THE MANNARKKAD SERVICE vs. THE INCOME TAX OFFICER

WP(C)/13377/2019HC KeralaKLHC01033250201910 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 orders passed by the assessment authority. Consequently, a direction was issued to the second respondent, the Commissioner of Income Tax (Appeals), to take up, consider, and pass appropriate orders on Exhibit P2 appeal at the earliest, within three months from the date of receipt of a copy of the judgment. Until orders are passed on the appeal, coercive proceedings based on the original assessment order are to be kept in abeyance. The principle is that statutory appeals should be decided before enforcement of the original demand, and recovery should be stayed pending such decision.

What were the facts?

The petitioner, Mannarkkad Service Co-operative Bank Ltd. (later corrected to Mannarkkad Rural Service Co-operative Bank Ltd.), a primary credit society, received an assessment order under the Income Tax Act. Aggrieved by this order, the petitioner filed a statutory appeal (Exhibit P2) before the Commissioner of Income Tax (Appeals), the second respondent. A stay petition (Exhibit P3) was also filed. Despite the pending appeal, demands were being raised based on the assessment order. The petitioner filed a writ petition before the High Court of Kerala seeking a direction to consider and dispose of their appeal before any recovery proceedings are initiated.

What were the issues?

1. Whether the appellate authority should be directed to consider and dispose of the statutory appeal filed by the petitioner before coercive recovery proceedings are initiated based on the assessment order. (Question of procedure and administrative direction). Assessee's Contention: The petitioner argued that their statutory appeal and stay petition were pending before the appellate authority, and recovery actions were being pursued based on the assessment order, which should not happen while the appeal is under consideration. Revenue's Contention: The judgment does not record any specific contentions made by the respondents (Income Tax Officer and Commissioner of Income Tax (Appeals)).

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 MRS. JUSTICE ANU SIVARAMAN FRIDAY, THE 10TH DAY OF MAY 2019 / 20TH VAISAKHA, 1941 WP(C).No. 13377 of 2019 PETITIONER: THE MANNARKKAD SERVICE CO-OPRATIVE BANK LTD. NO.P22, 8/767, MANNARKKAD, PALAKKAD-678582, REPRESENTED BY ITS SECRETARY, M.PURUSHOTHAMAN, AGED 52, S/O.MADHAVAN NAIR. BY ADVS. SRI.HARISANKAR V. MENON SMT.K.KRISHNA SMT.MEERA V.MENON RESPONDENTS: 1 THE INCOME TAX OFFICER WARD 4, AYAKAR BHAVAN, PALAKKAD-678014. 2 THE COMMISSIONER OF INCOME TAX(APPEALS) SAKTHAN N AGAR, THRISSUR-680021. OTHER PRESENT: SRI JOSE JOSEPH- STANDING COUNSEL THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 10.05.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: The name of the petitioner in the cause title of the judgment dated 10.5.2019 in W.P.(C) No.13377/19 is corrected as “The Mannarkkad Rural Service Co-operative Bank Ltd.” as per order dated 26.8.2019 in IA No.1/2019 in WPC No.13377/19. W.P.(C).No.13377/19 2

JUDGMENT 1.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. 3.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 sj

Appendix — schedule of exhibits

APPENDIX PETITIONER'S EXHIBITS: EXHIBIT P1 COPY OF ASSESSMENT ORDER ISSUED BY THE 1ST RESPONDENT FOR THE YEAR 2014-15 EXHIBIT P2 COPY OF APPEAL FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE YEAR 2014-15 EXHIBIT P3 COPY OF STAY PETITION FILED BY THE PETITIONER BEFORE THE 2ND RESPONDENT FOR THE YEAR 2014-15. True copy PS to Judge

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