K. Oormila Maloor vs Assistant Commissioner of Income Tax

T.L. Viswanatha Iyer, J.—The two petitioners were partners of two firms M.M. Nagalinga Nadar & Co., Quilon and Sri Rajvel & Co.,

Quilon. There appears to be a raging dispute between the partners of the firms with an (Arbitration) Original Suit No. 69 of 1993 pending in the

Sub-Court, Kollam. The petitioners have made various allegations against the other partners of the firms and also against the Chartered

Accountants of the firms. That suit is pending. According to the petitioners, they were not in a position to file returns for purposes of assessment to

income tax for the year 1990-91 for the reason that the books were not available to them and also for the reason that they had no faith in the audit

which had been done by the firm of auditors made parties in the suit against whom there are very serious allegations. In these circumstances, they

could not file any return and this eventually resulted in the orders of assessment Ext. P5 in each case for the year 1990-91. The petitioners have got

various allegations to make regarding the conduct of the auditors, regarding the conduct of the other partners as also about various other matters

on which, I do not think, this Court should address itself at this stage. The prayer ultimately is to quash the order of assessment as an illegal and

unjust one. It is not for this Court to adjudicate on the various points raised by the petitioners in the two original petitions. Suffice it to say, many of

them are matters concerning the suit requiring adjudication in the suit. Many of them are also matters which require adjudication at the departmental

level having regard to all that the petitioners state about the accounts and so on. This Court cannot embark on an enquiry on these matters nor is it

necessary for the reason that the petitioners have admittedly filed appeals against those assessments u/s 246 the income tax Act, 1961. A copy of

the appeal filed by the petitioner in O.P. No. 244 of 1994 has been filed as Ext. P6 in writ petition. Though a copy of the appeal is not annexed in

the other writ petition, it is admitted that such an appeal has been filed and that it is pending. In the circumstances it is only proper to direct that the

said appeals should be disposed of expeditiously with appropriate directions regarding the recovery proceedings.

The only other question which requires consideration is regarding the recovery of the amounts demanded pursuant to the assessments while the

appeals are pending. I leave it to the petitioners to move the appropriate authorities either for stay or for not treating them as in default pending the

appeals, taking into account the very serious contentions which the petitioners have raised in the original petition as also the allegations made by

them besides the grounds stated in the appeals. I am sure the authorities concerned will deal with the matter in accordance with law and in proper

exercise of the discretion as and when any such motion is made for stay pending the appeals.

The original petitions are dismissed leaving open the various questions raised for consideration in the appeals filed by the petitioners and subject to

the above observations.