Kerala HC Division Bench stays Coercive Income Tax Recovery Measures During Pendency of Appeal and Stay Petition

A Division Bench of the Kerala High Court has stayed the coercive proceedings related to an Income Tax Demand, owing to the pendency of an appeal and a stay petition before the authorities.

The Kerala High Court had directed to expeditiously decide the stay application in the matter, in an earlier Single Bench order.

The present writ petition has been filed seeking various prayers, including the prayer for a writ of mandamus commanding the respondents to keep coercive proceedings in abeyance pursuant to assessment order pending disposal of appeal and stay application, etc.

Read More: Non filing of Return of Income u/s 139 of Income Tax Act: Kerala HC directs to Decide Stay Application

The petitioner is an assessee under the provisions of the Income Tax Act, 1961 and is engaged in carrying out the business of an advertising agency under the name and style “Yesgo Advertising Media”.

The appellant had also preferred Ext.P19 application before the 3rd respondent seeking out of turn hearing of the appeal. In the meantime, coercive steps were taken for realization of the demands. Therefore, the appellant preferred WP(C) No.37397/2023 before this Court.

The Single Judge disposed of the writ petition with a direction to the 2nd respondent to consider and pass appropriate order on Ext.P17 stay application. The Single Judge, however, did not grant stay of recovery proceedings pending disposal of the stay petition by the said respondent.

The Kerala High Court Division Bench heard Nithish Sathesh Shenoy, the counsel for the appellant and G. Keerthivasan, the Standing Counsel for the Income Tax Department.

The bench observed that, the Single Judge had relegated the appellant to the alternative remedy before the statutory authority, it was incumbent upon the learned Judge to protect the appellant from recovery proceedings pending disposal of the petitions by the respondent appellate authority.

The court emphasized that during the pendency of a stay petition, there shall be a stay of recovery as well.

The Division Bench of Justice A K Jayasankaran Nambiar and Justice Kauser Edappagath stated that the impugned judgment of the learned Single Judge would be modified accordingly,  limited to clarifying that, pending the disposal of the stay petition or appeal, whichever occurs earlier by the appellate authority, the recovery proceedings against the appellant for the amounts confirmed against it shall be kept in abeyance, on hold.

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