THIRUVANANTHAPURAM DISTRICT COOPERATIVE BANK LTD, vs. PRINCIPAL COMMISSIONER OF INCOME TAX,

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WP(C)/7761/2019HC KeralaKLHC01019772201929 March 2019Author: HONOURABLE MR.JUSTICE S.V.BHATTI6 pages
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What did the High Court hold?

The High Court acknowledged that the interim order dated March 21, 2019, directing the return of seized documents after retaining copies, had been complied with. The court noted that the parties had presented arguments regarding a reasonable time for the petitioner to comply with Exhibit P17. The court, exercising its discretion, decided not to pronounce an order on the legal grounds raised against Exhibits P9 and P10 at that stage. Instead, it focused on providing the petitioner with a fair and reasonable opportunity to comply with Exhibit P17. The court granted the petitioner ten weeks from the date of the order to comply with the requirements of Exhibit P17. The court explicitly stated that the other legal grounds raised against Exhibits P9 and P10 remained un-adverted to and could be raised by the petitioner as and when a cause of action arose.

What were the facts?

The petitioner, Thiruvananthapuram District Co-operative Bank Ltd., filed a writ petition challenging an advance tax notice (Exhibit P9) and the subsequent seizure of its business documents (Exhibit P10) by the respondents, the Principal Commissioner of Income Tax and other income tax authorities. The petitioner argued that the seized documents were essential for finalizing its tax return before the financial year closure. An interim order was passed on March 21, 2019, directing the return of documents after retaining copies, with the petitioner obligated to produce them when required. The parties reported compliance with this interim order. Subsequently, the respondents issued another notice (Exhibit P17) demanding the petitioner to furnish accounts and documents by March 26, 2019. The parties then argued before the court regarding a reasonable time for compliance.

What were the issues?

1. Whether the seizure of documents (Exhibit P10) pursuant to an advance tax notice (Exhibit P9) was lawful, considering the petitioner's need for these documents to finalize its tax return before the financial year closure? (Question of law and fact, turning on the powers of income tax authorities under relevant provisions of the Income Tax Act, 1961). Assessee's contention: The documents seized were crucial for filing the tax return before the financial year closure, implying the seizure was detrimental and potentially unlawful. Revenue's contention: Not recorded in the judgment. 2. What is a reasonable time for the petitioner to comply with the notice (Exhibit P17) to furnish accounts and documents? Assessee's contention: Sought liberal time for compliance. Revenue's contention: Sought extremely conservative time for compliance.

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 MR.JUSTICE S.V.BHATTI FRIDAY ,THE 29TH DAY OF MARCH 2019 / 8TH CHAITHRA, 1941 WP(C).No. 7761 of 2019 PETITIONER/S: THIRUVANANTHAPURAM DISTRICT COOPERATIVE BANK LTD, REPRESENTED BY ITS GENERAL MANAGER, S.KUMAR, AGED 55 S/O. SREEDHARAN NAIR, SANKAR, SWATHI NAGAR PEROORKADA P.O, THIRUVANANTHAPURAM-695005. BY ADV. SMT.MARY BENJEMIN RESPONDENT/S: 1 PRINCIPAL COMMISSIONER OF INCOME TAX, OFFICE OF THE PRINCIPAL COMMISSIONER OF INCOME TAX, AAYAKAR BHAVAN, KOWDIAR, THIRUVANANTHAPURAM- 695003. 2 ADDITIONAL COMMISSIONER OF INCOME TAX, RANGE 2 OFFICE OF THE ADDITIONAL COMMISSIONER OF INCOME TAX, RANGE 2, AAYAKAR BHAVAN, KOWDIAR, THIRUVANANTHAPURAM-695003. 3 DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 2(1) TRIVANDRUM, OFFICE OF THE DEPUTY COMMISSIONER OF INCOME TAX,CIRCLE 2(1), AAYAKAR BHAVAN, KOWDIAR, THIRUVANANTHAPURAM-695003. OTHER PRESENT: SC SRI. CHRISTOPHER ABRAHAM THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 29.03.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C) No. 7761/2019 -2-

J U D G M E N T Heard Smt.Mary Benjamin, the petitioner's counsel and Sri Christopher Abraham, the learned Standing Counsel for respondents.

2.

The petitioner prays for the following reliefs: “a To call for the records leading to Exhibit P10 b To issue a writ of certiorari quashing Exhibits P9 and P10 c To issue an order of mandamus directing the respondents to return to the petitioner bank, all what are taken away from the petitioner bank as per Exhibit P10 d To issue an order of mandamus directing the respondents to make good all the damages caused to the petitioner bank by their illegal actions. e To grant such other relief as this Honourable Court may deem fit to the grant in the circumstances of the case. f To award to the petitioner the cost in these proceedings.”

3.

On 21.03.2019 this Court passed the following interim order: “The petitioner is a District Co-operative Bank. Pursuant to Ext.P9 advance tax notice, the documents maintained by the petitioner during the course of business have been taken away as -3- per Ext.P10. The details of the documents were also mentioned therein. The petitioner submits that those documents are required to finalize return before the closure of the financial year. Taking note of the above submission, I am of the view that the documents seized from the petitioner shall be returned to the petitioner after retaining the copy thereon. However, the petitioner shall produce the documents as and when the respondents direct to produce the same before them. Needful shall be done within three days.”

4.

The learned counsel appearing for the parties submit that the interim order dated 21.03.2019 is complied with, thereby the record, documents etc taken from the custody of the petitioner are returned to the petitioner. When matters stood thus the respondents issued Ext.P17 calling upon the petitioner to furnish the accounts, documents etc or or before 26.03.2019 at 11.30 a.m.

5.

The learned counsel are heard on the reasonable time that could be considered and granted to petitioner to comply with the requirement of Ext.P17. The learned counsel have tried to convince the Court on one hand to grant liberal time and on another hand with extreme conservative time schedule. As this is a matter -4- where the Court is not required to pronounce an order on an issue, but exercises discretion in such a way that the petitioner is afforded fair and reasonable opportunity to comply with the requirement of Ext.P17. 6. Keeping in view the rival submissions, the writ petition is disposed of by this order granting ten weeks' time from today to the petitioner to comply with the requirement of Ext.P17. 7. For the present the other legal grounds raised against Exts. P9 and P10 remain un-adverted to and the petitioner can raise legal and factual grounds as and when cause of action arises in this behalf. The writ petition is disposed of accordingly. S.V.BHATTI JUDGE jjj -5-

Appendix — schedule of exhibits
APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE ORDER DATED 12.12.2018 OF THE 1ST RESPONDENT. EXHIBIT P2 TRUE COPY OF THE CONSOLIDATED DEMAND NOTICE FOR THE AYS 2012-13. 2013-2014, 2014-2015 AND 2015- 2016. EXHIBIT P3 TRUE COPY OF THE APPLICATION DATED 07.01.2019 FOR CANCELLING THE DEMAND FOR THE YEARS 2013-2014. EXHIBIT P4 TRUE COPY OF THE APPLICATION DATED 07.01.2019 FOR CANCELLING THE DEMAND FOR THE YEARS 2014-2015. EXHIBIT P5 TRUE COPY OF THE APPLICATION DATED 07.01.2019 FOR CANCELLING THE DEMAND FOR THE YEARS 2015-2016. EXHIBIT P6 TRUE COPY OF THE PROCEEDINGS OF THE 3RD RESPONDENT DATED 05.03.2019 FOR THE YEAR 2009-10. EXHIBIT P7 TRUE COPY OF THE PROCEEDINGS OF THE 3RD RESPONDENT DATED 05.03.2019 FOR THE YEAR 2012- 2013. EXHIBIT P8 TRUE COPY OF THE PROCEEDINGS OF THE 3RD RESPONDENT DATED 05.03.2019 FOR THE YEAR 2013- 2014. EXHIBIT P9 TRUE COPY OF THE LETTER DATED 8.11.2018 OF THE 3RD RESPONDENT. EXHIBIT P10 TRUE COPY OF THE SURVEY PROCEEDINGS DATED 01.02.2019. EXHIBIT P11 TRUE COPY OF THE 1ST PAGE OF THE STATEMENT UNDER SECTION 131(1). EXHIBIT P12 TRUE COPY OF THE LAST PAGE OF THE STATEMENT UNDER SECTION 131(1). W.P.(C) No. 7761/2019 -6- EXHIBIT P13 TRUE COPY OF THE REPRESENTATION DATED 06.02.2019 WAS FILED BEFORE THE 3RD RESPONDENT, EXHIBIT P14 TRUE COPY OF THE LETTER DATED 10.02.2019 GIVEN BY THE PETITIONER TO THE 3RD RESPONDENT. EXHIBIT P15 TRUE COPY OF THE LETTER DATED 13.02.2019 GIVEN BY THE PETITIONER TO THE 3RD RESPONDENT. EXHIBIT P16 TRUE COPY OF THE LETTER DATED 06.03.2019 GIVEN BY THE PETITIONER TO THE 3RD RESPONDENT. EXHIBIT P17 TRUE COPY OF THE NOTICE DATED 23.03.2019 OF THE 3RD RESPONDENT

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