VATTIYOORKAVU SERVICE CO-OPERATIVE BANK LTD.NO.1652, vs. THE INCOME TAX OFFICER,

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WP(C)/18484/2019HC KeralaKLHC01047412201908 July 2019Author: HONOURABLE MR.JUSTICE S.V.BHATTI4 pages
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What did the High Court hold?

The High Court held that a case was made out for issuing necessary directions to the 2nd respondent (appellate authority) to dispose of the stay petitions. The Court was satisfied that, given the limited prayer and the grounds presented, the writ petition could be disposed of with specific directions. The appellate authority was directed to consider and dispose of the stay petitions (Exts.P4 and P8) 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 two months from the date of the order. The ratio decidendi is that the High Court can direct expeditious disposal of stay petitions to prevent appeals from becoming infructuous due to premature recovery proceedings.

What were the facts?

The petitioner, Vattiyoorkavu Service Co-operative Bank Ltd., filed appeals (Exts.P3 and P7) against assessment orders (Exts.P2 and P6) passed under Section 271B of the Income Tax Act. Along with these appeals, the petitioner filed stay petitions (Exts.P4 and P8). The petitioner approached the High Court of Kerala through a writ petition seeking a direction for the appellate authority (2nd respondent) to expeditiously consider and dispose of these stay petitions. The petitioner argued that the delay in disposing of stay petitions could lead to recovery proceedings by the assessing officer, rendering the appeals ineffective. The High Court perused the relevant documents and found a prima facie case for issuing directions.

What were the issues?

1. Whether the High Court should direct the appellate authority to expeditiously consider and dispose of stay petitions filed by the assessee pending appeal. Assessee's Contentions: - The mere filing or pendency of an appeal does not automatically grant a stay. - Delay in disposing of stay petitions can result in the assessing officer initiating recovery steps for the disputed tax amount. - Such recovery actions could render the statutory appeal either academic or ineffective. - The law provides for the expeditious disposal of stay orders to protect the appellant's interest pending appeal. Revenue's Contentions: - The judgment records no specific contentions from the revenue regarding the disposal of stay petitions.

Which sections of the Income-tax Act were involved?

Section 271B

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 MONDAY, THE 08TH DAY OF JULY 2019 / 17TH ASHADHA, 1941 WP(C).No.18484 of 2019 PETITIONER/S: VATTIYOORKAVU SERVICE CO-OPERATIVE BANK LTD.NO.1652, REPRESENTED BY ITS SECRETARY, VATTIYOORKAVU P.O., THIRUVANANTHAPURAM DISTRICT - 695 013. BY ADVS. SRI.T.R.HARIKUMAR SRI.ARJUN RAGHAVAN RESPONDENT/S: 1 THE INCOME TAX OFFICER, WARD - 2 (1), OFFICE OF THE JOINT COMMISSIONER OF INCOME TAX, RANGE-2, 1ST FLOOR, AYAKAR BHAVAN, KOWDIAR, THIRUVANANTHAPURAM DISTRICT - 695 003. 2 THE COMMISSIONER OF INCOME TAX (APPEALS), THIRUVANANTHAPURAM - 695 003. SC SRI JOS WINSON FOR SRI CHRISTOPHER ABRAHAM THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08.07.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No.18484 of 2019 2

JUDGMENT The petitioner filed appeals in Exts.P3 and P7 aggrieved by the orders of assessment in Exts.P2 and P6 made under Section 271 B of the Income Tax Act. The petitioner has filed the appeals with Exts.P4 and P8 stay petitions. The petitioner prays for appropriate direction to the appellate authority to consider and dispose of Exts.P4 and P8 expeditiously.

2.

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 Exts.P4 and P8 results in the assessing officer taking steps for recovering the tax amount which is under challenge in Exts.P3 and P7. 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 orders on stay petitions are passed expeditiously.

Hence the writ petition.

3.

Perused Exts.P2 and P6 assessment orders, P3 and P7 appeals and P4 and P8 stay petitions. Prima facie I am satisfied that a case is made out for issuing necessary directions to the 2nd respondent to dispose of the stay petitions in Exts.P4 and P8. 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 Exts.P4 and P8 stay petitions 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 two months from today. S.V.BHATTI JUDGE

Appendix — schedule of exhibits
APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 A TRUE COPY OF THE REPLY FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT DATED 07/01/2019. EXHIBIT P2 A TRUE COPY OF THE ORDER PASSED BY THE 1ST RESPONDENT DATED 30/05/2019 UNDER SECTION 271 B OF THE INCOME TAX ACT ALONG WITH NOTICE OF DEMAND UNDER SECTION 156. EXHIBIT P3 A TRUE COPY OF THE ONLINE APPEAL DATED 14/06/2019 FILED BEFORE THE 2ND RESPONDENT. EXHIBIT P4 A TRUE COPY OF THE STAY PETITION FILED IN EXT.P3 APPEAL DATED 13/06/2019. EXHIBIT P5 A TRUE COPY OF THE REPLY FILED BY THE PETITIONER BEFORE THE 1ST RESPONDENT DATED 29/01/2019. EXHIBIT P6 A TRUE COPY OF THE ORDER DATED 13/05/2019 PASSED BY THE 1ST RESPONDENT UNDER SECTION 271 B OF THE INCOME TAX ACT ALONG WITH NOTICE OF DEMAND UNDER SECTION 156. EXHIBIT P7 A TRUE COPY OF THE ONLINE APPEAL DATED 28/05/2019 FILED BEFORE THE 2ND RESPONDENT. EXHIBIT P8 A TRUE COPY OF THE STAY PETITION FILED IN EXT.P7 APPEAL DATED 02/07/2019. EXHIBIT P9 A TRUE COPY OF THE JUDGMENT DATED 03/04/2019 IN WP(C) NO.10419 OF 2019. sd

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