this court while dealing in such matters, have come across many writ petitions preferred by the assessees, seeking intervention of this court under Art.226 for issue for 5 WP(C).No.8414 OF 2020 direction and taking up applications for interim stay filed along with pending appeals. Even this court was apprised that the Appellate Authority are taking up the appeals, considering the predicament of such assessees including the petitioner, the directions having been issued, for consideration of at least interim application and by keeping coercive measures in abeyance. 5. In the instant case appeal filed has not been taken up rather the interim application, in such circumstances availed the remedy under Sec.220(6) 1961 Act, which resulted into impugned order Ext.P7, I am of the view that, the order prima facie do not reflect any application of mind except reference to the contentions. The officers who are competent to pass orders, are enjoined obligations to pass reasoned orders, which, according to the affected party, may not be sustainable in accordance with law. But such orders, if are passed in routine, cannot escape from 6 WP(C).No.8414 OF 2020 the judicial scrutiny of this court. Be that as it may, in order to prevent further mis-carriage of justice and in the interest of justice, I deem it appropriate issuing directions to the 2nd respondent to take a call on the application for interim stay in support of the appeal Ext.P5 and take a decision thereon after affording an opportunity of hearing to the petitioner in accordance with law, un-influenced by the findings referred to Ext.P7. Until such time the demand as raised Ext.P8 is ordered to be kept in abeyance. Let this exercise be taken within 45 days from the date of receipt of certified copy of this judgment. It is made clear that the interim stay shall be only till the adjudication of the interim application and not beyond. The writ petition in the above mentioned directions stands disposed of. AMIT RAWAL JUDGE SM 7 WP(C).No.8414 OF 2020 APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 28/12/2019 PASSED BY THE 1ST RESPONDENT U/S.143(3) OF THE ACT. EXHIBIT P2 TRUE COPY OF THE DEMAND NOTICE DATED 28/12/2019 PURSUANT TO EXT.P1 ASSESSMENT ORDER, ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER. EXHIBIT P3 TRUE COPY OF THE PENALTY NOTICE U/S 274 READ WITH SEC. 270A OF THE ACT, ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER. EXHIBIT P4 TRUE COPY OF THE PENALTY NOTICE SEC. 274 READ WITH SEC. 271AAC(1) OF THE ACT, ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER. EXHIBIT P5 TRUE COPY OF THE FIRST APPEAL DATED 27/01/2020, FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. EXHIBIT P6 TRUE COPY OF THE STAY PETITION DATED 13/02/2020 FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. EXHIBIT P7 TRUE COPY OF THE ORDER U/S.220(6) OF THE ACT, DATED 06/03/2020 PASSED BY THE 1ST RESPONDENT. EXHIBIT P8 TRUE COPY OF THE NOTICE DATED 06/03/2020 ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER. "