M/S. THURUTHIPURAM SERVICE CO-OPERATIVE BANK LTD. NO.1789, vs. THE INCOME TAX OFFICER, CORPORATE WARD ,

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WP(C)/1220/2024HC KeralaKLHC01002632202411 January 2024Author: HONOURABLE MR. JUSTICE D. K. SINGH5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that it would not exercise parallel jurisdiction with the appellate authority for granting an interim order as prayed for by the petitioner. Consequently, the writ petition was disposed of with a direction to the 3rd respondent (the appellate authority) to consider and pass appropriate orders, in accordance with law, on the stay petition (Ext.P3) expeditiously, preferably within a period of two months. The principle established is that writ courts should generally refrain from interfering with the appellate process by granting interim relief that the appellate authority itself is empowered to grant, thereby avoiding parallel proceedings. The High Court's role was limited to ensuring the expeditious disposal of the pending application before the appellate authority.

What were the facts?

The petitioner, M/s. Thuruthipuram Service Co-operative Bank Ltd., filed its income tax return for Assessment Year 2020-21 on January 6, 2021. The case was selected for complete scrutiny to verify claims related to Schedule BP, high creditors/liabilities, and Section 80P deductions. Notices under Section 143(2) and 142(1) were issued. The assessing authority denied the petitioner's claim for deduction of interest earned on deposits, assessing the interest income at Rs. 18,17,072/- under Sections 143(3) read with 144B. Interest was charged, and penalty proceedings under Section 270A were initiated. The petitioner filed an appeal and a stay petition against the assessment order.

What were the issues?

1. Whether the High Court should exercise parallel jurisdiction with the appellate authority to grant an interim order in a writ petition? Assessee's Contention: The petitioner sought a direction for the 3rd respondent (Deputy Commissioner of Income Tax/Joint Commissioner of Income Tax (Appeals)) to expeditiously decide its appeal and stay petition against the assessment order. The petitioner relied on the urgency of the matter and the need for interim relief. Revenue's Contention: The judgment does not record any specific contentions from the revenue regarding the issues before the High Court. However, the High Court's decision implies that it would not exercise parallel jurisdiction with the appellate authority.

Which sections of the Income-tax Act were involved?

Section 143(2),Section 142(1),Section 143(3),Section 144B,Section 80P,Section 270A

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH THURSDAY, THE 11TH DAY OF JANUARY 2024 / 21ST POUSHA, 1945 WP(C) NO. 1220 OF 2024 PETITIONER/S: M/S. THURUTHIPURAM SERVICE CO-OPERATIVE BANK LTD. NO.1789, THURUTHIPURAM P.O., PUTHENVELLIKARA, ERNAKULAM- 680667, REPRESENTED BY ITS SECRETARY, SHYMA. BY ADVS. M.M.MONAYE V.P.NARAYANAN M.PAUL VARGHESE K.V.SANOSH ANJANA SUGUNAN RESPONDENT/S: 1 THE INCOME TAX OFFICER, CORPORATE WARD , CENTRAL REVENUE BUILDING, IS PRESS ROAD, ERNAKULAM, PIN - 682018 2 THE ASSESSMENT UNIT NATIONAL E-ASSESSMENT CENTER, INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, ROOM NO. 401, 2ND FLOOR, E-RAMP, JAWAHARLAL STADIUM, NEW DELHI-110003,REPRESENTED BY COMMISSIONER OF INCOME TAX. 3 THE DEPUTY COMMISSIONER OF INCOME TAX /JOINT COMMISSIONER OF INCOME TAX (APPEALS), INCOME TAX DEPARTMENT, NATIONAL FACELESS APPELLATE CENTER, NEW DELHI, PIN - 110003 THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 11.01.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 1220 OF 2024 2

J U D G M E N T The present writ petition has been filed, inter alia seeking a relief in the nature of writ/direction to the 3rd respondent to decide appeal and stay petition at Exts.P2 and P3, respectively, filed against the assessment order in Ext.P1 for the assessment year 2020-21, expeditiously.

2.

The petitioner filed return of its income for the assessment year 2020-21 on 6.1.2021. The case of the petitioner/assessee was selected for complete scrutiny under CASS to verify, the claim of any other amount allowable as deduction in Schedule BP, high creditors/liabilities and deduction under Section 80P.

3.

A notice under Section 143(2) of the Income Tax Act, 1961 ('Act', for short) dated 29.6.2021 was served on the petitioner. Thereafter, notices under Section 142(1) of the Act

WP(C) NO. 1220 OF 2024 3 dated 3.12.2021 and 7.2.2022 were issued. The assessing authority denied the petitioner's claim for deduction of interest earned by it on deposits. The petitioner's interest income has been assessed at Rs.18,17,072/- under Sections 143(3) read with 144B of the Act. Interest has been charged. Penalty proceedings under Section 270A of the Act has been directed to be initiated against the petitioner.

4.

The petitioner is aggrieved by the assessment order as stated above. This Court would not like to exercise parallel jurisdiction with the appellate authority for granting an interim order as prayed for by the learned counsel for the petitioner.

5.

In view thereof, the present writ petition is disposed of with direction to the 3rd respondent to consider and pass appropriate orders, in accordance with law, on the stay petition, Ext.P3,

WP(C) NO. 1220 OF 2024 4 expeditiously, preferably within a period of two months. Pending interlocutory application, if any, in the present writ petition stands dismissed. DINESH KUMAR SINGH

JUDGE jg

WP(C) NO. 1220 OF 2024 5

Appendix — schedule of exhibits
APPENDIX OF WP(C) 1220/2024 PETITIONER EXHIBITS Exhibit P1 A TRUE COPY OF THE ASSESSMENT ORDER ALONG WITH THE DEMAND DATED 27.09.2022 ISSUED BY THE 2ND RESPONDENT FOR AY 2020-21 Exhibit P2 THE TRUE COPY OF THE MEMORANDUM OF APPEAL IN FORM NO. 35 FOR THE ASSESSMENT YEAR 2020-21 DATED 28.10.2022 FILED BEFORE THE 3RD RESPONDENT Exhibit P3 THE TRUE COPY OF THE STAY PETITION FILED BY THE PETITIONER BEFORE THE 3RD RESPONDENT DATED 28-10-2022 Exhibit P4 THE TRUE COPY OF CONDONATION OF DELAY PETITION FILED BY THE PETITIONER BEFORE THE 3RD RESPONDENT DATED 28-10-2022 Exhibit P5 THE TRUE COPY OF THE NOTICE ISSUED BY THE 1ST RESPONDENT DATED 25.12.2023 FOR AY 2020- 21

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