1997 (10) TMI 47 - HC - Income Tax

Summary

Issues Involved:
1. Entitlement of the petitioner to file an appeal against the assessment order.
2. Justification of the second respondent's refusal to issue challan for payment of appeal fees.
3. Validity of the third respondent's refusal to entertain the appeals filed by the petitioner.
4. Legality of the revenue recovery proceedings initiated through Exts. P-3 and P-9.

Issue-wise Detailed Analysis:

1. Entitlement of the Petitioner to File an Appeal Against the Assessment Order:
The petitioner argued that under Rule 76 of the Kerala Agricultural Income Tax Rules, 1991, "any person aggrieved by the order of the Agrl. ITO may file an appeal before the AAC." The petitioner claimed to be aggrieved by the assessment order Ext. P-2 as the tax due was sought to be recovered by the sale of properties purchased by him from Mr. Benjamin Dominic. The court considered the definition of 'assessee' under Section 2(7) of the Kerala Agrl. IT Act, 1991, which includes persons liable to pay tax under Section 57 of the Act. The court concluded that the petitioner, whose property was being proceeded against for recovery of tax due from Mr. Benjamin Dominic, qualifies as an 'assessee' for the purpose of Section 72 of the Act. Therefore, the petitioner is entitled to file an appeal against the assessment order.

2. Justification of the Second Respondent's Refusal to Issue Challan for Payment of Appeal Fees:
The second respondent refused to issue a challan for the payment of appeal fees on the ground that the petitioner was not an assessee of that office. The court found this refusal unjustified, noting that the petitioner had enclosed a cheque for the prescribed fees along with the appeal memorandum. The court emphasized that the provisions regarding appeals should be construed liberally and that any person aggrieved by an order of the Agrl. ITO should be allowed to file an appeal. Consequently, the second respondent was directed to issue the challan for payment of the prescribed fees.

3. Validity of the Third Respondent's Refusal to Entertain the Appeals Filed by the Petitioner:
The third respondent refused to entertain the appeals filed by the petitioner, citing the second respondent's refusal to issue a challan. The court held that the petitioner, being a person aggrieved by the assessment order, is entitled to file an appeal under Rule 76 of the Kerala Agrl. IT Rules. The court directed the third respondent to entertain the appeals filed by the petitioner, subject to the petitioner satisfying the other conditions provided in Section 72 of the Act read with Rule 76 of the Rules.

4. Legality of the Revenue Recovery Proceedings Initiated Through Exts. P-3 and P-9:
The petitioner sought to quash the revenue recovery notices Exts. P-3 and P-9 and requested a stay on the recovery of the disputed tax until the final disposal of the appeals. The court noted that the petitioner had already remitted a sum of Rs. 25,000 towards the demand made pursuant to the assessment order Ext. P-2. The court ordered that further proceedings for the recovery of the balance amount pursuant to Ext. P-9 be kept in abeyance until the disposal of the stay petition, if filed by the petitioner.

Conclusion:
The original petition was disposed of with directions to the second respondent to issue the challan for payment of the prescribed fees and to the third respondent to entertain the appeals filed by the petitioner. Further recovery proceedings were stayed pending the disposal of the stay petition.