Case Law Details
Chalakkal Antony Jose Valloor Vs ACIT (Kerala high Court)
Introduction: The Kerala High Court, in the case of Chalakkal Antony Jose Valloor vs. ACIT, has directed the expeditious consideration of a stay application related to a tax dispute. The petitioner, engaged in the advertising business, did not file an income tax return under Section 139 of the Income Tax Act for the assessment year 2017-18. The court’s intervention comes in response to the petitioner’s plea for a writ of mandamus to halt coercive proceedings until the appeal and stay application are resolved.
Detailed Analysis: The petitioner’s failure to file the income tax return prompted the issuance of a notice under Section 148 of the Income Tax Act in March 2021. Subsequent notices, including one under Section 142(1) of the Act, were met with no response from the petitioner. Despite multiple opportunities, the petitioner did not comply, leading to a best judgment assessment by tax authorities. The assessed income was determined as Rs.3,85,42,019, and tax demands were issued, along with a penalty order under Section 271B of the Act.
In response to the assessment, the petitioner filed an appeal on August 3, 2022, accompanied by a stay application, currently pending before the second respondent (NFAC). Seeking relief, the petitioner approached the Kerala High Court under Article 226 of the Constitution of India.
The court, while recognizing its limited jurisdiction under Article 226, emphasized the appellate authority’s responsibility to decide the stay application promptly. The writ petition was disposed of with a specific directive to the second respondent to consider and pass appropriate orders on the stay application (Ext.P17) within two months, in accordance with the law.
Conclusion: The Kerala High Court’s direction to expedite the decision on the stay application provides a glimpse into the court’s stance on timely resolution of tax-related disputes. The case underscores the importance of adherence to legal timelines and due process in income tax matters. Taxpayers and authorities alike should take note of the court’s emphasis on a swift and lawful resolution of stay applications, ensuring a fair and efficient appellate process.
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
The present writ petition has been filed seeking various prayers, including the prayer for a writ of mandamus commanding the respondents to keep in abeyance coercive proceedings pursuant to Ext.P13 assessment order pending disposal of Ext.P14 appeal and Ext.P17 stay application, etc.
2. The petitioner is an assessee under the provisions of the Income Tax Act, 1961 (“Act”, for short) and is engaged in carrying out the business of an advertising agency under the name and style “Yesgo Advertising Media”. The petitioner did not file return of its income under Section 139 of the Act for the assessment year 2017-18. As per the information made available through AIMS module in ITBA system of the Income Tax Department, it was cnoticed that the assessee was involved in huge financial transactions during the relevant assessment year, including the contractual receipts under Section 194C of Rs.2,31,56,103/-, interest earned during the year under Section 194A of Rs.28,310/-, besides other receipts. The petitioner-assessee had received commission/brockerage of Rs.74, 556/-, professional/technical receipts of Rs.8,160/-, cash payments for the goods and services of Rs.1,70,21,696/- and cash deposit of Rs.1,85,75,208/-.
3. The petitioner neither filed ITR nor furnished report of audit in prescribed Form before the due date as prescribed under the provisions of Section 44AB of the Act.
4. A notice under Section 148 of the Act was issued to the petitioner on 31.3.2021 directing him to file return within a period of 30 days from the service of the notice. Despite receipt of the said notice, the petitioner did not file his return of income in compliance of the notice under Section 148 of the Act. Thereafter, notice dated 16.7.2021 under Section 142(1) of the Act was issued. But, no response came from the petitioner in response to the said notice under Section 142(1) of the Act.
5. The assessment order would disclose that though the petitioner was granted several opportunities to file return and give response to the notices, but the petitioner failed to do so. In view thereof, best judgment assessment was carried out and total assessed income was determined as Rs.3,85,42,019/- on which tax has been demanded and order has been passed for proceeding for penalty under Section 271B of the Act.
6. Aggrieved by the said assessment order, the petitioner has filed appeal on 3.8.2022, along with an application for stay, which are pending before the 2nd respondent.
7. The petitioner has approached this Court in the present writ petition as this Court is exercising the parallel jurisdiction with the appellate authority. But, no such jurisdiction can be exercised under Article 226 of the Constitution of India. However, it is incumbent upon the appellate authority to decide the stay application of the petitioner, at the earliest.
8. In view of the above, the present writ petition is disposed of with direction to the 2nd respondent to consider and pass appropriate orders on the stay application, Ext.P17, pending before it, in accordance with law, preferably within a period of two months.
Pending interlocutory application, if any, in the writ petition stands dismissed.
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