PARIYARAM SERVICE CO-OPERATIVE BANK LIMITED vs. THE INCOME TAX OFFICER

WP(C)/21023/2019HC KeralaKLHC01053768201902 August 2019Author: HONOURABLE MR.JUSTICE S.V.BHATTI4 pages

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What did the High Court hold?

The High Court, perusing the documents, was prima facie satisfied that a case was made out for issuing necessary directions to the second respondent (The Commissioner of Income Tax (Appeals)) to dispose of the stay petition (Ext.P3). The Court acknowledged the limited prayer and the grounds presented. Consequently, the Court directed the appellate authority to consider and dispose of the stay application as early as possible, preferably within two months from the date of receipt of the judgment. Additionally, the respondents were directed not to take coercive steps or recover the amounts determined in the orders under appeal for ten weeks from the date of the order. The judgment did not decide on the merits of the appeal or the stay petition itself, but rather on the procedural aspect of expeditious disposal.

What were the facts?

The petitioner, Pariyaram Service Co-operative Bank Limited, filed an appeal (Ext.P2) against an assessment order (Ext.P1) passed under Section 143(3) of the Income Tax Act, 1961. Along with the appeal, the petitioner filed a stay petition (Ext.P3). The petitioner contended that the mere pendency of an appeal does not automatically grant a stay. They argued that delays in disposing of the stay petition could lead to the assessing officer initiating recovery proceedings, rendering the statutory appeal ineffective. The petitioner sought a direction for the appellate authority to consider and dispose of the stay petition expeditiously, as provided by law to protect the appellant's interest pending appeal.

What were the issues?

1. Whether the High Court can issue a direction to the appellate authority to consider and dispose of a stay petition expeditiously, when the recovery of disputed tax amount is being pursued by the assessing officer pending the appeal? The assessee argued that the mere filing of an appeal or pendency of the stay petition does not amount to a stay. They contended that delay in disposing of the stay petition would allow the assessing officer to take recovery steps, which could render the appeal academic or ineffective. The assessee relied on the principle that the law provides for protecting the interest of an appellant pending appeal and that orders on stay petitions should be passed expeditiously. The revenue did not record any specific arguments in the judgment.

Which sections of the Income-tax Act were involved?

Section 143(3)

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 S.V.BHATTI FRIDAY, THE 02ND DAY OF AUGUST 2019 / 11TH SRAVANA, 1941 WP(C).No.21023 of 2019 PETITIONER: PARIYARAM SERVICE CO-OPERATIVE BANK LIMITED NO. 593, PARIYARAM, THRISSUR-680 721, REPRESENTED BY ITS SECRETARY SRI. ANTONY THOMAS. BY ADV. SRI.K.S.HARIHARAN NAIR RESPONDENTS: 1 THE INCOME TAX OFFICER WARD 2(4), RANGE 2, AAYAKAR BHAVAN, SAKTHAN THAMPURAN NAGAR, THRISSUR-PIN-680 001. 2 THE COMMISSIONER OF INCOME TAX (APPEALS) AAYAKAR BHAVAN, SAKTHAN THAMPURAM NAGAR, THRISSUR, PIN-680 001 SC SRI JOSE JOSEPH THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 02.08.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.21023 of 2019 -2-

JUDGMENT The petitioner filed appeal in Ext.P2 aggrieved by the order of assessment in Ext.P1 made under Section 143 (3) of the Income Tax Act, 1961. The petitioner has filed the appeal with Ext.P3 stay petition. The petitioner prays for appropriate direction to the appellate authority to consider and dispose of Ext.P3 expeditiously.

The case of petitioner is that either the mere filing of appeal or mere pendency of appeal does not amount to granting stay by the appellate authority. The delay in considering and disposing of Ext.P3 results in the assessing officer taking steps for recovering the tax amount which is under challenge in Ext.P2. The assessing officer, if is successful in his effort the statutory appeal would become either academic or ineffective. It is further contended by the petitioner that in the manner the law provides for protecting the interest of appellant pending appeal, the order on stay petition is passed expeditiously. Hence the writ petition.

WP(C).No.21023 of 2019 -3-

Perused Exts. P1, P2, P3. Prima facie I am satisfied that a case is made out for issuing necessary directions to 2nd respondent to dispose of the stay petition in Ext.P3. Having regard to the limited prayer and the grounds referred to above, this Court is satisfied that the writ petition can be disposed of by this order: (a) The appellate authority/2nd respondent considers and disposes of Ext.P3 application as early as possible, preferably within two months from the date of receipt of copy of this judgment. (b) The respondents are directed not to take coercive steps or recover the amounts determined in the orders under appeal for ten weeks from today. S.V.BHATTI JUDGE JS

WP(C).No.21023 of 2019 -4-

Appendix — schedule of exhibits

APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 COPY OF ASSESSMENT ORDER DATED 03.11.2017 ISSUED BY THE 1ST RESPONDENT FOR THE ASSESSMENT YEAR 2015-16. EXHIBIT P2 COPY OF APPEAL MEMORANDUM DATED 07.12.2017 AGAINST EXT. P1. EXHIBIT P3 COPY OF THE STAY PETITION ON STATUTORY APPEAL BEFORE THE 2ND RESPONDENT DATED 26.07.2019. RESPONDENTS'S/S EXHIBITS: NIL

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