Case Law Details
Kunnappilly Builders LL.P Vs ACIT (Kerala High Court)
Introduction: The legal battle between Kunnappilly Builders LL.P and the Income Tax Department reached a pivotal moment as the Kerala High Court issued a directive to halt recovery proceedings pending the disposal of the appeal. This article delves into the details of the case, examining the court’s judgment and its implications.
Detailed Analysis: The appellant, dissatisfied with Ext.P1 assessment order for the 2015-2016 assessment years under the Income Tax Act, took recourse in Ext.P2 appeal and Ext.P3 stay application. As the respondents initiated recovery steps during the appeal and stay application’s pendency, the appellant sought relief through WP(C).No.33187 of 2023.
The learned Single Judge, in a judgment dated 17.10.2023, dismissed the writ petition, advising the appellant to pursue the alternate remedy of appeal. However, a crucial contention arises as the judgment did not explicitly stay recovery proceedings during the Appellate Authority’s consideration of the appeal or stay application.
In the subsequent appeal, the appellant challenges the Single Judge’s decision, emphasizing the absence of a stay on recovery during the pendency of the appeal. The High Court, upon hearing arguments from both sides, acknowledges the oversight and addresses the lacuna in the judgment.
The court opines that when relegating the appellant to the alternate remedy, the Single Judge should have safeguarded the appellant from recovery proceedings until the Appellate Authority disposed of the stay application or appeal. Consequently, the High Court modifies the judgment, clarifying that recovery proceedings, concerning the amounts confirmed by Ext.P1 assessment order, shall be kept in abeyance until the appellate authority reaches a decision on the stay application or appeal, whichever is earlier.
Conclusion: In conclusion, the Kerala High Court, recognizing the need for a protective shield against recovery proceedings, rectifies the oversight in the initial judgment. The modified directive ensures that the appellant is shielded from adverse financial repercussions until the Appellate Authority concludes its assessment of the stay application or appeal. This case serves as a reminder of the intricacies involved in balancing legal remedies and the importance of providing comprehensive protection to litigants during the pursuit of alternate legal avenues.
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
Against Ext.P1 assessment order for the assessment years 2015-2016 under the Income Tax Act, the appellant had preferred Ext.P2 appeal and Ext.P3 application for stay of recovery pending disposal of the appeal. When recovery steps were initiated by the respondents during the pendency of the statutory appeal and stay application, the appellant approached the writ court through WP(C).No.33187 of 2023, which was disposed by a learned Single Judge by judgment dated 17.10.2023 relegating the appellant to the alternate remedy of appeal and directing the Appellate Authority to dispose the stay application or the appeal within a period of two months. In the appeal before us, the appellant impugns the said judgment of the learned Single Judge solely on the ground that while disposing the Writ Petition, the learned Single Judge did not grant a stay of recovery proceedings till such time as the First Appellate Authority considered the stay application/appeal as directed by the learned Single Judge.
2. We have heard Sri. Anil D. Nair, the learned counsel for the appellant and Sri. Jose Joseph, the learned Standing counsel for the Income Tax Department.
3. In our view, since the learned Single Judge had relegated the appellant to the alternate remedy before the statutory authority it was incumbent upon the learned Judge to protect the appellant from recovery proceedings pending disposal of the application by the respondent appellate authority. Accordingly, we modify the impugned judgment of the learned Single Judge to the limited extent of clarifying that pending disposal of the stay application or appeal whichever is earlier, by the appellate authority, the recovery proceedings against the appellant for recovery of the amounts confirmed against him by Ext.P1 assessment order shall be kept in abeyance. Save for this limited modification, the rest of the directions in the impugned judgment are not interfered with.
