Case Law Details
P R Combines Vs ACIT (Kerala High Court)
The Kerala High Court recently issued an order in the case of P R Combines vs. ACIT, concerning delay condonation and tax recovery. The petitioner had filed statutory appeals against assessment orders with a significant delay, which had not been condoned or admitted. Meanwhile, recovery cum garnishee orders were issued to recover the assessed tax amount. This article provides a detailed analysis of the case and the court’s order.
Detailed Analysis
The petitioner, P R Combines, filed a writ petition challenging recovery cum garnishee orders (Exhibits P17 and P18) dated July 13, 2023, issued by the third respondent (income tax authorities). These orders aimed to recover the assessed tax amount based on assessment orders (Exhibits P1 to P4).
The petitioner had filed statutory appeals (Exhibits P9 to P12) against the assessment orders (Exhibits P1 to P4) with a delay of 433 days. However, the delay had not been condoned, and the appeals had not been admitted for further proceedings.
During the pendency of the appeals and the applications for delay condonation, the income tax authorities issued the recovery cum garnishee orders to recover the assessed tax amount.
The petitioner’s counsel submitted that the petitioner was willing to deposit 20% of the assessed tax amount, with the condition that the recovery cum garnishee orders would not be enforced until the final outcome of the appeals. The counsel for the Revenue did not object to this submission.
Taking into consideration the above circumstances, the Kerala High Court disposed of the writ petition with the following directives:
i. The petitioner was directed to deposit 20% of the assessed tax amount mentioned in Exhibits P1 to P4 within one month from the date of the court’s order.
ii. The appellate authority (Commissioner of Income Tax Appeals) was instructed to proceed with the applications for condoning the delay and the appeals expeditiously and to decide them in accordance with the law.
iii. The recovery cum garnishee orders (Exhibits P5 to P8) and the recovery cum garnishee orders challenged in the writ petition (Exhibits P17 and P18) were to be kept in abeyance until the disposal of the applications and appeals.
iv. If the petitioner failed to make the deposit of 20% of the assessed tax amount within the stipulated time, the income tax department would be free to enforce the recovery cum garnishee orders.
The court clarified that it had not expressed any opinion on the merits of the matter.
Conclusion
In the case of P R Combines vs. ACIT, the Kerala High Court granted delay condonation for the petitioner’s appeals and suspended tax recovery until the appeals were disposed of. This decision emphasizes the importance of allowing taxpayers to have their appeals heard and decided while providing a mechanism for partial payment to ensure compliance with any eventual tax liability.
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
The present writ petition has been filed impugning Exhibits P17 and P18 recovery cum garnishee orders dated 13.07.2023 issued by the third respondent to recover the assessed tax pursuant to Exhibits P1 to P4 assessment orders.
2. Against Exhibits P1 to P4 assessment orders, the petitioner has filed Exhibits P9 to P12 statutory appeals before the Commissioner of Income Tax (Appeals), respondent No.2, with a delay of 433 days. Neither the delay has been condoned, nor the appeals admitted.
3. Pending consideration of the applications for condonation of delay in filing the appeals, the impugned recovery cum garnishee orders have been issued by the third respondent to recover the assessed tax amount.
4. The learned counsel for the petitioner submits that the petitioner is willing to deposit 20% of the assessed tax amount, subject to the final outcome of the appeals and the recovery cum garnishee orders may not be enforced. The learned counsel appearing for the Revenue does not have any objection to the said submission.
5. Considering the aforesaid facts, the present writ petition is disposed of with a direction to the petitioner to deposit 20% of the assessed amount in Exhibits P1 to P4 within a period of one month from today. On making such deposit, the appellate authority should proceed with the applications for condoning delay and appeals expeditiously and decide the same in accordance with law. Till the disposal of the applications/appeals, the impugned Exhibits P5 to P8 demand notices and Exhibits P17 and P18 recovery cum garnishee orders, shall be kept in abeyance. If the petitioner fails to make deposit of the 20% of the assessed amount, the Department would be free to enforce Exhibits P17 and P19 recovery cum garnishee orders. It is made clear that this Court has not expressed any opinion on the merits of the matter.
