Equity Intelligence India Private Limited v. Deputy Commissioner of Income-tax, Corporate Cir-1(1), Kochi / Commissioner of Income-tax (Appeals), Kochi
[Citation -2020-LL-0629-7]

Citation 2020-LL-0629-7
Appellant Name Equity Intelligence India Private Limited
Respondent Name Deputy Commissioner of Income-tax, Corporate Cir-1(1), Kochi / Commissioner of Income-tax (Appeals), Kochi
Court HIGH COURT OF KERALA AT ERNAKULAM
Relevant Act Income-tax
Date of Order 29/06/2020
Assessment Year 2017-18, 2018-19
Judgment View Judgment
Keyword Tags rectification order • surplus funds • total income • capital gain • application for stay
Bot Summary: No.10002 OF 2020(A) 2 JUDGMENT Dated this the 29th day of June 2020 Petitioner, a company registered under the Companies Act, is a 'Portfolio Manager' and through instant writ petition assailed Ext.P14 impugned order dated 20.03.2020, whereby applications for stay submitted along with Exts.P5 and P12 appeals preferred against the assessment orders pertaining to assessment years 2017-18 and 2018-19, have been disposed of by commanding the petitioner to pay 20 of the demanded amount. P2 assessment order dated 27.12.2019, the net income of the petitioner company was determined as Rs.17,15,01,720/-. Sri.P.K. Ravi Sankar, learned counsel for the petitioner submits that the appellate authority vide Ext.P14 impugned order has erroneously dismissed the applications for stay relying upon Circular dated 31.07.2017 commanding the petitioner to deposit 20 of the demanded amount and there is no reference to the arguments or Circular dated 29.02.2016, whereby an option was given to the similarly situated persons for keeping the sale proceeds either in capital gain or in stock-in-trade. Jose Joseph, learned Standing Counsel accepts notice for respondents and submits that the other connected matters pertaining to disposal of the stay application by not demanding 20 of demanded amount, would not apply as they pertained to demand under Section 80P of the Income Tax Act and do not deny the fact that there is no advertance to the Circular or the arguments alleged to have been submitted on behalf of the petitioner in support of interim stay. Ext.P14. Operative part of the order dated 20.03.2020 is extracted hereunder:- With reference to your petition for stay of collection of demand and WP(C) No. 4618 of 2020(B) of High Court of Kerala filed by you in the above mentioned cases. Even the order do not reflect whether opportunity of hearing was given to the petitioner nor any advertance to any arguments. In view of what has been noticed above, Ext.P14 impugned order is set aside and the matter is remitted to the Office of the Commissioner of Income Tax - I, to consider the stay applications filed along with Exts.P5 and P12 appeals in respect of assessment years 2017-18 and 2018-19 and pass detailed order, after affording opportunity of hearing to the petitioner.


IN HIGH COURT OF KERALA AT ERNAKULAM PRESENT HONOURABLE MR. JUSTICE AMIT RAWAL MONDAY, 29TH DAY OF JUNE 2020 / 8TH ASHADHA, 1942 WP(C).No.10002 OF 2020(A) PETITIONER: EQUITY INTELLIGENCE INDIA PRIVATE LIMITED REPRESENTED BY ITS DIRECTOR, ABHILASH VARGHESE, 5TH FLOOR, AREEKAL MANSION, MANORAMA JUNCTION, MAIN AVENUE, PANAMPILLY NAGAR, COCHIN-682 036. BY ADV. SRI.P.K.RAVI SANKAR RESPONDENTS: 1 DEPUTY COMMISSIONER OF INCOME TAX CORPORATE CIR 1(1), KOCHI, CENTRAL REVENUE BUILDING, I.S. ROAD, KOCHI-682 018. 2 COMMISSIONER OF INCOME TAX (APPEALS) KOCHI, POORNIMA BUILDINGS, PANAMPILLY NAGAR, KOCHI-682 036. R1- R2 BY ADV. SRI.P.K.RAVINDRANATHA MENON (SR.) R1- R2 BY SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 29.06.2020, COURT ON SAME DAY DELIVERED FOLLOWING: WP(C).No.10002 OF 2020(A) 2 JUDGMENT Dated this 29th day of June 2020 Petitioner, company registered under Companies Act, is 'Portfolio Manager' and through instant writ petition assailed Ext.P14 impugned order dated 20.03.2020, whereby applications for stay submitted along with Exts.P5 and P12 appeals preferred against assessment orders pertaining to assessment years 2017-18 and 2018-19, have been disposed of by commanding petitioner to pay 20% of demanded amount. In support of aforementioned prayer, it is averred that petitioner company invests surplus funds from its principal business of Portfolio Management in equities of Indian Companies, apart from parking funds in Bank accounts. 2. For assessment year 2017-18, petitioner submitted return showing total income and net tax payable. But same was not accepted resulting into issuance of notice under Section 143(2) of Income Tax Act and after scrutiny of books of accounts, Ext. P2 assessment order dated 27.12.2019, net income of petitioner company was determined as Rs.17,15,01,720/-. Similarly for assessment year 2018-19, demand of WP(C).No.10002 OF 2020(A) 3 Rs.44,30,632/- was raised. petitioner preferred Exts. P5 and P12 appeals under Section 246 of Income Tax Act along with stay applications. 3. Adv. Sri.P.K. Ravi Sankar, learned counsel for petitioner submits that appellate authority vide Ext.P14 impugned order has erroneously dismissed applications for stay relying upon Circular dated 31.07.2017 commanding petitioner to deposit 20% of demanded amount and there is no reference to arguments or Circular dated 29.02.2016, whereby option was given to similarly situated persons for keeping sale proceeds either in capital gain or in stock-in-trade. 4. Issue notice before admission. 5. Adv. Sri. Navaneeth N. Nath for Sri. Jose Joseph, learned Standing Counsel accepts notice for respondents and submits that other connected matters pertaining to disposal of stay application by not demanding 20% of demanded amount, would not apply as they pertained to demand under Section 80P of Income Tax Act and do not deny fact that there is no advertance to Circular or arguments alleged to have been submitted on behalf of petitioner in support of interim stay. WP(C).No.10002 OF 2020(A) 4 6. Having heard learned counsel for parties and appraised paper books, I am of view that Ext.P14 impugned order is not only bereft of reasonings but has been passed in most sketchy and mechanical manner. Ext.P14. Operative part of order dated 20.03.2020 is extracted hereunder:- "With reference to your petition for stay of collection of demand and WP(C) No. 4618 of 2020(B) of High Court of Kerala filed by you in above mentioned cases. Please note that CBDT's order in O.M. No.404/72/93-ITCC dated 29.02.2016 and in Office Memorandum dated 31.07.2017 "20% of disputed demand should be paid, where demand is contested before CIT(A)." Taking overall view of facts and circumstances of case, further as per CBDT lnstruction 1914 and O.M. Dated 31.07.2017, appellant should pay 20% of disputed demand immediately and pursue appeal. Stay is granted for balance demand on condition of payment of disputed demand till decision of appeal." 7. Even assessing officer had also referred to Circular No. 6 of 2016 dated 29.02.2016 issued by Central Board of Direct Taxes, Department of Revenue, Ministry of Finance, Government of India, but interpreted in different context. Quasi- judicial authorities like Commissioner of Income Tax (Appeals) are also legitimately expected to refer to arguments submitted in WP(C).No.10002 OF 2020(A) 5 support of interim prayer sought in support of memorandum of appeal preferred against assessment orders and cannot blindly apply Circular, as in instant case. Even order do not reflect whether opportunity of hearing was given to petitioner nor any advertance to any arguments. Such order cannot escape scrutiny of Court, while exercising power of judicial review under Article 226 of Constitution of India. 8. In view of what has been noticed above, Ext.P14 impugned order is set aside and matter is remitted to Office of Commissioner of Income Tax (Appeals) - I, to consider stay applications filed along with Exts.P5 and P12 appeals in respect of assessment years 2017-18 and 2018-19 and pass detailed order, after affording opportunity of hearing to petitioner. Let this exercise be undertaken within period of two months and still that time, no coercive action shall be taken against petitioner. writ petition is disposed of. Sd/- AMIT RAWAL JUDGE DCS WP(C).No.10002 OF 2020(A) 6 APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF ARTICLES OF ASSOCIATION OF PETITIONER COMPANY. EXHIBIT P2 TRUE COPY OF ORDER OF ASSESSMENT DATED 27.12.2019 ISSUED BY IST RESPONDENT. EXHIBIT P3 TRUE COPY OF CIRCULAR NO.6 OF 2016 DATED 29.2.2016 ISSUED BY CENTRAL BOARD OF DIRECT TAXES, DEPARTMENT OF REVENUE, MINISTRY OF FINANCE GOVERNMENT OF INDIA. EXHIBIT P4 TRUE COPY OF NOTICE OF DEMAND DATED 27.12.2019 ISSUED BY IST RESPONDENT. EXHIBIT P5 TRUE COPY OF MEMORANDUM OF APPEAL DATED NIL SUBMITTED ON 22.1.2020 SUBMITTED BY PETITIOENR COMPANY BEFORE 2ND RESPONDENT. EXHIBIT P6 TRUE COPY OF PETITION DATED NIL FILED ON 28.1.2020 BY PETITIONER COMPANY BEFORE 2ND RESPONDENT. EXHIBIT P7 TRUE COPY OF JUDGMENT DATED 18.2.2020 IN WP(C) NO.4618 OF 2020 OF THIS HONOURABLE COURT. EXHIBIT P8 TRUE COPY OF RELEVANT PAGES OF INCOME TAX RETURNS FOR ASSESSMENT YEAR 20189-19 SUBMITTED BY PETITIONER COMPANY. EXHIBIT P9 TRUE COPY OF COMMUNICATION REFERENCE NUMBER CPC/1819/G22/1882111886 DATED 17.3.2019 ISSUED ON BEHALF OF IST RESPONDENT TO PETITIONER COMPANY. EXHIBIT P10 SCREEN SHOT OF CLARIFICATION SUBMITTED BY PETITIONER COMPANY. EXHIBIT P11 TRUE COPY OF RECTIFICATION ORDER DATED 30.10.2019 ISSUED UNDER SECTION 154 OF INCOME TAX ACT BY IST RESPONDENT. WP(C).No.10002 OF 2020(A) 7 EXHIBIT P12 TRUE COPY OF MEMORANDUM OF APPEAL DATED NIL SUBMITTED BY PETITIONER COMPANY BEFORE 2ND RESPONDENT. EXHIBIT P13 TRUE COPY OF PETITION DATED NIL BY PETITIONER COMPANY BEFORE 2ND RESPONDENT. EXHIBIT P14 TRUE COPY OF ORDER F.NO.CIT(A)-1/STAY OF DEMAND/2019-20 DATED 20.3.2020 ISSUED BY 2ND RESPONDENT. Equity Intelligence India Private Limited v. Deputy Commissioner of Income-tax, Corporate Cir-1(1), Kochi / Commissioner of Income-tax (Appeals), Kochi
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