Appeal by Medical Trust Against Income Tax Order issued u/s 201: Kerala HC Stays Recovery Proceedings Initated [Read Order]

In a ruling on the appeal filed by the Medical trust against Income Tax order issued under section 201 of the Income Tax Act, 1961, the Kerala High Court stayed the recovery proceedings initated by the department till the disposal of the appeals by the tribunal.

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Pulikkal Medical Foundation Medical Trust Hospital, Petitioner is a Trust registered under Section 12A of the Income Tax Act, 1961 ( ‘the Act’). The petitioner runs a multi-speciality hospital in Ernakulam. For the assessment year 2018-19 to 2021-22, it was issued with orders under Section 201 of the Act creating a huge liability. Appeals have been filed by the petitioner, which are pending. Petitioner challenges the orders issued under Section 201 of the Act. Though petitioner seeks to quash orders, during the course of hearing, Sri.Joseph Markos, the learned Senior counsel, appearing on behalf of the petitioner, as instructed by Sri.V.Abraham Markos, learned counsel submitted that petitioner is confining the relief to a stay of recovery proceedings pending the appeals already filed.

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Petitioner contends that pursuant to notices issued under Section 250 of the Act, an objection has been filed and all what remains for disposing the appeal filed by the petitioner is only a formal hearing for which a date has already been provided by the Appellate Authority. However, in the meantime, the proceedings for recovery of the amounts imposed in series have been initiated which causes prejudice.

Since the appeals filed by the petitioner as series are pending consideration  and is about to be heard apart from the notices under Section 250 having been issued already in the year 2024,it was viewed that recovery proceedings when the appeals are about to be disposed of is unnecessary.

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The recovery proceedings are kept in abeyance for a short period till the appeal is disposed of. In fact, the appeals have become ripe for hearing, ought to be disposed of in a time bound manner. The single bench of Justice Bechu Kurian Thomas stayed the orders till the appeals filed  are disposed of.

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