Kerala HC Stays Recovery Proceedings under Income Tax Act Till Disposal of Pending Appeal before ITAT [Read Order]

In a recent case, the Kerala High Court stayed the recovery proceedings under the Income Tax Act, 1961 till the disposal of the pending appeal before the Income Tax Appellate Tribunal (ITAT). The stay was made as the appeal filed against the order of assessment for the year 2012-13 is under consideration before the tribunal and already hearing of the appeal has been concluded with orders awaited.

SML Finance Limited, the petitioner, challenged an order of assessment for the year 2012-13 as well as the order in appeal.  During the course of arguments, the Senior Counsel appearing for the petitioner confined his submissions for a direction to keep in abeyance the recovery proceedings initiated pursuant to the aforesaid orders. It was also submitted that, the appeal preferred by the petitioner before the Income Tax Appellate Tribunal (ITAT) was already heard on 01.10.2024 but the order has not yet been delivered and certain clarifications have now been sought for by the Tribunal.  According to the petitioner, the appeal is expected to be disposed of soon.

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The court viewed that this writ petition can be disposed of with a direction. Since the appeal filed by the petitioner against the orders relating to the assessment year 2012-13 concededly heard already by the Tribunal, the single bench of Justice Bechu Kurian Thomas viewed that, resorting to recovery proceedings, at this juncture would cause serious prejudice to the petitioner.

It was viewed that interests of justice demand that the recovery proceedings be kept in abeyance till the appeal is disposed of by the 3rd respondent.

Since the appeal filed against the order of assessment for the year 2012-13 is under consideration before the 3rd respondent and already hearing of the appeal has been concluded with orders awaited, the recovery proceedings pursuant to the aforesaid order of assessment shall be kept in abeyance till the above referred appeal is disposed of.

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