Delay in deciding Stay application against Income Tax Assessment Order: Kerala HC directs NFAC to decide within 2 Months [Read Order]

The Kerala High Court directed the National Faceless Assessment Centre ( NFAC ) to decide within 2 months as there was a delay in deciding to stay the application against the Income Tax assessment order.

The Centre for Management Development, the appellant has approached the Court aggrieved by the judgment of a Single Judge. It was urged by the counsel for the appellant that the Single Judge while relegating the appellant to his alternate remedy of pursuing appeals, along with delay condonation applications and stay applications, against the impugned assessment orders for the assessment years 2018-19, 2020-21, 2021-22 and 2022-23 under the Income Tax Act, 1961 had directed the appellant to remit 20% of the assessed amounts in respect of all the assessment years pending disposal of the stay applications/condonation of delay applications by the First Appellate Authority.

The counsel for the appellant, Sherry Samuel Oommen pointed out that the Single Judge had directed the 1st respondent to pass orders on the applications preferred by the appellant under Section 119 of the Income Tax Act for condonation of delay in filing returns which was necessary for a consideration of the claim for exemption made by the appellant on merits.

The Single Judge did not thereafter stay the recovery of the assessed amounts from the appellant for the aforementioned assessment years while directing consideration of stay applications/delay condonation applications preferred by the appellant along with the appeals filed before the First Appellate Authority under the Income Tax Act for the said assessment years.

On a consideration of the rival submissions, and finding the Single Judge by the impugned judgment has already directed the 1st respondent to dispose series of applications within a specified time limit.

A division bench of Dr Justice A K Jayasankaran Nambiar & Justice Syam Kumar V M disposed of the respondent has already summoned the appellant for a personal hearing in connection with the said applications and modified the latter part of the impugned judgment of the  Single Judge that directs the appellant to pay 20% of the assessed amounts pending consideration of the stay applications/delay condonation applications filed by the appellant before the First Appellate Authority (5th respondent) along with the appeals against the assessment order for the assessment years.

The Court found that the latter direction of the Single to be legally unsustainable since the appellant has made out a prima facie case warranting a protection from recovery of the disputed demands pending consideration of the stay applications/condonation of delay applications by the First Appellate Authority.

“The recovery of the amounts confirmed against the appellant by the  assessment orders impugned in the appeals before the 5th respondent, shall be kept in abeyance till such time as orders are passed by the 5th respondent in the delay condonation applications/stay applications referred above.”, the bench held.

To Read the full text of the Order CLICK HERE

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