KANIPPAYYUR SERVICE CO-OPERATIVE BANK LTD., vs. THE INCOME TAX OFFICER
What did the High Court hold?
The High Court, while hearing the writ appeal, acknowledged that the appellant is a Co-operative Bank and its liability for payment cannot be disputed prima facie. However, the Court was inclined to show indulgence by extending the time limit for depositing the amount to satisfy the condition. Consequently, the impugned judgment in the writ petition was modified to allow the deposit of 20% of the disputed amount under demand within a period of six weeks from the date of the writ appeal's judgment. The writ appeal was disposed of with this modification. The principle here is that while tax demands are serious, courts may grant procedural leniency in deposit conditions for appeals, especially for institutions like co-operative banks, provided there is a prima facie case and a willingness to comply with modified terms.
What were the facts?
The appellant, Kanippayyur Service Co-operative Bank Ltd., is in appeal against a judgment of the High Court of Kerala. The High Court had modified a condition imposed by the Commissioner of Income Tax Appeals (CIT(A)) for granting an interim stay on a tax demand for assessment year 2013-14. Initially, the CIT(A) had granted a stay subject to a 30% deposit. The appellant failed to comply, leading to a notice under Section 221(1) of the Income Tax Act. The writ petition sought to challenge this notice and expedite the appeal. The High Court reduced the deposit condition to 20% and directed the appeal to be disposed of within six months, with a stay on recovery contingent on timely deposits. The appellant is aggrieved by this modified condition.
What were the issues?
1. Whether the High Court was justified in directing the appellant to deposit 20% of the tax demand for assessment year 2013-14 pending disposal of the statutory appeal (mixed question of law and fact, concerning the powers of the High Court under Article 226 and the principles of granting interim relief). Assessee's Contention: The appellant sought indulgence from the Court to extend the period stipulated for depositing the first installment by a further period of one month. Revenue's Contention: The revenue, represented by the Income Tax Officer and Commissioner of Income Tax Appeals, did not explicitly record arguments in the judgment, but their position was represented by the Income Tax Department's counsel. The judgment notes that the appellant's liability prima facie cannot be disputed.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
J U D G M E N T Petitioner in W.P.(C) No.10405 of 2019 is in appeal aggrieved by the judgment dated 3rd April, 2019, to the extent it directed deposit of 20% of the amount of tax determined for the assessment year 2013-14, pending disposal of Ext.P3 statutory appeal filed against the assessment. The respondents herein are the respondents in the writ petition.
In the statutory appeal instituted by the appellant against the assessment, Ext.P4 interim stay was granted subject to condition of deposit of 30% of the demand. The appellant failed to comply with the condition. As a consequence, Ext.P8 Notice under Section 221(1) of the Income Tax Act,1961 was issued. The writ petition was filed challenging the said notice and also seeking direction for disposal of Ext.P3 appeal by the appellate authority. The learned Judge was pleased to interfere with the condition stipulated by the appellate authority and reduced the amount insisted for deposit, to 20%. Therefore relief was granted staying the recovery, subject to condition of the appellant depositing 10% of the tax demanded within six weeks from the date of the judgment and another 10% within six weeks thereafter. It was made clear that, in default of payment, the stay granted will be deemed to have been vacated. There was also a direction issued to the appellate authority to consider and dispose of the appeal as expeditiously as possible, at any rate within a period of six months. It is aggrieved by the said judgment, the above writ appeal is filed.
Upon hearing arguments of the counsel for the appellant and Sri. Christopher Abraham, learned counsel for the respondents, we are not persuaded to interfere with the judgment impugned. Having confronted with the situation, learned counsel for the appellant sought indulgence of this Court to extend the period stipulated for deposit of the first instalment by a further period of one month from today.
We take note of the fact that the appellant is a Co-operative Bank and the liability for payment of the amount, prima facie, cannot be disputed. However, we are inclined to show indulgence in extending the time limit stipulated, in order to facilitate deposit of the amount to satisfy the condition.
Hence, the impugned judgment in W.P.(C) No.10405 of 2019 is modified to the extent of allowing deposit of 20% of the disputed amount under demand within a period of six weeks from today. The writ appeal is disposed of as above. C.K.ABDUL REHIM JUDGE R. NARAYANA PISHARADI JUDGE DST //// P.A. To Judge
More judgments on Section 221(1)
- Ruby Singh, Delhi vs DCIT, CC-8, DelhiITA 3044/DEL/2026[2019-20]Status: Disposed31 Aug 2026AY 2019-20
- Ruby Singh, Delhi vs DCIT, CC-8, DelhiITA 3043/DEL/2026[2018-19]Status: Disposed31 Aug 2026AY 2018-19
- Ruby Singh, Delhi vs DCIT, CC-8, DelhiITA 3042/DEL/2026[2016-17]Status: Disposed31 Aug 2026AY 2016-17
- Kamuben Ramanlal Patel, Daman vs Income Tax Officer, DamanITA 798/SRT/2025[2017-18]Status: Disposed10 Aug 2026AY 2017-18
- Bank of Baroda (E-Vijaya Bank), Delhi vs Addl Commissioner of Income Tax…ITA 1864/DEL/2026[2013-14]Status: Disposed5 Aug 2026AY 2013-14
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