TULSI DEVELOPERS INDIA (P) LTD V. THE ASSISTANT COMMISSIONER OF INCOME TAX

WP(C)/16473/2020

AI Insights

The case involves Tulsi Developers India (P) Ltd, which challenged a stay order (Ext.P6) issued by the first appellate authority in relation to an income tax assessment. The petitioner argued that the appellate authority, influenced by CBDT instructions, mandated a 20% payment of the disputed demand as a condition for the stay, contrary to the court's earlier directive to consider the application on its merits. The court found that the appellate authority did not adhere to its directive and failed to provide a hearing to the petitioner, leading to the quashing of the stay order and a directive for a fresh decision.

• Counselvise Citation: [2020] 140 COUNSELVISE.COM (IT) 691827 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 12-08-2020
• Assessment Year: misc
• Other Referred Cases: M/S Mother Hospital Pvt. Ltd. vs. Commissioner of Income Tax
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH
• Assessee Lawyers: AJI DEV; ALAN DEV
• Keywords: Assessment Order; CBDT instructions; Income Tax; Stay order; Quasi judicial powers
• Section: 143(3)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR WEDNESDAY, THE 12TH DAY OF AUGUST 2020 / 21ST SRAVANA, 1942 WP(C).No.16473 OF 2020 PETITIONER/S: TULSI DEVELOPERS INDIA (P) LTD VIII/522B, 139, MAVELIPURAM, SEAPORT-AIR PORT ROAD, KAKKANAD, ERNAKULAM-683020, REPRESENTED BY ITS MANAGING DIRECTOR, SRI.G.THULASIDAS. BY ADVS. SRI.AJI V.DEV SRI.ALAN PRIYADARSHI DEV RESPONDENT/S: 1 THE ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE, AAYAKAR BHAVAN, NEAR KARBALA JUNCTION, RAILWAY STATION ROAD, KOLLAM-691001. 2 THE COMMISSIONER OF INCOME TAX (APPEALS)-I, G-51, PARAPILLY LANE, MANORAMA JUNCTION, GIRI NAGAR, PANAMPILLY NAGAR, KOCHI, KERALA-682036. 3 THE COMMISSIONER OF INCOME TAX (APPEALS)-III, POORNIA BUILDING, MANORAMA JUNCTION, PANAMPILLY NAGAR, KOCHI-682036. 4 THE INCOME TAX OFFICER, CORPORATE WARD-II (4), CENTRAL REVENUE BUILDING, I.S.PRESS ROAD, KACHERIPADY, KOCHI-682018. OTHER PRESENT: SC: JOSE JOSEPH THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 12.08.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.16473 OF 2020 2 JUDGMENT The petitioner has approached this Court aggrieved by Ext.P6 stay order passed by the first appellate authority in a stay application filed along with an appeal against the order of assessment under the Income Tax Act. In the writ petition, it is the specific case of the petitioner that while the appellate authority was directed to consider the stay application preferred by the petitioner on merits, by Ext.P5 judgment of this Court, the appellate authority while passing Ext.P6 stay order relied on certain office memoranda issued by the CBDT to insist on the petitioner paying 20% of the disputed demand as a condition for grant of stay, pending disposal the appeal. It is the contention of the learned counsel for the petitioner that while the appellate authority ought not to have gone by the directions in the office memorandum of the CBDT, while considering a stay application pursuant to the direction of this Court, it is a further fact that before passing the said order, the petitioner was also not given an opportunity of hearing. 2.I have heard the learned counsel appearing for the petitioner and also the learned Standing Counsel appearing for the respondents. On a consideration of the facts and circumstances of the case as also the submissions made across the Bar, I find force in the contention of the learned counsel for the petitioner that while passing Ext.P6 stay order, the first appellate authority was virtually acting under dictation, in that the first WP(C).No.16473 OF 2020 3 appellate authority felt compelled by the CBDT instructions relied upon in his order, to insist on a payment of 20% of the disputed demand, pending disposal of the appeal. In my view, when there was a specific direction in Ext.P5 judgment of this Court to the appellate authority to consider the stay application on merits, the appellate authority ought to have considered the stay application as directed by this Court, and without placing any reliance on the instructions issued by the CBDT directing the application to be decided in a particular way. Even otherwise, it is obligatory on statutory authorities who are entrusted with quasi judicial powers under a statute, to adjudicate on issues without being bogged down by executive instructions that direct them to exercise their discretion in any particular manner. As a creature of the statute, on whom the discretionary power is conferred, the authority cannot abdicate his responsibilities by acting on the dictates of another who has no role to play under the statutory scheme. I also find force in the contention of the learned counsel for the petitioner that the appellate authority did not hear him while passing Ext.P6 stay order, and that this was a further act in contravention of the directions of this Court in Ext.P5 judgment. In the result, I quash Ext.P6 order and direct the first appellate authority to pass fresh orders in the matter after hearing the petitioner, either through a physical hearing or through video conference, keeping in mind the observations made in this judgment. The 2nd respondent shall accordingly pass fresh orders as directed within a period of four months from the date of receipt of a copy of this judgment. Needless to say, till such time as orders are passed by the 2nd respondent as directed, and the order communicated to the petitioner, recovery steps for recovery of amounts WP(C).No.16473 OF 2020 4 confirmed against the petitioner by the assessment orders impugned in the appeal shall be kept in abeyance. The petitioner shall produce a copy of the writ petition together with a copy of this judgment, before 2nd respondent, for further action. Sd/- A.K.JAYASANKARAN NAMBIAR JUDGE SJ WP(C).No.16473 OF 2020 5 APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER PASSED BY THE 1ST RESPONDENT FOR THE YEAR 2017-18 DATED 24.12.2019. EXHIBIT P2 TRUE COPY OF THE RECTIFICATION PETITION FILED DATED 24.1.2020. EXHIBIT P3 TRUE COPY OF THE APPEAL FILED AGAINST EXT.P1 FOR THE YEAR 2017-18 DATED 17.1.2020. EXHIBIT P4 TRUE COPY OF THE STAY PETITION DATED 17.1.2020. EXHIBIT P5 TRUE COPY OF JUDGMENT DATED 6.2.2020 OF THIS HON'BLE COURT IN W.P.(C) 3222 OF 2020. EXHIBIT P6 TRUE COPY OF THE STAY ORDER PASSED BY THE 2ND RESPONDENT FOR THE YEAR 2017-18 DATED 20.3.2020. EXHIBIT P7 TRUE COPY OF THE ASSESSMENT ORDER PASSED BY THE 1ST RESPONDENT FOR THE YEAR 2012-13 DATED 14.12.2018. EXHIBIT P8 TRUE COPY OF THE STAY ORDER PASSED BY THE 3RD RESPONDENT DATED 25.4.2019. EXHIBIT P9 TRUE COPY OF THE JUDGMENT OF THE HON'BLE SUPREME COURT IN M/S.MOTHER HOSPITAL PVT. LTD. VS. COMMISSIONER OF INCOME TAX DATED 8.3.2017. "