Modifying a decision in an Income Tax matter, the Kerala High Court has granted interim protection to assessee from coercive actions and recovery during the appellate remedy in pendency.
The Division Bench of Justice A.K. Jayasankaran Nambiar and Justice Syam Kumar V M delivered the decision in the case revolving around an assessment order under the Income Tax Act for the assessment years 2016-2017.
The appellant, Remya Vikraman Nair Rema Devi, had filed an appeal and an application for stay against the assessment order. The appellant’s appeal and stay application were in response to recovery measures initiated by the respondents during the pendency of the statutory appeal and stay application. Initially, the appellant sought relief through a writ petition, which was disposed of by a Single Judge Bench. The Single Judge had directed the appellant to pursue the alternate remedy of appeal and instructed the Appellate Authority to decide on the stay application within two months.
However, the Single Judge did not grant a stay on recovery proceedings during this period.
During the hearing of the Writ Appeal, the appellant contested the Single Judge’s decision, arguing that protection from recovery proceedings should have been granted pending the appellate authority’s decision on the stay application/appeal.
After hearing arguments from both parties, the High Court modified the judgment of the Single Judge. The Court held that it was necessary to protect the appellant from recovery proceedings during the pendency of the stay application or appeal before the appellate authority.
Therefore, the High Court clarified that recovery proceedings against the appellant for the amounts confirmed in the assessment order shall be suspended until the appellate authority disposes of the stay application or appeal, whichever is earlier. The High Court decision marks an important clarification regarding the protection of appellants in tax-related cases.
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