MAVELIKKARA GOVERNMENT SERVANTS CO-OPERATIVE BANK LIMITED vs. THE JOINT DIRECTOR OF INCOME TAX (I AND CI) KOCHI

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ITA/38/2020HC KeralaKLHC01071667201905 August 2020Author: HONOURABLE MR.JUSTICE K.VINOD CHANDRAN,HONOURABLE MR. JUSTICE T.R.RAVI5 pages
AI SummaryDismissed

What did the High Court hold?

The High Court of Kerala, in a joint decision for both appeals, dismissed the appeals filed by the assessees. The Court explicitly stated that it was respectfully following the decision of the Hon'ble Supreme Court in Kathiroor Service Cooperative Bank Limited V. Commissioner of Income Tax (Cib) and Others, reported in 2014 (14) SCC 352. In that precedent, the Supreme Court had answered the question of whether the Income Tax Officer has jurisdiction to proceed under the second proviso of Section 133(6) of the Income Tax Act without authorization from the Director or Commissioner against the assessees and in favour of the Department. Therefore, the High Court found no merit in the assessees' appeals on this specific jurisdictional issue.

What were the facts?

These appeals concern the Mavelikkara Government Servants Co-operative Bank Limited (ITA No. 38/2020) and M/s. Nooranad North Service Co-operative Bank Limited (ITA No. 35/2020). Both are co-operative banks located in Alappuzha District, Kerala. The appeals are filed against orders of the Income Tax Appellate Tribunal, Cochin Bench. The specific orders under challenge are ITA 317/COCH/2019 dated June 18, 2019, for Mavelikkara Government Servants Co-operative Bank Limited, and ITA 462/COCH/2019 dated October 24, 2019, for M/s. Nooranad North Service Co-operative Bank Limited. The respondent in both appeals is the Joint Director of Income Tax (I and CI), Kochi. The appeals were heard together by the High Court of Kerala.

What were the issues?

1. Whether the Income Tax Officer has the jurisdiction to proceed under the second proviso of Section 133(6) of the Income Tax Act, 1961, without the prior authorization of the Director or the Commissioner, as stipulated by the provision. Assessee's Contentions: The assessees contended that the Income Tax Officer lacked the necessary authority to issue notices or take action under the second proviso of Section 133(6) without obtaining the requisite authorization from higher authorities like the Director or Commissioner. They argued that such actions were beyond the officer's jurisdiction. Revenue's Contentions: The Revenue contended that the Income Tax Officer was empowered to proceed under the second proviso of Section 133(6) and that the actions taken were within their jurisdictional limits. They likely argued that the interpretation of the proviso did not necessitate the explicit mention of authorization in every instance of its application, or that such authorization was implicitly granted or not a prerequisite for the specific actions taken.

Which sections of the Income-tax Act were involved?

Section 133(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, COCHIN BENCH

F.NO.DIT(INTEL)/272A(2)(C)/2014-15 DATED 27.10.2014 OF THE ADDL. DIRECTOR OR INCOME TAX (INTELLIGENCE), KOCHI ANNEXURE-IIOF THE ORDER DATED 26.2.2019 IN ITA NO.723/ITG/EKM/CIT(A)-1/2014-15 OF THE COMMISSIONER OF INCOME TAX (APPEALS)-1, KOCHI

I.T. Appeal Nos. 38 & 35 of 2020 5 APPENDIX OF ITA 35/2020 PETITIONER'S/S EXHIBITS: ANNEXURE-IOF THE NOTICE DATED 2.9.2013 ISSUED BY THE INCOME TAX OFFICER (INTELLIGENCE), ALAPPUZHA ANNEXURE-IIOF THE APPELLANT'S REPLY DATED 12.10.2013 SUBMITTED TO THE INCOME TAX OFFICER (INTELLIGENCE), ALAPPUZHA AGAINST ANNEXURE 1 NOTICE ANNEXURE IIIOF THE RESPONDENT'S NOTICE DATED 1.6.2015 ISSUED TO THE APPELLANT. ANNEXURE IVOF THE APPELLANT'S REPLY DATED 12.6.2015 SUBMITTED TO THE RESPONDENT AGAINST ANNEXURE III NOTICE ANNEXURE VOF THE RESPONDENT'S ORDER DATED 22.12.2015 ISSUED TO THE APPELLANT ANNEXURE VIOF THE ORDER DATED 14.5.2019 ISSUED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-1, KOCHI IN ITA NO.99/ITG/EKM/CIT(A)-1/2015-16.

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