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K.P. Abdul Kareem Hajee Vs. Income-tax Officer, A-ward and anr. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtKerala High Court
Decided On
Case NumberOriginal Petition No. 2277/1973-D
Judge
Reported in(1982)31CTR(Ker)278; [1983]141ITR120(Ker)
ActsIncome Tax Act, 1961 - Sections 220(2)
AppellantK.P. Abdul Kareem Hajee
Respondentincome-tax Officer, A-ward and anr.
Appellant Advocate K.S. Paripoornan, Adv.
Respondent Advocate P.K. Ravindranatha Menon, Adv.
Excerpt:
- .....p-3a dated january 31, 1975. on appeal taken by the department against that order, the income-tax appellate tribunal by ex. p-4 dated july 31, 1977, affirmed the decision of the aac relating to hamsa. by ext. p-4a dated january 31, 1977, the tribunal, however, allowed the department's appeal in respect of the petitioner and affirmed the assessment order (ex. p-2a). as a result of exs. p-2a and p-4a, the petitioner alone was found liable for the income-tax due in respect of the amount seized.2. the question which now arises in the present proceeding is as regards the interest demanded from the petitioner by the ito as seen in ex. p-6, which reads :'the interest chargeable under section 220(2) for the assessment year 1970-71, on rs. 60,278 works out to rs. 24,682. this is charged. this.....
Judgment:

Kochu Thommen, J.

1. The petitioner is Abdul Kareem Haji. For the assessment year 1970-71, the ITO made an assessment on Poyakkaraveettil Hamsa consequent upon a seizure of Rs. 84,000 by the Enforcement Directorate during a raid conducted at his premises. The amount seized was claimed by the petitioner as his. As a result of this claim, an alternative or protective assessment was made upon the petitioner, Abdul Kareem Hajee, in respect of the amounts seized. The respective orders of assessment relating to Hamsa and the petitioner are exs. P-2 and P-2A, both dated December 1, 1973. These two orders were set aside in appeal by the AAC by ex. P-3A dated January 31, 1975. On appeal taken by the Department against that order, the Income-tax Appellate Tribunal by ex. P-4 dated July 31, 1977, affirmed the decision of the AAC relating to Hamsa. By ext. P-4A dated January 31, 1977, the Tribunal, however, allowed the Department's appeal in respect of the petitioner and affirmed the assessment order (ex. P-2A). As a result of exs. P-2A and P-4A, the petitioner alone was found liable for the income-tax due in respect of the amount seized.

2. The question which now arises in the present proceeding is as regards the interest demanded from the petitioner by the ITO as seen in ex. P-6, which reads :

'The interest chargeable under Section 220(2) for the assessment year 1970-71, on Rs. 60,278 works out to Rs. 24,682. This is charged. This should be paid as per demand notice.'

3. Exhibit P-6 was affirmed in revision by the Commissioner by ex. P-7 dated March 4, 1978. It is contended by the petitioner's counsel, Shri Paripoornan, that in so far as ex. P-2A was set aside by the AAC by ex. P-3A, no interest had become payable by the petitioner on the tax demanded and his liability arose only upon the final order of the Appellate Tribunal. In other words, counsel contends that for the period commencing on January 31, 1975, which is the date of the order of the AAC and ending on July 31, 1977, which is the date of the order of the Tribunal, no interest had accrued on the amount in question.

4. The order of a judicial or quasi-judicial authority is not final for the purpose of res judicata during the time allowed for filing an appeal or the pendency of an appeal. In the absence of any statutory provision to the contrary, or an interim stay granted by a competent authority, the order, although not final, is provisionally executable, subject to restoration. The finality of ex. P-2A was qualified by and subject to appeal, which was taken before the appellate authority. The order of the appellate authority itself was likewise provisional during the period allowed for filing an appeal or during the pendency of the appeal. When the order of the AAC concerning the petitioner was finally set aside by the Tribunal, thereby affirming ex. P-2A order of the ITO, the cloud hanging over ex. P-2A was removed and its finality was affirmed. Consequently, for the relevant period, ex. P-2A is deemed to have operated in full vigour to make the petitioner liable in law by reason of the Tribunal's affirmative order. If this is the position in law, which I think it is, Section 220(2) of the I.T. Act was attracted in respect of the amount due from the petitioner as per ex. P-2A dated December 1, 1973. It is that interest which is now demanded by the ITO, vide ex. P-6, and affirmed by the Commissioner by ex. P-7. The challenge against the impugned orders accordingly fails. The O.P. is dismissed. No costs.


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