AMBALAPAD SERVICE CO-OPERATIVE BANK LTD. NO. 759 vs. THE INCOME TAX OFFICER WARD 2(1)

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WP(C)/19666/2019HC KeralaKLHC01050281201919 July 2019Author: HONOURABLE MR. JUSTICE A.MUHAMED MUSTAQUE4 pages
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What did the High Court hold?

The High Court of Kerala modified the condition imposed in the impugned order. The Court held that the precondition of remitting 20% of the demand should be modified to exclude the claim referable under Section 80P(2)(d) of the Income Tax Act, 1961. This decision was based on the precedent set by a previous judgment of the same Court (Ext.P7) which granted an absolute stay in similar circumstances involving Section 80P(2)(d) claims. The Court clarified that if any other demand existed beyond the Section 80P(2)(d) claim, the petitioner would still be bound by the conditional stay to that extent. The operative direction was to modify the stay order to exclude the 80P(2)(d) claim from the 20% pre-deposit requirement.

What were the facts?

The petitioner, Ambalapad Service Co-operative Bank Ltd., filed a writ petition challenging an order (Ext.P8) passed by the Commissioner of Income Tax (Appeals). The impugned order imposed a precondition for granting a stay on the demand, requiring the petitioner to remit 20% of the disputed amount. The petitioner argued that the appeal primarily concerned a claim under Section 80P(2)(d) of the Income Tax Act, 1961. The petitioner relied on a previous judgment of the High Court of Kerala in a similar matter where an absolute stay was granted concerning claims under Section 80P(2)(d). The present writ petition was filed before the High Court of Kerala at Ernakulam.

What were the issues?

1. Whether the precondition of remitting 20% of the demand for granting a stay, as imposed by the Commissioner of Income Tax (Appeals), is justified, considering the nature of the claim under Section 80P(2)(d) of the Income Tax Act, 1961? Assessee's contentions: The petitioner argued that the issue in appeal was confined to a claim under Section 80P(2)(d) of the Income Tax Act, 1961. They relied on a previous judgment of the High Court of Kerala (Ext.P7) which granted an absolute stay in similar matters involving claims under Section 80P(2)(d). Therefore, the conditional stay imposed by the respondent authority was inappropriate. Revenue's contentions: The judgment does not record any specific contentions made by the revenue in response to the writ petition.

Which sections of the Income-tax Act were involved?

Section 80P(2)(d)

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 A.MUHAMED MUSTAQUE FRIDAY, THE 19TH DAY OF JULY 2019 / 28TH ASHADHA, 1941 WP(C).No.19666 of 2019 PETITIONER: AMBALAPAD SERVICE CO-OPERATIVE BANK LTD. NO. 759 NO.XI/57, P.O. KUNDUKAD-680 028, THRISSUR, REPRESENTED BY ITS SECRETARY. BY ADVS. SRI.M.SASINDRAN SRI.S.SHYAM KUMAR RESPONDENTS: 1 THE INCOME TAX OFFICER WARD 2(1) AYAKAR BHAVAN, INCOME TAX OFFICE, SHAKTHANTHAMPURAM NAGAR, THRISSUR-680 001. 2 THE COMMISSIONER OF INCOME TAX (APPEALS) 3RD FLOOR, AAYAKAR BHAVAN, THRISSUR-680 001. SRI.CHRISTOPHER ABRAHAM, SC IT SMT.TUSHARA JAMES, GP THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 19.07.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.19666 of 2019 2

JUDGMENT The writ petition is filed challenging Ext.P8 order in an income tax appeal. By the impugned order, as a precondition to grant stay petition was directed to remit 20% of the demand.

2.

The learned counsel for the petitioner submitted that the issue in appeal is confined to a claim under Section 80 P(2)(d) of the Income Tax Act, 1961 and this Court in similar matter, granted absolute stay. Ext.P7 is the judgment of this Court. In the light of fact that in Ext.P7 judgment, this Court granted an absolute stay in the light of provision under Section 80 P(2)(d) of the Income Tax Act, the condition in the impugned order is modified to exclude such claim as referable under Section 80 P(2)(d) of the Income Tax Act. It is made clear that if any other demand exists, the petitioner is bound by conditional stay to the extent as above. The writ petition is disposed of as above. A.MUHAMED MUSTAQUE JUDGE APPENDIX PETITIONER'S EXHIBITS: EXHIBIT P1 AOF THE CERTIFICATE OF CLASSIFICATION DATED 3.10.2016 ISSUED BY THE JOINT REGISTRAR (GENERAL) OF CO- OPERATIVE SOCIETIES, THRISSUR. EXHIBIT P1 A AOF THE CERTIFICATE ISSUED BY THE ASSISTANT REGISTRAR (GENERAL) THALAPPILLY DATED 21.1.2019. EXHIBIT P2 AOF THE ASSESSMENT ORDER DATED 21.12.2018 FOR THE ASSESSMENT YEAR 2016- 2017. EXHIBIT P3 AOF THE DEMAND NOTICE DATED 00.12.2018. EXHIBIT P4 AOF THE APPEAL MEMORANDUM FILED BEFORE THE 2ND RESPONDENT. EXHIBIT P4 A AOF THE STAY PETITION FILED BEFORE THE 2ND RESPONDENT. EXHIBIT P5 AOF THE NOTICE UNDER SECTION 221(1) OF THE INCOME TAX ACT. EXHIBIT P6 AOF THE JUDGMENT DATED 9.4.2019 IN WPC 11285 OF 2019. EXHIBIT P7 AOF THE JUDGMENT DATED 21.12.2017 IN WPC NO.38566 OF 2017. EXHIBIT P8 AOF THE ORDER DATED 25.6.2019 EXT.P4(A) STAY PETITION IN ITA NO.270/18-

19.

RESPONDENTS' EXHIBITS:- NIL SAS/19/07/2019 //// P.A. TO JUDGE

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