ALAPAD PULLU SERVICE CO-OPERATIVE BANK LIMITED NO. 130 vs. CENTRAL BOARD OF DIRECT TAXES (CBDT)

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WP(C)/15218/2019HC KeralaKLHC01037553201904 June 2019Author: HONOURABLE MRS. JUSTICE ANU SIVARAMAN4 pages
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What did the High Court hold?

The High Court of Kerala, while hearing the writ petition, was of the view that the appeal preferred by the petitioner institution ought to be considered and disposed of on merits before proceeding with the recovery of amounts demanded in terms of the assessment orders. Consequently, the court directed the second respondent (Income Tax Officer) to consider and pass orders either on the appeal (Ext.P3, though referred to as appeal, it seems to be a typo and refers to the stay petition) or a reasoned order on the application for stay, after hearing the petitioner and considering the legal contentions raised. Until such orders are passed, the demand raised against the petitioner shall be kept in abeyance. The writ petition is ordered accordingly.

What were the facts?

The petitioner, M/s Alapad Pullu Service Co-operative Bank Limited, 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) before the Income Tax Officer (respondent 2) and a stay petition (Exhibit P3) in conjunction with the appeal. Despite the pending appeal and stay petition, the petitioner contends that demands are being raised based on the assessment orders. The petitioner has approached the High Court of Kerala by way of a writ petition seeking relief.

What were the issues?

1. Whether the Income Tax Officer (respondent 2) should proceed with the recovery of amounts based on the assessment order when a statutory appeal and stay petition are pending before the appellate authority? Assessee's Contention: The petitioner argues that coercive proceedings for recovery should not be initiated while their statutory appeal and stay petition are pending before the appellate authority. They seek a direction for the disposal of their appeal and stay application before any recovery action is taken. Revenue's Contention: The judgment records no specific argument from the revenue's side regarding the issues raised by the petitioner. The court heard the learned standing counsel appearing for the respondents.

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 TUESDAY, THE 04TH DAY OF JUNE 2019 / 14TH JYAISHTA, 1941 WP(C).No. 15218 of 2019 PETITIONER: M/S ALAPAD PULLU SERVICE CO-OPERATIVE BANK LIMITED NO. 130, P.O. ALAPAD, THRISSUR-680641 REPRESENTED BY THE SECRETARY BY ADVS. SRI.C.HARIKUMAR SRI.HARIKRISHNAN SRI.RENJITH RAJAPPAN RESPONDENTS: 1 CENTRAL BOARD OF DIRECT TAXES (CBDT) DEPARTMENT OF REVENUE, MINISTRY OF FINANCE GOVERNMENT OF INDIA, SOUTH BLOCK, NEW DELHI-110 001 REPRESENTED BY THE SECRETARY. 2 THE INCOME TAX OFFICER, WARD-2(1), AAYAKAR BHAVAN, SAKTHAN TAMPURAN NAGAR, MUNCIPAL OFFICER ROAD, THRISSUR-680001 3 THE COMMIKSSIONER OF INCOEM TAX(APPEALS) AAYAKAR BHAVAN, SAKTHAN TAMPURAN NAGAR MUNICIPAL OFFICER ROAD, THRISSUR-680001 SMT.THUSHARA JAMES, GOVERNMENT PLEADER SRI.JOSE JOSEPH, SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 04.06.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 15218 of 2019 2

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.

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, I am of the opinion that Ext.P3 appeal is to be considered

WP(C).No. 15218 of 2019 3 and reasoned order is to be passed at least on the application preferred by the petitioner for stay before any further coercive proceedings are taken against the petitioner. The second respondent is directed to consider and pass orders either on Ext.P3 appeal or a reasoned order on the application preferred by the petitioner for stay after hearing the petitioner and after considering the legal contentions raised. Till orders are passed as directed above, the demand raised against the petitioner shall be kept in abeyance. The writ petition is ordered accordingly. ANU SIVARAMAN ACM/7.6.2019 JUDGE

WP(C).No. 15218 of 2019 4

Appendix — schedule of exhibits
APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 THE TRUE COPY OF THE ASSESSMENT ORDER NO.ITBA/AST/S/143(3)/2018- 19/1014480203(1) PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT, BY THE INCOME TAX OFFICER, WARD-2(1), THRISSUR DATED 21.12.2018 EXHIBIT P2 THE TRUE COPY OF THE NOTICE OF DEMAND UNDER SECTION 156 OF THE INCOME TAX ACT ISSUED BY THE 2ND RESPONDENT DATED 21.12.2018 EXHIBIT P3 THE TRUE COPY OF THE INCOME TAX APPEAL AND STAY PETITION FILED BY THE PETITIONER BEFORE THE 2RD RESPONDENT

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