M/S.RAINBOW REALTORS, V. ASST. COMMISSIONER OF INCOME TAX

WP(C)/15061/2019

AI Insights

The case involves M/s. Rainbow Realtors, represented by its managing partner, challenging a condition imposed by the Commissioner of Income Tax (Appeals) in a stay order regarding tax assessments for the assessment years 2011-12 to 2016-17. The petitioner contested the requirement to deposit 20% of the total tax demand in four installments as a condition for stay. The petitioner argued that they had already deposited a significant amount and requested either the acceptance of this deposit as full compliance or an extension of the installment period. The respondents defended the discretion exercised in setting the deposit condition, emphasizing the consideration of relevant circumstances including the petitioner's hardship. The court, after considering the arguments and the circumstances, decided to extend the installment period from four to six months.

• Counselvise Citation: [2019] 140 COUNSELVISE.COM (IT) 754746 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 20-06-2019
• Assessment Year: misc
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: THUSHARA JAMES
• Assessee Lawyers: S RAJ
• Keywords: Assessment Order; Deposit Condition; Income Tax; Stay Petition

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI THURSDAY, THE 20TH DAY OF JUNE 2019 / 30TH JYAISHTA, 1941 WP(C).No.15061 of 2019 PETITIONER: M/S.RAINBOW REALTORS, RAINBOW SUITES, BELLARD ROAD, KANNUR 670 001 REPRESENTED BY ITS MANAGING PARTNER ETTOOL KALATHIL ABDULHAMEED. BY ADV. SRI.S.ARUN RAJ RESPONDENTS: 1 ASST. COMMISSIONER OF INCOME TAX CIRCLE-1, KANNUR 670 006 2 COMMISSIONERE OF INCOME TAX (APPEALS) AAYAKAR BHAVAN, MANANCHIRA, KOZHIKODE 673 001 3 THE PRINCIPAL COMMISSIONERE OF INCOME TAX , AAYAKAR BHAVAN, MANANCHIRA, KOZHIKODE 673 001 GP. DR. THUSHARA JAMES THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 20.06.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: -2- WP(C).No.15061 of 2019 JUDGMENT Heard Sri. Arun Raj S., the learned counsel for the petitioner and Sri. Christopher Abraham the learned Standing Counsel for the parties on either side. 2. Ext.P5 is challenged in the writ petition and the challenge is confined to firstly the condition of depositing 20% and directing deposit of amount in equal four installments. 3. The operative portion of Ext.P5 reads thus: “Without going into merits of the case at this point and considering all circumstances of the case, I direct the appellant to pay 20% of the total demand for A.Y 2011-12 to 2016-17 in four equal monthly installments. The challan of first payment shall be furnished to the Assessing Officer by 22nd of March, 2019. it is again reiterated that the stay petitions are disposed without going into merit of the case which requires in depth examination. The balance demand is stayed for six months or disposal of appeal whichever is earlier. Any default on the part of the appellant to furnish any of the -3- WP(C).No.15061 of 2019 payment challans will automatically entail revocation of stay granted and the Assessing Officer shall be free to take recovery action accordingly. The stay petitions for A.Y 2011-12, 2012-13, 2013-14, 2014-15, 2015-16, 2016-17 of the appellant are disposed of accordingly.” 4. The learned counsel made a few submissions to convince this Court that adherence to bench mark deposit of 20% in the case on hand is completely unwarranted and that the petitioner has already deposited Rs.98,44,201/- (Rupees Ninety eight lakh forty four thousand two hundred and one only) and by accepting the said deposit as due compliance with the condition imposed in Ext.P5 the appeals can be directed to be disposed of. The counsel alternatively submits that for paying the balance of 10% of amount the petitioner may be granted eight more installments. 5. Sri.Christopher Abraham contends that Ext.P5 reflects exercise of discretion to the extent necessary for the -4- WP(C).No.15061 of 2019 purpose of granting stay of the assessment order under appeal before the 2nd respondent. The very fact that four equal installments are granted by the 2nd respondent indicates consideration of all relevant circumstances including the hardship which was brought to the notice of the 2nd respondent. The case does not warrant interference against the discretion exercised by the 2nd respondent in Ext.P5. He prays for dismissing the writ petition. He alternatively submits that the petitioner since has established a few bona fides by depositing Rs.98,44,201/- (Rupees Ninety eight lakh forty four thousand two hundred and one only) the four equal installments granted in Ext.P5 can be extended reasonably by this Court. 6. After perusing the Ext.P5, I am satisfied that the condition imposed cannot be treated as arbitrary or unreasonably in the facts and circumstances of the case. The -5- WP(C).No.15061 of 2019 2nd respondent has granted four equal installments. In all the circumstances granting four equal installments amounts to granting sufficient time for complying with the condition imposed by the appellate authority. But keeping in mind the hardship now pleaded by the counsel appearing for the petitioner as an exceptional case and the exercise of the jurisdiction of the this Court under Article 226 of the Constitution of India, the installments are extended from four to six installments. Thereby the modified order reads thus: “Without going into merits of case at this point and considering all circumstances directs petitioner to pay 20% of the total demand for A.Y 2011-12 to 2016-17 in six equal monthly installments. The challan of next payment shall be furnished to the Assessing Officer by 15.07.2019. In other words, the instalments are completed on or before 11.9.2019. It is again reiterated that the stay petitions are disposed -6- WP(C).No.15061 of 2019 without going into merits of the case which requires in depth examination. The balance demand is stayed for six months or disposal of appeal whichever is earlier. Any default on the part of the appellant to furnish any of the payment challans will automatically entail revocation of stay granted and the Assessing Officer shall be free to take recovery action accordingly. The stay petitions for A.Y 2011-12, 2012-13, 2013-14, 2014-15, 2015-16, 2016-17 of the appellant are disposed of accordingly”. Sd/- S.V.BHATTI JUDGE JS -7- WP(C).No.15061 of 2019 APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER DATED 31-12-2016 PASSED BY THE 1ST RESPONDENT FOR THE AY 2011-12 EXHIBIT P1 A TRUE COPY OF THE ASSESSMENT ORDER DATED 31-12-2016 PASSED BY THE 1ST RESPONDENT FOR THE AY 2012-13 EXHIBIT P1 B TRUE COPY OF THE ASSESSMENT ORDER DATED 31-12-2016 PASSED BY THE 1ST RESPONDENT FOR THE AY 2013-14 EXHIBIT P1 C TRUE COPY OF THE ASSESSMENT ORDER DATED 31-12-2016 PASSED BY THE 1ST RESPONDENT FOR THE AY 2014-15 EXHIBIT P1 D TRUE COPY OF THE ASSESSMENT ORDER DATED 31-12-2016 PASSED BY THE 1ST RESPONDENT FOR THE AY 2015-16 EXHIBIT P1 E TRUE COPY OF THE ASSESSMENT ORDER DATED 31-12-2016 PASSED BY THE 1ST RESPONDENT FOR THE AY 2016-17 EXHIBIT P2 TRUE COPY OF THE APPEAL MEMORANDUM ALONG WITH THE GROUND OF APPEAL FILED BEFORE THE 2ND RESPONDENT BY THE PETITIONER FOR AY 2011-12 EXHIBIT P2 A TRUE COPY OF THE APPEAL MEMORANDUM ALONG WITH THE GROUND OF APPEAL FILED BEFORE THE 2ND RESPONDENT BY THE PETITIONER FOR AY 2012-13 EXHIBIT P2 B TRUE COPY OF THE APPEAL MEMORANDUM ALONG WITH THE GROUND OF APPEAL FILED BEFORE THE 2ND RESPONDENT BY THE PETITIONER FOR AY 2013-14 EXHIBIT P2 C TRUE COPY OF THE APPEAL MEMORANDUM ALONG WITH THE GROUND OF APPEAL FILED -8- WP(C).No.15061 of 2019 BEFORE THE 2ND RESPONDENT BY THE PETITIONER FOR AY 2014-15 EXHIBIT P2 D TRUE COPY OF THE APPEAL MEMORANDUM ALONG WITH THE GROUND OF APPEAL FILED BEFORE THE 2ND RESPONDENT BY THE PETITIONER FOR AY 2015-16 EXHIBIT P2 E TRUE COPY OF THE APPEAL MEMORANDUM ALONG WITH THE GROUND OF APPEAL FILED BEFORE THE 2ND RESPONDENT BY THE PETITIONER FOR AY 2016-17 EXHIBIT P3 TRUE COPY OF STAY PETITION SUBMITTED BY THE PETITIONER TO THE 2ND RESPONDENT FOR THE AY 2011-12 EXHIBIT P3 A TRUE COPY OF STAY PETITION SUBMITTED BY THE PETITIONER TO THE 2ND RESPONDENT FOR THE AY 2012-13 EXHIBIT P3 B TRUE COPY OF STAY PETITION SUBMITTED BY THE PETITIONER TO THE 2ND RESPONDENT FOR THE AY 2013-14 EXHIBIT P3 C TRUE COPY OF STAY PETITION SUBMITTED BY THE PETITIONER TO THE 2ND RESPONDENT FOR THE AY 2014-15 EXHIBIT P3 D TRUE COPY OF STAY PETITION SUBMITTED BY THE PETITIONER TO THE 2ND RESPONDENT FOR THE AY 2015-16 EXHIBIT P3 E TRUE COPY OF STAY PETITION SUBMITTED BY THE PETITIONER TO THE 2ND RESPONDENT FOR THE AY 2016-17 EXHIBIT P4 TRUE COPY OF THE JUDGMENT DATED 24-1- 2019 IN WP(C) NO. 2193 OF 2019 PASSED BY THIS HONOURABLE COURT. EXHIBIT P5 TRUE COPY OF THE COMMON ORDER DATED 11-3-2019 PASSED BY THE 2ND RESPONDENT ON EXHIBIT P-3,P-3(A) , P-3(B), P- 3(C), P-3(D) AND P-3(E) STAY PETITIONS -9- WP(C).No.15061 of 2019 EXHIBIT P6 TRUE COPY OF THE LETTER DATED 30-04- 2019 SUBMITTED TO THE JOINT COMMISSIONER OF INCOME TAX BY THE PETITIONER "