THE KODUR SERVICE CO-OPERATIVE BANK LIMITED F 1523, vs. THE COMMISSIONER OF INCOME TAX(APPEALS)
What did the High Court hold?
The High Court held that it was not inclined to interfere with the conditions imposed by the Commissioner of Income Tax (Appeals) in Ext.P6 order, particularly in light of CBDT circulars permitting up to 20% of the disputed tax as a condition for stay. The Court noted that the petitioners had also failed to comply with the extended deadlines granted by the High Court itself. However, as an exceptional measure, the Court directed the Commissioner of Income Tax (Appeals) to dispose of the appeals within three months from the date of receiving a copy of the judgment. The Court further stipulated that if the petitioners deposit 10% of the demand within four weeks from the date of the judgment, they would be entitled to a stay of the assessment orders until the disposal of their appeals. Failure to comply with this new condition would disentitle them to the stay, and authorities could proceed with recovery. The Court explicitly stated that this order should not be treated as a precedent.
What were the facts?
The petitioners, Kodur Service Co-operative Bank Limited and three other co-operative banks, filed writ petitions challenging an order (Ext.P6) passed by the Commissioner of Income Tax (Appeals). The Commissioner had imposed conditions for granting a stay of assessment orders pending appeal. These conditions included paying 10% of the disputed demand by April 30, 2019, and another 10% by May 31, 2019, with the balance stayed for six months or until the appeal was decided. The High Court, upon admission, had extended the deposit deadlines by one month. However, the petitioners failed to comply with these extended deadlines. The Revenue contended that the petitioners could not seek expeditious disposal of appeals while not paying any tax.
What were the issues?
1. Whether the conditions imposed by the Commissioner of Income Tax (Appeals) for granting stay of demand are arbitrary and require interference by this Court, considering the petitioners' contention against the discretion exercised in imposing these conditions. 2. Whether the petitioners are entitled to an expeditious disposal of their appeals pending before the Commissioner of Income Tax (Appeals) for the assessment year 2016-2017, despite non-compliance with the stay conditions. Assessee's Contention: The petitioners argued that the discretion exercised by the Commissioner in imposing stay conditions was flawed. They also sought expeditious disposal of their appeals. Revenue's Contention: The Revenue opposed granting a direction for expeditious disposal of appeals, arguing that the petitioners could not simultaneously avoid paying tax and demand speedy resolution of their appeals.
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Heard together (4 matters)
Read from the judgment's own cause title. This page is filed under one of them.
Cause title — parties, addresses and appearances
JUDGMENT All these writ petitions are filed challenging Ext.P6 order passed by the 1st respondent. The 1st respondent while considering the prayers of the petitioners/assessees for granting stay of assessment orders under challenge in the appeals before him imposed the following conditions; 3.”considering the facts and merits of the case, the appellant is directed to pay 10% of the demand by 30.04.2019 and another 10% by 31.05.2019 and produce copy of challan to the Assessing Officer. The balance demand is stayed for a limited period of six months or disposal of appeal whichever is earlier.
Assessing Officer is directed to monitor the payment of demand which shall be remitted by the appellant in two equal installments by the end of April and May, 2019. The assessing officer is also directed to report the default in this matter to be undersigned”.
Hence the following writ petitions;
The petitioners raise several grounds against the discretion exercised by the 1st respondent while imposing the -6- conditions excerpted above. This court on admission in W.P.(C). Nos. 12806 of 2019, 12843 of 2019 & 12817 of 2019 had imposed the following condition for continuation of stay of recovery of impugned tax; “'The time prescribed by the Commissioner of Income Tax ( Appeals) for deposit of 10% of the demand by 30.04.2019, and another 10% by 31.05.2019, will be stand extended for a further period of one month”.
The said condition is also not complied with. This Court is not pursued to interfere with the condition imposed in Ext.P6 order particularly keeping in view the CBDT circular issued which stipulates 20% of disputed tax could be imposed as condition for granting the stay. The challenge hence fails.
After the order is dictated Sri. Sivadas, the learned counsel for the petitioners requests for expeditious disposal of the appeals pending before the 1st respondent for the assessment year 2016-2017. -7-
Mr. Christopher Abraham, the learned standing counsel for the respondents opposes issuing a direction for disposal of appeal within time frame as may be stipulated by this Court; for, according to him, the petitioners cannot be allowed to have it both ways, i.e. not paying any tax and at the same time insist for expeditious disposal of appeals.
I have taken note of the order dated 30.4.2019 passed by this Court in these writ petitions and also the issue for consideration before the 1st respondent. This Court as an exceptional case directs the 1st respondent to dispose of the appeals within three months from the date of receipt of copy of this judgment.
The petitioners, if complies with the condition of depositing 10% within four weeks from today, the petitioners are entitled to the stay of the assessment orders under challenge in the subject appeals till its disposal thereof. The petitioners, if fail, to comply with the condition now stipulated by this court, it is made clear that the petitioners are not entitled for the benefit of the stay -8- orders. The authorities can proceed to recover the amount in accordance with law. This order shall not be treated as a precedent. S.V.BHATTI JUDGE SJ -9-
Appendix — schedule of exhibits
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