THE ARIYUR SERVICE CO-OPERATIVE BANK LTD, vs. THE INCOME TAX OFFICER

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WP(C)/13351/2019HC KeralaKLHC01033242201910 May 2019Author: HONOURABLE MRS. JUSTICE ANU SIVARAMAN4 pages
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What did the High Court hold?

The High Court held that the appeal preferred by the petitioner institution is liable to be considered and disposed of on merits before proceeding with the recovery of amounts in terms of the assessment orders. The Court directed the second respondent, the Commissioner of Income Tax (Appeals), to take up, consider, and pass appropriate orders on Exhibit P2 appeal at the earliest, at any rate, within three months from the date of receipt of a copy of the judgment. Furthermore, the Court ordered that coercive proceedings based on the original assessment order shall be kept in abeyance until orders are passed on the appeal. The ratio decidendi is that the appellate remedy should not be rendered infructuous by coercive recovery actions before its disposal, ensuring due process.

What were the facts?

The petitioner, The Ariyur Service Co-operative Bank Ltd., is a primary credit society that received an assessment order under the Income Tax Act. Aggrieved by this order, the petitioner filed a statutory appeal (Exhibit P2) and a stay petition (Exhibit P3) before the Commissioner of Income Tax (Appeals), the second respondent. Despite the pending appeal, demands were being raised based on the assessment order. The petitioner approached the High Court of Kerala seeking a direction for the disposal of their appeal before any recovery proceedings are initiated.

What were the issues?

1. Whether the appellate authority should consider and dispose of the statutory appeal filed by the petitioner before proceeding with the recovery of amounts demanded in the assessment order? (Question of law and fact, concerning the procedural fairness and the efficacy of the appellate remedy). Assessee's Contention: The petitioner argued that demands were being raised based on the assessment order, despite the pendency of their statutory appeal and stay petition before the appellate authority. They sought a direction for the disposal of the appeal before recovery. Revenue's Contention: The judgment does not record any specific contentions made by the revenue.

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
WP(C).13351/19 1 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MRS. JUSTICE ANU SIVARAMAN FRIDAY, THE 10TH DAY OF MAY 2019 / 20TH VAISAKHA, 1941 WP(C).No. 13351 of 2019 PETITIONER/S: THE ARIYUR SERVICE CO-OPERATIVE BANK LTD, KOTTOPADAM P.O, MANNARKKAD, PALAKKAD-678583, REPRESENTED BY ITS SECRETARY, N.P. KARTHIAYANI, AGED 47, W/O. CHANDRASEKHARAN. BY ADVS. SRI.HARISANKAR V. MENON SMT.MEERA V.MENON RESPONDENT/S: 1 THE INCOME TAX OFFICER WARD 4, AYAKAR BHAVAN, PALAKKAD-670014. 2 THE COMMISSIONER OF INCOME TAX (APPEALS) SAKTHAN NAGAR, THRISSUR-680021. OTHER PRESENT: SRI MOHAMMED RAFIQ-GOVERNMENT PLEADER THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 10.05.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).13351/19 2 ANU SIVARAMAN, J. ----------------------------------------------- W.P(C).No. 13351 of 2019 ----------------------------------------------- Dated this the 10th day of May, 2019

JUDGMENT Petitioner is a primary credit society which has been issued with assessment order under the Income Tax Act. Being aggrieved by the assessment order, the petitioner has preferred statutory appeal, Exhibit P2, before the 2nd respondent appellate authority under the Income Tax Act. The petitioner has also preferred Exhibit P3 stay petition in the appeal. However, it is contended that demands are being raised in terms of the assessment orders.

2.

Having heard the learned counsel for the petitioner as well as the learned standing counsel appearing for the respondents, I am of the opinion that the appeal preferred by the petitioner institution is liable to be considered and disposed of on merits before proceeding with the recovery of amounts in terms of the orders passed by the assessment authority. In the above view of the matter, there will be a direction to the 2nd respondent appellate authority to take up consider and pass appropriate orders on Exhibit P2 appeal preferred by the petitioner and to dispose of the same in accordance with law at the earliest, at any rate, within three months from the date of receipt of a copy of this judgment. Till orders are passed on the appeal, as directed above, coercive proceedings on the basis of the original order shall be kept in abeyance. Writ petition is ordered accordingly.

ANU SIVARAMAN JUDGE vgs10/5

Appendix — schedule of exhibits
APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 COPY OF ASSESSMENT ORDER ISSUED BY THE 1ST RESPONDENT FOR THE YEAR 2014-15 DATED 14- 12-2016. EXHIBIT P2 COPY OF APPEAL FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE YEAR 2014-15 DATED 10.01.2017. EXHIBIT P3 COPY OF STAY PETITION FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE YEAR 2014-15 DATED 18.04.2019.

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