Case Law Details
Zakkariya Raj Sabjan Vs Additional/ Joint/ Deputy/ ACIT (Kerala High Court)
The Kerala High Court dismissed an appeal challenging a judgment that declined to examine the merits of a penalty order passed under Section 271D of the Income Tax Act and instead directed the taxpayer to avail the statutory appellate remedy. The appellant contended that the penalty order was invalid as the essential ingredients of Section 271D were not satisfied, that the authority had failed to properly consider his statement, and that the proceedings were barred by limitation under Section 275 of the Act.
The Revenue submitted that the authority had recorded that the appellant failed to discharge the preliminary onus regarding Section 269SS, thereby justifying initiation of penalty proceedings under Section 271D. The High Court observed that the appellant’s contentions involved disputed questions of fact, including the evaluation of evidence and the applicability of Sections 271D and 275, which were required to be examined by the competent appellate authority under the statutory framework.
Holding that the Single Judge had correctly relegated the appellant to the alternative statutory remedy, the Court declined to interfere with the impugned judgment. However, considering that the appeal had remained pending before the High Court, it granted the appellant an additional three weeks to file the statutory appeal. The Court clarified that all contentions on merits were left open for consideration by the appellate authority.
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
The appellant assails the judgment of the learned Single
Judge because it refused to enter into the merits of his contentions; and has relegated him to the alternative statutory remedy.
2. Smt. K.Krishna – learned counsel for the appellant, argued that, as ex facie evident from Ext.P5 – which is the impugned order issued under Section 271D of the Income Tax Act (‘Act’ for short) – none of the requisite ingredients justifying its issue have been attracted; and consequently, that it can only be seen to be inept and void. She contended that, in such circumstances, her client is fully entitled to have approached this Court directly, without invoking the alternative statutory remedy.
3. Sri. Jose Joseph – learned Senior Standing Counsel for the Department of Tax, however, submitted that it has been specifically recorded in Ext.P5 by the Authority, that the appellant has not even discharged “the preliminary onus to prove the provisions of Section 269SS” (sic); and consequently that he was statutorily enjoined to initiate action under Section 271D, and to have concluded it through the said order.
4. As evident from the impugned judgment, the learned Single Judge did not evaluate the credibility or otherwise of the allegations, but left it open for the appellant to invoke alternative statutory remedy.
5. We are of the firm view that the learned Single Judge was right in having adopted the afore course for the singular reason that, even going by the submissions made at the Bar by the appellant, his specific case is that he had given a statement, namely Ext.P4, which has not been properly evaluated by the Authority while issuing Ext.P5; and further that the ingredients of Section 271D of the Act has not been attracted. The appellant has an adscititious case that, under Section 275 of the Act, the entire proceedings is hit by limitation.
6. We have little doubt that all the afore aspects are to be considered at the first instance by the competent Authority, under the statutory scheme, since they are underpinned on disputation of facts.
7. Pertinently, as per the judgment, the learned Single Judge has allowed three weeks’ time from the date of its receipt to the appellant to file their statutory appeal.
8. Since this appeal has been filed in time and has been pending before this Court, albeit without being admitted, we are of the view that the appellant should be given a further three weeks’ time to file their statutory appeal, as has been permitted by the learned Single Judge.
9. In the afore circumstances, this appeal is dismissed, without entering into the merits of any of the rival contentions and affirming the judgment of the learned Single Judge; however, allowing the appellant a further period of three weeks from the date of receipt of a copy of this judgment to file their statutory appeal.
Needless to say, every contention of the appellant, including those based on Section 275 and Section 271D of the ‘Act’ are left open to be impelled and pursued in the statutory appeal to be filed by him.
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