2024 (1) TMI 70 - HC - Income Tax

Stay of demand - petitioner neither filed ITR nor furnished report of audit in prescribed Form before the due date as prescribed under the provisions of Section 44AB - 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 on which tax has been demanded and order has been passed for proceeding for penalty under Section 271B HELD THAT - 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. 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.

Summary

Issues involved:
The issues involved in the judgment are related to a writ petition seeking a writ of mandamus to keep coercive proceedings in abeyance pending disposal of appeal and stay application, failure to file income tax return, best judgment assessment, and jurisdiction of the appellate authority.

Writ of Mandamus:
The petitioner, an assessee under the Income Tax Act, did not file the income tax return for the assessment year 2017-18 despite being involved in significant financial transactions. Notices were issued under Sections 148 and 142(1) of the Act, but the petitioner failed to comply. Consequently, a best judgment assessment was conducted, determining the total assessed income at Rs. 3,85,42,019/- with tax demanded and penalty proceedings initiated under Section 271B of the Act. The petitioner filed an appeal and a stay application, which are pending before the appellate authority. The High Court, while recognizing its limitations under Article 226 of the Constitution, directed the appellate authority to consider and decide on the stay application within two months.

Appellate Jurisdiction:
The petitioner approached the High Court through a writ petition, seeking relief as the Court exercises parallel jurisdiction with the appellate authority. However, the Court clarified that it cannot exercise such jurisdiction under Article 226 of the Constitution. The responsibility lies with the appellate authority to adjudicate on the stay application promptly. The Court disposed of the writ petition with a directive for the appellate authority to decide on the stay application in accordance with the law within a specified timeframe.

Conclusion:
The High Court of Kerala addressed the petitioner's concerns regarding coercive proceedings, best judgment assessment, and the jurisdiction of the appellate authority. While acknowledging its limitations under Article 226, the Court directed the appellate authority to expeditiously consider and decide on the stay application pending before it. The writ petition was disposed of with the directive for timely resolution of the stay application, emphasizing adherence to legal procedures and timelines.