THE ALANALLUR SERVICE CO-OPERATIVE BANK LTD.NO.F.1178 vs. THE INCOME TAX OFFICER
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. Consequently, the court directed the 2nd respondent appellate authority 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 court did not decide on the merits of the assessment itself, but rather on the procedural aspect of recovery pending appeal.
What were the facts?
The petitioner, The Alanallur 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 2nd respondent, the Commissioner of Income Tax (Appeals). Despite the pending appeal, demands were being raised based on the assessment order. The petitioner approached the High Court of Kerala seeking intervention to prevent recovery proceedings until the appeal was decided.
What were the issues?
1. Whether the recovery of amounts based on the assessment order should be stayed pending the disposal of the statutory appeal filed by the petitioner? The petitioner contended that since a statutory appeal has been filed before the appellate authority, the recovery proceedings should be kept in abeyance until the appeal is decided on merits. The revenue, represented by the Standing Counsel, did not appear to have made any specific arguments on this point as recorded in the judgment. The court heard the learned counsel for the petitioner and the learned standing counsel for the respondents.
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Cause title — parties, addresses and appearances
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. He 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.
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 vgs7/5
Appendix — schedule of exhibits
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