Case Law Details
Padmanabhan Viswanathan Vs ADIT (Kerala High Court)
Introduction: In a recent judgment, the Kerala High Court has directed the consideration of a condonation application for a significant delay of 234 days in an appeal against the rejection of a Foreign Tax Credit (FTC) claim. The case of Padmanabhan Viswanathan vs. ADIT (Assistant Director of Income Tax) raises questions about the timeline for filing appeals and the importance of condonation applications in tax disputes. This article provides a detailed analysis of the case and its implications.
Detailed Analysis: The petitioner, Padmanabhan Viswanathan, filed his income tax return for the assessment year 2021-22, declaring a total income of Rs. 5,87,59,725. He claimed a foreign tax credit of Rs. 1,79,29,048. However, the assessing authority disagreed with his claim for FTC and issued an intimation on 28.10.2022, under Section 143(1) of the Income Tax Act, 1961, demanding Rs. 2,28,80,370.
In response, the petitioner filed an application under Section 154 of the Income Tax Act, seeking rectification of the rejection of his FTC claim. Unfortunately, his rectification application was rejected on 11.1.2023, and a demand of Rs. 2,41,49,000 was raised.
The petitioner then decided to file an appeal under Section 246 of the Income Tax Act, along with an application for condonation of the substantial delay of 234 days in filing the appeal.
The Kerala High Court acknowledged the significant delay in filing the appeal and issued a directive to the appellate authority. The appellate authority was instructed to consider the application for condonation of delay promptly, preferably within two months. If the delay is condoned, the appellate authority should also address the stay application submitted by the petitioner and ensure its expeditious resolution.
Conclusion: The Kerala High Court’s decision to direct the consideration of the condonation application for a 234-day delay in an appeal against the rejection of an FTC claim highlights the importance of adhering to timelines in legal proceedings. It also emphasizes the significance of condonation applications in cases of substantial delays. This judgment underscores the need for a fair and efficient process in addressing tax disputes and provides hope for taxpayers seeking redress in such matters.
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
The present writ petition has been filed by the petitioner for a writ of mandamus commanding the 2nd respondent to refrain from recovering the demand pursuant to Exhibit P1 rectification order, pending disposal of the appeal and stay petition (Exhibits P3 and P4), before the 3rd respondent in respect of the assessment year 2021-22.
2. The petitioner filed return of his income for the assessment year 2021-22 on 31.3.2022 declaring total income of Rs.5,87,59,725/-. The petitioner claimed foreign tax credit of Rs.1,79,29,048/-. The assessing authority did not agree with the claim of the petitioner for FTC vide intimation dated 28.10.2022 under Section 143(1) of the Income Tax Act, 1961 and a demand of Rs.2,28,80,370/- was made.
3. Petitioner thereafter filed application under Section 154 of the Income Tax Act against the rejection of FTC claim. However, rectification application was rejected vide order dated 11.1.2023 and demand of Rs.2,41,49,000/- was raised from the petitioner. Petitioner has filed an appeal along with an application for condonation of delay. The appeal is filed under Section 246 of IT Act before the 3rd respondent. There is a delay of 234 days in filing the appeal.
4. There is huge delay in filing the appeal. In view of the aforesaid, this Court directs the appellate authority to consider the application for condonation of delay expeditiously, preferably within a period of two months and if delay is condoned, the appellate authority should take up the stay application filed by the petitioner and dispose the same expeditiously.
With the aforesaid direction, this writ petition stands disposed of.
